Exhibit h.1
________ Shares
NUVEEN PREFERRED AND CONVERTIBLE INCOME FUND
Common Shares
UNDERWRITING AGREEMENT
________, 2003
Salomon Smith Barney Inc.
Nuveen Investments, LLC
A.G. Edwards & Sons, Inc.
Prudential Securities Incorporated
Wachovia Securities, Inc.
Advest, Inc.
Robert W. Baird & Co. Incorporated
H&R Block Financial Advisors, Inc.
Fahnestock & Co. Inc.
Ferris, Baker Watts, Incorporated
Janney Montgomery Scott LLC
Legg Mason Wood Walker, Incorporated
McDonald Investments Inc., a KeyCorp Company
Quick & Reilly, Inc. A FleetBoston Financial Company
RBC Dain Rauscher Inc.
Ryan Beck & Co., Inc.
Stifel, Nicolaus & Company, Incorporated
TD Waterhouse Investor Services, Inc.
Wedbush Morgan Securities Inc.
Wells Fargo Securities, LLC
As Representatives of the Several Underwriters
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
The undersigned, Nuveen Preferred and Convertible Income Fund, a
Massachusetts business trust (the "Fund"), Nuveen Institutional Advisory Corp.,
a Delaware corporation (the "Investment Adviser"), Spectrum Asset Management,
Inc., a Connecticut corporation ("Spectrum"), and Froley, Revy Investment
Co., Inc., a California corporation ("Froley, Revy" and, together with
Spectrum, the "Subadvisers" and the Subadvisers, together with the Investment
Adviser, the "Advisers"), address you as Underwriters and as the representatives
(the "Representatives") of each of the other persons, firms and corporations, if
any, listed in Schedule I hereto (herein collectively called "Underwriters").
The Fund proposes to issue and sell an aggregate of _____ shares (the "Firm
Shares") of its common shares of beneficial interest, $0.01 par value per share
(the "Common Shares"), to the several Underwriters. The Fund also proposes to
sell to the Underwriters, upon the terms and conditions set forth in Section 2
hereof,
up to an additional _____ Common Shares (the "Additional Shares"). The Firm
Shares and Additional Shares are hereinafter collectively referred to as the
"Shares".
The Fund and the Advisers wish to confirm as follows their agreements with
you and the other several Underwriters on whose behalf you are acting in
connection with the several purchases of the Shares by the Underwriters.
The Fund has entered into an investment management agreement with the
Investment Adviser dated February 20, 2003, a Master Custodian Agreement with
State Street Bank and Trust Company dated as of August 19, 2002 and effective as
of March __, 2003, and a Shareholder Transfer Agency and Service Agreement with
State Street Bank and Trust Company dated October 7, 2002 and effective as of
March 26, 2003, and such agreements are herein referred to as the "Management
Agreement", the "Custodian Agreement" and the "Transfer Agency Agreement",
respectively. The Investment Adviser has entered into an investment sub-advisory
agreement with Spectrum dated March 14, 2003, and an investment sub-advisory
agreement with Froley, Revy dated March 14, 2003, and such agreements are herein
referred to as the "Spectrum Sub-Advisory Agreement" and the "Froley, Revy
Sub-Advisory Agreement", respectively. Collectively, (i) the Management
Agreement, the Custodian Agreement and the Transfer Agency Agreement are herein
referred to as the "Fund Agreements" and (ii) the Spectrum Sub-Advisory
Agreement and the Froley, Revy Sub-Advisory Agreement are herein referred to as
the "Sub-Advisory Agreements". This Underwriting Agreement is herein referred to
as the "Agreement".
1. Registration Statement and Prospectus. The Fund has prepared and filed
with the Securities and Exchange Commission (the "Commission") in accordance
with the provisions of the Securities Act of 1933, as amended (the "1933 Act"),
the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations of the Commission under the 1933 Act (the "1933 Act Rules and
Regulations") and the 1940 Act (the "1940 Act Rules and Regulations" and,
together with the 1933 Act Rules and Regulations, the "Rules and Regulations") a
registration statement on Form N-2 (File Nos. 333-102903 and 811-21293) under
the 1933 Act and the 1940 Act and may, pursuant to the Rules and Regulations,
prepare and file an additional registration statement relating to a portion of
the Shares pursuant to Rule 462(b) of the 1933 Act Rules and Regulations (a
"462(b) Registration Statement") (collectively, the "registration statement"),
including a prospectus (including any statement of additional information)
relating to the Shares and a notification of registration of the Fund as an
investment company under the 1940 Act on Form N-8A (the "1940 Act
Notification"). The term "Registration Statement" as used in this Agreement
means the registration statement (including all financial schedules and
exhibits), as amended at the time it becomes effective under the 1933 Act or, if
the registration statement became effective under the 1933 Act prior to the
execution of this Agreement, as amended or supplemented, at the time it became
effective prior to the execution of this Agreement, and includes any information
deemed to be included by Rule 430A under the 1933 Act Rules and Regulations. If
it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed under the
1933 Act and must be declared effective before the offering of the Shares may
commence, the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. For the
avoidance of doubt, if the Fund has filed a 462(b) Registration Statement, the
term "Registration Statement" as used in this Agreement shall
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include such 462(b) Registration Statement. The term "Prospectus" as used in
this Agreement means the prospectus (including the statement of additional
information) in the form included in the Registration Statement or, if the
prospectus (including the statement of additional information) included in the
Registration Statement omits information in reliance on Rule 430A and such
information is included in a prospectus (including the statement of additional
information) filed with the Commission pursuant to Rule 497(h) under the 1933
Act Rules and Regulations, the term "Prospectus" as used in this Agreement means
the prospectus (including the statement of additional information) in the form
included in the Registration Statement as supplemented by the addition of the
information contained in the prospectus (including the statement of additional
information) filed with the Commission pursuant to Rule 497(h). The term
"Prepricing Prospectus" as used in this Agreement means the prospectus
(including the statement of additional information) subject to completion in the
form included in the registration statement at the time of the initial filing of
the registration statement with the Commission and as such prospectus (including
the statement of additional information) shall have been amended from time to
time prior to the date of the Prospectus, together with any other prospectus
(including any other statement of additional information) relating to the Fund
other than the Prospectus.
The Fund has furnished the Representatives with copies of such Registration
Statement, each amendment to such Registration Statement filed with the
Commission and each Prepricing Prospectus.
2. Agreements to Sell and Purchase. The Fund hereby agrees, subject to all
the terms and conditions set forth herein, to issue and to sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Fund and the Advisers herein contained and subject to all of
the other terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Fund at a purchase price per
share of $14.325 (the "purchase price per share"), the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto (or such number
of Firm Shares increased as set forth in Section 10 hereof).
The Fund also agrees, subject to all the terms and conditions set forth
herein, to issue and to sell to the Underwriters and, upon the basis of the
representations, warranties and agreements of the Fund and the Advisers herein
contained and subject to all of the other terms and conditions set forth herein,
the Underwriters shall have the right to purchase from the Fund, at the purchase
price per share, pursuant to an option (the "over-allotment option") which may
be exercised at any time and from time to time prior to 9:00 P.M., New York City
time, on the 45th day after the date of the Prospectus (or if such 45th day
shall be a Saturday or a Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange (the "NYSE") is open for trading) up
to an aggregate of ______ Additional Shares. Additional Shares may be purchased
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. Upon any exercise of the over-allotment option,
upon the basis of the representations, warranties and agreements of the Fund and
the Advisers herein contained and subject to all of the other terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Fund the number of Additional Shares (subject to such
adjustments as you may determine to avoid fractional shares) which bears the
same
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proportion to the number of Additional Shares to be purchased by the
Underwriters as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I (or such number of Firm Shares increased as set forth
in Section 10 hereof) bears to the aggregate number of Firm Shares.
3. Terms of Public Offering. The Fund and the Advisers have been advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Firm Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Firm Shares upon the terms set forth in the Prospectus.
4. Delivery of Shares and Payments Therefor.
(a) Delivery to the Underwriters of and payment to the Fund for the
Firm Shares shall be made at the office of Salomon Smith Barney Inc., 388
Greenwich Street, New York, New York 10013 or through the facilities of the
Depository Trust Company or another mutually agreeable facility, at 9:00
A.M., New York City time, on March 31, 2003 (the "Closing Date"). The place
of closing for the Firm Shares and the Closing Date may be varied by
agreement between you and the Fund.
(b) Delivery to the Underwriters of and payment to the Fund for any
Additional Shares to be purchased by the Underwriters shall be made at the
aforementioned office of Salomon Smith Barney Inc., or through the
facilities of the Depository Trust Company or another mutually agreeable
facility, at such time on such date (an "Option Closing Date"), which may
be the same as the Closing Date, but shall in no event be earlier than the
Closing Date nor earlier than two nor later than three business days after
the giving of the notice hereinafter referred to, as shall be specified in
a written notice from you on behalf of the Underwriters to the Fund of the
Underwriters' determination to purchase a number, specified in said notice,
of Additional Shares. The place of closing for any Additional Shares and
the Option Closing Date for such Additional Shares may be varied by
agreement between you and the Fund.
(c) Certificates for the Firm Shares and for any Additional Shares
shall be registered in such names and in such denominations as you shall
request prior to 1:00 P.M., New York City time, (i) in respect of the Firm
Shares, on the second business day preceding the Closing Date and (ii) in
respect of Additional Shares, on the day of the giving of the written
notice in respect of such Additional Shares. Such certificates will be made
available to you in New York City for inspection and packaging not later
than 9:00 A.M., New York City time, on the business day next preceding the
Closing Date or any Option Closing Date, as the case may be. The
certificates evidencing the Firm Shares and any Additional Shares to be
purchased hereunder shall be delivered to you on the Closing Date or the
Option Closing Date, as the case may be, through the facilities of the
Depository Trust Company or another mutually agreeable facility, against
payment of the purchase price therefor in immediately available funds to
the order of the Fund.
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5. Agreements of the Fund and the Advisers. The Fund and the Advisers,
jointly and severally, agree with the several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective under the 1933 Act before the offering of
the Firm Shares may commence, the Fund will use its reasonable best efforts
to cause the Registration Statement or such post-effective amendment to
become effective under the 1933 Act as soon as possible. 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 1933 Act Rules and Regulations, the Fund will file a
Prospectus including such information pursuant to Rule 497(h) of the 1933
Act Rules and Regulations, as promptly as practicable, but no later than
the second business day following the earlier of the date of the
determination of the offering price of the Shares or the date the
Prospectus is first used after the effective date of the Registration
Statement. If the Registration Statement has become effective and the
Prospectus contained therein does not so omit such information, the Fund
will file a Prospectus pursuant to Rule 497 (c) or (j) of the 1933 Act
Rules and Regulations as promptly as practicable, but no later than the
fifth business day following the date of the later of the effective date of
the Registration Statement or the commencement of the public offering of
the Shares after the effective date of the Registration Statement. The Fund
will advise you promptly and, if requested by you, will confirm such advice
in writing (i) when the Registration Statement or such post-effective
amendment has become effective or (ii) when the Prospectus has been timely
filed pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules and
Regulations or the certification permitted pursuant to Rule 497(j) of the
1933 Act Rules and Regulations has been timely filed, whichever is
applicable.
(b) The Fund will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request made by the Commission
for amendment of or a supplement to the Registration Statement, any
Prepricing Prospectus or the Prospectus (or any amendment or supplement to
any of the foregoing) or for additional information, (ii) of the issuance
by the Commission, the National Association of Securities Dealers, Inc.
(the "NASD"), any state securities commission, any national securities
exchange, any arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official of any order
suspending the effectiveness of the Registration Statement, prohibiting or
suspending the use of the Prospectus, any Prepricing Prospectus or any
sales material (as hereinafter defined), of any notice pursuant to Section
8(e) of the 1940 Act, of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation or contemplated
initiation of any proceeding for any such purposes, (iii) of receipt by the
Fund, the Advisers, any affiliate of the Fund or the Advisers or any
representative or attorney of the Fund or the Advisers of any other
material communication from the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or
any other governmental, regulatory, self-regulatory or administrative
agency or any official relating to the Fund (if such communication relating
to the Fund is received by such
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person within three years after the date of this Agreement), the
Registration Statement, the 1940 Act Notification, the Prospectus, any
Prepricing Prospectus, any sales material (as hereinafter defined) (or any
amendment or supplement to any of the foregoing), this Agreement or any of
the Fund Agreements and (iv) within the period of time referred to in
paragraph (f) below, of any material, adverse change in the condition
(financial or other), business, prospects, properties, net assets or
results of operations of the Fund or the Advisers or of the happening of
any event which makes any statement of a material fact made in the
Registration Statement, the Prospectus, any Prepricing Prospectus or any
sales material (as hereinafter defined) (or any amendment or supplement to
any of the foregoing) untrue or which requires the making of any additions
to or changes in the Registration Statement, the Prospectus, any Prepricing
Prospectus or any sales materials (as hereinafter defined) (or any
amendment or supplement to any of the foregoing) in order to state a
material fact required by the 1933 Act, the 1940 Act or the Rules and
Regulations to be stated therein or necessary in order to make the
statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading or of the
necessity to amend or supplement the Registration Statement, the
Prospectus, any Prepricing Prospectus or any sales material (as hereinafter
defined) (or any amendment or supplement to any of the foregoing) to comply
with the 1933 Act, the 1940 Act, the Rules and Regulations or any other law
or order of any court or regulatory body. If at any time the Commission,
the NASD, any state securities commission, any national securities
exchange, any arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official shall issue any
order suspending the effectiveness of the Registration Statement,
prohibiting or suspending the use of the Prospectus, any Prepricing
Prospectus or any sales material (as hereinafter defined) (or any amendment
or supplement to any of the foregoing) or suspending the qualification of
the Shares for offering or sale in any jurisdiction, the Fund will use its
reasonable best efforts to obtain the withdrawal of such order at the
earliest possible time.
(c) The Fund will furnish to you, without charge, three signed copies
of the registration statement and the 1940 Act Notification as originally
filed with the Commission and of each amendment thereto, including
financial statements and all exhibits thereto (except any post-effective
amendment required by Rule 8b-16 of the 1940 Act Rules and Regulations
which is filed with the Commission after the later of (x) one year from the
date of this Agreement and (y) the date on which the distribution of the
Shares is completed) and will also furnish to you, without charge, such
number of conformed copies of the registration statement as originally
filed and of each amendment thereto (except any post-effective amendment
required by Rule 8b-16 of the 1940 Act Rules and Regulations which is filed
with the Commission after the later of (x) one year from the date of this
Agreement and (y) the date on which the distribution of the Shares is
completed), with or without exhibits, as you may reasonably request.
(d) The Fund will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus, any
Prepricing Prospectus or any sales material (as hereinafter defined) (or
any amendment or supplement to any of the foregoing) of which you shall not
previously have been advised or to which you shall
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reasonably object within a reasonable time after being so advised or (ii)
so long as, in the opinion of counsel for the Underwriters, a Prospectus is
required to be delivered in connection with sales by any Underwriter or
dealer, file any information, documents or reports pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), without
delivering a copy of such information, documents or reports to you, as
Representatives of the Underwriters, prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this Agreement, the Fund
has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of each form of any Prepricing Prospectus. The
Fund consents to the use, in accordance with the provisions of the 1933 Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by dealers, prior to the
date of the Prospectus, of each Prepricing Prospectus so furnished by the
Fund.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time, for such period as in the
opinion of counsel for the Underwriters a prospectus is required by the
1933 Act to be delivered in connection with sales of Shares by any
Underwriter or dealer, the Fund will expeditiously deliver to each
Underwriter and each dealer, without charge, as many copies of the
Prospectus (and of any amendment or supplement thereto) as you may
reasonably request. The Fund consents to the use of the Prospectus (and of
any amendments or supplements thereto) in accordance with the provisions of
the 1933 Act and with the securities or Blue Sky laws of the jurisdictions
in which the Shares are offered by the several Underwriters and by all
dealers to whom Shares may be sold, both in connection with the offering or
sale of the Shares and for such period of time thereafter as the Prospectus
is required by law to be delivered in connection with sales of Shares by
any Underwriter or dealer. If during such period of time any event shall
occur that in the judgment of the Fund or in the opinion of counsel for the
Underwriters is required to be set forth in the Prospectus (as then amended
or supplemented) or should be set forth therein in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading or if it is necessary to supplement or amend the
Prospectus to comply with the 1933 Act, the 1940 Act, the Rules and
Regulations or any other law, rule or regulation, the Fund will forthwith
prepare and, subject to the provisions of paragraph (d) above, file with
the Commission an appropriate amendment or supplement thereto and will
expeditiously furnish to the Underwriters and dealers, without charge, such
number of copies thereof as they shall reasonably request. In the event
that the Prospectus is to be amended or supplemented, the Fund, if
requested by you, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or
supplement.
(g) The Fund will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
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qualification; provided that in no event shall the Fund be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in
suits, other than those arising out of the offering or sale of the Shares,
in any jurisdiction where it is not now so subject.
(h) The Fund will make generally available to its security holders an
earnings statement, which need not be audited, covering a twelve-month
period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which earnings statement shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act
Rules and Regulations.
(i) The Fund will comply with the undertaking set forth in paragraph 6
of Item 33 of Part C of the Registration Statement.
(j) During the period of five years hereafter, the Fund will furnish
to you (i) as soon as available, a copy of each report of the Fund mailed
to shareholders or filed with the Commission and (ii) from time to time
such other information concerning the Fund as you may reasonably request.
(k) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (other than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating
this Agreement pursuant to Section 10 or Section 11 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Fund or the Advisers to comply with the terms or
fulfill any of the conditions of this Agreement, the Fund and the Advisers,
jointly and severally, agree to reimburse the Representatives for all
out-of-pocket expenses (including fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith, but the Fund and the
Advisers shall in no event be liable for any internal cost of the
Underwriters or any loss of anticipated profits or speculative,
consequential or similar damages for such termination.
(l) The Fund will direct the investment of the net proceeds of the
offering of the Shares in such a manner as to comply with the investment
objectives, policies and restrictions of the Fund as described in the
Prospectus.
(m) The Fund will file the requisite copies of the Prospectus with the
Commission in a timely fashion pursuant to Rule 497(c) or Rule 497(h) of
the 1933 Act Rules and Regulations, whichever is applicable or, if
applicable, will file in a timely fashion the certification permitted by
Rule 497(j) of the 1933 Act Rules and Regulations and will advise you of
the time and manner of such filing.
(n) Except as provided in this Agreement or pursuant to any dividend
reinvestment plan of the Fund in effect on the date hereof, neither the
Fund nor the Advisers will sell, contract to sell or otherwise dispose of
or hedge, any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares or
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grant any options or warrants to purchase Common Shares, for a period of
180 days after the date of the Prospectus, without the prior written
consent of Salomon Smith Barney Inc.
(o) Except as stated in this Agreement and in the Prospectus, neither
the Fund nor the Advisers have taken, nor will any of them take, directly
or indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the
Common Shares.
(p) The Fund will use its reasonable best efforts to have the Common
Shares listed, subject to notice of issuance, on the NYSE concurrently with
the effectiveness of the Registration Statement and to comply with the
rules and regulations of such exchange.
6. Representations and Warranties of the Fund and the Advisers. The Fund
and the Advisers, jointly and severally, represent and warrant to each
Underwriter that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement
thereto, complied when so filed in all material respects with the
provisions of the 1933 Act, the 1940 Act and the Rules and Regulations.
(b) The Registration Statement, in the form in which it became or
becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective and the Prospectus
and any amendment or supplement thereto when filed with the Commission
under Rule 497 of the 1933 Act Rules and Regulations and the 1940 Act
Notification when originally filed with the Commission and any amendment or
supplement thereto when filed with the Commission complied or will comply
in all material respects with the provisions of the 1933 Act, the 1940 Act
and the Rules and Regulations and did not or will not at any such times
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein (in the case of a prospectus, in light of the circumstances under
which they were made) not misleading; except that this representation and
warranty does not apply to statements in or omissions from the Registration
Statement or the Prospectus (or any amendment or supplement thereto) made
in reliance upon and in conformity with information relating to any
Underwriter furnished to the Fund in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) All the outstanding Common Shares of the Fund have been duly
authorized and validly issued, are fully paid and, except as described in
the Registration Statement, nonassessable and are free of any preemptive or
similar rights; the Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and, except as
described in the Registration Statement, nonassessable and free of any
preemptive or similar rights and the capital stock of the Fund conforms to
the description thereof in the
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Registration Statement and the Prospectus (and any amendment or supplement
to either of them).
(d) The Fund has been duly formed and is validly existing in good
standing as a business trust under the laws of The Commonwealth of
Massachusetts, with full power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them) and is duly registered and qualified to conduct business and is in
good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or to qualify does
not have a material, adverse effect on the condition (financial or other),
business, properties, net assets or results of operations of the Fund. The
Fund has no subsidiaries.
(e) There are no legal or governmental proceedings pending or, to the
knowledge of the Fund, threatened, against the Fund or to which the Fund or
any of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them) but are not described as required by the 1933 Act, the 1940
Act or the Rules and Regulations and there are no agreements, contracts,
indentures, leases or other instruments that are required to be described
in the Registration Statement or the Prospectus (or any amendment or
supplement to either of them) or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the
1933 Act, the 1940 Act or the Rules and Regulations.
(f) The Fund is not in violation of its Declaration of Trust or
By-Laws or in material violation of any material law, ordinance,
administrative or governmental rule or regulation applicable to the Fund or
of any material decree of the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or
any other governmental, regulatory, self-regulatory or administrative
agency or any official having jurisdiction over the Fund or in breach or
default in any material respect in the performance of any obligation,
agreement or condition contained in any material bond, debenture, note or
any other evidence of indebtedness or in any agreement, indenture, lease or
other instrument to which the Fund is a party or by which it or any of its
properties may be bound.
(g) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement nor any of the Fund Agreements by
the Fund, nor the consummation by the Fund of the transactions contemplated
hereby or thereby (i) requires any consent, approval, authorization or
other order of or registration or filing which has not yet been obtained or
made with the Commission, the NASD, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official (except compliance
with the securities or Blue Sky laws of various jurisdictions which have
been or will be effected in accordance with this Agreement and except for
compliance with the filing requirements of the NASD Division of Corporate
Finance) or conflicts or will conflict with or constitutes or will
constitute a breach of the Declaration of Trust or By-Laws of the Fund or
(ii) conflicts or
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will conflict with or constitutes or will constitute a breach of or a
default under, any material agreement, indenture, lease or other instrument
to which the Fund is a party or by which it or any of its properties may be
bound or materially violates or will materially violate any material
statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Fund or any of its properties or will result in the
creation or imposition of any material lien, charge or encumbrance upon any
property or assets of the Fund pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound or to which
any of the property or assets of the Fund is subject.
(h) Since the date as of which information is given in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), except as otherwise stated therein, (i) there has been
no material, adverse change in the condition (financial or other),
business, properties, net assets or results of operations of the Fund or
business prospects (other than as a result of a change in the financial
markets generally) of the Fund, whether or not arising in the ordinary
course of business, (ii) there have been no transactions entered into by
the Fund which are material to the Fund other than those in the ordinary
course of its business as described in the Prospectus (and any amendment or
supplement thereto) and (iii) there has been no dividend or distribution of
any kind declared, paid or made by the Fund on any class of its common
stock.
(i) The accountants, Ernst & Young LLP, who have audited or shall
audit at or prior to the Closing Date the Statement of Assets and
Liabilities and the related Statement of Operations both included in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), are an independent public accounting firm as required
by the 1933 Act, the 1940 Act and the Rules and Regulations.
(j) The financial statements, together with related schedules and
notes, included in the Registration Statement and the Prospectus (or any
amendment or supplement to either of them) present fairly the financial
position of the Fund on the basis stated in the Registration Statement and
the Prospectus at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved except as disclosed
therein; and the other financial and statistical information and data
included in the Registration Statement or the Prospectus (or any amendment
or supplement thereto) are accurately derived from such financial
statements and the books and records of the Fund.
(k) The Fund, subject to the Registration Statement having been
declared effective and the filing of the Prospectus under Rule 497 under
the 1933 Act Rules and Regulations, has taken all required action under the
1933 Act, the 1940 Act and the Rules and Regulations to make the public
offering and consummate the sale of the Shares as contemplated by this
Agreement.
(l) The execution and delivery of and the performance by the Fund of
its obligations under, this Agreement and the Fund Agreements have been
duly and validly authorized by the Fund and this Agreement and the Fund
Agreements have been duly
11
executed and delivered by the Fund and constitute the valid and legally
binding agreements of the Fund, enforceable against the Fund in accordance
with their terms, except as rights to indemnity and contribution hereunder
may be limited by federal or state securities laws and subject to the
qualification that the enforceability of the Fund's obligations hereunder
and thereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights
generally and by general equitable principles.
(m) Except as disclosed in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), subsequent
to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), the Fund has not incurred any liability or obligation,
direct or contingent, that is material to the Fund and there has not been
any change in the capital stock or material increase in the short-term debt
or long-term debt of the Fund.
(n) The Fund has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute to the public in either printed or electronic form any
offering material in connection with the offering and sale of the Shares
other than the Registration Statement, the Prepricing Prospectus included
in Pre-Effective Amendment No. 2 to the Registration Statement, the
Prospectus and the advertisements/sales literature filed by Nuveen
Investments with the NASD on March 3, 2003.
(o) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own
its property and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto); the Fund has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows or, after notice or lapse of
time, would allow, revocation or termination thereof or results in any
other material impairment of the rights of the Fund under any such permit,
subject in each case to such qualification as may be set forth in the
Prospectus (and any amendment or supplement thereto); and, except as
described in the Prospectus (and any amendment or supplement thereto), none
of such permits contains any restriction that is materially burdensome to
the Fund.
(p) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization and with the investment policies and restrictions of
the Fund and the applicable requirements of the 1940 Act, the 1940 Act
Rules and Regulations and the Internal Revenue Code of 1986, as amended
(the "Code"); (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles, to calculate net asset value, to maintain
accountability for assets and to maintain material compliance with the
books and records requirements under the 1940 Act and the 1940 Act Rules
and Regulations; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the recorded
account for assets is compared
12
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(q) The conduct by the Fund of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of
any patents, patent licenses, trademarks, service marks or trade names
which it does not own, possess or license.
(r) Except as stated in this Agreement and in the Prospectus (and any
amendment or supplement thereto), the Fund has not taken and will not take,
directly or indirectly, any action designed to or which should reasonably
be expected to cause or result in or which will constitute stabilization or
manipulation of the price of the Common Shares in violation of federal
securities laws and the Fund is not aware of any such action taken or to be
taken by any affiliates of the Fund.
(s) The Fund is duly registered under the 1940 Act as a closed-end,
diversified management investment company and the 1940 Act Notification has
been duly filed with the Commission and, at the time of filing thereof and
at the time of filing any amendment or supplement thereto, conformed in all
material respects with all applicable provisions of the 1940 Act and the
1940 Act Rules and Regulations. The Fund has not received any notice from
the Commission pursuant to Section 8(e) of the 1940 Act with respect to the
1940 Act Notification or the Registration Statement (or any amendment or
supplement to either of them).
(t) All advertising, sales literature or other promotional material
(including "prospectus wrappers" and "broker kits"), whether in printed or
electronic form, authorized in writing by or prepared by the Fund or the
Advisers for use in connection with the offering and sale of the Shares
(collectively, "sales material") complied and comply in all material
respects with the applicable requirements of the 1933 Act, the 1933 Act
Rules and Regulations and the rules and interpretations of the NASD and if
required to be filed with the NASD under the NASD's conduct rules were so
filed. No sales material contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(u) This Agreement and each of the Fund Agreements complies in all
material respects with all applicable provisions of the 1940 Act, the 1940
Act Rules and Regulations, the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), and the rules and regulations adopted by the
Commission under the Advisers Act (the "Advisers Act Rules and
Regulations").
(v) No holder of any security of the Fund has any right to require
registration of Common Shares or any other security of the Fund because of
the filing of the registration statement or consummation of the
transactions contemplated by this Agreement.
13
(w) The Shares have been duly approved for listing upon notice of
issuance on the NYSE and the Fund's registration statement on Form 8-A,
under the 1934 Act, has become effective.
(x) The Fund intends to direct the investment of the proceeds of the
offering of the Shares in such a manner as to comply with the requirements
of Subchapter M of the Code.
7. Representations and Warranties of the Advisers. Each of the Investment
Adviser, Spectrum and Froley, Revy, severally as to itself only and not jointly
or as to any other party, represents and warrants to each Underwriter as
follows:
(a) Such Adviser is a corporation duly organized and validly existing
in good standing under the laws of its jurisdiction of incorporation, with
full corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them) and is
duly registered and qualified to conduct business and is in good standing
in each jurisdiction or place where the nature of its properties or conduct
of its business requires such registration or qualification, except where
the failure so to register or to qualify would not have a material, adverse
effect on the condition (financial or other), business, properties, net
assets or results of operations of such Adviser.
(b) Such Adviser is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act, the 1940 Act, the
Advisers Act Rules and Regulations or the 1940 Act Rules and Regulations
from acting under the Fund Agreements to which it is a party for the Fund
or the Sub-Advisory Agreements to which it is a party as contemplated by
the Registration Statement and the Prospectus (or any amendment or
supplement thereto).
(c) Such Adviser has full power and authority to enter into this
Agreement, the Fund Agreements to which it is a party and the Sub-Advisory
Agreements to which it is a party, the execution and delivery of, and the
performance by such Adviser of its obligations under, this Agreement, the
Fund Agreements to which it is a party and the Sub-Advisory Agreements to
which it is a party have been duly and validly authorized by such Adviser;
and this Agreement, the Fund Agreements to which it is a party and the
Sub-Advisory Agreements to which it is a party have been duly executed and
delivered by such Adviser and constitute the valid and legally binding
agreements of such Adviser, enforceable against such Adviser in accordance
with their terms, except as rights to indemnity and contribution hereunder
may be limited by federal or state securities laws and subject to the
qualification that the enforceability of such Adviser's obligations
hereunder and thereunder may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
(d) Such Adviser has the financial resources available to it necessary
for the performance of its services and obligations as contemplated in the
Registration Statement
14
and the Prospectus (or any amendment or supplement thereto) and under this
Agreement and the Fund Agreements to which it is a party and the
Sub-Advisory Agreements to which it is a party.
(e) The description of such Adviser and its business, and the
statements attributable to such Adviser, in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) complied and
comply in all material respects with the provisions of the 1933 Act, the
1940 Act, the Advisers Act, the Rules and Regulations and the Advisers Act
Rules and Regulations and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances under which they were made) not
misleading.
(f) There are no legal or governmental proceedings pending or, to the
knowledge of such Adviser, threatened against such Adviser or to which any
of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them) but are not described as required or that reasonably should
be expected to result in any material, adverse change in the condition
(financial or other), business, properties, net assets or results of
operations of such Adviser or that reasonably should have a material,
adverse effect on the ability of such Adviser to fulfill its obligations
hereunder or under the Fund Agreements to which it is a party or under the
Sub-Advisory Agreements to which it is a party.
(g) Since the date as of which information is given in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), except as otherwise stated therein, (i) there has been
no material, adverse change in the condition (financial or other),
business, properties, net assets or results of operations or business
prospects of such Adviser, whether or not arising from the ordinary course
of business and (ii) there have been no transactions entered into by such
Adviser which are material to such Adviser other than those in the ordinary
course of its business as described in the Prospectus.
(h) Such Adviser has such licenses, permits and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own
its property and to conduct its business in the manner described in the
Prospectus; such Adviser has fulfilled and performed all its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of such Adviser under any such permit.
(i) This Agreement, the Fund Agreements to which such Adviser is a
party and the Sub-Advisory Agreements to which it is a party comply in all
material respects with all applicable provisions of the 1940 Act, the 1940
Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
15
(j) Neither the execution, delivery or performance of this Agreement
or the Fund Agreements by such Adviser which is a party thereto or the
Sub-Advisory Agreements by such Adviser which is a party thereto, nor the
consummation by such Adviser of the transactions contemplated hereby or
thereby (A) requires any consent, approval, authorization or other order of
or registration or filing with the Commission, the NASD, any state
securities commission, any national securities exchange, any arbitrator,
any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official (except compliance with the
securities or Blue Sky laws of various jurisdictions which have been or
will be effected in accordance with this Agreement and except for
compliance with the filing requirements of the NASD Division of Corporate
Finance) or conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, the Certificate of Incorporation
or Articles of Incorporation, as applicable, or By-Laws of such Adviser or
(B) conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, any material agreement, indenture, lease or
other instrument to which such Adviser is a party or by which it or any of
its properties may be bound or materially violates or will materially
violate any material statute, law, regulation or filing or judgment,
injunction, order or decree applicable to such Adviser or any of its
properties or will result in the creation or imposition of any material
lien, charge or encumbrance upon any property or assets of such Adviser
pursuant to the terms of any agreement or instrument to which it is a party
or by which it may be bound or to which any of the property or assets of
such Adviser is subject.
(k) Except as stated in this Agreement and in the Prospectus (and in
any amendment or supplement thereto), such Adviser has not taken and nor
will it take, directly or indirectly, any action designed to or which
should reasonably be expected to cause or result in or which will
constitute, stabilization or manipulation of the price of the Common Shares
in violation of federal securities laws and such Adviser is not aware of
any such action taken or to be taken by any affiliates of such Adviser.
(l) In the event that the Fund or such Adviser makes available any
promotional materials intended for use only by qualified broker-dealers and
registered representatives thereof by means of an Internet web site or
similar electronic means, such Adviser will install and maintain
pre-qualification and password-protection or similar procedures which are
reasonably designed to effectively prohibit access to such promotional
materials by persons other than qualified broker-dealers and registered
representatives thereof.
8. Indemnification and Contribution.
(a) The Fund and the Advisers, jointly and severally, agree to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and
all losses, claims, damages, liabilities and expenses, joint or several
(including reasonable costs of investigation) arising out of or based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus, any Prepricing
Prospectus, any sales
16
material (or any amendment or supplement to any of the foregoing) or
arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, except insofar as
such losses, claims, damages, liabilities or expenses arise out of or are
based upon any untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in reliance upon
and in conformity with the information relating to such Underwriters
furnished in writing to the Fund by or on behalf of any Underwriter through
you expressly for use in connection therewith; provided, however, that the
foregoing indemnity with respect to the Registration Statement, the
Prospectus or any Prepricing Prospectuses (or any amendment or supplement
to any of the foregoing) shall not inure to the benefit of any Underwriter
from whom the person asserting any loss, claim, damage, liability or
expense purchased Shares, if it is shown that a copy of the Prospectus, as
then amended or supplemented, which would have cured any defect giving rise
to such loss, claim, damage, liability or expense was not sent or delivered
to such person by or on behalf of such Underwriter, if required by law to
be so delivered, at or prior to the confirmation of the sale of such Shares
to such person and such Prospectus, amendments and supplements had been
provided by the Fund to the Underwriters in the requisite quantity and on a
timely basis to permit proper delivery. The foregoing indemnity agreement
shall be in addition to any liability which the Fund or the Advisers may
otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Fund or the Advisers, such Underwriter
or such controlling person shall promptly notify the Fund or the Advisers
and the Fund or the Advisers shall assume the defense thereof, including
the employment of counsel and the payment of all fees and expenses. Such
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding and to participate
in the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or controlling person unless (i) the
Fund or the Advisers have agreed in writing to pay such fees and expenses,
(ii) the Fund and the Advisers have failed within a reasonable time to
assume the defense and employ counsel or (iii) the named parties to any
such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person and the Fund or the
Advisers and such Underwriter or such controlling person shall have been
advised by its counsel that representation of such indemnified party and
the Fund or the Advisers by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the Fund and the
Advisers shall not have the right to assume the defense of such action,
suit or proceeding on behalf of such Underwriter or such controlling
person). It is understood, however, that the Fund and the Advisers shall,
in connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances
be liable for the
17
reasonable fees and expenses of only one separate firm of attorneys (in
addition to any local counsel if there is any action, suit or proceeding in
more than one jurisdiction) at any time for all such Underwriters and
controlling persons not having actual or potential differing interests with
you or among themselves, which firm shall be designated in writing by
Salomon Smith Barney Inc. and that, subject to the requirements of 1940 Act
Release No. 11330, all such fees and expenses shall be reimbursed promptly
as they are incurred. The Fund and the Advisers shall not be liable for any
settlement of any such action, suit or proceeding effected without the
written consent of the Fund or the Advisers, but if settled with such
written consent or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the Fund and the Advisers agree to
indemnify and hold harmless any Underwriter, to the extent provided in the
preceding paragraph, and any such controlling person from and against any
loss, liability, damage or expense by reason by such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Fund and the Advisers, their trustees, directors, any
officers of the Fund who sign the Registration Statement and any person who
controls the Fund or the Advisers within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, to the same extent as the foregoing
indemnity from the Fund and the Advisers to each Underwriter, but only with
respect to information relating to such Underwriter furnished in writing by
or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or the Prepricing Prospectus (or any
amendment or supplement to any of the foregoing). If any action, suit or
proceeding shall be brought against the Fund or the Advisers, any of their
trustees, directors, any such officer or any such controlling person, based
on the Registration Statement, the Prospectus or the Prepricing Prospectus
(or any amendment or supplement to any of the foregoing) and in respect of
which indemnity may be sought against any Underwriter pursuant to this
paragraph (c), such Underwriter shall have the rights and duties given to
the Fund by paragraph (b) above (except that if the Fund or the Advisers
shall have assumed the defense thereof such Underwriter shall not be
required to do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such counsel shall be
at such Underwriter's expense) and the Fund and the Advisers, their
trustees, directors, any such officer and any such controlling person shall
have the rights and duties given to the Underwriters by paragraph (b)
above. The foregoing indemnity agreement shall be in addition to any
liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Fund and the Advisers on the one hand
(treated jointly for this purpose as one person) and the Underwriters on
the other hand from the offering of the Shares or (ii) if the allocation
18
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Fund and
the Advisers on the one hand (treated jointly for this purpose as one
person) and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Fund and the Advisers
on the one hand (treated jointly for this purpose as one person) and the
Underwriters on the other hand shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses)
received by the Fund as set forth in the table on the cover page of the
Prospectus bear to the total payments received by the Underwriters with
respect to the Firm Shares as set forth in the table on the cover page of
the Prospectus. The relative fault of the Fund and the Advisers on the one
hand (treated jointly for this purpose as one person) and of the
Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Fund and the Advisers on the one hand
(treated jointly for this purpose as one person) or by the Underwriters on
the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(e) The Fund, the Advisers and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price of the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section 8 are several in proportion to the
respective number of Firm Shares set forth opposite their names in Schedule
I (or such numbers of Firm Shares increased as set forth in Section 10
hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such
19
settlement includes an unconditional release of such indemnified party from
all liability from claimants on claims that are the subject matter of such
action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Fund and the Advisers set forth in
this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter, the Fund, the Advisers or their
trustees, directors or officers or any person controlling the Fund or the
Advisers, (ii) acceptance of any Shares and payment therefor hereunder and
(iii) any termination of this Agreement. A successor to any Underwriter or
to the Fund, the Advisers or their trustees, directors or officers or any
person controlling any Underwriter, the Fund or the Advisers shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
9. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase any Shares hereunder are subject to the accuracy of and
compliance with the representations, warranties and agreements of and by the
Fund and the Advisers contained herein on and as of the date hereof, the date on
which the Registration Statement becomes or became effective, the date of the
Prospectus (and of any amendment or supplement thereto), the Closing Date and,
with respect to any Additional Shares, any Option Closing Date; to the accuracy
and completeness of all statements made by the Fund, the Advisers or any of
their officers in any certificate delivered to the Representatives or their
counsel pursuant to this Agreement and to the following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the Registration Statement or such post-effective amendment shall
have become effective not later than 5:30 p.m., New York City time, on the
date hereof or at such later date and time as shall be consented to in
writing by you and all filings, if any, required by Rules 497 and 430A
under the 1933 Act Rules and Regulations shall have been timely made; no
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been instituted
or, to the knowledge of the Fund, the Advisers or any Underwriter,
threatened by the Commission and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) You shall have received on the Closing Date an opinion of Bell,
Boyd & Lloyd LLC, special counsel for the Fund and the Investment Adviser,
dated the Closing Date and addressed to you, as Representatives of the
several Underwriters, to the effect that:
20
(i) The Fund is a business trust duly established, validly
existing and in good standing under the laws of The Commonwealth of
Massachusetts with full power and authority to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto through the date of the opinion) and is duly
registered and qualified to conduct its business and is in good
standing in each jurisdiction where the nature of its properties or
the conduct of its business requires such registration or
qualification, except where the failure so to register or to qualify
does not have a material, adverse effect on the condition (financial
or other), business, properties, net assets or results of operations
of the Fund;
(ii) The authorized and outstanding capital stock of the Fund is
as set forth in the Registration Statement and Prospectus (or any
amendment or supplement thereto through the date of the opinion); and
the description of the authorized capital stock of the Fund contained
in the Prospectus (or any amendment or supplement thereto through the
date of the opinion) under the caption "Description of Shares"
conforms in all material respects as to legal matters to the terms
thereof contained in the Fund's Declaration of Trust;
(iii) All of the shares of capital stock of the Fund outstanding
prior to the issuance of the Shares have been duly authorized and
validly issued and are fully paid and nonassessable, except that, as
described in the Prospectus under the heading, "Certain Provisions in
the Declaration of Trust," shareholders of the Fund may under certain
circumstances be held personally liable for its obligations;
(iv) The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued, fully paid and
nonassessable and not subject to any preemptive rights that entitle or
will entitle any person to acquire any Shares upon the issuance
thereof by the Fund, except that, as described in the Prospectus under
the heading, "Certain Provisions in the Declaration of Trust,"
shareholders of the Fund may under certain circumstances be held
personally liable for its obligations;
(v) The form of certificate for the Shares is in due and proper
form and complies with the requirements of all applicable laws and the
NYSE;
(vi) The Fund has the power and authority to enter into this
Agreement and the Fund Agreements and to issue, sell and deliver the
Shares to the Underwriters as provided herein and this Agreement and
each of the Fund Agreements have been duly authorized, executed and
delivered by the Fund;
(vii) Assuming due authorization, execution and delivery by the
other parties thereto and that the performance of the Fund Agreements
by such
21
other parties will not violate law, agreements to which such other
parties or their properties are subject or orders applicable to such
other parties, the Fund Agreements constitute the valid, legal and
binding agreements of the Fund, enforceable against the Fund in
accordance with their terms, subject to the qualification that the
enforceability of the Fund's obligations thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and by general
equitable principles, whether enforcement is considered in a
proceeding in equity or at law;
(viii) The Fund Agreements comply in all material respects with
all applicable provisions of the 1933 Act, the 1940 Act, the Advisers
Act, the Rules and Regulations and the Advisers Act Rules and
Regulations;
(ix) The Fund is not in violation of its Declaration of Trust or
By-Laws or, to the best knowledge of such counsel after reasonable
inquiry, is not in material default in the performance of any material
obligation, agreement or condition contained in any bond, debenture,
note or other evidence of indebtedness, except as may be disclosed in
the Prospectus (and any amendment or supplement thereto);
(x) No consent, approval, authorization or order of or
registration or filing with the Commission, the NASD, any state
securities commission, any national securities exchange, any
arbitrator, any court or any other governmental body, agency or
regulatory, self-regulatory or administrative agency or any official
is required on the part of the Fund (except as have been obtained
under the 1933 Act and the 1934 Act or such as may be required under
state securities or Blue Sky laws governing the purchase and
distribution of the Shares) for the valid issuance and sale of the
Shares to the Underwriters as contemplated by this Agreement,
performance of the Fund Agreements or this Agreement by the Fund, the
consummation by the Fund of the transactions contemplated thereby or
hereby or the adoption of the Fund's Dividend Reinvestment Plan;
(xi) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement or the Fund
Agreements, compliance by the Fund with the provisions hereof or
thereof, consummation by the Fund of the transactions contemplated
hereby or thereby, the adoption of the Fund's Dividend Reinvestment
Plan nor the adoption of Fund's Managed Dividend Policy, if
applicable, violates the Declaration of Trust or By-Laws of the Fund
or any material agreement, indenture, lease or other instrument to
which the Fund is a party or by which it or any of its properties is
bound that is an exhibit to the Registration Statement or that is
known to such counsel after reasonable inquiry or, to the best of such
counsel's knowledge after reasonable inquiry, will result in the
creation or imposition of any material lien, charge or encumbrance
upon any property or assets of the Fund, nor, to the best of such
counsel's knowledge after reasonable inquiry, will any such action
result in any violation of
22
any existing material law, regulation, ruling (assuming compliance
with all applicable state securities and Blue Sky laws), judgment,
injunction, order or decree known to such counsel after reasonable
inquiry, applicable to the Fund or any of its properties, except that,
in the published opinion of the Commission, the indemnification
provisions in this Agreement and the Fund Agreements, insofar as they
relate to indemnification for liabilities arising under the 1933 Act,
are against public policy as expressed in the 1933 Act and therefore
unenforceable;
(xii) The Registration Statement and all post-effective
amendments, if any, have become effective under the 1933 Act and, to
the best knowledge of such counsel after reasonable inquiry, no order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose are pending before or
contemplated by the Commission; and any filing of the Prospectus and
any amendments or supplements thereto required pursuant to Rule 497 of
the 1933 Act Rules and Regulations prior to the date of such opinion
has been made in accordance with Rule 497;
(xiii) The Fund is duly registered with the Commission under the
1940 Act as a closed-end, diversified management investment company
and all action has been taken by the Fund as required by the 1933 Act
and the 1940 Act and the Rules and Regulations in connection with the
issuance and sale of the Shares to make the public offering and
consummate the sale of the Shares as contemplated by this Agreement;
(xiv) The statements made in the Registration Statement and the
Prospectus (and any amendment or supplement thereto through the date
of the opinion) under the caption "Tax Matters" have been reviewed by
such counsel and to the extent they describe or summarize tax laws,
doctrines or practices of the United States, present a fair and
accurate description or summary thereof as of the date of the opinion;
(xv) The statements in the Registration Statement and Prospectus
(and any amendment or supplement thereto through the date of the
opinion), insofar as they are descriptions of contracts, agreements or
other legal documents or refer to statements of law or legal
conclusions, are accurate and present fairly the information required
to be shown;
(xvi) The Registration Statement and the Prospectus (and any
amendment or supplement thereto through the date of the opinion)
comply as to form in all material respects with the requirements of
the 1933 Act, the 1940 Act and the Rules and Regulations (except that
no opinion need be expressed as to the financial statements and the
notes thereto and the schedules and other financial and statistical
data included therein);
(xvii) To the best knowledge of such counsel after reasonable
inquiry, (A) other than as described or contemplated in the Prospectus
(or any
23
amendment or supplement thereto through the date of the opinion),
there are no actions, suits or other legal or governmental proceedings
pending or expressly threatened against the Fund (through the date of
the opinion) and (B) there are no material agreements, contracts,
indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto through the date of the opinion) or to
be filed as an exhibit to the Registration Statement that are not
described or filed as required, as the case may be;
(xviii) To the best knowledge of such counsel after reasonable
inquiry, the Fund is not in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the
Fund or of any decree of the Commission, the NASD, any state
securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official having
jurisdiction over the Fund; and
(xix) The Shares are duly authorized for listing, subject to
official notice of issuance, on the NYSE and the Fund's registration
statement on Form 8-A under the 1934 Act is effective.
Such counsel shall also state that although counsel has not
undertaken, except as otherwise indicated in their opinion, to determine
independently and does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), such counsel has
participated in the preparation of the Registration Statement and the
Prospectus, including review and discussion of the contents thereof, and
nothing has come to the attention of such counsel that has caused it to
believe that the Registration Statement, at the time the Registration
Statement became effective or the Prospectus, as of its date and as of the
Closing Date, contained an 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 (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading or that any
amendment or supplement to the Prospectus, as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to the
financial statements and the notes thereto and the schedules and other
financial and statistical data included in, or omitted from, the
Registration Statement or the Prospectus (or any amendment or supplement
thereto)).
In rendering such opinion, such counsel may limit such opinion to
matters involving the application of the laws of The Commonwealth of
Massachusetts and the United States. To the extent they deem proper and to
the extent specified in such opinion, such counsel may rely, as to matters
involving the application of laws of The Commonwealth of Massachusetts,
upon the opinion of Bingham McCutchen LLP or other counsel of good standing
whom they believe to be reliable and who are satisfactory to the
Representatives;
24
provided that (X) such reliance is expressly authorized by the opinion so
relied upon and a copy of each such opinion is delivered to the
Representatives and is, in form and substance, satisfactory to them and
their counsel and (Y) Bell, Boyd & Lloyd LLC states in their opinion that
they believe that they and the Underwriters are justified in relying
thereon.
(c) You shall have received on the Closing Date an opinion of Gifford
R. Zimmerman, Managing Director, Assistant Secretary and General Counsel
for the Investment Adviser, dated the Closing Date and addressed to you, as
Representatives of the several Underwriters, to the effect that:
(i) The Investment Adviser is a corporation duly incorporated and
validly existing in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto) and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure
so to register or to qualify does not have a material, adverse effect
on the condition (financial or other), business, properties, net
assets or results of operations of the Investment Adviser;
(ii) The Investment Adviser is duly registered with the
Commission under the Advisers Act as an investment adviser and is not
prohibited by the Advisers Act, the 1940 Act or the Rules and
Regulations under such acts from acting for the Fund under the
Management Agreement as contemplated by the Prospectus (and any
amendment or supplement thereto);
(iii) The Investment Adviser has corporate power and authority to
enter into this Agreement, the Management Agreement and each of the
Sub-Advisory Agreements and this Agreement, the Management Agreement
and each of the Sub-Advisory Agreements have been duly authorized,
executed and delivered by the Investment Adviser and each of the
Management Agreement and the Sub-Advisory Agreements is a valid, legal
and binding agreement of the Investment Adviser, enforceable against
the Investment Adviser in accordance with its terms, subject to the
qualification that the enforceability of the Investment Adviser's
obligations thereunder may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles;
(iv) Each of the Management Agreement and the Sub-Advisory
Agreements complies in all material respects with all applicable
provisions of the Advisers Act, the 1940 Act and the Advisers Act
Rules and Regulations and the 1940 Act Rules and Regulations;
(v) Neither the execution and delivery by the Investment Adviser
of this Agreement, the Management Agreement or either of the
Sub-Advisory
25
Agreements nor the consummation by the Investment Adviser of the
transactions contemplated hereunder or thereunder constitutes or will
constitute a breach of or a default under the Certificate of
Incorporation or By-Laws of the Investment Adviser or any material
agreement, indenture, lease or other instrument to which the
Investment Adviser is a party or by which it or any of its properties
is bound that is known to such counsel after reasonable inquiry, or
will result in the creation or imposition of any material lien, charge
or encumbrance upon any property or assets of the Investment Adviser,
nor will any such action result in any violation of any existing
material law, regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment, injunction,
order or decree known to such counsel after reasonable inquiry,
applicable to the Fund or any of its properties;
(vi) The description of the Investment Adviser and its business
in the Prospectus (and any amendment or supplement thereto) complies
in all material respects with all requirements of the 1933 Act, the
1940 Act and the Rules and Regulations;
(vii) To the best knowledge of such counsel after reasonable
inquiry, other than as described or contemplated in the Prospectus
(and any amendment or supplement thereto), there are no actions, suits
or other legal or governmental proceedings pending or threatened
against the Investment Adviser or to which the Investment Adviser or
any of its property is subject which are required to be described in
the Registration Statement or Prospectus (or any amendment or
supplement thereto);
(viii) The Investment Adviser owns, possesses or has obtained and
currently maintains all governmental licenses, permits, consents,
orders, approvals and other authorizations as are necessary for the
Investment Adviser to carry on its business as contemplated in the
Prospectus (and any amendment or supplement thereto); and
(ix) No material consent, approval, authorization or order of or
registration or filing with any court, regulatory body, administrative
or other governmental body, agency or official is required on the part
of the Investment Adviser for the performance of this Agreement, the
Management Agreement or the Sub-Advisory Agreements by the Investment
Adviser or for the consummation by the Investment Adviser of the
transactions contemplated hereby or thereby.
Such counsel shall also state that although counsel has not
undertaken, except as otherwise indicated in its opinion, to determine
independently and does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement and the
Prospectus (and any amendment or supplement therto), such counsel has
participated in the preparation of the Registration Statement and the
Prospectus, including review and discussion of the contents thereof and
nothing has come to its attention that has caused it to believe that the
Registration Statement at the time it became
26
effective or the Prospectus, as of its date and as of the Closing Date,
contained an 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 (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading or that any
amendment or supplement to the Prospectus, as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to the
financial statements and the notes thereto and the schedules and other
financial and statistical data included in, or omitted from, the
Registration Statement or the Prospectus (or any amendment or supplement
thereto)).
In rendering such opinion, counsel may limit such opinion to matters
involving the application of the laws of the State of Illinois, the
Delaware General Corporation Law statute and the laws of the United States
and may rely upon an opinion or opinions, each dated the Closing Date, of
other counsel retained by the Investment Adviser as to laws of any
jurisdiction other than the United States, the State of Illinois and the
Delaware General Corporation Law statute, provided that (X) each such local
counsel is acceptable to the Representatives, (Y) such reliance is
expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Representatives and is, in form and substance,
satisfactory to them and their counsel and (Z) counsel shall state in his
view that he believes that he and the Underwriters are justified in relying
thereon.
(d) You shall have received on the Closing Date an opinion of Wolf,
Block, Schorr and Solis-Cohen LLP, special counsel for Spectrum, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
(i) Spectrum is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Connecticut
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto) and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure
so to register or to qualify does not have a material, adverse effect
on the condition (financial or other), business, properties, net
assets or results of operations of Spectrum;
(ii) Spectrum is duly registered with the Commission under the
Advisers Act as an investment adviser and is not prohibited by the
Advisers Act, the 1940 Act or the rules and regulations promulgated by
the Commission under such acts from acting for the Fund under the
Spectrum Sub-Advisory Agreement as contemplated by the Prospectus (and
any amendment or supplement thereto);
(iii) Spectrum has corporate power and authority to enter into
this Agreement and the Spectrum Sub-Advisory Agreement and this
Agreement and
27
the Spectrum Sub-Advisory Agreement have been duly authorized,
executed and delivered by Spectrum and the Spectrum Sub-Advisory
Agreement is a valid, legal and binding agreement of Spectrum,
enforceable against Spectrum in accordance with its terms, subject to
the qualification that the enforceability of Spectrum's obligations
thereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights
generally and by general equitable principles;
(iv) The Spectrum Sub-Advisory Agreement complies in all material
respects with all applicable provisions of the Advisers Act, the 1940
Act and the Advisers Act Rules and Regulations and the 1940 Act Rules
and Regulations;
(v) Neither the execution and delivery by Spectrum of this
Agreement or the Spectrum Sub-Advisory Agreement nor the consummation
by Spectrum of the transactions contemplated hereunder or thereunder
constitutes or will constitute a breach of or a default under the
Amended and Restated Certificate of Incorporation or By-Laws of
Spectrum or any material agreement, indenture, lease or other
instrument to which Spectrum is a party or by which it or any of its
properties is bound that is known to such counsel after reasonable
inquiry, or will result in the creation or imposition of any material
lien, charge or encumbrance upon any property or assets of Spectrum,
nor will any such action result in any violation of any existing
material law, regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment, injunction,
order or decree known to such counsel after reasonable inquiry,
applicable to Spectrum or any of its properties;
(vi) The description of Spectrum and its business in the
Prospectus (and any amendment or supplement thereto) complies in all
material respects with all requirements of the 1933 Act, the 1940 Act
and the Rules and Regulations;
(vii) To the best knowledge of such counsel after reasonable
inquiry, other than as described or contemplated in the Prospectus
(and any amendment or supplement thereto), there are no actions, suits
or other legal or governmental proceedings pending or threatened
against Spectrum or to which Spectrum or any of its property is
subject that are required to be described in the Registration
Statement or Prospectus (or any amendment or supplement thereto);
(viii) Spectrum owns, possesses or has obtained and currently
maintains all governmental licenses, permits, consents, orders,
approvals and other authorizations as are necessary for Spectrum to
carry on its business as contemplated in the Prospectus (and any
amendment or supplement thereto); and
(ix) No material consent, approval, authorization or order of or
registration or filing with any court, regulatory body, administrative
or other governmental body, agency or official is required on the part
of Spectrum for the performance of this Agreement or the Spectrum
Sub-Advisory Agreement by
28
Spectrum or for the consummation by Spectrum of the transactions
contemplated hereby or thereby.
Such counsel shall also state that although counsel has not
undertaken, except as otherwise indicated in its opinion, to determine
independently and does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), such counsel has
participated in the preparation of the Registration Statement and the
Prospectus, including review and discussion of the contents thereof and
nothing has come to its attention that has caused it to believe that the
Registration Statement at the time it became effective or the Prospectus,
as of its date and as of the Closing Date, contained an 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 (in the case of a
prospectus, in light of the circumstances under which they were made) not
misleading or that any amendment or supplement to the Prospectus, as of the
Closing Date, contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading
(it being understood that such counsel need express no opinion with respect
to the financial statements and the notes thereto and the schedules and
other financial and statistical data included in, or omitted from, the
Registration Statement or the Prospectus (or any amendment or supplement
thereto)).
In rendering such opinion, counsel may limit such opinion to matters
involving the application of the laws of the State of New York, and the
laws of the United States and may rely upon an opinion or opinions, each
dated the Closing Date, of other counsel retained by Spectrum as to laws of
any jurisdiction other than the United States and the State of New York,
provided that (X) each such local counsel is acceptable to the
Representatives, (Y) such reliance is expressly authorized by each opinion
so relied upon and a copy of each such opinion is delivered to the
Representatives and is, in form and substance, satisfactory to them and
their counsel and (Z) counsel shall state in their view that they believe
that they and the Underwriters are justified in relying thereon. In
addition, in rendering the opinions dependent upon the laws of the State of
Connecticut contained in Sections 9(d)(i) and (iii) above, such counsel may
state that in their investigations of such law nothing has come to the
attention of such counsel that has caused them to believe that such
opinions would not be true.
(e) You shall have received on the Closing Date an opinion of Jane
Katz Crist, special counsel for Froley, Revy, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, to the
effect that:
(i) Froley, Revy is a corporation duly incorporated and validly
existing in good standing under the laws of the State of California
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto) and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place
where the
29
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register
or to qualify does not have a material, adverse effect on the
condition (financial or other), business, properties, net assets or
results of operations of Froley, Revy;
(ii) Froley, Revy is duly registered with the Commission under
the Advisers Act as an investment adviser and is not prohibited by the
Advisers Act, the 1940 Act or the rules and regulations promulgated by
the Commission under such acts from acting for the Fund under the
Froley, Revy Sub-Advisory Agreement as contemplated by the Prospectus
(and any amendment or supplement thereto);
(iii) Froley, Revy has corporate power and authority to enter
into this Agreement and the Froley, Revy Sub-Advisory Agreement and
this Agreement and the Froley, Revy Sub-Advisory Agreement have been
duly authorized, executed and delivered by Froley, Revy and the
Froley, Revy Sub-Advisory Agreement is a valid, legal and binding
agreement of Froley, Revy, enforceable against Froley, Revy in
accordance with its terms, subject to the qualification that the
enforceability of Froley, Revy's obligations thereunder may be limited
by bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and by general
equitable principles;
(iv) The Froley, Revy Sub-Advisory Agreement complies in all
material respects with all applicable provisions of the Advisers Act,
the 1940 Act and the Advisers Act Rules and Regulations and the 1940
Act Rules and Regulations;
(v) Neither the execution and delivery by Froley, Revy of this
Agreement or the Froley, Revy Sub-Advisory Agreement nor the
consummation by Froley, Revy of the transactions contemplated
hereunder or thereunder constitutes or will constitute a breach of or
a default under the Articles of Incorporation or By-Laws of Froley,
Revy or any material agreement, indenture, lease or other instrument
to which Froley, Revy is a party or by which it or any of its
properties is bound that is known to such counsel after reasonable
inquiry, or will result in the creation or imposition of any material
lien, charge or encumbrance upon any property or assets of Froley,
Revy, nor will any such action result in any violation of any existing
material law, regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment, injunction,
order or decree known to such counsel after reasonable inquiry,
applicable to Froley, Revy or any of its properties;
(vi) The description of Froley, Revy and its business in the
Prospectus (and any amendment or supplement thereto) complies in all
material respects with all requirements of the 1933 Act, the 1940 Act
and the Rules and Regulations;
30
(vii) To the best knowledge of such counsel after reasonable
inquiry, other than as described or contemplated in the Prospectus
(and any amendment or supplement thereto), there are no actions, suits
or other legal or governmental proceedings pending or threatened
against Froley, Revy or to which Froley, Revy or any of its property
is subject that are required to be described in the Registration
Statement or Prospectus (or any amendment or supplement thereto);
(viii) Froley, Revy owns, possesses or has obtained and currently
maintains all governmental licenses, permits, consents, orders,
approvals and other authorizations as are necessary for Froley, Revy
to carry on its business as contemplated in the Prospectus (and any
amendment or supplement thereto); and
(ix) No material consent, approval, authorization or order of or
registration or filing with any court, regulatory body, administrative
or other governmental body, agency or official is required on the part
of Froley, Revy for the performance of this Agreement or the Froley,
Revy Sub-Advisory Agreement by Froley, Revy or for the consummation by
Froley, Revy of the transactions contemplated hereby or thereby.
Such counsel shall also state that although counsel has not undertaken,
except as otherwise indicated in her opinion, to determine independently and
does not assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement and the Prospectus (and any amendment
or supplement thereto), such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review and discussion of
the contents thereof and nothing has come to its attention that has caused it to
believe that the Registration Statement at the time it became effective or the
Prospectus, as of its date and as of the Closing Date, contained an 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 (in the case of a
prospectus, in light of the circumstances under which they were made) not
misleading or that any amendment or supplement to the Prospectus, as of the
Closing Date, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to: (a) the
financial statements and the notes thereto and the schedules and other financial
and statistical data included in, or omitted from, the Registration Statement or
the Prospectus (or any amendment or supplement thereto); (b) the statements
concerning the Investment Adviser or Spectrum included in, or omitted from, the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); (c) the description of, and risks associated with, the Fund's
investments to be managed solely by the Investment Adviser or Spectrum included
in the Registration Statement or the Prospectus; (d) the description of, and
risks associated with, FundPreferred Shares included in the Registration
Statement or the Prospectus; (e) the description of the Fund's Dividend
Reinvestment Plan included in the Registration Statement or the Prospectus; (f)
the description of the Fund's Distributions included in the Registration
Statement or the Prospectus; (g) the description of the Fund's Declaration of
Trust included in the Registration Statement or the Prospectus; (h) the
description of Shares included in the Registration Statement or the Prospectus;
(i) the statements made and opinion given about tax
31
matters included in the Registration Statement or the Prospectus; and (j) the
description of Fund expenses included in the Registration Statement or the
Prospectus).
In rendering such opinion, counsel may limit such opinion to matters
involving the application of the laws of the State of California, and the
laws of the United States.
(f) That you shall have received on the Closing Date, an opinion,
dated the Closing Date, of Simpson Thacher & Bartlett, counsel for the
Underwriters, dated the Closing Date and addressed to you, as
Representatives of the several Underwriters, with respect to such matters
as the Underwriters may require and the Fund, the Advisers and their
respective counsels shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon such
matters.
(g) That you shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and
the Closing Date from Ernst & Young LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(h) (i) No order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Prospectus (or any
amendment or supplement thereto) or any Prepricing Prospectus or any sales
material shall have been issued and no proceedings for such purpose or for
the purpose of commencing an enforcement action against the Fund, the
Advisers or, with respect to the transactions contemplated by the
Prospectus (or any amendment or supplement thereto) and this Agreement, any
Underwriter, may be pending before or, to the knowledge of the Fund, the
Advisers or any Underwriter or in the reasonable view of counsel to the
Underwriters, shall be threatened or contemplated by the Commission at or
prior to the Closing Date and that any request for additional information
on the part of the Commission (to be included in the Registration
Statement, the Prospectus or otherwise) be complied with to the
satisfaction of the Representatives, (ii) there shall not have been any
change in the capital stock of the Fund nor any material increase in debt
of the Fund from that set forth in the Prospectus (and any amendment or
supplement thereto) and the Fund shall not have sustained any material
liabilities or obligations, direct or contingent, other than those
reflected in the Prospectus (and any amendment or supplement thereto);
(iii) since the date of the Prospectus there shall not have been any
material, adverse change in the condition (financial or other), business,
prospects, properties, net assets or results of operations of the Fund or
the Advisers; (iv) the Fund and the Advisers 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 or from any other
occurrence not described in the Registration Statement and the Prospectus
(and any amendment or supplement thereto); and (v) all of the
representations and warranties of the Fund and the Advisers contained in
this Agreement shall be true and correct on and as of the date hereof and
as of the Closing Date as if made on and as of the Closing Date.
(i) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change or any development involving a prospective
change in or
32
affecting the condition (financial or other), business, prospects,
properties, net assets or results of operations of the Fund or the Advisers
not contemplated by the Prospectus (and any amendment or supplement
thereto), which in your opinion, as Representatives of the several
Underwriters, would materially, adversely affect the market for the Shares
or (ii) any event or development relating to or involving the Fund, the
Advisers or any officer or trustee or director of the Fund or the Advisers
which makes any statement of a material fact made in the Prospectus (or any
amendment or supplement thereto) untrue or which, in the opinion of the
Fund and its counsel or the Underwriters and their counsel, requires the
making of any addition to or change in the Prospectus (or any amendment or
supplement thereto) in order to state a material fact required by the 1933
Act, the 1940 Act, the Rules and Regulations or any other law to be stated
therein or necessary in order to make the statements therein (in the case
of a prospectus, in light of the circumstances under which they were made)
not misleading, if amending or supplementing the Prospectus (or any
amendment or supplement thereto) to reflect such event or development
would, in your opinion, as Representatives of the several Underwriters,
materially, adversely affect the market for the Shares.
(j) That neither the Fund nor the Advisers shall have failed at or
prior to the Closing Date to have performed or complied with any of the
agreements herein contained and required to be performed or complied with
by them at or prior to the Closing Date.
(k) That you shall have received on the Closing Date a certificate,
dated such date, of the president, any managing director or any vice
president and of the controller, treasurer or assistant treasurer of each
of the Fund, the Investment Adviser and each of the Subadvisers certifying
that (i) the signers have carefully examined the Registration Statement,
the Prospectus (and any amendments or supplements to either of them) and
this Agreement, (ii) the representations and warranties of the Fund (with
respect to the certificates from such Fund officers) and the
representations of the Advisers (with respect to the certificates from such
officers of the Advisers) in this Agreement are true and correct on and as
of the date of the certificate as if made on such date, (iii) since the
date of the Prospectus (and any amendment or supplement thereto) there has
not been any material, adverse change in the condition (financial or
other), business, prospects (other than as a result of a change in the
financial markets generally), properties, net assets or results of
operations of the Fund (with respect to the certificates from such Fund
officers) or the Advisers (with respect to the certificates from such
officers of the Advisers), (iv) to the knowledge of such officers after
reasonable investigation, no order suspending the effectiveness of the
Registration Statement or prohibiting the sale of any of the Shares or
having a material, adverse effect on the Fund (with respect to the
certificates from such Fund officers) or the Advisers (with respect to the
certificates from such officers of the Advisers) has been issued and no
proceedings for any such purpose are pending before or threatened by the
Commission or any court or other regulatory body, the NASD, any state
securities commission, any national securities exchange, any arbitrator,
any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official, (v) each of the Fund (with respect
to certificates from such Fund officers) and the Advisers (with respect to
certificates from such officers of the Advisers) has performed
33
and complied with all agreements that this Agreement requires it to perform
by such Closing Date, (vi) neither the Fund (with respect to the
certificate from such officers of the Fund) nor the Advisers (with respect
to the certificate from such officers of the Advisers) has sustained any
material loss or interference with its business from any court or from
legislative or other governmental action, order or decree or from any other
occurrence not described in the Registration Statement and the Prospectus
and any amendment or supplement thereto and (vii) with respect to the
certificate from such officers of the Fund, there has not been any change
in the capital stock of the Fund nor any material increase in the debt of
the Fund from that set forth in the Prospectus (and any amendment or
supplement thereto) and the Fund has not sustained any material liabilities
or obligations, direct or contingent, other than those reflected in the
Prospectus (and any amendment or supplement thereto).
(l) That the Fund and the Advisers shall have furnished to you such
further certificates, documents and opinions of counsel as you shall
reasonably request (including certificates of officers of the Fund and the
Advisers).
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in
form and substance to you and your counsel acting in good faith.
Any certificate or document signed by any officer of the Fund or the
Advisers and delivered to you, as Representatives of the Underwriters or to
Underwriters' counsel, shall be deemed a representation and warranty by the
Fund or the Advisers to each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to (i) the accuracy of and compliance with the
representations, warranties and agreements of and by the Fund and the
Advisers contained herein on and as of the Option Closing Date, as though
made on any Option Closing Date, the date on which the Registration
Statement becomes or became effective and the date of the Prospectus (and
any amendment or supplement thereto) (ii) satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 9 except
that, if any Option Closing Date is other than the Closing Date, the
certificates, opinions and letters referred to in paragraphs (b), (c), (d),
(e), (f), (g), (k), (l) and this paragraph shall be dated the Option
Closing Date in question and the opinions and letters called for by
paragraphs (b), (c), (d), (e) and (f) shall be revised to reflect the sale
of Additional Shares, (iii) the accuracy and completeness of all statements
made by the Fund, the Advisers or any of their officers in any certificate
delivered to the Representatives or their counsel pursuant to this
Agreement and (iv) the absence of circumstances on or prior to the Option
Closing Date which would permit termination of this Agreement pursuant to
Section 11 hereof if they existed on or prior to the Closing Date.
10. Effective Date of Agreement. This Agreement shall become effective: (i)
upon the execution and delivery hereof by the parties hereto; or (ii) if, at the
time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective
34
amendment thereto to be declared effective before the offering of the Shares may
commence, when notification of the effectiveness of the Registration Statement
or such post-effective amendment has been released by the Commission. Until such
time as this Agreement shall have become effective, it may be terminated by the
Fund by notifying you or by you, as Representatives of the several Underwriters,
by notifying the Fund.
If any one or more of the Underwriters shall fail or refuse to purchase
Firm Shares which it or they have agreed to purchase hereunder and the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
number of the Firm Shares, each non-defaulting Underwriter shall be obligated,
severally, in the proportion which the aggregate number of Firm Shares set forth
opposite its name in Schedule I hereto bears to the aggregate number of Firm
Shares set forth opposite the names of all non-defaulting Underwriters or in
such other proportion as you may specify in accordance with the Salomon Smith
Barney Master Agreement Among Underwriters, to purchase Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase.
If any Underwriter or Underwriters shall fail or refuse to purchase Firm Shares
and the aggregate number of Firm Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Firm Shares and
arrangements satisfactory to you and the Fund for the purchase of such Firm
Shares by one or more non-defaulting Underwriters or other party or parties
approved by you and the Fund are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Fund. In any such case which does not result
in termination of this Agreement, either you or the Fund shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any such default of any such Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement includes, for all
purposes of this Agreement, any party not listed in Schedule I hereto who, with
your approval and the approval of the Fund, purchases Firm Shares which a
defaulting Underwriter agreed, but failed or refused, to purchase.
Any notice under this Section 10 may be made by telegram, facsimile or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of the
Underwriters to the Fund or the Advisers, by notice given to the Fund or the
Advisers prior to delivery of and payment for the Firm Shares and any Additional
Shares, as the case may be, if at any time prior to such time (i) trading in the
Fund's Common Shares shall have been suspended by the Commission or the NYSE or
trading in securities generally on the NYSE shall have been suspended or limited
or minimum prices for trading in securities generally shall have been
established on the NYSE, (ii) a commercial banking moratorium shall have been
declared by either federal or New York state authorities, or (iii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war, or other calamity or crisis the
effect of which on financial markets in the United States is such as to make it,
in your sole judgment, impracticable or inadvisable to proceed with the offering
or delivery of the Shares as contemplated by the
35
Prospectus (exclusive of any supplement thereto). Notice of such termination may
be given to the Fund or the Advisers by telegram, facsimile or telephone and
shall be subsequently confirmed by letter.
12. Expenses. The Fund agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by the Fund of its
obligations hereunder: (i) the preparation, printing or reproduction, filing
(including, without limitation, the filing fees prescribed by the 1933 Act, the
1940 Act and the Rules and Regulations) and distribution of the Registration
Statement (including exhibits thereto), the Prospectus, each Prepricing
Prospectus and the 1940 Act Notification and all amendments or supplements to
any of them, (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, the Prospectus, each Prepricing
Prospectus, any sales material and all amendments or supplements to any of them
as may be reasonably requested for use in connection with the offering and sale
of the Shares, (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Shares, including any stamp taxes and transfer
agent and registrar fees payable in connection with the original issuance and
sale of such Shares, (iv) the registrations or qualifications of the Shares for
offer and sale under the securities or Blue Sky laws of the several states as
provided in Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel for the Underwriters relating to the preparation,
printing or reproduction and delivery of the preliminary and supplemental Blue
Sky Memoranda and such registration and qualification), (v) the fees and
expenses of the Fund's independent accountants, counsel for the Fund and of the
transfer agent, (vi) the expenses of delivery to the Underwriters and dealers
(including postage, air freight and the cost of counting and packaging) of
copies of the Prospectus, the Prepricing Prospectus, any sales material and all
amendments or supplements to the Prospectus as may be requested for use in
connection with the offering and sale of the Shares, (vii) the printing (or
reproduction) and delivery of this Agreement, any dealer agreements, the
preliminary and supplemental Blue Sky Memoranda and all other company-authorized
agreements or other documents printed (or reproduced) and delivered in
connection with the offering of the Shares, (viii) the filing fees and the fees
and expenses of counsel for the Underwriters in connection with any filings
required to be made with the NASD and incurred with respect to the review of the
offering of the Shares by the NASD and (ix) the registration of the Shares under
the 1934 Act and the listing of the Shares on the NYSE.
Notwithstanding the foregoing, in the event that the sale of the Firm
Shares is not consummated pursuant to Section 2 hereof, the Advisers will pay
the costs and expenses of the Fund set forth above in this Section 12 (i)
through (ix), and reimbursements of Underwriter expenses in connection with the
offering shall be made in accordance with Section 5(k) hereof.
13. Information Furnished by the Underwriters. The names of the
underwriters and numbers of Shares listed opposite such names in the first
paragraph under the caption "Underwriting" in the Prospectus, as well as, under
the same caption, the last sentence of the second paragraph, the first sentence
of the eleventh paragraph, the first sentence of the thirteenth paragraph and
the eighteenth paragraph constitute the only information relating to any
Underwriter furnished to the Fund in writing by or on behalf of the Underwriters
through you as such information is referred to herein, expressly for use in the
Prospectus.
36
14. Miscellaneous. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (a) if to the Fund or the Investment Adviser, c/o
Nuveen Investments at 333 West Wacker Drive, Chicago, Illinois 60606, Attention:
Alan G. Berkshire, (b) if to Spectrum, at the offices of Spectrum Asset
Management, Inc. at 4 High Ridge Park, Stamford, Connecticut 06905, Attention:
Mark A. Lieb, (c) if to Froley, Revy, at the offices of Froley, Revy Investment
Co., Inc. at 10900 Wilshire Boulevard, Suite 900, Los Angeles, California
90024, Attention: Andrea Revy O'Connell or (d) if to you, as Representatives of
the Underwriters, at the office of Salomon Smith Barney Inc. at 388 Greenwich
Street, New York, New York 10013, Attention: Manager, Investment Banking
Division.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Fund, the Advisers, their trustees, directors and officers and
the other controlling persons referred to in Section 8 hereof and their
respective successors and assigns to the extent provided herein and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" or the term "successors and assigns" as used in
this Agreement shall include a purchaser from any Underwriter of any of the
Shares in his status as such purchaser.
A copy of the Declaration of Trust of the Fund is on file with the
Secretary of State of The Commonwealth of Massachusetts. This Agreement has been
executed on behalf of the Fund by the vice-president of the Fund in such
capacity and not individually and the obligations of the Fund under this
Agreement are not binding upon such officer, any of the trustees or the
shareholders individually but are binding only upon the assets and property of
the Fund.
15. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
37
Please confirm that the foregoing correctly sets forth the agreement among
the Fund and the Advisers and the several Underwriters.
Very truly yours,
NUVEEN PREFERRED AND CONVERTIBLE INCOME FUND
By: ___________________________
Name:
Title:
NUVEEN INSTITUTIONAL ADVISORY CORP.
By: _____________________________
Name:
Title:
SPECTRUM ASSET MANAGEMENT, INC.
By: ___________________________
Name:
Title:
FROLEY, REVY INVESTMENT CO., INC.
By: ___________________________
Name:
Title:
38
Confirmed as of the date
first above written on
behalf of themselves and
the other several Underwriters
named in Schedule I hereto.
By: SALOMON SMITH BARNEY INC.
NUVEEN INVESTMENTS, LLC
A.G. EDWARDS & SONS, INC.
PRUDENTIAL SECURITIES INCORPORATED
WACHOVIA SECURITIES, INC.
ADVEST, INC.
ROBERT W. BAIRD & CO. INCORPORATED
H&R BLOCK FINANCIAL ADVISORS, INC.
FAHNESTOCK & Co. Inc.
FERRIS, BAKER WATTS, INCORPORATED
JANNEY MONTGOMERY SCOTT LLC
LEGG MASON WOOD WALKER, INCORPORATED
MCDONALD INVESTMENTS INC., A KEYCORP COMPANY
QUICK & Reilly, Inc. A FleetBoston Financial Company
RBC DAIN RAUSCHER INC.
RYAN BECK & CO., INC.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
TD WATERHOUSE INVESTOR SERVICES, INC.
WEDBUSH MORGAN SECURITIES INC.
WELLS FARGO SECURITIES, LLC
AS REPRESENTATIVES OF THE SEVERAL UNDERWRITERS
By: SALOMON SMITH BARNEY INC.
By: ___________________________________
Name:
Title:
39
SCHEDULE I
Number of
Name of Underwriter Common Shares
- ------------------- -------------
Salomon Smith Barney Inc. ......................................
Nuveen Investments, LLC.........................................
A.G. Edwards & Sons, Inc. ......................................
Prudential Securities Incorporated..............................
Wachovia Securities, Inc. ......................................
Advest, Inc. ...................................................
Robert W. Baird & Co. Incorporated .............................
H&R Block Financial Advisors, Inc. .............................
Fahnestock & Co. Inc. ..........................................
Ferris, Baker Watts, Incorporated...............................
Janney Montgomery Scott LLC.....................................
Legg Mason Wood Walker, Incorporated............................
McDonald Investments Inc., a KeyCorp Company....................
Quick & Reilly, Inc. A FleetBoston Financial Company............
RBC Dain Rauscher Inc. .........................................
Ryan Beck & Co., Inc. ..........................................
Stifel, Nicolaus & Company, Incorporated .......................
TD Waterhouse Investor Services, Inc. ..........................
Wedbush Morgan Securities Inc. .................................
Wells Fargo Securities, LLC.....................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
Number of
Name of Underwriter Common Shares
- ------------------- -------------
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
.................................................................
Total...........................................................