Exhibit H.2.A
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
April 11, 2003
Gifford R. Zimmerman
Nuveen Preferred and Convertible Income Fund
c/o Nuveen Investments
333 West Wacker Drive
Chicago, Illinois 60606
Dear Mr. Zimmerman:
Reference is made to Nuveen Preferred and Convertible Income Fund (the
"Fund"). The Fund made an initial public offering of its common shares of
beneficial interest through several underwriters (collectively, the
"Underwriters"), pursuant to the terms of the Underwriting Agreement, dated
March 26, 2003, among the Fund, Nuveen Institutional Advisory Corp., Spectrum
Asset Management, Inc., Froley, Revy Investment Co., Inc. and the Underwriters
(the "Underwriting Agreement"). Such offering is referred to herein as the
"Offering". We have acted as lead manager and representative (the
"Representative") of the Underwriters of the Offering.
The Representative is requesting that it be able to re-allocate to
itself the full amount of Additional Shares (as defined in the Underwriting
Agreement) that an Underwriter fails or refuses to purchase in connection with
any exercise by the Underwriters on or after the date hereof of the
over-allotment option provided for in the Underwriting Agreement. This letter is
to confirm our agreement with you as to the terms and conditions on which the
Representative may re-allocate such Additional Shares:
a. The number of Additional Shares to be re-allocated will be the number
of Additional Shares (subject to such adjustments as the Representative may
determine to avoid fractional shares) which bears the same proportion to the
number of Additional Shares that were to be purchased by the defaulting
Underwriter as the number of Firm Shares (as defined in the Underwriting
Agreement) set forth opposite the name of such defaulting Underwriter in
Schedule I to bears to the aggregate number of Firm Shares (such amount is
referred to herein as the "Re-Allocated Additional Shares");
b. The Representative will purchase in full the Re-Allocated Additional
Shares and will also purchase the number of Additional Shares allocated to it in
accordance with Section 2 of the Underwriting Agreement without taking into
account the re-allocation of the Re-Allocated Additional Shares;
c. The number of Additional Shares to be purchased by each non-defaulting
Underwriter other than the Representative will be determined in accordance with
Section 2 of the Underwriting Agreement without taking into account the
re-allocation of the Re-Allocated
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Additional Shares and will not be altered with respect to such non-defaulting
Underwriter in any manner as a result of the re-allocation of the Re-Allocated
Additional Shares; and
d. Notwithstanding any re-allocation of the Re-Allocated Additional
Shares, all other terms and conditions of, and agreements contained in, the
Underwriting Agreement will remain unchanged and continue with full force and
effect.
The Fund's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This letter agreement is executed on behalf of
the Fund by the Fund's officers as officers and not individually and the
obligations imposed upon the Fund by this letter agreement are not binding upon
any of the Fund's Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Fund.
If the foregoing correctly sets forth our understanding regarding the
matters described herein, please so indicate by signing a copy of this letter
where indicated below and returning the signed copy of this letter to us. For
your convenience, a duplicate copy of this letter has been included.
On behalf of themselves and, in
respect of the Offering, the other
Underwriters of the Offering
By: Citigroup Global Markets Inc.
Citigroup Global Markets Inc.,
as Representative of the Underwriters
By /s/ Kevin Deignan
--------------------------
Name: Kevin Deignan
Title: Vice President
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Acknowledged and agreed to as of this
11th day of April 2003
NUVEEN PREFERRED AND CONVERTIBLE INCOME FUND
By: /s/ Gifford R. Zimmerman
-----------------------------
Name: Gifford R. Zimmerman
Title: Chief Administrative Officer
NUVEEN INSTITUTIONAL ADVISORY CORP.
By: /s/ Gifford R. Zimmerman
-----------------------------
Name: Gifford R. Zimmerman
Title: Managing Director
SPECTRUM ASSET MANAGEMENT, INC.
By: /s/ Bernard Sussman
-----------------------------
Name: Bernard Sussman
Title: Executive Director
FROLEY, REVY INVESTMENT CO., INC.
By: /s/ K. Andrea O'Connell
-----------------------------
Name: K. Andrea O'Connell
Title: President