Exhibit h.5
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
March __, 2003
_______________
__________________________
Salomon Smith Barney Inc.
388 Greenwich Street
New York, NY 10013
Dear ____________:
Reference is made to Nuveen Preferred and Convertible Income Fund (the
"Fund"). The Fund currently is making an initial public offering of its common
shares of beneficial interest (the "Shares") through several underwriters. Such
offering is referred to herein as the "Offering". You are acting as lead manager
and representative (the "Representative") of the underwriters of the Offering,
and we are participating as a manager and underwriter of the Offering.
We are requesting that we be able to offer certain broker-dealers the
opportunity to participate as selling dealers in the Offering. This letter is to
confirm our agreement with you as to the terms and conditions on which we may
transact business (collectively, the "Nuveen Selected Dealers" and,
individually, a "Nuveen Selected Dealer"):
a. Each Nuveen Selected Dealer to whom we offer to sell, or sell,
Shares shall have entered into a master selected dealer agreement
("Selected Dealer Agreement") with Nuveen, the form of which is attached
hereto as Exhibit A;
b. Before offering to sell, or selling, Shares to a Nuveen Selected
Dealer, Nuveen will carry out such independent investigations as it deems
necessary to determine that such dealer satisfies the criteria set forth in
Section 6 of the Selected Dealer Agreement;
c. We will act under and enforce each Selected Dealer Agreement only
with your consent (which shall not be unreasonably withheld) or upon your
instruction;
d. We shall not allow any Nuveen Selected Dealer purchasing Shares in
an Offering a selling concession that is in an amount in excess of the
maximum selling concession set by you for selected dealers for the
Offering; and
e. We agree upon instruction from you, subject to the other terms of
the Offering, to pay for and purchase all Shares that we reserve in the
Offering, whether such Shares are reserved by us for our own account or for
the account of one or more Nuveen Selected Dealers, and we agree to make
all purchases of Shares in accordance with Master Agreement among
Underwriters dated July 1, 1999 between the Representatives and Nuveen and
the underwriting agreement for the Offering of such Shares.
2
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.
NUVEEN INVESTMENTS
By __________________________
Name: ___________________
Title: ___________________
3
Acknowledged and agreed to as of this
___ day of March 2003 on behalf of themselves
and, in respect of the Offering, the other
underwriters of the Offering.
By: SALOMON SMITH BARNEY INC.
SALOMON SMITH BARNEY INC.,
as Representative of the Underwriters
By __________________________
Name: ___________________
Title: ___________________
EXHIBIT A
Form of:
NUVEEN EXCHANGE-TRADED FUNDS
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MASTER SELECTED DEALER AGREEMENT
[DATED]
Dear Ladies and Gentlemen:
In connection with public offerings of securities ("Securities") of
registered investment companies sponsored by Nuveen Investments ("Nuveen") which
are underwritten by a group of underwriters ("Underwriters") which are
represented by Nuveen alone or in conjunction with other firms (the
"Representatives"), you (a "Dealer") may be offered from time to time the
opportunity to purchase a portion of such securities, as a principal, at a
discount from the public offering price representing a selling concession or
reallowance granted as consideration for services rendered in the distribution
of such securities, subject to the terms and conditions of this Agreement.
1. General. (a) This Agreement sets forth the general terms, conditions and
representations applicable to any such purchase. These general terms, conditions
and representations may be modified, amended or supplemented in connection with
an offering of Securities by telegram, telex, facsimile transmission or other
written form (electronic or otherwise) of communication of Nuveen or other
Representative of the Underwriters of such offering (any communication in any
such form being herein referred to as a "written communication") to you in
connection with such offering. This Agreement shall become effective with
respect to your participation in an offering of Securities upon your acceptance
of any reservation of any such Securities, as a Dealer. Such acceptance shall
constitute your acceptance of this Agreement as modified, amended or
supplemented by any such written communication.
(b) As used herein, the term "Agreement" shall mean this Agreement and,
after receipt by you of written notice thereof, any amendment or supplement
hereto, plus any additional or supplementary terms, conditions and
representations contained in the prospectus relating to the offering of
Securities or any other written communication to you from Nuveen or any other
Representative of the Underwriters of any offering of securities. This Agreement
shall constitute a binding agreement between you and Nuveen, individually, and,
in respect of a public
offering of Securities, Nuveen and the other Representatives of the Underwriters
of such offering on whose behalf Nuveen is acting.
(c) This Agreement supersedes any prior understanding you have with Nuveen
with respect to the subject matter hereof.
2. Sales to Selected Dealers. For any specific offering, we will advise you
by telegram of the method and terms of offering, the time of the release of the
Securities for sale to the public, the initial offering price, the selling
concession, the portion of the selling concession allowable to certain dealers
(the "reallowance"), the time at which subscription books will be opened, the
amount, if any, of Securities reserved for purchase by Dealers and the period of
reservation. Subscription books may be closed by us at any time in our
discretion without notice, and the right is reserved to reject any subscription
in whole or in part. Notification of allotments against the rejections of
subscriptions will be made as promptly as practicable. In purchasing Securities,
you must rely only on the prospectus, and on no other statements whatsoever,
written or oral.
3. Offering Provisions. Upon receipt of the telegram or letter referred to
in Section 2 hereof, promptly on the date set forth in such telegram for release
of the Securities for sale to the public, you will reoffer the Securities
purchased by you hereunder, subject to receipt and acceptance of the Securities
by the Underwriters, and upon the other terms, conditions and representations
set forth herein and in the prospectus relating to such Securities. Securities
purchased hereunder are to be offered to the public at the initial public
offering price set forth in the prospectus, except that if a reallowance is in
effect, a reallowance from the public offering price not in excess of such
reallowance may be allowed by you but only to dealers who are actually engaged
in the investment banking or securities business, who execute the written
agreement prescribed by Rule 2740(c) of the Rules of Conduct of the National
Association of Securities Dealers, Inc. ("NASD") and who are members in good
standing of the NASD or are foreign dealers, not eligible for membership in the
NASD, who, in each case, represent to you that they will promptly reoffer such
Securities to the public at the initial public offering price set forth in the
prospectus and will abide by the conditions with respect to foreign brokers and
dealers set forth in the first paragraph of Section 6 hereof.
If prior to the completion of a distribution of the Securities in an
offering, directly or indirectly in connection with their activities under this
agreement, Nuveen or an Underwriter of the offering purchases on the open market
any Securities purchased by you under this Agreement as part of the offering,
you agree to pay Nuveen or the lead Representative of the Underwriters of the
offering on demand an amount equal to the concession with respect to the
Securities, plus, as applicable, transfer taxes, broker's commission, or
dealer's markups, if any, paid in connection with such transactions.
Alternatively, Nuveen or the Representatives of the Underwriters of the offering
may withhold payment for a period of time of, or determine not to pay, all or
any part of the concession with respect to the Securities so received. You will
advise Nuveen or any other Representative from time to time at our request, of
the number of Securities purchased by you hereunder remaining unsold and you
agree to sell to us, at our request, for the account of one or
more of the Underwriters, such number of such unsold Securities as we may
designate, at the initial offering price less an amount to be determined by us,
not in excess of the full concession.
4. Delivery and Payment. Payment for and delivery of Securities purchased
by you hereunder will be made through the facilities of the Depository Trust
Company, if you are a member, or, if you are not a member, settlement may be
made through a correspondent who is a member pursuant to instructions which you
will send to us prior to such specified date. At the discretion of Nuveen or a
Representative of the Underwriters of the offering, we may require you to pay
the full public offering price for any offering of Securities. If you are called
upon to pay the full public offering price for the Securities purchased by you
the concession will be paid to you, less any amounts charged to your account
pursuant to Section 3 above, after termination of this Agreement.
5. Termination. This Agreement shall continue in full force and effect
until terminated by either party by five days' written notice to the other;
provided, that if this Agreement has become effective with respect to any
offering of Securities, this Agreement may not be terminated by you with respect
to such offering. It shall remain in full force and effect as to such offering.
Notwithstanding any distribution and settlement of accounts, you shall be liable
for the proper proportion of any transfer tax or other liability which may be
asserted against the Representatives or any of the Underwriters or Dealers based
upon the claim that the Dealers, or any of them, constitute a partnership, an
association, an unincorporated business or other separate entity.
6. Position of Selected Dealers and Underwriters. You represent that you
are actually engaged in the investment banking or securities business and are a
member in good standing of the NASD or that you are a foreign dealer, not
eligible for membership in the NASD, which agrees not to offer or sell any
Securities in, or to persons who are nationals or residents of, the United
States of America. In making sales of Securities, if you are such a member, you
agree to comply with all applicable rules of the NASD, including, without
limitation, IM 2110-1 (the NASD's Interpretation with Respect to Free-Riding and
Withholding) and Rules 2740 and 2750 of the NASD's Rules of Conduct, or, if you
are a foreign dealer, you agree to comply with such Interpretation and Rules
2730, 2740 and 2750 of such Rules of Conduct as though you were such a member,
and with Rule 2420 as that Rule applies to a non-member broker or dealer in a
foreign country. You also confirm that you have complied and will comply with
the prospectus delivery requirements of Rule 15c2-8 under the Securities
Exchange Act of 1934, as amended including Rule 15c2-8(b) which requires all
participating dealers to distribute a copy of the preliminary prospectus
relating to the offering of Securities to each person to whom they expect to
confirm a sale of the Securities not less than 48 hours prior to the time they
expect to mail such confirmation. You are not authorized to give any information
or make any representations with respect to an offering of Securities other than
those contained in the prospectus for the offering, or to act as agent for the
issuer, any Underwriter, Representative or Nuveen.
Neither Nuveen, individually or as Representative of the Underwriters, nor
any of the Representatives or Underwriters shall be under any liability to you,
except for obligations expressly assumed in this Agreement and any liabilities
under the Securities Act of 1933, as amended. No obligations on the part of
Nuveen will be implied or inferred herefrom. All communications to Nuveen
relating to the subject matter of this Agreement should be addressed
to Nuveen Investments, Incorporated, 333 W. Wacker Drive, Chicago, Illinois
60606 (Attention: Debby Taylor), and any notices to you shall be deemed to have
been duly given if mailed or telegraphed to you at such address as you shall
indicate on the last page of this Agreement.
7. Blue Sky Matters. Neither Nuveen, individually or as a Representative of
the Underwriters, nor any of the Representatives or Underwriters will have any
responsibility with respect to the right of any Dealer to sell Securities in any
jurisdiction, notwithstanding any information we may furnish in that connection.
8. Indemnification. You agree to indemnify and hold harmless Nuveen and
each Representative and Underwriter of an offering of Securities and each
person, if any, who controls Nuveen or any such Representative or Underwriter
within the meaning of Section 15 of the Securities Act of 1933, as amended or
Section 20 of the Securities Exchange Act of 1934, as amended, from and against
any and all losses, claims, damages, liabilities and expenses, joint or several
(including reasonable costs of investigation) (any of the foregoing being
hereinafter referred to individually as a "Loss" and collectively, as "Losses")
suffered or incurred by any such indemnified person arising out of or in
connection with such offering for or on account of or arising from or in
connection with (i) any violation of any law, rule or regulation (including any
rule of any self-regulatory organization) or (ii) any breach of any
representation, warranty, covenant or agreement contained in this Agreement. The
foregoing indemnity agreement shall be in addition to any liability which you
may otherwise have.
9. Procedures Relating to Indemnification. (a) An indemnified person under
Section 8 of this Agreement (the "Indemnified Party") shall give written notice
to you of any Loss in respect of which you have a duty to indemnify such
Indemnified Party under Section 8 of this Agreement (a "Claim"), specifying in
reasonable detail the nature of the Loss for which indemnification is sought,
except that any delay or failure so to notify you shall only relieve you of your
obligations hereunder to the extent, if at all, that you are actually prejudiced
by reason of such delay or failure.
(b) If a Claim results from any action, suit or proceeding brought or
asserted against an Indemnified Party, you shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses. The Indemnified Party shall have
the right to employ separate counsel in such action, suit or proceeding and
participate in such defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Indemnified Party unless (i) you have agreed in
writing to pay such fees and expenses, (ii) you 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 Indemnified Party and you and such Indemnified Party shall have been
advised by its counsel that representation of such Indemnified Party and you 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 you and
the Indemnified Party (in which case you shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such Indemnified Party).
It is understood, however, that you shall, in connection with any one 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 reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all such Indemnified Parties not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by the Representatives of the offering and that all such fees and
expenses shall be reimbursed promptly as they are incurred. You shall not be
liable for any settlement of any such action, suit or proceeding effected
without your written consent, but if settled with such written consent or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, you agree to indemnify and hold harmless any Indemnified Party from
and against any loss, liability, damage or expense by reason by such settlement
or judgment.
(c) With respect to any Claim not within Paragraph (b) of Section 9 hereof,
you shall have 20 days from receipt of notice from the Indemnified Party of such
Claim within which to respond thereto. If you do not respond within such
twenty-day period, you shall be deemed to have accepted responsibility to make
payment and shall have no further right to contest the validity of such Claim.
If you notify the Indemnified Party within such twenty-day period that you
reject such Claim in whole or in part, the Indemnified Party shall be free to
pursue such remedies as may be available to the Indemnified Party under
applicable law.
10. Survival. The representations, warranties, covenants and agreements of
the undersigned contained in this Agreement, including, without limitation, the
indemnity agreements contained in Sections 8 and 9 hereof, shall remain
operative and in full force and effect, regardless of (i) any investigation made
by or on behalf of any Representative or Underwriter or any person controlling
any Representative or Underwriter, or their directors or officers, (ii)
acceptance of any Shares and payment therefor and (iii) any termination of this
Agreement.
11. This Agreement shall be governed by the laws of the State of New York
or the laws of such other state as indicated in a written communication to you
by Nuveen with respect to any particular securities offering.
Please confirm your agreement to the foregoing by signing in the space
provided below and returning to us the enclosed counterpart of this Agreement.
NUVEEN INVESTMENTS
By: __________________________
Managing Director
Confirmed as of _____________.
[Date]
______________________________
By: __________________________
Title:
Address:
______________________________
______________________________
______________________________