<PAGE>
As filed with the Securities and Exchange Commission on December 9, 1999
1933 Act File No. 333-91881
1940 Act File No. 811-05809
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-2
(Check appropriate box or boxes)
[X] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] Pre-Effective Amendment No. 2
[_] Post-Effective Amendment No.
and/or
[_] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X] Amendment No. 11
Nuveen
Performance Plus Municipal Fund, Inc.
Enter Name of Registrant as Specified in Charter
333 West Wacker Drive, Chicago, Illinois 60606
Address of Principal Executive Offices (Number, Street, City, State and Zip
Code)
(312) 917-7700
Registrant's Telephone Number, including Area Code
Gifford R. Zimmerman, Esq.--Vice President and Secretary
333 West Wacker Drive
Chicago, Illinois 60606
Name and Address (Number, Street, City, State and Zip Code) of Agent for
Service
Copies of Communications To:
Thomas S. Harman Gary S. Schpero
Morgan, Lewis & Bockius LLP Simpson Thacher & Bartlett
1800 M Street, N.W. 425 Lexington Avenue
Washington, DC 20036 New York, NY 10017
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this Registration Statement
If any of the securities being registered on this Form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act
of 1933, other than securities offered in connection with a dividend
reinvestment plan, check the following box. [_]
--------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<CAPTION>
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Securities Being Offering Price Aggregate Registration
Being Registered Registered Per Unit Offering Price Fee(1)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Municipal Auction Rate
Cumulative Preferred
Stock Series TH...... 1,800 shares $25,000 $45,000,000 $11,880
</TABLE>
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- -------------------------------------------------------------------------------
(1) Previously paid.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such dates as the Commission, acting pursuant to
said Section 8(a), may determine.
The undersigned registrant hereby undertakes that: (1) For purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424 (b) (1) or (4) or 497 (b) under
the Securities Act shall be deemed to be part of this registration statement
as of the time it was declared effective. (2) For the purpose of determining
any liability under the Securities Act of 1933, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
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<PAGE>
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
CROSS REFERENCE SHEET
Part A--Prospectus
<TABLE>
<CAPTION>
Items in Part A of Form N-2 Location in Prospectus
--------------------------- ----------------------
<C> <S> <C>
Item 1. Outside Front Cover Cover Page
Item 2. Inside Front and Outside Inapplicable
Back Cover Page
Item 3. Fee Table and Synopsis Inapplicable
Item 4. Financial Highlights Financial Highlights
Item 5. Plan of Distribution Cover Page; Prospectus Summary; The
Auction; Underwriting
Item 6. Selling Shareholders Inapplicable
Item 7. Use of Proceeds Use of Proceeds; Investment Objectives
and Policies
Item 8. General Description of Cover Page; Prospectus Summary; The
the Registrant Fund; Investment Objectives and
Policies; Description of MuniPreferred;
Common Stock
Item 9. Management Prospectus Summary; Management of the
Fund; Other Service Providers
Item 10. Capital Stock, Long-Term
Debt, and Other Capitalization; Investment Objectives
Securities and Policies; Description of
MuniPreferred; The Auction; Common
Stock; Control of the Fund; Tax Matters
Item 11. Defaults and Arrears on Inapplicable
Senior Securities
Item 12. Legal Proceedings Legal Proceedings
Item 13. Table of Contents of the
Statement of Additional Table of Contents for the Statement of
Information Additional Information
Part B--Statement of Additional Information
<CAPTION>
Location in Statement of
Items in Part B of Form N-2 Additional Information
--------------------------- ------------------------
<C> <S> <C>
Item 14. Cover Page Cover Page
Item 15. Table of Contents Cover Page
Item 16. General Information and Inapplicable
History
Item 17. Investment Objectives and Investment Objectives and Policies;
Policies Certain Trading Strategies of the Fund;
Portfolio Transactions
Item 18. Management Management of the Fund; Portfolio
Transactions
Item 19. Control Persons and
Principal Holders of Management of the Fund; Certain Owners
Securities of Record
Item 20. Investment Advisory and Management of the Fund; Experts
Other Services
Item 21. Brokerage Allocation and Portfolio Transactions
Other Practices
Item 22. Tax Status Tax Matters
Item 23. Financial Statements Financial Statements
</TABLE>
Part C--Other Information
Items 24-33 have been answered in Part C of this Registration Statement.
<PAGE>
PART C -- OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS
(1) FINANCIAL STATEMENTS:
Included in Part A of the Registration Statement
Financial Highlights for each of the ten years ended October 31, 1998
PART I
Portfolio of Investments, October 31, 1998 (audited)
Statement of Net Assets, October 31, 1998 (audited)
Statement of Operations for the year ended October 31, 1998 (audited)
Statement of Changes in Net Assets for the two years ended October 31, 1998
(audited)
(2) EXHIBITS
The exhibits to this Registration Statement are listed in the Exhibit Index
located elsewhere herein.
ITEM 25: MARKETING ARRANGEMENTS
See Sections 2(a) and 3(i) of the Purchase Agreement filed as an Exhibit
herein.
ITEM 26: OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission fees $ 11,616
Printing and engraving expenses 60,000
Legal fees 65,000
Accounting expenses 5,000
Rating Agency fees 22,500
Blue Sky filing fees and expenses 10,000
Miscellaneous expenses 5,000
--------
Total* $179,116
========
</TABLE>
C-I
<PAGE>
[*Estimated]
ITEM 27: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable
ITEM 28: NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
-------------- --------------
<S> <C>
Common Stock, $.01 par value (at 10/31/99).................. 39,796
------
Preferred Stock, $.01 par value (at 11/15/99)............... 28
------
</TABLE>
ITEM 29: INDEMNIFICATION
Article EIGHTH of the Registrant's Articles of Incorporation provides as
follows:
EIGHTH: To the maximum extent permitted by the Minnesota Business
Corporation Act, as from time to time amended, the Corporation shall indemnify
its currently acting and its former directors, officers, employees and agents,
and those persons who, at the request of the Corporation, serve or have served
another corporation, partnership, joint venture, trust or other enterprise in
one or more such capacities. The indemnification provided for herein shall not
be deemed exclusive of any other rights to which those seeking indemnification
may otherwise be entitled.
Expenses (including attorneys' fees) incurred in defending a civil or
criminal action, suit or proceeding (including costs connected with the
preparation of a settlement) may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding, if authorized by the Board
of Directors in the specific case, upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay that amount of the
advance which exceeds the amount which it is ultimately determined that he is
entitled to receive from the Corporation by reason of indemnification as
authorized herein; provided, however, that prior to making any such advance at
least one of the following conditions shall have been met: (1) the indemnitee
shall provide a security for his undertaking, (2) the Corporation shall be
insured against losses arising by reason of any lawful advances, or (3) a
majority of a quorum of the disinterested, non-party directors of the
Corporation, or an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts, that there is reason to
believe that the indemnitee ultimately will be found entitled to
indemnification.
C-II
<PAGE>
Nothing in these Articles of Incorporation or in the By-Laws shall be
deemed to protect or provide indemnification to any director or officer of the
Corporation against any liability to the Corporation or to its security holders
to which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office ("disabling conduct"), and the Corporation shall not
indemnify any of its officers or directors against any liability to the
Corporation or to its security holders unless a determination shall have been
made in the manner provided hereafter that such liability has not arisen from
such officer's or director's disabling conduct. A determination that an officer
or director is entitled to indemnification shall have been properly made if it
is based upon (1) a final decision on the merits by a court or other body before
whom the proceeding was brought that the indemnitee was not liable by reason of
disabling conduct or, (2) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of disabling conduct, by (a) the vote of a majority of a quorum
of directors who are neither "interested persons" of the Corporation as defined
in the Investment Company Act of 1940 nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion.
The directors and officers of the Registrant are covered by Investment
Trust Errors and Omission policies in the aggregate amount of $40,000,000 (with
a maximum deductible of $500,000) against liability and expenses of claims of
wrongful acts arising out of their position with the Registrant, except for
matters which involve willful acts, bad faith, gross negligence and willful
disregard of duty (i.e., where the insured did not act in good faith for a
purpose he or she reasonably believed to be in the best interest of the
Registrant or where he or she had reasonable cause to believe this conduct was
unlawful).
Section 7 of the Underwriting Agreement filed as Exhibit h to this
Registration Statement provides for each of the parties thereto, including the
Registrant and the Underwriters, to indemnify the others, their directors,
certain of their officers and directors and persons who control them against
certain liabilities in connection with the offering described herein, including
liabilities under the Federal securities laws.
ITEM 30: BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Nuveen Advisory Corp. serves as investment adviser to the following open-
end management type investment companies: Nuveen Flagship Multistate Trust I,
Nuveen Flagship Multistate Trust II, Nuveen Flagship Multistate Trust III,
Nuveen Flagship Multistate Trust IV, Nuveen Flagship Municipal Trust, Nuveen
Taxable Funds Inc., Nuveen California Tax-Free Fund, Inc., Nuveen Tax-Free Money
Market Fund, Inc., Nuveen Tax-Exempt Money Market Fund, Inc., and Nuveen Tax-
Free Reserves, Inc. It also serves as investment adviser to the following
closed-end management type investment companies: Nuveen Municipal Value Fund,
Inc., Nuveen California Municipal Value Fund, Inc., Nuveen New York Municipal
Value Fund, Inc., Nuveen Municipal Income Fund, Inc., Nuveen Premium Income
Municipal Fund, Inc.,
C-III
<PAGE>
Nuveen Performance Plus Municipal Fund, Inc., Nuveen California Performance Plus
Municipal Fund, Inc., Nuveen New York Performance Plus Municipal Fund, Inc.,
Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund,
Inc., Nuveen California Municipal Market Opportunity Fund, Inc., Nuveen
Investment Quality Municipal Fund, Inc., Nuveen California Investment Quality
Municipal Fund, Inc., Nuveen New York Investment Quality Municipal Fund, Inc.,
Nuveen Insured Quality Municipal Fund, Inc., Nuveen Florida Investment Quality
Municipal Fund, Nuveen New Jersey Investment Quality Municipal Fund, Inc.,
Nuveen Pennsylvania Investment Quality Municipal Fund, Nuveen Select Quality
Municipal Fund, Inc., Nuveen California Select Quality Municipal Fund, Inc.,
Nuveen New York Select Quality Municipal Fund, Inc., Nuveen Quality Income
Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen
Florida Quality Income Municipal Fund, Nuveen Michigan Quality Income Municipal
Fund, Inc., Nuveen Ohio Quality Income Municipal Fund, Inc., Nuveen Texas
Quality Income Municipal Fund, Nuveen California Quality Income Municipal Fund,
Inc., Nuveen New York Quality Income Municipal Fund, Inc., Nuveen Premier
Municipal Income Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc.,
Nuveen Premium Income Municipal Fund 2, Inc., Nuveen Insured California Premium
Income Municipal Fund, Inc., Nuveen Insured New York Premium Income Municipal
Fund, Inc., Nuveen Select Maturities Municipal Fund, Nuveen Arizona Premium
Income Municipal Fund, Inc., Nuveen Insured Florida Premium Income Municipal
Fund, Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen New Jersey
Premium Income Municipal Fund, Inc., Nuveen Premium Income Municipal Fund 4,
Inc., Nuveen Insured California Premium Income Municipal Fund 2, Inc., Nuveen
Pennsylvania Premium Income Municipal Fund 2, Nuveen Maryland Premium Income
Municipal Fund, Nuveen Massachusetts Premium Income Municipal Fund, Nuveen
Virginia Premium Income Municipal Fund, Nuveen Connecticut Premium Income
Municipal Fund, Nuveen Georgia Premium Income Municipal Fund, Nuveen Missouri
Premium Income Municipal Fund, Nuveen North Carolina Premium Income Municipal
Fund, Nuveen California Premium Income Municipal Fund, Nuveen Insured Premium
Income Municipal Fund 2, Nuveen Dividend Advantage Municipal Fund, Nuveen
California Dividend Advantage Municipal Fund, Nuveen New York Dividend Advantage
Municipal Fund, Nuveen Senior Income Fund, and Nuveen Floating Rate Fund. Nuveen
Advisory Corp. has no other clients or business at the present time. The
principal business address for all of these investment companies is 333 West
Wacker Drive, Chicago, Illinois 60606.
ITEM 31: LOCATION OF ACCOUNTS AND RECORDS
Nuveen Advisory Corp., 333 West Wacker Drive, Chicago, Illinois 60606,
maintains Articles of Incorporation, By-Laws, minutes of directors and
shareholders meetings, and contracts of the Registrant and all advisory material
of the investment adviser.
The Chase Manhattan Bank, 4 New York Plaza, New York, New York 10004,
maintains all general and subsidiary ledgers, journals, trial balances, records
of all portfolio purchases and sales, and all other required records not
maintained by Nuveen Advisory Corp. It also maintains all the required records
in its capacity as transfer, dividend paying, and shareholder service agent for
shares of the Registrant's Common Stock. Bankers Trust Company, 4 Albany Street,
New
C-IV
<PAGE>
York, New York 10006, maintains all required records in its capacity as transfer
agent, registrar, dividend disbursing agent and redemption agent for the
Registrant's MuniPreferred shares.
ITEM 32: MANAGEMENT SERVICES
Not applicable.
ITEM 33: UNDERTAKINGS
(1) Registrant undertakes to suspend the offering of its shares until it amends
its prospectus if (1) subsequent to the effective date of its Registration
Statement, the net asset value declines more than 10 percent from its net asset
value as of the effective date of the Registration Statement, or (2) the net
asset value increases to an amount greater than its net proceeds as stated in
the prospectus.
(2) Not applicable
(3) Not applicable
(4) Not applicable
(5) Registrant undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as a part of a
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant under Rule 497(h) under the Securities Act of
1933 shall be deemed to be a part of this Registration Statement as of the time
it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering thereof.
(6) Registrant undertakes to send by first class mail or other means designed to
ensure equally prompt delivery, within two business days of receipt of a written
or oral request, any Statement of Additional Information.
(7) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding (is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
C-V
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Pre-effective Amendment Number 2 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Chicago, and State of Illinois, on the 9th day of December, 1999.
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
/s/ GIFFORD R. ZIMMERMAN
--------------------------------------
Gifford R. Zimmerman, Vice President
Pursuant to the requirements of the Securities Act of 1933, this Pre-effective
Amendment Number 2 to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ STEPHEN D. FOY Vice President and December 9, 1999
- ------------------------------- Controller (Principal
Stephen D. Foy Financial and Accounting
Officer)
Timothy R. Schwertfeger* Executive Officer
Robert P. Bremner* Director
Lawrence H. Brown* Director
Anne E. Impellizzeri* Director
Peter R. Sawers* Director
William J. Schneider* Director
Judith M. Stockdale* Director
</TABLE>
By
/s/ GIFFORD R. ZIMMERMAN
----------------------------------
Gifford R. Zimmerman
Attorney-in-Fact
December 9, 1999
- -----------------
* An original power of attorney authorizing, among others, Timothy R.
Schwertfeger, Gifford R. Zimmerman, Larry W. Martin, and each of them, to
execute this Registration Statement, and Amendments thereto, for each of the
officers and directors of Registrant on whose behalf this Registration Statement
is filed, have been executed and are filed herewith.
C-VI
<PAGE>
INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER PAGE
- ------- ------------
a. Articles of Incorporation of Registrant, as amended, including
the Statement Establishing and Fixing the Rights and
Preferences of Registrant's Municipal Auction Rate Cumulative
Preferred Stock....................................................
b. By-Laws of Registrant..............................................
c. Not applicable.....................................................
d.1 Basic Terms of Auction Agency Agreement, including form of request
and acceptance letter related thereto..............................
d.2 Basic Terms of Broker-Dealer Agreement, including form of request
and acceptance letter related thereto..............................
d.3 Form of Letter of Representation to The Depository Trust Company
relating to the Series of MuniPreferred............................*
e. Dividend Reinvestment Plan.........................................
f. Not applicable.....................................................
g.1 Investment Management Agreement....................................
g.2 Renewal of Investment Management Agreement.........................
h. Form of Underwriting Agreement.....................................*
i. Deferred Compensation Plan for Non-Employee Directors..............
j.1 Exchange-Traded Fund Custody Agreement.............................
j.2 Fund Accounting Agreement..........................................
j.3 Letter of Succession to Agreements.................................
k. Not applicable.....................................................
l. Opinion and consent of Morgan, Lewis & Bockius LLP.................*
m. Not applicable.....................................................
n. Consent of Ernst & Young...........................................
o. Not applicable.....................................................
p. Not applicable.....................................................
q. Not applicable.....................................................
r. Financial Data Schedule............................................
s. Powers of Attorney.................................................
* Filed herein
C-VII
<PAGE>
EXHIBIT 99.d.3
[DTC LOGO]
BOOK-ENTRY-ONLY AUCTION-RATE/MONEY MARKET PREFERRED/AND
REMARKETED PREFERRED SECURITIES
LETTER OF REPRESENTATIONS
[TO BE COMPLETED BY ISSUER AND TRUST COMPANY]
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
--------------------------------------------
[NAME OF ISSUER]
BANKERS TRUST COMPANY
---------------------
[NAME OF TRUST COMPANY]
Attention: General Counsel's Office , 1999
THE DEPOSITORY TRUST COMPANY [DATE]
55 Water Street, 49th Floor
New York, NY 10041-0099
Re: 1,760 Shares of Municipal Auction Rate Cumulative Preferred Stock,
Series TH, par value $.01 per share of Nuveen Performance Plus
Municipal Fund, Inc., CUSIP No._____
[ISSUE DESCRIPTION, INCLUDING CUSIP NUMBER]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Trust Company will
act as transfer agent, registrar, dividend disbursing agent, and redemption
agent with respect to the Securities. The Securities will be issued pursuant to
a prospectus, private placement memorandum, or other such document authorizing
the issuance of the Securities dated _____, 1999 (the "Document"). Salomon
Smith Barney Inc. ("underwriter") is distributing the Securities through The
Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC, and
to act in accordance with its Rules with respect to the Securities, Issuer and
Trust Company make the following representations to DTC:
1. Prior to closing on the Securities on _____, 1999 there shall be
deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede & Co., which represents the total number of Securities issued.
Said certificate shall remain in DTC's custody as provided in the Document. If,
however, the aggregate principal amount of the Securities exceeds $200 million,
one certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount. Each Security certificate shall bear the following
legend:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its
agent for registration of transfer,
<PAGE>
exchange, or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.; has
an interest herein.
2. Issuer:(a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC, Participants nor any person having an interest in
the Securities shall be deemed to have notice of the provisions of the Security
certificate(s) by virtue of submission of such certificate(s) to DTC.
3. In the event of any solicitation of consents from or voting by holders
of the Securities, Issuer shall establish a record date for such purposes (with
no provision for revocation of consents or votes by subsequent holders) and
shall send notice of such record date to DTC not less than 15 calendar days in
advance of such record date. Notices to DTC pursuant to this Paragraph by
telecopy shall be sent to DTC's Reorganization Department at (212) 709-6896 or
(212) 709-6897, and receipt of such notices shall be confirmed by telephoning
(212) 709-6870. Notices to DTC pursuant to this Paragraph by mail or by any
other means shall be sent to DTC's Reorganization Department as indicated in
Paragraph 5.
4. In the event of a full or partial redemption of the outstanding
Securities, Issuer or Trust Company shall send a notice to DTC specifying: (a)
the number of Securities to be redeemed; and (b) the date such notice is to be
distributed to Security holders or published (the "Publication Date"). Such
notice shall be sent to DTC by a secure means (e.g., legible telecopy,
registered or certified mail, overnight delivery) in a timely manner designed to
assure that such notice is in DTC's possession no later than the close of
business on the business day before or, if possible, two business days before
the Publication Date. Issuer or Trust Company shall forward such notice either
in a separate secure transmission for each CUSIP number or in a secure
transmission for multiple CUSIP numbers (if applicable) which includes a
manifest or list of each CUSIP number submitted in that transmission. (The party
sending such notice shall have a method to verify subsequently the use of such
means and the timeliness of such notice.) The Publication Date shall be not less
than 30 days nor more than 60 days prior to the redemption date. Notices to DTC
pursuant to this Paragraph by telecopy shall be sent to DTC's Call Notification
Department at (516) 227-4039 or (516) 227-4190. If the party sending the notice
does not receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (516) 227-4070. Notices to DTC pursuant to
this Paragraph by mail or by any other means shall be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
5. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Trust
Company to Security holders specifying the terms of the tender and the
Publication Date of such notice shall be sent to DTC by a secure means in the
manner set forth in the preceding Paragraph. Notices to DTC pursuant to this
Paragraph and notices of other corporate actions by telecopy shall be sent to
DTC's Reorganization Department at (212)709-1093 or (212) 709-1094, and receipt
of
<PAGE>
such notices shall be confirmed by telephoning (212) 709-6884. Notices to DTC
pursuant to the above by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
6. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities (listed on Schedule A hereto) and the accompanying
description of such Security, which, as of the date of this letter is
"___________".
7. The Document indicates that the dividend rate for the Securities may
vary from time to time. Absent other existing arrangements with DTC, Issuer or
Trust Company shall give DTC notice of each such change in the dividend rate, on
the same day that the new rate is determined, by telephoning the Supervisor of
DTC's Dividend Announcement Section at (212) 709-1270, or by telecopy sent to
(212) 709-1723. Such verbal or telecopy notice shall be followed by prompt
written confirmation sent by a secure means in the manner set forth in Paragraph
4 to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
8. The Document indicates that each purchaser of Securities must sign a
purchaser's letter which contains provisions restricting transfer of the
Securities purchased. Issuer and Trust Company acknowledge that as long as Cede
& Co. is the sole record owner of the Securities, Cede & Co. shall be entitled
to all voting rights applicable to the Securities and to receive the full amount
of all dividends, liquidation proceeds, and redemption proceeds payable with
respect to the Securities, even if the credits of Securities to the DTC accounts
of any DTC Participant ("Participant") result from transfers or failures to
transfer in violation of the provisions of the purchaser's letter. Issuer and
Trust Company acknowledge that DTC shall treat any Participant having Securities
credited to its DTC accounts as entitled to the full benefits of ownership of
such Securities. Without limiting the generality of the preceding sentence,
Issuer and Trust Company acknowledge that DTC shall treat any Participant having
Securities credited to its DTC accounts as entitled to receive dividends,
distributions, and voting rights, if any, in respect of Securities and, subject
to Paragraphs 12 and 13, to receive certificates evidencing Securities if such
certificates are to be issued in accordance with Issuer's certificate of
incorporation. (The treatment by DTC of the effects of the crediting by it of
Securities to the accounts of Participants described in the preceding two
sentences shall not affect the rights of issuer, participants in auctions
relating to the Securities, purchasers, sellers, or holders of Securities
against any Participant.) DTC shall not have any responsibility to ascertain
whether any transfer of Securities is made in accordance with the provisions of
the purchaser's letter.
9. Issuer or Trust Company shall provide a written notice of dividend
payment and distribution information to a standard announcement service
subscribed to by DTC as soon as the information is available.
<PAGE>
In the unlikely event that no such service exists, Issuer or Trust Company shall
provide this information directly to DTC electronically, as previously arranged
by Issuer or Trust Company and DTC, as soon as the information is available. If
electronic transmission has not been arranged, absent any other arrangements
between Issuer or Trust Company and DTC, such information should be sent by
telecopy to DTC's Dividend Department at (212) 709-1723 or (212) 709-1686, and
receipt of such notices shall be confirmed by telephoning (212) 709-1270.
Notices to DTC pursuant to the above by mail or by any other means shall be
addressed as follows:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
10. Issuer or Trust Company shall provide CUSIP-level detail for dividend
payments and distributions to DTC no later than noon (Eastern Time) on the
payment date.
11. Dividend payments and distributions shall be received by Cede & Co.,
as nominee of DTC, or its registered assigns in same-day funds no later than
2:30 p.m. (Eastern Time) on each payment date. Absent any other arrangements
between Issuer or Trust Company and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA #021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Dividend Deposit Account #066-026776
12. Redemption payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds no later than 2:30 p.m.
(Eastern Time) on the payment date. Absent any other arrangements between Issuer
or Trust Company and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA #021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Redemption Deposit Account #066-027306
13. Reorganization payments and CUSIP-level detail resulting from
corporate actions (such as tender offers, remarketing, or mergers) shall be
received by Cede & Co., as nominee of DTC, or its registered assigns in same-day
funds no later than 2:30 p.m. (Eastern Time) on the first payment date. Absent
any other arrangements between Issuer or Trust Company and DTC, such funds shall
be wired as follows:
The Chase Manhattan Bank
ABA #021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Reorganization Deposit Account #066-027608
<PAGE>
14. DTC may direct Issuer or Trust Company to use any other number or
address as the number or address to which notices, payments of dividends,
distributions, or redemption proceeds may be sent.
15. In the event of a redemption acceleration, or any similar transaction
(e.g., tender made and accepted in response to Issuer's or Trust Company's
invitation) necessitating a reduction in the number of Securities Outstanding,
or an advance refunding of part of the Securities outstanding DTC, in its
discretion: (a) may request Issuer or Trust Company to issue and authenticate a
new Security certificate; or (b) may make an appropriate notation on the
Security certificate indicating the date and amount of such reduction in the
number of Securities outstanding, except in the case of final redemption, in
which case the certificate will be presented to Issuer or Trust Company prior to
payment, if required.
16. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trust
Company shall notify DTC of the availability of certificates. In such event,
Issuer or Trust Company shall issue, transfer, and exchange certificates in
appropriate amounts, as required by DTC and others.
17. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Trust Company (at which time DTC will confirm with Issuer or Trust Company
the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trust Company shall cooperate fully
with DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
18. Issuer hereby authorizes DTC to provide to Trust Company security
position listings of Participants with respect to the Securities from time to
time at the request of Trust Company. Issuer also authorizes DTC, in the event
of a partial redemption of Securities, to provide Trust Company, upon request,
with the names of those Participants whose positions in Securities have been
selected for redemption by DTC. DTC will use its best efforts to notify Trust
Company of those Participants whose positions in Securities have been selected
for redemption by DTC. Issuer authorizes and instructs Trust Company to provide
DTC with such signatures, examples of signatures, and authorizations to act as
may be deemed necessary or appropriate by DTC to permit DTC to discharge its
obligations to its Participants and appropriate regulatory authorities. Such
requests for security position listings shall be sent to DTC's Reorganization
Department in the manner set forth in Paragraph 5.
This authorization, unless revoked by Issuer, shall continue with respect
to the Securities while any Securities are on deposit at DTC, until and unless
Trust Company shall no longer be acting. In such event, Issuer shall provide DTC
with similar evidence, satisfactory to DTC, of the authorization of any
successor thereto so to act.
19. Nothing herein shall be deemed to require Trust Company to advance
funds on behalf of Issuer.
20. This Letter of Representations may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts together constitute but one and the same instrument.
21. This Letter of Representations is governed by, and shall be construed
in accordance with, the laws of
<PAGE>
the State of New York.
22. The following riders, attached hereto, are hereby incorporated into
this Letter of Representations:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
NOTES:
A. IF THERE IS A TRUST COMPANY (AS DEFINED IN THIS LETTER OF REPRESENTATIONS),
TRUST COMPANY AS WELL AS ISSUER MUST SIGN THIS LETTER. IF THERE IS NO
TRUST COMPANY, IN SIGNING THIS LETTER ISSUER ITSELF UNDERTAKES TO PERFORM
ALL OF THE OBLIGATIONS SET FORTH HEREIN.
B. SCHEDULE B CONTAINS STATEMENTS THAT DTC BELIEVES ACCURATELY DESCRIBE DTC,
THE METHOD OF EFFECTING BOOK-ENTRY TRANSFERS OF SECURITIES DISTRIBUTED
THROUGH DTC, AND CERTAIN RELATED MATTERS.
Very truly yours,
Nuveen Performance Plus Municipal Fund, Inc.
(Issuer)
By:
--------------------------------------
(Authorized Officer's Signature)
Bankers Trust Company
(Trust Company)
By:
--------------------------------------------
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:
---------------------------
cc: Underwriter
Underwriter's Counsel
<PAGE>
SCHEDULE A
1,760 Municipal Auction Rate Cumulative Preferred Stock, Series TH, par value
$.01 per share of Nuveen Performance Plus Municipal Fund, Inc.
-----------------------------
(Describe Issue)
CUSIP Number Share Total Value ($ Amount)
- ------------ ----------- ----------------
<PAGE>
SCHEDULE B
SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
-----------------------------------
(PREPARED BY DTC-BRACKETED MATERIAL MAY BE APPLICABLE ONLY TO CERTAIN ISSUES)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities will
be issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully-registered Security certificate will be
issued for [each issue of] the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the
aggregate principal amount of [any] issue exceeds $200 million, one certificate
will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a number
of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Securities,
except in the event that use of the book-entry system for the Securities is
discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Securities; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Securities are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
<PAGE>
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
<PAGE>
[6. Redemption notices shall be sent to DTC. If less than all of the
Securities within an issue are being redeemed, DTC's practice is to determine by
lot the amount of the interest of each Direct Participant in such issue to be
redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
8. Redemption proceeds, distributions and dividend payments on the
Securities will be made to Cede & Co., as nominee of DTC. DTC's practice is to
credit Direct Participants' accounts, upon DTC's receipt of payment and
corresponding detail information from Issuer or Trust Company on payable date in
accordance with their respective holdings shown on DTC's records. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, Trust Company, or Issuer,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of redemption proceeds, distributions and dividends to
Cede & Co. is the responsibility of Issuer or Trust Company, disbursement of
such payments to Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to Trust Company [or
Tender/Remarketing Agent], and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trust Company [or Tender/Remarketing Agent].
The requirement for physical delivery of Securities in connection with an
optional tender or a mandatory purchase will be deemed satisfied when the
ownership rights in the Securities are transferred by Direct Participants on
DTC's records and followed by a book-entry credit of tendered Securities to
Trustee's [or Tender/Remarketing Agent's] DTC account.]
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Trust Company. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required to be
printed and delivered.
11. Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources but Issuer believes to be reliable, but
Issuer takes no responsibility for the accuracy thereof.
11
<PAGE>
RIDER AMENDING DTC LETTER OF REPRESENTATIONS -
BEO AUCTION-RATE/MONEY MARKET PREFERRED/AND REMARKETED PREFERRED SECURITIES
DTC's Reorganization and Dividend Departments have relocated to 55 Water Street.
Following are revisions to the Letter of Representations including current
addresses, telephone numbers, and telecopy numbers.
Paragraph 3 of the Letter of Representations:
- - --------------------------------------------
Old Telecopier Numbers: Current Telecopier Numbers:
(212) 709-6896 and (212) 709-6897 (212) 855-5181 and (212) 855-5182
The confirmation number (formerly (212) 709-6870) is now (212) 855-5202.
Old Te1ecopier Numbers: Current Telecopier Number:
(212) 709-1093 and (212) 709-1094 (212) 855-5278
The confirmation number (formerly (212) 709-6884) is now (212) 855-5280.
The current address is: Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
55 WATER STREET 50TH FLOOR
NEW YORK, NY 10041-0099.
Paragraph 7 of the Letter of Representations:
- --------------------------------------------
Old Telecopier Number: Current Telecopier Number
(212) 709-1723 (212) 855-4555
The confirmation number (formerly (212) 709-1270) is now (212) 855-4550.
The current address is: Manager; Announcements
Dividend Department
The Depository Trust Company
55 WATER STREET 25TH FLOOR
NEW YORK, NY 10041-0099
Paragraph 9 of the Letter of Representations:
- --------------------------------------------
Old Telecopier Numbers: Current Telecopier Numbers:
(212) 709-1723 and (212) 709-1686 (212) 855-4555 and (212) 855-4556
The confirmation number (formerly (212) 709-1270) is now (212) 855-4550.
<PAGE>
The current address for Paragraph 9 is the same as that listed above, for
Paragraph 7.
The following additional text relates to Paragraph 10 of the Letter of
Representations:
Such information shall be conveyed by automated notification. If the
circumstances prevent the funds being paid to Cede & Co., as nominee of DTC, by
2:30 p.m. ET from equaling the dollar amount associated with detail payments by
12:00 noon ET, Issuer or Agent must provide CUSIP-level reconciliation to DTC no
later than 2:30 p.m. ET. Reconciliation may be provided by automated means or in
written format.
The following additional text relates to Paragraph 11 of the Letter of
Representations:
Issuer must remit free funds to Agent by 1:00 p.m. ET on each payment date, or
at such earlier time as required by Agent to guarantee timely credit to the
Dividend Deposit Account of Cede & Co.
The following additional text relates to Paragraph 12 of the Letter of
Representations:
Issuer must remit free funds to Agent by 1:00 p.m. ET on each payment date, or
at such earlier time as required by Agent to guarantee timely credit to the
Redemption Deposit Account of Cede & Co. Issuer or Agent shall deliver CUSIP-
level detail regarding such payments to DTC no later than 2:30 p.m. ET on each
payment date.
The following additional text relates to Paragraph 13 of the Letter of
Representations.
Issuer must remit free funds to Agent by 1:00 p.m. ET on each payment date, or
at such earlier time as required by Agent to guarantee timely credit to the
Reorganization Deposit Account of Cede & Co. Issuer or Agent shall deliver
CUSIP-level detail regarding such payments to DTC no later than 2:30 p.m. ET on
each payment date.
<PAGE>
EXHIBIT 99.h
Municipal Auction Rate Cumulative Preferred Shares
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
1,760 Shares, Series TH
Liquidation Preference $25,000 Per Share
UNDERWRITING AGREEMENT
________ __, 1999
PAINE WEBBER INCORPORATED
SALOMON SMITH BARNEY INC.
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Nuveen Performance Plus Municipal Fund, Inc., a Minnesota corporation
(the "Fund"), proposes, upon the terms and conditions set forth herein, to issue
and sell an aggregate of 1,760 shares of its Municipal Auction Rate Cumulative
Preferred Shares, Series TH, (the "MuniPreferred"), par value .01 per share,
with a liquidation preference of $25,000 per share (the shares of MuniPreferred
to be sold hereby are referred to herein, collectively, as the "Shares"). The
Shares will be authorized by, and subject to the terms and conditions of, the
Statement Establishing and Fixing the Rights and Preferences of Municipal
Auction Rate Cumulative Preferred Stock (the "Statement") in the form filed as
an exhibit to the registration statement referred to in Section 1 of this
agreement. Nuveen Advisory Corp., a Delaware corporation (the "Adviser"), is the
Fund's investment adviser. This is to confirm the agreement concerning the
purchase of the Shares from the Fund by Salomon Smith Barney Inc. (the
"Representative") and Paine Webber Incorporated (each an "Underwriter", and
together with the Representative, the "Underwriters"). The Representative has
been duly authorized by each of the Underwriters to execute this Underwriting
Agreement (the "Agreement") on behalf of such Underwriters and has been duly
authorized to act hereunder on behalf of each of the Underwriters.
The Fund has entered into an investment management agreement with the
Adviser, an exchange traded fund custody agreement with United States Trust
Company of New York, a fund accounting agreement with United States Trust
Company of New York and an auction agency agreement, including the Basic Terms
in respect thereof, with Bankers Trust Company.
<PAGE>
Such agreements are hereinafter referred to as the "Investment Management
Agreement", the "Custodian Agreement", the "Fund Accounting Agreement" and the
"Auction Agency Agreement", respectively. Collectively, the Investment
Management Agreement, the Custodian Agreement, the Fund Accounting Agreement and
the Auction Agency Agreement are hereinafter referred to as the "Fund
Agreements".
1. Registration Statement and Prospectus. The Fund has prepared, in
conformity 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 Securities and Exchange Commission (the
"Commission"), promulgated 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 under the 1933 Act and the 1940 Act (the
"registration statement"), including a prospectus relating to the Shares, and
has filed the registration statement and prospectus in accordance with the 1933
Act and the 1940 Act. The Fund also has filed 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. 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. If the Fund has filed an abbreviated
registration statement to register an additional amount of Shares pursuant to
Rule 462(b) under the 1933 Act (the "Rule 462 Registration Statement"), then any
reference herein to the term "Registration Statement" shall include such Rule
462 Registration Statement. The term "Prospectus" as used in this Agreement
means the prospectus and statement of additional information in the forms
included in the Registration Statement or, if the prospectus and statement of
additional information included in the Registration Statement omit information
in reliance on Rule 430A under the 1933 Act Rules and Regulations and such
information is included in a prospectus and statement of additional information
filed with the Commission pursuant to Rule 497 under the 1933 Act, the term
"Prospectus" as used in this Agreement means the prospectus and statement of
additional information in the forms included in the Registration Statement as
supplemented by the addition of the information contained in the prospectus
filed with the Commission pursuant to Rule 497. The term "Prepricing Prospectus"
as used in this Agreement means the prospectus and statement of additional
information subject to completion in the forms included in the registration
statement at the time of filing of pre-effective amendment no. 1 to the
registration statement under the 1933 Act with the Commission on April __, 1999,
and as such prospectus and statement of additional information shall have been
amended from time to time prior to the date of the Prospectus, together with any
other prospectus and statement of additional information relating to the Fund
other than the Prospectus approved in writing by or directly or indirectly
prepared by the Fund or the Adviser; it being understood that the definition of
Prepricing Prospectus above shall not include any Prepricing Prospectus prepared
by the
<PAGE>
Underwriters unless approved in writing by the Fund or Adviser. The terms
"Registration Statement", "Prospectus" and "Prepricing Prospectus" shall also
include any financial statements incorporated by reference therein.
The Fund has furnished the Underwriters 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 sell to the
Underwriters, and, upon the basis of the representations, warranties and
agreements of the Fund and the Adviser herein contained and subject to all the
terms and conditions set forth herein, the Underwriters agree to purchase from
the Fund, at a purchase price of $_______ per Share, the number of shares of
MuniPreferred set forth opposite the names of the Underwriters in Schedule I
hereto.
3. Terms of Public Offering. The Fund and the Adviser have been advised
by the Underwriters that the Underwriters propose to make a public offering of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in the Underwriters' judgment is advisable and initially to
offer the Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Shares shall be made at the office of
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, NY 10017, at 9:30
A.M., New York City time, on ________ __, 1999 (the "Closing Date"). The place
of closing for the Shares and the Closing Date may be varied by agreement
between the Representative and the Fund.
Certificates for the Shares shall be registered in such names and in
such denominations as the Underwriters shall request prior to 9:30 A.M., New
York City time, on the second business day preceding the Closing Date. Such
certificates shall be made available to the Underwriters in New York City for
inspection not later than 9:30 A.M., New York City time, on the business day
next preceding the Closing Date. The certificates evidencing the Shares shall be
delivered to the Underwriters on the Closing Date, through the facilities of The
Depository Trust Company, against payment of the purchase price therefor in
immediately available funds.
5. Agreements of the Fund and the Adviser. The Fund and the Adviser,
jointly and severally, agree with the 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 Shares
may commence, the Fund will endeavor to cause the Registration Statement or such
post-effective amendment to become effective under the 1933 Act as soon as
possible and will advise the Underwriters promptly and, if requested by the
Underwriters, will confirm such advice in writing when the Registration
Statement or such post-effective amendment has become effective.
<PAGE>
(b) The Fund will advise the Underwriters promptly and, if requested by
the Underwriters, 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 or 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 of any proceeding for any such purposes, (iii)
of receipt by the Fund, the Adviser, any affiliate of the Fund or the Adviser or
any representative or attorney of the Fund or the Adviser 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 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 herein defined) (or any amendment
or supplement to any of the foregoing) or 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 Adviser or of the happening of any other event which makes any statement
of a material fact made in the Registration Statement or the Prospectus or any
sales material (as herein 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 or the Prospectus, or any Prepricing Prospectus or
any sales material (as herein 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 light of the circumstances under which they
were made, not misleading or of the necessity to amend or supplement the
Registration Statement, the Prospectus, or any Prepricing Prospectus or any
sales material (as herein 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 or any sales material (as herein 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 make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
(c) The Fund will furnish to the Underwriters, without charge, three
signed copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits thereto, and will also furnish to the
<PAGE>
Underwriters, without charge, such number of conformed copies of the
Registration Statement as originally filed and of each amendment thereto, but
without exhibits, as the Underwriters may request.
(d) The Fund will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus, or any sales
material (as herein defined), of which the Underwriters shall not previously
have been advised or to which the Underwriters shall reasonably object after
being so advised or (ii) so long as, in the opinion of counsel for the
Underwriters, a Prospectus is required by the 1933 Act to be delivered in
connection with sales by the Underwriters or any dealer, file any information,
documents or reports pursuant to the Securities Exchange Act of 1934, as amended
(the "1934 Act") or the 1940 Act, without delivering a copy of such information,
documents or reports to the Underwriters prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this Agreement, the Fund has
delivered to the Underwriters, without charge, in such quantities as the
Underwriters have requested, copies of each form of the Prepricing Prospectus.
The Fund consents to the use, in accordance with the provisions of the 1933 Act
and with the state securities or blue sky laws of the jurisdictions in which the
Shares are offered by the 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 by the Underwriters or any dealer, the Fund
will expeditiously deliver to the Underwriters and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto) as
the Underwriters may request. The Fund consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the 1933 Act and with the state securities or blue sky laws of the
jurisdictions in which the Shares are offered by the Underwriters and by all
dealers to whom Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as the Prospectus is
required by the 1933 Act to be delivered in connection with sales by the
Underwriters or any 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 Registration Statement or the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Registration Statement or the Prospectus to comply with the 1933 Act,
the 1940 Act, the Rules and Regulations or any other federal law, rule or
regulation, or any state securities or blue sky disclosure laws, rules or
regulations, the Fund will forthwith prepare and, subject to the provisions of
paragraph (d) above, promptly file with the Commission an appropriate supplement
or amendment thereto, and will expeditiously furnish to the Underwriters and
dealers, without charge, a reasonable number of copies thereof. In the event
that the Fund and the Representative agree that the Registration Statement or
the Prospectus should be amended or supplemented, the Fund, if requested by the
Representative, will promptly
<PAGE>
6
issue a press release announcing or disclosing the matters to be covered by the
proposed amendment or supplement.
(g) The Fund will make generally available to its security holders an
earnings statement, which need not be audited, covering a twelve-month period
ending not later than 15 months after the effective date of the Registration
Statement 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.
(h) During the period of five years hereafter, the Fund will furnish to
the Underwriters (i) as soon as available, a copy of each report of the Fund
mailed to stockholders or filed with the Commission or furnished to the New York
Stock Exchange (the "NYSE") other than reports on Form N-SAR, and (ii) from time
to time such other information concerning the Fund as the Underwriters may
reasonably request.
(i) The Fund will apply the net proceeds from the sale of the Shares
substantially in accordance with the description set forth in the Prospectus and
in such a manner as to comply with the investment objectives, policies and
restrictions of the Fund as described in the Prospectus.
(j) The Fund will timely file the requisite copies of the Prospectus
with the Commission pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules
and Regulations, whichever is applicable or, if applicable, will timely file the
certification permitted by Rule 497(j) of the 1933 Act Rules and Regulations and
will advise the Representative of the time and manner of such filing.
(k) Except as provided in this Agreement, the Fund will not sell,
contract to sell, or otherwise dispose of any senior securities (as defined in
the 1940 Act) of the Fund, or grant any options or warrants to purchase senior
securities of the Fund, for a period of 120 days after the date of the
Prospectus, without the prior written consent of the Representative.
(l) Except as stated in this Agreement and in the Prepricing Prospectus
and Prospectus, neither the Fund nor the Adviser has taken, nor will it 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 any
securities issued by the Fund to facilitate the sale or resale of the Shares.
(m) The Fund will use its best efforts to cause the MuniPreferred,
prior to the Closing Date, to be assigned a rating of 'aaa' by Moody's Investors
Service, Inc. ("Moody's") and AAA by Standard & Poor's Rating Group ("S&P" and,
together with Moody's, the "Rating Agencies").
(n) The Fund and the Adviser will use their best efforts to perform all
of the agreements required of them and discharge all conditions to closing as
set forth in this Agreement.
<PAGE>
6. Representations and Warranties of the Fund and the Adviser. The Fund
and the Adviser, jointly and severally, represent and warrant to the
Underwriters that:
(a) Each Prepricing Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 497 of the 1933 Act Rules and Regulations, complied
when so filed in all material respects with the provisions of the 1933 Act, the
1940 Act and the Rules and Regulations. The Commission has not issued any order
preventing or suspending the use of any Prepricing Prospectus.
(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 supplement
or amendment 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 not misleading, except that this representation and warranty
does not apply to statements in or omissions from the Registration Statement or
the Prospectus made in reliance upon and in conformity with information relating
to the Underwriters furnished to the Fund in writing by or on behalf of the
Underwriters expressly for use therein.
(c) All the outstanding shares of capital stock of the Fund have been
duly authorized and validly issued, are fully paid and 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
nonassessable and free of any preemptive or similar rights and will conform to
the description thereof in the Registration Statement and the Prospectus (and
any amendment or supplement to either of them); and the capital stock of the
Fund conforms to the description thereof in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them).
(d) The Fund is a corporation duly organized and validly existing in
good standing under the laws of the State of Minnesota, 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 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; and 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 (and any amendment or supplement to
either of them), but are not described as required, and there are no
<PAGE>
8
agreements, contracts, indentures, leases or other instruments that are required
to be described in the Registration Statement or the Prospectus (and 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 Articles of Incorporation (the
"Articles"), the Statement or by-laws (the "By-Laws"), or other organizational
documents (together, the "Organizational Documents") of the Fund or of any law,
ordinance, administrative or governmental rule or regulation of any decree of
the Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or governmental agency, body or
official having jurisdiction over the Fund, or in default in any material
respect in the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or in 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.
(g) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or any of the Fund Agreements by the
Fund, nor the consummation by the Fund 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,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may have been obtained prior to the date hereof and
such as may be required for compliance with the state securities or blue sky
laws of various jurisdictions which have been or will be effected in accordance
with this Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the Organizational Documents of the
Fund or (B) conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, 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, or violates or will violate any statute, law, regulation 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 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 its property or assets is subject. The Fund is not subject to any
order of any court or of any arbitrator, governmental authority or
administrative agency.
(h) The accountants, Ernst & Young, who have certified or shall certify
the financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or supplement to
either of them), are independent public accountants as required by the 1933 Act,
the 1940 Act and the Rules and Regulations.
(i) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them), present
fairly the financial position, results of operations and changes in financial
position of the Fund on the basis stated or incorporated by reference in the
Registration Statement 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
<PAGE>
9
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 and the Prospectus
(and any amendment or supplement to either of them), are accurately presented
and prepared on a basis consistent with such financial statements and the books
and records of the Fund.
(j) 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 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 and thereunder may be limited by federal or state securities laws.
(k) Except as disclosed in the Registration Statement and the
Prospectus (or 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 (or any amendment or supplement to either of them),
the Fund has not incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, 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, or any
material adverse change, or any development involving or which may reasonably be
expected to involve, a prospective material adverse change, in the condition
(financial or other), business, prospects, properties, net assets or results of
operations of the Fund, whether or not arising in the ordinary course of
business.
(l) The Fund has filed all tax returns required to be filed, which
returns are complete and correct in all material respects, and the Fund is not
in material default in the payment of any taxes which were payable pursuant to
said returns or any assessments with respect thereto.
(m) The Fund is 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 any
amendment or supplement thereto, conformed in all material respects with all
applicable provisions of the 1940 Act and the Rules and Regulations. The Fund
is, and at all times through the completion of the transactions contemplated
hereby, will be, in compliance in all material respects with the terms and
conditions of the 1933 Act and the 1940 Act. No person is serving or acting as
an officer, director or investment adviser of the Fund except in accordance with
the provisions of the 1940 Act and the Rules and Regulations and the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and the rules and
regulations of the Commission promulgated under the Advisers Act (the "Advisers
Act Rules and Regulations").
(n) As required by Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"), the Fund is currently in compliance with the
requirements to qualify as a regulated investment company under the Code.
(o) The Fund's common shares are duly listed on the New York Stock
Exchange.
<PAGE>
10
(p) 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 any offering material in connection with the offering and sale of
the Shares other than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials, if any, permitted by the 1933 Act, the 1940 Act
or the Rules and Regulations.
(q) No holder of any security of the Fund has any right to require
registration of shares of common stock, shares of MuniPreferred or any other
security of the Fund because of the filing of the Registration Statement or
consummation of the transactions contemplated by this Agreement.
(r) 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.
(s) Except as stated in this Agreement and in the Prospectus (and any
amendment or supplement thereto), the Fund has not taken, nor will it take,
directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
securities issued by the Fund to facilitate the sale or resale of the Shares,
and the Fund is not aware of any such action taken or to be taken by any
affiliates of the Fund.
(t) The Fund has filed in a timely manner each document or report
required to be filed by it pursuant to the 1940 Act, the 1940 Act Rules and
Regulations, the 1934 Act and the rules and regulations of the Commission
promulgated thereunder (the "1934 Act Rules and Regulations"); each such
document or report at the time it was filed conformed to the requirements of the
1934 Act and the 1934 Act Rules and Regulations; and none of such documents or
reports contained an untrue statement of any material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(u) All advertising, sales literature or other promotional material
(including "prospectus wrappers," "broker kits," "road show slides" and "road
show scripts") authorized in writing by or prepared by the Fund or the Adviser
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 1940 Act, the Rules and Regulations
and the rules and interpretations of the NASD and no such 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.
(v) The Fund has implemented a comprehensive, detailed program to
analyze and address the risk that its computer hardware and software may be
unable to recognize and properly execute date-sensitive functions involving
certain dates prior to and any dates after December 31,
<PAGE>
11
1999 (the "Year 2000 Problem") and has determined that its computer hardware and
software are and will be able to process all date information prior to and after
December 31, 1999 without any errors, aborts, delays or other interruptions in
operations associated with the Year 2000 Problem; and the Fund believes, after
due inquiry, that each supplier, vendor, customer or financial service
organization used by the Fund has remedied or will remedy on a timely basis the
Year 2000 Problem, except to the extent that a failure to remedy by any such
supplier, vendor, customer or financial service organization would not have a
material adverse effect on the Fund. The Fund is in compliance with the
Commission's staff legal bulletin No. 5 dated January 12, 1998 related to Year
2000 compliance, as amended to date.
7. Representations and Warranties of the Adviser. The Adviser
represents and warrants to the Underwriters as follows:
(a) The 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 to either of them), 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.
(b) The Adviser is duly registered with the Commission as an investment
adviser under the Advisers Act and is not prohibited by the Advisers Act, the
Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules and
Regulations from acting under the Investment Management Agreement for the Fund
as contemplated by the Prospectus (or any amendment or supplement thereto).
There does not exist any proceeding or any facts or circumstances the existence
of which could lead to any proceeding which might adversely affect the
registration of the Adviser with the Commission.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of the Adviser, threatened against the Adviser, or to which the
Adviser 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 or that may reasonably be
expected to involve a prospective material adverse change, in the condition
(financial or other), business, prospects, properties, assets or results of
operations of the Adviser or on the ability of the Adviser to perform its
obligations under this Agreement and the Investment Management Agreement.
(d) The Adviser is not in violation of its corporate charter or
by-laws, or other organizational documents, in default under any agreement,
indenture or instrument or in breach or violation of any judgment, decree,
order, rule or regulation of any court or governmental or self-regulatory agency
or body.
(e) Neither the execution, delivery or performance of this Agreement or
the Investment Management Agreement by the Adviser, nor the consummation by the
Adviser of the
<PAGE>
12
transactions contemplated hereby or thereby (A) requires the Adviser to obtain
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, regulatory body, administrative
agency or other governmental body, agency or official or conflicts or will
conflict with or constitutes or will constitute a breach of or a default under,
the corporate charter or by-laws, or other organizational documents, of the
Adviser or (B) conflicts or will conflict with or constitutes or will constitute
a breach of or a default under, any agreement, indenture, lease or other
instrument to which the Adviser is a party or by which it or any of its
properties may be bound, or violates or will violate any statute, law,
regulation or filing or judgment, injunction, order or decree applicable to the
Adviser or any of its properties or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the 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 the
Adviser is subject. The Adviser is not subject to any order of any court or of
any arbitrator, governmental authority or administrative agency.
(f) The execution and delivery of, and the performance by the Adviser
of its obligations under, this Agreement and the Investment Management Agreement
have been duly and validly authorized by the Adviser, and this Agreement and the
Investment Management Agreement have been duly executed and delivered by the
Adviser and each constitutes the valid and legally binding agreement of the
Adviser, enforceable against the Adviser in accordance with its terms.
(g) The Adviser has the financial resources available to it necessary
for the performance of its services and obligations as contemplated in the
Prospectus (or any amendment or supplement thereto) and under this Agreement and
the Investment Management Agreement.
(h) The description of the Adviser in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) complied and comply in
all material respects with the provisions 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 light of the circumstances under which they
were made, not misleading.
(i) Except as disclosed in the Registration Statement and the
Prospectus (or 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 (or any amendment or supplement to either of them),
the Adviser has not incurred any liability or obligation, direct or contingent,
or entered into any transaction, not in the ordinary course of business, that is
material to the Adviser or the Fund and that is required to be disclosed in the
Registration Statement or the Prospectus and there has not been any material
adverse change, or any development involving or which may reasonably be expected
to involve, a prospective material adverse change, in the condition (financial
or other), business, prospects, properties, assets or results of operations of
the Adviser, whether or not arising in the ordinary course of business, or
which, in each case, could
<PAGE>
13
have a material adverse effect on the ability of the Adviser to perform its
obligations under this Agreement and the Investment Management Agreement.
8. Indemnification and Contribution. (a) The Fund and the Adviser,
jointly and severally, agree to indemnify and hold harmless each of the
Underwriters and each person, if any, who controls the Underwriters 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 (including
reasonable costs of investigation), joint or several, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, 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 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 the
Underwriters furnished in writing to the Fund by or on behalf of the
Underwriters expressly for use in connection therewith; provided, however, that
the indemnification contained in this paragraph (a) with respect to any
Prepricing Prospectus shall not inure to the benefit of the Underwriters (or to
the benefit of any person controlling the Underwriters) on account of any such
loss, claim, damage, liability or expense arising from the sale of the Shares by
the Underwriters to any person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the 1933 Act and
the 1933 Act Rules and Regulations, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Prepricing Prospectus was corrected in the Prospectus, provided that the Fund
has delivered the Prospectus to the Underwriters in requisite quantity on a
timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Fund or the Adviser
may otherwise have.
(b) If any action, suit or proceeding shall be brought against the
Underwriters or any person controlling any Underwriter in respect of which
indemnity may be sought against the Fund or the Adviser, the Underwriters or
such controlling person shall promptly notify the Fund or the Adviser, and the
Fund or the Adviser shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. The Underwriters 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 the Underwriters or
such controlling person unless (i) the Fund or the Adviser has agreed in writing
to pay such fees and expenses, (ii) the Fund and the Adviser have failed 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 the
Underwriters or such controlling person and the Fund or the Adviser and the
Underwriters or such controlling person shall have been advised by its counsel
that representation of such indemnified party and the Fund or the Adviser 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 Adviser shall not have the right to assume the defense of
such action, suit or proceeding on behalf of the
<PAGE>
14
Underwriters or such controlling person). It is understood, however, that the
Fund and the Adviser 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 reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
the Underwriters and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be designated
in writing by the Representative, and that all such fees and expenses shall be
reimbursed as they are incurred. The Fund and the Adviser shall not be liable
for any settlement of any such action, suit or proceeding effected without its
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, the
Fund and the Adviser agree to indemnify and hold harmless the Underwriters, to
the extent provided in the preceding paragraph, and any such controlling person
from and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) The Underwriters agree, severally and not jointly, to indemnify and
hold harmless the Fund and the Adviser, their directors, any officers who sign
the Registration Statement, and any person who controls the Fund or the Adviser
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 Adviser to
the Underwriters, but only with respect to information relating to the
Underwriters furnished in writing by or on behalf of the Underwriters expressly
for use in the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Fund or the Adviser, any of their
directors, any such officer, or any such controlling person based on the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against the Underwriters pursuant to this paragraph (c), the Underwriters shall
have the rights and duties given to the Fund and the Adviser by paragraph (b)
above (except that if the Fund or the Adviser shall have assumed the defense
thereof the Underwriters 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 the Underwriters' expense), and the Fund
and the Adviser, their 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 Adviser 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 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 Adviser on the one hand
<PAGE>
15
(treated jointly for this purpose as one person) and the Underwriters on the
other in connection with the statements or omissions that 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
Adviser on the one hand (treated jointly for this purpose as one person) and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Fund bear to the total sales load received by the Underwriters, in each case as
set forth in the table on the cover page of the Prospectus. The relative fault
of the Fund and the Adviser on the one hand (treated jointly for this purpose as
one person) and 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 Adviser 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 Adviser and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
a pro rata allocation 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 investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 8, the Underwriters
shall not 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
publicexceeds the amount of any damages which the Underwriters have 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.
(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 settlement includes an unconditional release of
such indemnified party from all liability 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 Adviser 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 the Underwriters or any person
controlling the Underwriters, the Fund, the Adviser, their directors or
officers, or any person controlling the Fund or the Adviser, (ii) acceptance of
<PAGE>
16
any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to the Underwriters or any person controlling any
Underwriter, or to the Fund, the Adviser, their directors or officers, or any
person controlling the Fund or the Adviser, shall be entitled to the benefits of
the indemnity, contribution, and reimbursement agreements contained in this
Section 8.
9. Conditions of Underwriters' Obligations. The obligation of the
Underwriters to purchase the Shares hereunder are subject 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 the
Underwriters, and all filings, if any, required by Rules 497 and 430A under the
1933 Act and the 1933 Act Rules and Regulations shall have been timely made; no
stop order suspending the effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act shall have been issued and no
proceeding for those purposes shall have been instituted or, to the knowledge of
the Fund, the Adviser or the Underwriters, 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 the Underwriters' satisfaction.
(b) 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 affecting the condition (financial or other), business, prospects,
properties, net assets, or results of operations of the Fund or the Adviser not
contemplated by the Prospectus, which in the Underwriters' opinion would
materially, adversely affect the market for the Shares, or (ii) any event or
development relating to or involving the Fund or the Adviser or any officer or
director of the Fund or the Adviser which makes any statement made in the
Prospectus 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 in order to state a material fact required by the 1933 Act,
the 1940 Act or the Rules and Regulations or any other law to be stated therein
or necessary in order to make the statements therein not misleading, if amending
or supplementing the Prospectus to reflect such event or development would, in
the Underwriters' opinion, materially adversely affect the market for the
Shares.
(c) The Fund shall have furnished to the Representative a report
showing compliance with the asset coverage requirements of the 1940 Act and a
Basic Maintenance Report (as defined in the Statement), each dated the Closing
Date and in form and substance satisfactory to the Representative. Each such
report may use portfolio holdings and valuations as of the close of business of
any day not more than six business days preceding the Closing Date, provided,
however, that the Fund represents in such report that its total net assets as of
the Closing Date have not declined by 5% or more from such valuation date.
<PAGE>
17
(d) Morgan, Lewis & Bockius LLP, counsel to the Fund, shall have
furnished to the Representative on the Closing Date their opinion addressed to
the Underwriters and dated the Closing Date, to the effect that:
(i) The Fund has been duly organized and is validly existing and
in good standing as a corporation under the laws of the State of
Minnesota, 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 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;
(ii) The Fund has no subsidiaries;
(iii) All of the outstanding shares of capital stock of the Fund
have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights;
(iv) The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance
with the terms of the Underwriting Agreement, will be validly issued,
fully paid and nonassessable and free of any preemptive or similar
rights. Except as set forth in the Articles and the Statement, there
are no restrictions upon the transfer of any Shares pursuant to the
Articles or By-Laws of the Fund or any agreement or other outstanding
instrument known to such counsel; and the certificate evidencing the
Shares complies with all formal requirements of Minnesota law;
(v) The Shares conform in all material respects to the description
thereof in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them) and the capital stock of the
Fund (including the MuniPreferred and any other outstanding series of
preferred stock) conforms in all material respects to the description
thereof in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them); and the authorized and
outstanding capital stock of the Fund is as set forth in the
Prospectus;
(vi) The Registration Statement is effective under the 1933 Act
and the 1940 Act; any required filing of the Prospectus pursuant to
Rule 497 of the Rules and Regulations has been made within the time
periods required by Rule 497; to the best of such counsel's knowledge,
no stop-order suspending the effectiveness of the Registration
Statement or order pursuant to Section 8(e) of the 1940 Act has been
issued and no proceeding for any such purpose has been instituted or is
pending or threatened by the Commission;
<PAGE>
18
(vii) The 1940 Act Notification, the Registration Statement and
the Prospectus and each amendment or supplement to the Registration
Statement and the Prospectus as of their respective or issue dates
(except that no opinion need be expressed as to the financial
statements or other financial data contained therein) complied as to
form in all material respects with the requirements of the 1933 Act,
the 1940 Act and the Rules and Regulations;
(viii) The statements made in the Prospectus under the captions
"The Auction" and "Description of MuniPreferred", insofar as they
purport to summarize the provisions of the Statement or other documents
or agreements specifically referred to therein, constitute accurate
summaries of the terms of any such documents;
(ix) The statements made in the Prospectus under the caption
"Prospectus Summary-Taxation" and both captions entitled "Tax Matters",
insofar as they constitute matters of law or legal conclusions, have
been reviewed by such counsel and constitute accurate statements of any
such matters of law or legal conclusions, and fairly present the
information called for with respect thereto by Form N-2;
(x) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or 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 (and
any amendment or supplement to either of them), but are not described
as required;
(xi) To the best of such counsel's knowledge, there are no
agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the
Prospectus (and 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;
(xii) To the best of such counsel's knowledge, the Fund is not in
violation of its Articles, the Statement or its By-Laws, or other
organizational documents of the Fund or of any law, ordinance,
administrative or governmental rule or regulation, of any decree of the
Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or governmental agency,
body or official having jurisdiction over the Fund, or in default in
any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence
of indebtedness or in 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;
<PAGE>
19
(xiii) The Underwriting Agreement and the Fund Agreements have
each been duly and validly authorized, executed and delivered by the
Fund, each complies with all applicable provisions of the 1940 Act and
each constitutes the valid and legally binding agreement of the Fund,
enforceable against the Fund in accordance with its terms, except as
rights to indemnity and contribution under the Underwriting Agreement
and the Fund Agreements may be limited by federal or state securities
laws, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(xiv) The Fund is registered under the 1940 Act as a closed-end
diversified management investment company; the provisions of the
Articles, Statement and By-Laws of the Fund and the investment policies
and restrictions described in the Prospectus under the caption
"Prospectus Summary-Investment Objectives", "The Fund" and "Risk
Factors", both captions entitled "Investment Objectives and Policies",
and the captions entitled "Municipal Bonds", "Portfolio Investments",
"Insured Funds: Municipal Bond Insurance", "Investment Restrictions"
and "Certain Trading Strategies of the Funds" comply with the
requirements of the 1940 Act;
(xv) To the best of such counsel's knowledge, no person is serving
or acting as an officer, director or investment adviser of the Fund
except in accordance with the provisions of the 1940 Act and the 1940
Act Rules and Regulations and the Investment Advisers Act and the
Advisers Act Rules and Regulations.
(xvi) Neither the issuance and sale of the Shares, the execution,
delivery or performance of the Underwriting Agreement or any of the
Fund Agreements by the Fund, nor the consummation by the Fund of the
transactions contemplated in the Underwriting Agreement or any of the
Fund Agreements (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, regulatory body, administrative
agency or governmental body, agency or official (except such as may
have been obtained prior to the date hereof and such as may be required
for compliance with the state securities or blue sky laws of various
jurisdictions in accordance with the Underwriting Agreement) or
conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, the Organizational Documents of the Fund
or (B) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, 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, or violates or will violate any
statute, law, regulation 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 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
<PAGE>
20
by which it may be bound or to which any of its property or assets is
subject. The Fund is not subject to any order of any court or of any
arbitrator, governmental authority or administrative agency;
(xvii) No holder of any security of the Fund has any right to
require registration of shares of common stock, shares of MuniPreferred
or any other security of the Fund because of the filing of the
Registration Statement or consummation of the transactions contemplated
by the Underwriting Agreement; and
(xviii) Such counsel shall also state that they have participated
in conferences with officers and employees of the Fund, representatives
of the independent accountants for the Fund, Minnesota counsel to the
Fund, the Underwriters and counsel for the Underwriters at which the
contents of the Registration Statement and the Prospectus and related
matters were discussed and, although they are not passing upon, and do
not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus, except to the limited extent otherwise covered by
paragraphs (v), (vii), (viii), (ix) and (xiv), and have made no
independent check or verification thereof, and on the basis of the
foregoing, no facts have come to their attention that would have led
them to believe that the Registration Statement or any amendment or
supplement thereto, at the time it became effective, contained an
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
contained therein not misleading or that the Prospectus or any
amendment or supplement thereto, as of its issue date and as of the
Closing Date, 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 contained therein, in light
of the circumstances under which they were made, not misleading, except
that they express no belief with respect to the financial statements,
schedules and other financial information and statistical data included
therein or excluded therefrom or the exhibits to the Registration
Statement, including the information under the caption "Taxable
Equivalent Yield Table" in Appendix A to the Prospectus.
Such opinion shall also contain a statement that such counsel has no
reason to believe that the 1940 Act Notification contains any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
In giving such opinion, Morgan, Lewis & Bockius LLP may rely on the
opinion of Dorsey & Whitney as to matters of Minnesota law, provided that
Morgan, Lewis & Bockius LLP furnish a copy thereof to the Underwriters and state
that such opinion is satisfactory in substance and form and that the
Underwriters and counsel for the Underwriters are entitled to rely thereon.
<PAGE>
21
(e) Gifford Zimmerman, Esq., Vice President and Secretary of the
Adviser, shall have furnished to the Representative on the Closing Date his
opinion addressed to the Underwriters and dated the Closing Date, to the effect
that:
(i) The Adviser has been duly organized and is validly existing
and in good standing as a corporation 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 to either of them), 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;
(ii) The Adviser is duly registered and in good standing with the
Commission as an investment adviser under the Advisers Act and is not
prohibited by the Advisers Act, the Advisers Act Rules and Regulations,
the 1940 Act or the 1940 Act Rules and Regulations from acting under
the Investment Management Agreement for the Fund as contemplated by the
Prospectus (or any amendment or supplement thereto); there does not
exist any proceeding or any facts or circumstances the existence of
which could lead to any proceeding which might adversely affect the
registration of the Adviser with the Commission;
(iii) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened against the Adviser,
or to which the Adviser 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 or that may reasonably be expected to involve
a prospective material adverse change, in the condition (financial or
other), business, prospects, properties, assets or results of
operations of the Adviser or on the ability of the Adviser to perform
its obligations under the Underwriting Agreement and the Investment
Management Agreement;
(iv) To the best of such counsel's knowledge, the Adviser is not
in violation of its corporate charter or by-laws, or other
organizational documents, nor is the Adviser in default under any
agreement, indenture or instrument or in breach or violation of any
judgment, decree, order, rule or regulation of any court or
governmental or self-regulatory agency or body;
(v) The Underwriting Agreement and the Investment Management
Agreement have each been duly and validly authorized, executed and
delivered by the Adviser, each complies with all applicable provisions
of the 1940 Act and the Advisers Act and the 1940 Act Rules and
Regulations and the Advisers Act Rules and Regulations and each
constitutes the valid and legally binding agreement of the Adviser,
enforceable against the Adviser in accordance with its terms, subject
as to
<PAGE>
22
enforcement to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles;
(vi) The description of the 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 light of the circumstances under which they were made, not
misleading;
(vii) Except as disclosed in the Registration Statement and the
Prospectus (or 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 (or any
amendment or supplement to either of them), the Adviser has not
incurred any liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of business, that is
material to the Adviser or the Fund and that is required to be
disclosed in the Registration Statement or the Prospectus and there has
not been any material adverse change, or any development involving or
which may reasonably be expected to involve, a prospective material
adverse change, in the condition (financial or other), business,
prospects, properties, assets or results of operations of the Adviser,
whether or not arising in the ordinary course of business, or which, in
each case, could have a material adverse effect on the ability of the
Adviser to perform its obligations under the Underwriting Agreement and
the Investment Management Agreement; and
(viii) Neither the execution, delivery or performance of the
Underwriting Agreement or the Investment Management Agreement by the
Adviser, nor the consummation by the Adviser of the transactions
contemplated in the Underwriting Agreement or the Investment Management
Agreement (A) requires the Adviser to obtain 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, regulatory body,
administrative agency or other governmental body, agency or official or
conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, the corporate charter or by-laws, or
other organizational documents, of the Adviser or (B) conflicts or will
conflict with or constitutes or will constitute a breach of or a
default under, any agreement, indenture, lease or other instrument to
which the Adviser is a party or by which it or any of its properties
may be bound, or violates or will violate any statute, law, regulation
or filing or judgment, injunction, order or decree applicable to the
Adviser or any of its properties or will result in the creation or
imposition of any lien, charge or encumbrance upon any
<PAGE>
23
property or assets of the 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 the Adviser is
subject. The Adviser is not subject to any order of any court or of any
arbitrator, governmental authority or administrative agency.
(f) The Representative shall have received on the Closing Date an
opinion of Simpson Thacher & Bartlett, counsel for the Underwriters, dated the
Closing Date and addressed to the Underwriters, with respect to such matters as
the Underwriters may reasonably request.
(g) The Fund shall have furnished to the Representative on the Closing
Date a certificate, dated the Closing Date, of its President or a Vice President
and its Controller or Treasurer stating that:
(i) The representations, warranties and agreements of the Fund in
Section 6 hereof are true and correct as of the Closing Date; the Fund
has complied with all its agreements contained herein; and the
conditions set forth in Section 9(a) have been fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion, (A) as of the date of its
effectiveness (or the most recent post-effective amendment thereto),
the Registration Statement did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and on such Closing Date, the Prospectus did not include any
untrue statement of a material fact and did not omit to state any
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, and (B) since the date of effectiveness of the
Registration Statement (or the most recent post-effective amendment
thereto), no event has occurred which should have been set forth in a
supplement to or amendment of the Prospectus which has not been set
forth in such a supplement or amendment.
(h) The Adviser shall have furnished to the Representative on the
Closing Date a certificate, dated the Closing Date, of its Chairman of the
Board, President or a Vice President and its Controller or Treasurer stating
that:
(i) The representations, warranties and agreements of the Adviser
in Sections 6 and 7 hereof are true and correct as of such Closing Date
and the Adviser has complied with all its agreements contained herein;
and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion, (A) as of the date of its
effectiveness (or the most recent post-effective amendment thereto),
the Registration Statement did not include any untrue statement of a
material fact and did not omit to state any material fact
<PAGE>
24
required to be stated therein or necessary to make the statements
therein not misleading and on such Closing Date, the Prospectus did not
include any untrue statement of a material fact and did not omit 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, and (B) since the date of its
effectiveness, (or the most recent post-effective amendment thereto)
the Registration Statement, no event has occurred which should have
been set forth in a supplement to or amendment of the Prospectus which
has not been set forth in such a supplement or amendment.
(i) The Representative shall have received letters addressed to the
Underwriters, and dated the date hereof and the Closing Date from Ernst &
Young, independent certified public accountants, substantially in the forms
heretofore approved by the Representative.
(j) Subsequent to the date of effectiveness of the Registration
Statement (or the most recent post-effective amendment thereto), there shall
not have occurred any change, or any development involving a prospective
change, in or affecting particularly the business or financial affairs of
the Fund or the Adviser which, in the opinion of the Underwriters, would
materially and adversely affect the market for the Shares.
(k) (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 Adviser or,
with respect to the transactions contemplated by the Prospectus (or any
amendment or supplement thereto) and this Agreement, the Underwriters, may be
pending before or, to the knowledge of the Fund, the Adviser or the Underwriters
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 Underwriters; (ii) there shall not have been any change
in the capital stock of the Fund nor any material increase in the short-term or
long-term debt of the Fund (other than in the ordinary course of business) from
that set forth or contemplated in the Registration Statement or the Prospectus
(or any amendment or supplement thereto); (iii) there shall not have been,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), except as may otherwise be stated in the Registration Statement and
Prospectus (or any amendment or supplement thereto), any material adverse change
in the condition (financial or other), business, prospects, properties, net
assets or results of operations of the Fund or the Adviser; (iv) the Fund shall
not have any liabilities or obligations, direct or contingent (whether or not in
the ordinary course of business), that are material to the Fund, other than
those reflected in the Registration Statement or the Prospectus (or any
amendment or supplement to either of them); and (v) all the representations and
warranties of the Fund and the Adviser contained in this Agreement shall be true
and correct
<PAGE>
25
on and as of the date hereof and on and as of the Closing Date as if made on and
as of the Closing Date.
(l) Neither the Fund nor the Adviser shall have failed at or prior to
the Closing Date to have performed or complied in all material respects with any
of its agreements herein contained and required to be performed or complied with
by it hereunder at or prior to the Closing Date.
(m) The Fund shall have delivered and the Underwriters shall have
received evidence satisfactory to the Representative that the shares of
MuniPreferred are rated `aaa' by Moody's and AAA by S&P as of the Closing Date,
and there shall not have been given any notice of any intended or potential
downgrading, or of any review for a potential downgrading, in the rating
accorded to any outstanding shares of capital stock of the Fund by any Rating
Agency.
(n) The Fund and the Adviser shall have furnished or caused to be
furnished to the Underwriters such further certificates and documents as the
Representative shall have reasonably requested.
(o) The issuance of the Shares will not impair the rating for any
outstanding shares of capital stock of the Fund .
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 the Representative and the Underwriters' counsel.
Any certificate or document signed by any officer of the Fund or the
Adviser and delivered to the Underwriters, or to counsel for the Underwriters,
shall be deemed a representation and warranty by the Fund or the Adviser to the
Underwriters as to the statements made therein.
10. Expenses. The Fund agrees to pay the costs incident to the
authorization, issuance, sale and delivery of the Shares to be sold by the Fund
to the Underwriters and any taxes payable in that connection; the costs incident
to the preparation, printing and filing under the 1933 Act and 1940 Act of the
Registration Statement and any amendments and exhibits thereto; the costs of
preparing, printing and distributing the Registration Statement as originally
filed and each amendment and any post-effective amendment thereto (including
exhibits), any Prepricing Prospectus, the Prospectus and any amendment or
supplement to the Prospectus; the costs of printing this Agreement and
distributing the terms of agreements relating to the organization of any
underwriting syndicate by mail, telex or other means of communication; the fees
paid to Rating Agencies in connection with the rating of the Shares; the fees
and expenses of qualifying the Shares under the securities laws of the several
jurisdictions as provided in this Section and of preparing and printing a blue
sky survey (including related fees and expenses of counsel to the Underwriters);
the fees and expenses of the Auction Agent as set forth in the Auction Agency
Agreement; and all other costs and expenses incident to the performance of the
obligations of the Fund under this Agreement; provided that (i) the Fund, the
Adviser and each Underwriter shall
<PAGE>
26
pay its own costs and expenses in attending any information meeting relating to
the Fund, (ii) each Underwriter shall pay the costs and expenses of any sales
material prepared by it in connection with the public offering of the Shares,
(iii) the Underwriters shall pay the costs and expenses of any "tombstone"
advertisements, and (iv) except as provided in this Section and in Section 5
hereof, the Underwriters shall pay their own costs and expenses, including the
fees and expenses of their counsel and any transfer taxes on the Shares which
they may sell.
If notice shall have been given pursuant to Paragraph 12 terminating
the Underwriters' obligations hereunder, or if the sale of the Shares provided
for herein is not consummated because of any failure, refusal or inability on
the part of the Fund or Adviser to perform any agreement on its part to be
performed or if the Underwriters shall decline to purchase the Shares for any
reason permitted under this Agreement, the Fund shall reimburse the Underwriters
for the fees and expenses of their counsel and for such other out-of-pocket
expenses as shall have been incurred by them in connection with this Agreement
and the proposed purchase of the Shares, and upon demand the Fund shall pay the
full amount thereof to the Underwriters; it being understood that the Fund shall
not in any event be liable to any of the Underwriters for damages on account of
loss of anticipated profits from the sale by them of the Shares. If the Fund
fails to reimburse the Underwriters for such fees and expenses, the Adviser
shall upon demand, pay the full amount thereof to the Underwriters.
11 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 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 the
Underwriters, or by the Underwriters, by notifying the Fund.
If either of the Underwriters shall fail or refuse to purchase Shares
which it is obligated to purchase hereunder on the Closing Date, and the
aggregate number of Shares which such defaulting Underwriter is obligated but
fails or refuses to purchase is not more than one-tenth of the aggregate number
of Shares which the Underwriters are obligated to purchase on the Closing Date,
the non-defaulting Underwriter shall be obligated to purchase the Shares which
such defaulting Underwriter is obligated, but fails or refuses, to purchase. If
either of the Underwriters shall fail or refuse to purchase Shares which it is
obligated to purchase on the Closing Date and the number of Shares with respect
to which such default occurs is more than one-tenth of the aggregate number of
Shares which the Underwriters are obligated to purchase on the Closing Date and
arrangements satisfactory to the Representative and the Fund for the purchase of
such Shares by the non-defaulting Underwriter 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 the non-defaulting
Underwriter or the Fund. In any such case which does not result in termination
of this Agreement, either the Representative 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
<PAGE>
27
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve the 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 Shares which a defaulting Underwriter is
obligated, but fails or refuses, to purchase.
Any notice under this Section 11 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
12 Termination of Agreement. This Agreement shall be subject to
termination in the Representative's absolute discretion, without liability on
the part of the Underwriters to the Fund or the Adviser, by notice to the Fund
or the Adviser, if prior to the Closing Date (i) trading in securities generally
on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall have been declared
by either federal or state authorities, or (iii) there shall have occurred any
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions, the
effect of which on the financial markets of the United States is to make it, in
the Representative's judgment, impracticable or inadvisable to commence or
continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the resale
of the Shares by the Underwriters. Notice of such termination may be given to
the Fund by telegram, telecopy or telephone and shall be subsequently confirmed
by letter.
13 Information Furnished by the Underwriters. The statements set forth
in the first and third paragraphs under the caption "Underwriting" in any
Prepricing Prospectus and in the Prospectus, constitute the only information
furnished by or on behalf of the Underwriters as such information is referred to
in Sections 6(b) and 8 hereof.
14 Miscellaneous. Except as otherwise provided in Sections 5, 11 and 12
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Fund or the Adviser, at the office
of the Fund at 333 West Wacker Drive, Chicago, IL 60606, Attention: Gifford R.
Zimmerman, Vice President and Secretary; or (ii) if to the Underwriters, to
Salomon Smith Barney Inc, 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
Underwriters, the Fund, the Adviser, their 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" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Underwriters of any of the Shares in his
status as such purchaser.
<PAGE>
28
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.
[End of Text]
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
among the Fund, the Adviser and the Underwriters.
Very truly yours,
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
By:
---------------------------------------
Name:
Title:
NUVEEN ADVISORY CORP.
By:
---------------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON SMITH BARNEY INC.
By:
-------------------------------------------
Name:
Title:
For itself and the other Underwriters
named in Schedule I to the foregoing
Agreement
<PAGE>
SCHEDULE I
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
<TABLE>
<CAPTION> Number of
Underwriters Shares
------------ ---------
<S> <C>
Salomon Smith Barney Inc.................................
PaineWebber Incorporated.................................
Total....................................................
</TABLE>
<PAGE>
EXHIBIT 99.L
[MLB LETTERHEAD]
Nuveen Performance Plus Municipal Fund, Inc.
333 West Wacker Drive
Chicago, IL 60606
RE: NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
REGISTRATION STATEMENT ON FORM N-2
(REGISTRATION NOS. 333-91881 AND 811-05809)
Ladies and Gentlemen:
We are acting as counsel for Nuveen Performance Plus Municipal Fund, Inc.
(the "Fund"), in connection with the Fund's filing of a registration statement
on Form N-2 (the "Registration Statement") with the Securities and Exchange
Commission covering the registration of 1,760 authorized but unissued shares of
Municipal Auction Rate Cumulative Preferred Stock, of Series TH, $.01 par value
per share, with a liquidation preference of $25,000 per share, of the Fund (the
"MuniPreferred"). In that capacity, we have examined such corporate records,
certificates and other documents, and have made such other factual and legal
investigations as we have deemed necessary and appropriate for the purposes of
this opinion.
Based upon the foregoing, it is our opinion that:
(1) The Fund is validly existing as a corporation in good standing under
the laws of the State of Minnesota.
(2) The MuniPreferred, when issued and delivered by the Fund pursuant to
and upon satisfaction of the conditions in, the Purchase Agreement against
payment of the consideration set forth therein, will be legally issued, fully
paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 1 to the
Registration Statement and to the reference to us under the caption "Legal
Opinions" in the prospectus contained in the Registration Statement.
Very truly yours,
MORGAN LEWIS & BOCKIUS LLP
