<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 29, 1994
SECURITIES ACT FILE NO. 33-54139
INVESTMENT COMPANY ACT FILE NO. 811-7187
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. 1 [X]
POST-EFFECTIVE AMENDMENT NO. [ ]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
AMENDMENT NO. 1 [X]
INTERCAPITAL MANAGED MUNICIPAL TRUST
(A MASSACHUSETTS BUSINESS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600
SHELDON CURTIS, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPIES TO:
FRANK P. BRUNO, Esq. CHRISTINE A. EDWARDS, Esq.
BROWN & WOOD Two World Trade Center
One World Trade Center New York, New York 10048
New York, New York 10048
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of this registration statement
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
- -----------------------------------------------------------------------------
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES BEING AMOUNT BEING OFFERING PRICE OFFERING PRICE REGISTRATION
REGISTERED REGISTERED (1) PER UNIT (2) (2) FEE (2) (3)
- ------------------------------ ---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Shares of Beneficial Interest,
$.01 par value ............... 8,050,000 Shares $15.00 $120,750,000 $41,637.93
- ------------------------------ ---------------- ---------------- ---------------- ---------------
- -----------------------------------------------------------------------------
<FN>
(1) Includes 1,050,000 shares subject to the Underwriters' over-allotment
option.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Previously paid.
</TABLE>
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 FUTURE 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 DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE>
<PAGE>
INTERCAPITAL MANAGED MUNICIPAL TRUST
FORM N-2
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
PARTS A AND B
ITEM NUMBER CAPTION PROSPECTUS CAPTION
- --------------------------------------------------------- ----------------------------------------------------
<S> <C> <C>
1. Outside Front Cover Page ........................ Cover Page
2. Inside Front and Outside Back Cover Pages ...... Cover Page; Underwriting
3. Fee Table and Synopsis .......................... Prospectus Summary; Summary of Fund Expenses
4. Financial Highlights ............................ Not Applicable
5. Plan of Distribution ............................ Cover Page; Prospectus Summary; Underwriting
6. Selling Shareholders ............................ Not Applicable
7. Use of Proceeds ................................. Use of Proceeds; Investment Objective and Policies
8. General Description of Registrant ............... The Trust and its Management; Description of Shares
9. Management ...................................... Trustees and Officers; The Trust and its Management;
Investment Management Agreement; Investment Objective
and Policies; Investment Practices; Investment
Restrictions; Portfolio Transactions and Brokerage;
Cus-todian, Transfer Agent and Dividend-Paying Agent.
10. Capital Stock, Long-Term Debt, and Other Description of Shares; Taxation
Securities ......................................
11. Defaults and Arrears on Senior Securities ...... Not Applicable
12. Legal Proceedings ............................... Not Applicable
13. Table of Contents of Statement of Additional Not Applicable
Information .....................................
14. Cover Page ...................................... Not Applicable
15. Table of Contents ............................... Not Applicable
16. General Information and History ................. Not Applicable
17. Investment Objectives and Policies .............. Investment Objective and Policies; Other Invest-ment
Policies; Investment Restrictions
18. Management ...................................... The Trust and its Management; Trustees and Officers;
Investment Management Agreement
19. Control Persons and Principal Holders of The Trust and its Management; Investment Management
Securities ...................................... Agreement
20. Investment Advisory and Other Services ......... Investment Management Agreement; Custodian, Transfer
Agent and Dividend-Paying Agent
21. Brokerage Allocations and Other Practices ...... Portfolio Transactions and Brokerage
22. Tax Status ...................................... Taxation
23. Financial Statements ............................ Statement of Assets and Liabilities
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
<PAGE>
SUBJECT TO COMPLETION
Dated July 29, 1994
7,000,000 SHARES OF BENEFICIAL INTEREST
INTERCAPITAL MANAGED MUNICIPAL TRUST
InterCapital Managed Municipal Trust (the "Trust") is a newly organized,
closed-end diversified management investment company which seeks to provide
current income exempt from federal income tax. The Trust will seek to achieve
its investment objective by investing primarily in a diversified portfolio of
Municipal Obligations which are rated in the four highest grades (investment
grade) by Moody's Investors Service, Inc. or Standard & Poor's Corporation
(Baa or BBB, respectively, or higher). Up to 25% of the Trust's total assets
may be invested in Municipal Obligations which are rated below investment
grade or are unrated. Certain Municipal Obligations in which the Trust may
invest without limit may be subject to the individual alternative minimum
tax. See "Investment Objective and Policies." No assurance can be given that
the Trust's investment objective will be achieved.
The address of the Trust is Two World Trade Center, New York, New York 10048,
and its telephone number is (212) 392-1600. The Prospectus sets forth the
information investors should know before investing in the Trust. Investors
are advised to read this Prospectus and retain it for future reference.
The Trust's Shares have been approved for listing on the New York Stock
Exchange under the symbol "IMM." PRIOR TO THIS OFFERING, THERE HAS BEEN NO
PUBLIC MARKET FOR THE TRUST'S SHARES. SHARES OF CLOSED-END INVESTMENT
COMPANIES FREQUENTLY TRADE AT A DISCOUNT FROM THEIR NET ASSET VALUE. The risk
of loss may be greater for initial investors expecting to sell their shares
in a relatively short period after completion of the public offering. See
"Prospectus Summary--Special Risk Considerations."
------------
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, and the Shares are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board or any other
agency.
------------
The minimum purchase in this offering is 100 shares ($1,500).
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SALES LOAD PROCEEDS TO
PRICE TO PUBLIC (1) THE TRUST (2)
- ----------- --------------- ------------- -------------
<S> <C> <C> <C>
Per Share $15.00 $ $
Total (3) $105,000,000 $ $
- ----------- --------------- ------------- -------------
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<FN>
(1) The Trust and the Investment Manager have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933.
(2) Before deduction of offering expenses and organization costs payable
by the Trust from the proceeds of this offering, estimated at $ .
Organization costs (estimated at $ ) will be amortized over five
years and charged as an expense against the income of the Trust.
Offering expenses (estimated at $ ) will be reflected as a
reduction of the initial net assets of the Trust at the closing of this
offering. See "Statement of Assets and Liabilities at September ,
1994."
(3) The Trust has granted the several Underwriters a 45-day option to
purchase up to an additional 1,050,000 Shares to cover over-allotments,
if any. If all such Shares are purchased, the total price to public,
sales load and proceeds to the Trust will be $120,750,000, $
and $ , respectively. See "Underwriting."
</TABLE>
------------
The Shares are offered by the several Underwriters named herein, when, as and
if delivered to and accepted by them, subject to their right to reject orders
in whole or in part and subject to certain other conditions. It is expected
that delivery of the Shares will be made in New York City on or about
September , 1994.
------------
DEAN WITTER DISTRIBUTORS INC.
September , 1994
<PAGE>
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE TRUST OR THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Prospectus Summary .......................................... 3
Summary of Trust Expenses ................................... 7
The Trust and its Management ................................ 8
Use of Proceeds ............................................. 9
Investment Objective and Policies ........................... 9
Investment Practices ........................................ 14
Investment Restrictions ..................................... 19
Trustees and Officers ....................................... 21
Investment Management Agreement ............................. 24
Portfolio Transactions and Brokerage ........................ 25
Determination of Net Asset Value ............................ 27
Dividends and Distributions; Dividend Reinvestment Plan .... 28
Taxation .................................................... 29
Description of Shares ....................................... 32
Share Repurchases and Tenders ............................... 34
Custodian, Dividend Disbursing Agent and Transfer Agent .... 36
Underwriting ................................................ 37
Reports to Shareholders ..................................... 38
Legal Opinions and Experts .................................. 38
Further Information ......................................... 39
Report of Independent Accountants ........................... 40
Statement of Assets and Liabilities at September , 1994 .. 41
Appendix A .................................................. A-1
Appendix B .................................................. B-1
Appendix C .................................................. C-1
Appendix D .................................................. D-1
Appendix E .................................................. E-1
</TABLE>
UNTIL OCTOBER , 1994 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
TRUST'S SHARES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
2
<PAGE>
<PAGE>
PROSPECTUS SUMMARY
The following information is qualified in its entirety by reference to the
more detailed information included elsewhere in this Prospectus.
THE TRUST .............. InterCapital Managed Municipal Trust (the
"Trust") is a newly organized, closed-end
diversified management investment company
investing primarily in Municipal Obligations
which are rated in the four highest grades
(investment grade) by Moody's Investors
Service, Inc. ("Moody's") or Standard &
Poor's Corporation ("S&P") (Baa or BBB,
respectively, or higher). See "The Trust and
its Management."
THE OFFERING ........... The Trust is offering 7,000,000 shares of
beneficial interest (the "Shares"), of $.01
par value, at an offering price of $15.00
per share, through a group of underwriters
(the "Underwriters") represented by Dean
Witter Distributors Inc. The Underwriters
have been granted an option to purchase up
to 1,050,000 additional Shares to cover
over-allotments. See "Underwriting." The
minimum purchase is 100 Shares ($1,500).
INVESTMENT OBJECTIVE ... The investment objective of the Trust is to
provide current income exempt from federal
income tax. The Trust will seek to achieve
its investment objective by investing at
least 80% of its total assets in Municipal
Obligations except during temporary
defensive periods. Under normal
circumstances, the Trust will invest at
least 75% of its total assets in a
diversified portfolio of Municipal
Obligations which are rated in the four
highest grades (investment grade) by Moody's
or S&P (Baa or BBB, respectively, or
higher). Up to 25% of the Trust's total
assets may be invested in Municipal
Obligations which are rated below investment
grade (commonly referred to as "junk bonds")
or are unrated. As such, the Trust may be
invested in securities rated Ba or lower by
Moody's or BB or lower by S&P. Such
securities are considered to be speculative
investments. Municipal Obligations consist
of Municipal Bonds, Municipal Notes and
Municipal Commercial Paper, as well as lease
obligations. There can be no assurance that
the Trust's investment objective will be
achieved. See "Investment Objective and
Policies."
INVESTMENT MANAGER ..... Dean Witter InterCapital Inc. (the
"Investment Manager" or "InterCapital") is
the Investment Manager of the Trust. Dean
Witter InterCapital Inc. is a wholly-owned
subsidiary of Dean Witter, Discover & Co.
("DWDC"), a balanced financial services
organization providing a broad range of
nationally marketed credit and investment
products. In an internal reorganization
which took place in January, 1993, the
Investment Manager assumed the investment
advisory, management and administrative
activities previously performed by the
InterCapital Division of Dean Witter
Reynolds Inc. ("DWR"). As part of that
reorganization, the investment company share
distribution activities previously performed
by DWR were assumed by Dean Witter
Distributors Inc. a wholly-owned subsidiary
of DWDC and an affiliate of DWR and
InterCapital. The Investment Manager has
over twenty years of experience managing
investment companies. InterCapital and its
wholly-owned
3
<PAGE>
<PAGE>
subsidiary, Dean Witter Services Company
Inc. ("DWSC"), act as investment manager,
manager, investment adviser, sub-adviser,
administrator or sub-administrator to a
total of eighty-eight investment companies,
thirty of which are listed on the New York
Stock Exchange, with combined assets of
approximately $69.4 billion as of June 30,
1994, including approximately $11 billion in
tax-exempt securities. See "The Trust and
its Management" and "Investment Management
Agreement."
MANAGEMENT FEE ......... The Trust will pay the Investment Manager a
monthly fee at the annual rate of 0.35% of
the Trust's average weekly net assets. See
"Investment Management Agreement."
DISTRIBUTIONS .......... The Trust's policy will be to make monthly
distributions to Shareholders of
substantially all net investment income of
the Trust. Initial distributions to
Shareholders are expected to be declared
within approximately 60 days and paid within
approximately 90 days from the completion of
this offering. Net capital gains, if any,
will be distributed at least annually. Each
Shareholder of record may elect to have all
dividends and distributions automatically
reinvested in Shares purchased in the open
market at the prevailing market price
pursuant to a dividend reinvestment plan.
See "Dividends and Distributions; Dividend
Reinvestment Plan" and "Taxation."
SHARE REPURCHASES AND
TENDERS ................ The Trustees may authorize the Trust to
repurchase the Shares in the open market or
to tender for the Shares at net asset value.
The Trustees have presently determined to
consider, on an annual basis, the making of
a tender offer for the Shares of the Trust.
See "Share Repurchases and Tenders."
LISTING ................ The Trust's Shares have been approved for
listing on the New York Stock Exchange under
the symbol "IMM.''
CUSTODIAN .............. The Bank of New York will serve as Custodian
of the Trust's assets. See "Custodian,
Dividend Disbursing Agent and Transfer
Agent."
SPECIAL RISK
CONSIDERATIONS ......... The Trust has no operating history. In
connection with the management of its
portfolio, the Trust may engage in certain
futures and options transactions for hedging
purposes and may purchase or sell options on
portfolio securities to achieve additional
return or to hedge its portfolio. The Trust
may also enter into repurchase agreements.
These investment practices may involve
special risks. In addition, the Trust may
borrow money for emergency purposes or for
repurchase of its shares provided that
immediately after such borrowing the amount
borrowed does not exceed 33 1/3 % of the
value of its total assets (including the
amount borrowed) less its liabilities (not
including any borrowings but including the
fair market value at the time of computation
of any other senior securities then
outstanding). The use of borrowed funds for
other than emergency purposes involves the
speculative factor known as "leverage." The
foregoing may involve risks greater than
those assumed by other investment companies
which do not engage in such techniques or
4
<PAGE>
<PAGE>
transactions. See "Investment Objective and
Policies" and "Investment Practices."
The Trust may invest without limit in
certain Municipal Obligations which may be
subject to the individual alternative
minimum tax. Additionally, the Trust may
invest without limit in private activity
bonds or industrial development bonds, the
interest on which is not federally
tax-exempt to "substantial users" or
"related persons." Therefore, the Trust may
not be a suitable investment for such
investors. See "Taxation."
The Trust may invest up to 25% of its assets
in Municipal Obligations which are rated
below investment grade or are unrated.
Non-investment grade securities (Ba or lower
by Moody's or BB or lower by S&P) and
comparable unrated securities are regarded
as predominantly speculative with respect to
the issuer's capacity to pay interest and
repay principal in accordance with the terms
of the obligations. Such securities
generally offer a higher current yield than
that available from higher grade issuers but
typically involve greater risks such as
greater market risk in terms of
deteriorating economic conditions and a
greater susceptibility to adverse economic
and industry conditions. Additionally, the
market for lower rated securities may be
thinner and less active than the market for
higher rated securities which may in turn
have an effect on the ability to arrive at a
fair valuation of such securities. Some of
the lower rated securities in which the
Trust may invest may not be currently paying
interest or may be in payment default.
The Trust reserves the right to invest 25%
or more of its total assets in certain types
of Municipal Obligations. See "Investment
Restrictions." A discussion of the risks
associated with investment in such
obligations is set forth in Appendix C.
Although the Investment Manager expects that
the Trust's investments primarily will be in
securities for which an established resale
market exists, there is no overall
limitation on the percentage of illiquid
securities which may be held by the Trust
and as such substantially all of the Trust's
assets may be invested in illiquid
securities.
The value of the Trust's portfolio
securities, and therefore the Trust's net
asset value per share, will increase or
decrease due to various factors, principally
changes in prevailing interest rates and the
ability of the issuers of the Trust's
portfolio securities to pay interest and
principal on such obligations. Net asset
value generally increases when interest
rates decline, and decreases when interest
rates rise, although this is not always the
case. See "Determination of Net Asset
Value."
Shares of closed-end investment companies
frequently trade at a discount to net asset
value, especially shortly after the
completion of the public offering. This
characteristic of shares of closed-end funds
is a risk separate and distinct from the
risk that a fund's net asset value will
decrease. It should be noted, however, that
in some cases, shares of closed-end funds
may trade at
5
<PAGE>
<PAGE>
a premium to net asset value. The Trust
cannot predict whether its own Shares will
trade at, below, or above net asset value.
The Trust is designed primarily as a
long-term investment and not as a trading
vehicle. The Shareholders will elect twelve
Trustees at the first annual meeting of
Shareholders. The Trust's Declaration of
Trust includes anti-takeover provisions,
including a staggered vote for Trustees, and
the requirement for an 80% shareholder vote
for certain mergers, share issuances and
asset acquisitions, that could have the
effect of limiting the ability of other
entities or persons to acquire control of the
Trust. See "Description of Shares."
6
<PAGE>
<PAGE>
SUMMARY OF TRUST EXPENSES
- -----------------------------------------------------------------------------
The following table illustrates all expenses and fees that a shareholder
of the Trust will incur. The expenses and fees set forth in the table are for
the year ending October 31, 1994.
<TABLE>
<CAPTION>
<S> <C>
Shareholder Transaction Expenses
Sales Load (as a Percentage of Offering Price) ... %
Dividend Reinvestment Plan ........................ None
Annual Expenses (as a Percentage of Net Assets) ..
Investment Management Fees* ....................... 0.35%
Other Expenses* ................................... %
Total Annual Expenses ............................. %
</TABLE>
* "Management Fees" as shown above is for the fiscal year of the Trust
ending October 31, 1994. "Other Expenses" as shown above is based upon
estimated amounts of expenses of the Trust for its fiscal period ending
October 31, 1994.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming a 5% annual return: ............. $ $ $ $
</TABLE>
- ------------
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF THE TRUST MAY BE GREATER
OR LESS THAN THOSE SHOWN.
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Trust will bear directly
or indirectly. For a more complete description of these costs and expenses,
see the cover page of this Prospectus and "Use of Proceeds" and "Investment
Management Agreement."
7
<PAGE>
<PAGE>
THE TRUST AND ITS MANAGEMENT
- -----------------------------------------------------------------------------
InterCapital Managed Municipal Trust (the "Trust") is a newly organized,
closed-end diversified management investment company whose investment
objective is to provide current income which is exempt from federal income
tax. The Trust will seek to achieve its investment objective by investing
primarily in a diversified portfolio of Municipal Obligations which are rated
in the four highest grades (investment grade) by Moody's Investors Service,
Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") (Baa or BBB,
respectively, or higher). There can be no assurance that the Trust's
investment objective will be achieved.
The Trust is a trust of the type commonly known as a "Massachusetts
business trust" and was organized under the laws of the Commonwealth of
Massachusetts on June 10, 1994. As a newly organized entity, the Trust has no
operating history. The Trust's principal office is located at Two World Trade
Center, New York, New York 10048.
Investment in shares of the Trust is designed to offer several benefits.
The Trust offers investors the opportunity to receive income substantially
exempt from federal income taxes by investing in a professionally managed
portfolio of Municipal Obligations. The Trust also relieves the investor of
the burdensome administrative details involved in managing a portfolio of
Municipal Obligations. These benefits are at least partially offset by the
expenses involved in operating an investment company. Such expenses primarily
consist of the fee of the Investment Manager and the operational costs of the
Trust.
The Trust has been organized as a closed-end investment company.
Closed-end investment companies differ from open-end investment companies
(commonly referred to as "mutual funds") in that closed-end investment
companies have a permanent capital base and do not redeem their shares,
whereas open-end investment companies issue securities redeemable at net
asset value at any time at the option of the shareholder and typically engage
in a continuous offering of their shares. Accordingly, open-end companies are
subject to periodic asset in-flows and out-flows that can complicate
portfolio management. Closed-end investment companies do not face the
prospect of having to liquidate portfolio holdings in the event of net
redemptions or having to maintain cash positions to meet potential
redemptions. Shares of closed-end investment companies may trade at a
discount to net asset value. This characteristic of shares of closed-end
funds is a risk separate and distinct from the risk that the fund's net asset
value will decrease. The Trust cannot predict whether its own Shares will
trade at, below or above net asset value. The Trust is designed primarily as
a long-term investment and not as a trading vehicle.
Dean Witter InterCapital Inc., whose address is Two World Trade Center,
New York, New York 10048, is the Trust's Investment Manager (the "Investment
Manager" or "InterCapital"), pursuant to an Investment Management Agreement
with the Trust. See "Investment Management Agreement." InterCapital is a
wholly-owned subsidiary of Dean Witter, Discover & Co. ("DWDC"), a balanced
financial services organization providing a broad range of nationally
marketed credit and investment products.
InterCapital and its wholly-owned subsidiary, Dean Witter Services Company
Inc. ("DWSC"), act as investment manager, manager, investment adviser,
sub-adviser, administrator or sub-administrator to a total of eighty-eight
investment companies (the "Dean Witter Funds"), thirty of which are listed on
the New York Stock Exchange, and other portfolios, with combined total assets
of approximately $69.4 billion, including $11 billion of tax-exempt
securities, at June 30, 1994. The Investment Manager has over twenty years of
experience managing investment companies and currently advises or administers
assets for more than three million investor accounts. In an internal
reorganization which took place in January, 1993, the Investment Manager
assumed the investment advisory, management and administrative
8
<PAGE>
<PAGE>
activities previously performed by the InterCapital Division of Dean Witter
Reynolds Inc. ("DWR"). As part of the January, 1993 reorganization, the
investment company underwriting activities previously performed by DWR were
assumed by Dean Witter Distributors Inc., a wholly-owned subsidiary of DWDC
and an affiliate of DWR and InterCapital. DWR is a major securities
broker-dealer and investment banker and is a member of the New York Stock
Exchange, the American Stock Exchange, the Chicago Board of Options Exchange
and other principal regional stock exchanges. DWR maintains its offices at
Two World Trade Center, New York, New York 10048.
USE OF PROCEEDS
- -----------------------------------------------------------------------------
The net proceeds of the offering will be approximately $
($ if the Underwriters exercise their over-allotment option in full)
after payment of the sales load and organization and offering expenses. A
portion of the organization and offering expenses have been advanced by the
Trust's Investment Manager.
Organization expenses relating to the Trust incurred and to be incurred by
the Investment Manager will be reimbursed by the Trust. Such expenses,
estimated at $ , will be deferred and amortized on the straight-line
method by the Trust against operations over a period not to exceed sixty
months from the commencement of operations of the Trust. Costs relating to
the public offering of its Shares, estimated to be $ , will be paid from
the proceeds of the offering and charged to capital at the time of issuance
of such shares.
The net proceeds of the offering will be invested in accordance with the
Trust's investment objective and policies. Investment of the net proceeds
will take place during a period which is not expected to exceed six months
from commencement of operations. Pending their investment, the proceeds of
the offering will be invested in high quality Municipal Obligations or high
quality short-term tax-exempt money market instruments, if available, or
otherwise in high quality taxable money market instruments, in any case as
described below under "Investment Objective and Policies."
INVESTMENT OBJECTIVE AND POLICIES
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The investment objective of the Trust is to provide current income which
is exempt from federal income tax. The Trust will invest at least 80% of its
total assets in Municipal Obligations, except during temporary defensive
periods. The remaining portion of the Trust's total assets may be invested in
"temporary investments" and in options and futures, all as described below.
Under normal circumstances, the Trust expects that substantially greater than
80% of its total assets will be invested in Municipal Obligations. "Municipal
Obligations" consist of Municipal Bonds, Municipal Notes, Municipal
Commercial Paper as well as lease obligations, including such obligations
purchased on a when-issued or delayed delivery basis. See "Investment
Practices." Certain Municipal Bonds in which the Trust may invest without
limit may subject certain investors to the alternative minimum tax and,
therefore, a substantial portion of the income produced by the Trust may be
taxable for such investors under the alternative minimum tax. The Trust,
therefore, may not ordinarily be a suitable investment for investors who are
subject to the alternative minimum tax. The suitability of the Trust for
these investors will depend upon a comparison of the after-tax yield likely
to be provided from the Trust to comparable tax-exempt investments not
subject to such tax and also to comparable fully taxable investments in light
of each such investor's tax position. See "Taxation" and Appendix D. The
foregoing investment objective is a fundamental policy of the Trust and may
not be changed without the approval of a majority of the outstanding voting
securities of the Trust.
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Except during temporary defensive periods, the Trust will invest at least
75% of its total assets in: (a) Municipal Bonds which are rated at the time
of purchase within the four highest grades (investment grade) by Moody's
(Aaa, Aa, A, Baa) or S&P (AAA, AA, A, BBB); (b) Municipal Notes which at the
time of purchase are rated in the two highest grades by Moody's (MIG 1, MIG
2) or in the three highest grades by S&P (SP-1, SP-2, SP-3) or, if not rated,
whose issuers have outstanding one or more issues of Municipal Bonds rated as
set forth in clause (a) of this paragraph; and (c) Municipal Commercial Paper
which at the time of purchase is rated P-1 or higher by Moody's or A-1 or
higher by S&P. For purposes of the foregoing percentage limitation, any
Municipal Bond or Municipal Note which depends directly or indirectly on the
credit of the federal government shall be considered to have a Moody's rating
of Aaa or an S&P rating of AAA. A general description of Moody's and S&P
ratings of Municipal Bonds, Notes and Commercial Paper is set forth in
Appendix A.
Up to 25% of the Trust's total assets may be invested in Municipal
Obligations which are rated below investment grade (commonly referred to as
"junk bonds") or are unrated. Therefore, the Trust may invest in securities
rated Ba or lower by Moody's or BB or lower by S&P. Such securities are
considered to be speculative investments. Furthermore, the Trust does not
have any minimum quality rating standard for its downgraded or lower-rated
investments. As such, the Trust may invest in securities rated as low as Caa,
Ca or C by Moody's or CCC, CC, C, Cl or D by S&P. Bonds rated Caa or Ca by
Moody's may already be in default on payment of interest or principal, while
bonds rated C by Moody's, their lowest bond rating, can be regarded as having
extremely poor prospects of ever attaining any real investment standing.
Bonds rated Cl or D by S&P, their lowest bond rating, are no longer making
interest payments or are in default.
Because of the special nature of securities which are rated below
investment grade by national credit rating agencies or comparable unrated
securities ("lower rated securities"), the Investment Manager must take
account of certain special considerations in assessing the risks associated
with such investments. For example, an economic downturn or increase in
interest rates is likely to have a negative effect on this market and on the
value of the lower rated securities held by the Trust, as well as on the
ability of the securities' issuers to repay principal and interest on their
borrowings.
The prices of lower rated securities are likely to be more sensitive to
adverse economic changes or individual issuer developments than higher rated
investments. During an economic downturn or substantial period of rising
interest rates, issuers with a large amount of debt outstanding may
experience financial stress which would adversely affect their ability to
service their principal and interest payment obligations, to meet their
projected operating goals or to obtain additional financing. If the issuer of
a bond owned by the Trust defaults, the Trust may incur additional expenses
to seek recovery. In addition, periods of economic uncertainty and change can
be expected to result in an increased volatility of market prices of lower
rated securities and a concomitant volatility in the net asset value of a
Share of the Trust.
The secondary market for lower rated securities may be less liquid than
the markets for higher quality securities and, as such, may have an adverse
effect on the market prices of certain securities. The limited liquidity of
the market may also adversely affect the ability of the Trust's Trustees to
arrive at a fair value for certain lower rated securities at certain times
and should make it difficult for the Trust to sell certain securities.
Laws and proposed new laws may have a potentially negative impact on the
market for lower rated securities. For example, federally-insured savings and
loan associations have been required by law to divest their investments in
lower rated securities. This legislation and other proposed legislation may
have an adverse effect upon the value of lower rated securities and a
concomitant negative impact upon the net asset value of a Share of the Trust.
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The Trust intends to emphasize investments in Municipal Obligations with
long-term maturities because such long-term obligations generally produce a
higher yield than short-term obligations, although such longer-term
obligations are more susceptible to market fluctuations resulting from
changes in interest rates than shorter-term obligations. The average weighted
maturity of the Trust's portfolio under normal circumstances is expected to
be in excess of 20 years, but the average maturity, as well as the emphasis
on longer-term obligations, may vary depending upon market conditions.
Except during temporary defensive periods, the Trust may not invest more
than 20% of its total assets in "temporary investments," the income from
which may be subject to federal income taxes. The Trust may invest more than
20% of its total assets in temporary investments for defensive purposes
(e.g., investments made during times where temporary imbalances of supply and
demand or other temporary dislocations in the Municipal Obligations market
adversely affect the price at which Municipal Bonds, Notes and Commercial
Paper are available), and in order to keep cash on hand fully invested.
Temporary investments are short-term, high quality securities which may be
either tax-exempt or taxable. The Trust will invest only in temporary
investments which are certificates of deposit of U.S. domestic banks,
including foreign branches of domestic banks, with assets of $1 billion or
more; bankers' acceptances; time deposits; U.S. Government securities; or
debt securities rated within the two highest grades by Moody's or S&P or, if
not rated, are of comparable quality as determined by the Investment Manager,
and which mature within one year from the date of purchase. See Appendix A
for a general description of Moody's and S&P's ratings of securities in such
categories. Temporary investments of the Trust may also include repurchase
agreements (see below).
The foregoing percentage and rating limitations apply at the time of
acquisition of a security based on the last previous determination of the
Trust's net asset value. Any subsequent change in any rating by a rating
service or change in percentages resulting from market fluctuations or other
changes in the Trust's total assets will not require elimination of any
security from the Trust's portfolio. However, any subsequent change in any
rating of any security below investment grade, which results in the Trust
having less than 75% of its total assets in investment grade Municipal
Obligations, will result in the elimination of that security from the Trust's
portfolio as soon as practicable without adverse market or tax consequences
to the Trust.
DESCRIPTION OF MUNICIPAL OBLIGATIONS
"Municipal Bonds" and "Municipal Notes" are debt obligations of states,
cities, counties, municipalities and state and local governmental agencies
which generally have maturities, at the time of their issuance, of either one
year or more (Bonds) or from six months to three years (Notes). "Municipal
Commercial Paper," as presently constituted, although issued under programs
having a final maturity of more than one year, is generally short-term paper
subject to periodic rate changes and maturities of less than one year
selected at the holder's option. Municipal Obligations in which the Trust
primarily will invest bear interest that, in the respective opinions of bond
counsel to the issuers at the time of original issuance of such obligations,
is not includible in the gross income of the holders thereof for federal
income tax purposes. See "Taxation."
Municipal Bonds are issued to raise funds for various public purposes,
including the construction of such public facilities as airports, bridges,
highways, housing, hospitals, mass transportation, schools, streets, electric
systems, solid waste disposal and water and sewer works. Other public
purposes for which Municipal Bonds may be issued include the refinancing of
outstanding obligations, the obtaining of funds for general operating
expenses and for loans to other public institutions and facilities. In
addition, certain private activity bonds, industrial development bonds and
pollution control bonds may be included
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APITAL PRINTING SYSTEMS]
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within the term Municipal Bonds if the interest paid thereon, in the opinion
of bond counsel to the issuer, qualifies as not includible in the gross
income of the holders thereof for federal income tax purposes. The principal
types of Municipal Notes currently being issued include tax anticipation
notes, bond anticipation notes and revenue anticipation notes, although there
are other types of Municipal Notes in which the Trust may invest. Notes sold
in anticipation of collection of taxes, a bond sale or receipt of other
revenues are usually general obligations of the issuing state, municipality
or agency. Municipal Commercial Paper is likely to be used to meet seasonal
working capital needs of an issuer or interim construction financing and to
be paid from general revenues of the issuer or refinanced with long-term
debt. Municipal Commercial Paper may be backed by letters of credit, lending
agreements, note repurchase agreements or other credit facility agreements
offered by banks or other institutions.
The two principal classifications of Municipal Obligations are "general
obligation" and "revenue" bonds, notes or commercial paper. General
obligation bonds, notes or commercial paper are secured by the issuer's
pledge of its faith, credit and taxing power for the payment of principal and
interest. Issuers of general obligation bonds, notes or commercial paper
include states, counties, cities, towns and other governmental units. Revenue
bonds, notes or commercial paper are payable from the revenues derived from a
particular facility or class of facilities or, in some cases, from other
specific revenue sources. Revenue bonds, notes or commercial paper are issued
for a wide variety of purposes, including the financing of electric, gas,
water and sewer systems and other public utilities; industrial development
and pollution control facilities; single and multi-family housing units;
public buildings and facilities; air and marine ports; transportation
facilities such as toll roads, bridges and tunnels; and health and
educational facilities such as hospitals and dormitories. They rely primarily
on user fees to pay debt service, although the principal revenue source may
be supplemented by additional security features which are intended to enhance
the creditworthiness of the issuer's obligations. In some cases, particularly
revenue bonds issued to finance housing and public buildings, a direct or
implied "moral obligation" of a governmental unit may be pledged to the
payment of debt service. In other cases, a special tax or other charge may
augment user fees. Municipal bonds may also be classified as "tax allocation"
bonds, which are payable from tax increment revenues, that is, from collected
property taxes in the project area allocable to the increase in the assessed
valuation of land, improvements, and personal and public utility property due
to the project. There are, of course, variations in the security of Municipal
Bonds, Notes and Commercial Paper, both within a particular classification
and between classifications, depending on numerous factors.
Also included within the general category of Municipal Obligations are
participations in lease obligations or installment purchase contract
obligations (hereinafter collectively called "lease obligations") of
municipal authorities or entities. Although lease obligations do not
constitute general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation is ordinarily
backed by the municipality's covenant to budget for, appropriate and make the
payments due under the lease obligation. However, certain lease obligations
contain "non-appropriation" clauses which provide that the municipality has
no obligation to make lease or installment purchase payments in any year
unless money is appropriated for such purpose for such year. In addition to
the "non-appropriation" risk, these securities represent a relatively new
type of financing that has not yet developed the depth of marketability
associated with more conventional Municipal Obligations and therefore certain
lease obligations may be considered to be illiquid securities. Although
"non-appropriation" lease obligations are secured by the leased property,
disposition of the property in the event of default and foreclosure might
prove difficult. The Trust will seek to minimize these risks by only
investing in those "non-appropriation" lease obligations where (1) the nature
of the leased equipment or property is such that its ownership or use is
essential to a governmental function of the municipality, (2) the lease
payments will
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commence amortization of principal at an early date resulting in an average
life of seven years or less for the lease obligation, (3) appropriate
covenants will be obtained from the municipal obligor prohibiting the
substitution or purchase of similar equipment if lease payments are not
appropriated, (4) the investment is of a size that will be attractive to
institutional investors, and (5) the underlying leased equipment has elements
of portability or use that enhance its marketability in the event foreclosure
on the underlying equipment is ever required. The Trust may also purchase
"certificates of participation," which are securities issued by a particular
municipality or municipal authority to evidence a proportionate interest in
base rental or lease payments relating to a specific project to be made by a
municipality, agency or authority. The risks and characteristics of
investments in certificates of participation are similar to the risks and
characteristics of lease obligations discussed above.
Although the Investment Manager expects that the Trust's investments
primarily will be in securities for which an established resale market
exists, there is no overall limitation on the percentage of illiquid
securities which may be held by the Trust and as such substantially all the
Trust's assets may be invested in illiquid securities.
The yields on Municipal Obligations are dependent on a variety of factors,
including the condition of the general money market and the tax-exempt
market, changes in federal and state income taxes, the size of a particular
offering, the maturity of the obligation and the rating of the issue. The
ratings of Moody's and S&P represent their opinions as to the quality of the
securities which they undertake to rate. It should be emphasized, however,
that ratings are general and are not absolute standards of quality.
Consequently, Municipal Obligations with the same maturity, coupon and rating
may have different yields while obligations of the same maturity and coupon
with different ratings may have the same yield. The market value of the
Trust's portfolio securities, and therefore the Trust's net asset value per
share, will vary with changes in prevailing interest rate levels and as a
result of changing evaluations of the ability of issuers of the Trust's
portfolio securities to meet interest and principal payments on a timely basis.
Generally, a rise in interest rates will result in a decrease in the Trust's
net asset value per share, while a drop in interest rates will result in an
increase in the Trust's net asset value per share, although this is not always
the case.
Securities of issuers of Municipal Obligations are subject to the
provisions of bankruptcy, insolvency and other laws affecting the rights and
remedies of creditors, such as the Bankruptcy Reform Act of 1978. In
addition, the obligations of such issuers may become subject to the laws
enacted in the future by Congress, state legislatures or referenda extending
the time for payment of principal and/or interest, or imposing other
constraints upon enforcement of such obligations or upon the ability of
municipalities to levy taxes. There is also the possibility that, as a result
of legislation or other conditions, the power or ability of any one or more
issuers to pay, when due, the principal of and interest on its, or their,
Municipal Obligations may be materially affected.
The Internal Revenue Code of 1986, as amended, limits the types and volume
of bonds qualifying for the federal income tax exemption on interest with the
result that in recent years the volume of new issues of Municipal Obligations
has declined substantially. As a result, this legislation, and legislation
which may be enacted in the future, may affect the availability of Municipal
Obligations for investment by the Trust.
As set forth in investment restriction 3 under "Investment Restrictions,"
the Trust reserves the right to invest 25% or more of its total assets in any
of the following types of Municipal Obligations provided that the percentage
of the Trust's total assets in private activity bonds in any one category
does not exceed 25% of the Trust's total assets: health facility obligations,
housing obligations, single family
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mortgage revenue bonds, industrial revenue
obligations (including pollution control obligations), electric utility
obligations, airport facility revenue obligations, water and sewer
obligations, university and college revenue obligations, bridge authority and
toll road obligations and resource recovery obligations. A discussion of the
risks associated with investment in such obligations is set forth in Appendix
C.
INVESTMENT PRACTICES
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The following investment practices apply to the portfolio investments of
the Trust and may be changed by the Trustees of the Trust without shareholder
approval, following written notice to the shareholders.
Futures Contracts and Options Thereon. The Trust may purchase and sell
financial futures contracts ("futures contracts") and may purchase and write
put and call options on such futures contracts only for the purpose of
hedging its portfolio (or anticipated portfolio) securities against changes
in prevailing interest rates.
If the Investment Manager anticipates that interest rates may rise, the
Trust may sell a futures contract to protect against the potential decline in
the value of the securities held by the Trust. If declining interest rates
are anticipated, the Trust may purchase a futures contract to protect against
a potential increase in the price of securities the Trust intends to
purchase.
As a futures contract purchaser, the Trust incurs an obligation to take
delivery of a specified amount of the obligation underlying the contract at a
specified time in the future for a specified price. As a seller of a futures
contract, the Trust incurs an obligation to deliver the specified amount of
the underlying obligation at a specified time in return for an agreed upon
price. The specific securities taken or delivered at the settlement date
would not be determined until or near that date. The determination would be
in accordance with the rules of the exchange on which the futures contract
sale or purchase was effected. Although the terms of futures contracts specify
actual delivery or receipt of securities, in most instances the contracts are
closed out before the settlement date without the making or taking of delivery
of the securities. Closing out a futures contract is effected by entering into
an offsetting purchase or sale transaction.
Unlike a futures contract, which requires the parties to buy and sell a
security on a set date, an option on a futures contract entitles its holder
to decide on or before a future date whether to enter into such a contract.
If the holder decides not to enter into the contract, the premium paid for
the option is lost. Since the value of the option is fixed at the point of
sale, there are no daily payments of cash to reflect the change in the value
of the underlying contract as there are by a purchaser or seller of a futures
contract. The value of the option does change and is reflected in the net
asset value of the Trust.
The Trust may not purchase and sell futures contracts or purchase related
options thereon if, immediately thereafter, the amount committed to initial
margin plus the amount paid for premiums for unexpired options on futures
contracts exceeds 5% of the value of the Trust's total assets.
Special Risk Considerations Relating to Futures and Options
Thereon. Certain risks are inherent in the Trust's use of futures contracts
and options on futures. One such risk arises because the correlation between
movements in the price of futures contracts or options on futures and
movements in the price of the securities hedged or used for cover will not be
perfect. Another risk is that the price of futures contracts or options on
futures may not move inversely with changes in interest rates. The risk of
imperfect correlations may be increased by the fact that the Trust may invest
in futures contracts on taxable securities and there is no guarantee that the
prices of taxable securities will move in a similar manner to the prices of
tax-exempt securities.
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The Trust's ability to establish and close out positions in futures
contracts and options on futures contracts will be subject to the development
and maintenance of a liquid secondary market. Although the Trust generally
will purchase only those futures contracts and options thereon for which
there appears to be a liquid market, there is no assurance that a liquid
market on an exchange will exist for any particular futures contract or
option or at any particular time.
Successful use of futures contracts and options thereon by the Trust is
subject to the ability of the Investment Manager to predict correctly
movements in the direction of interest rates and other factors affecting
markets for securities. These skills are different from those needed to
select portfolio securities. If the Investment Manager's expectations are not
met, the Trust will be in a worse position than if a hedging strategy had not
been pursued. For example, if the Trust has hedged against the possibility of
an increase in interest rates which would adversely affect the price of
securities in its portfolio and the price of such securities increases
instead, the Trust will lose part or all of the benefit of the increased
value of its securities because it will have offsetting losses in its futures
positions.
Certain federal income tax requirements may limit the Trust's ability to
engage in options and futures. Gains from transactions in options and futures
contracts distributed to shareholders will be taxable as ordinary income or,
in certain circumstances, as long-term capital gains to shareholders.
For a further discussion of the use, risks and costs of futures contracts
and options thereon, see Appendix B.
Municipal Bond Index Futures. The Trust may purchase and sell municipal
bond index futures contracts for hedging purposes. The Trust's strategies in
employing such contracts will be similar to that discussed above with respect
to financial futures and options thereon. A municipal bond index is a method
of reflecting in a single number the market value of many different municipal
bonds and is designed to be representative of the municipal bond market
generally. The index fluctuates in response to changes in the market values of
the bonds included within the index. Unlike futures contracts on particular
financial instruments, transactions in futures on a municipal bond index will
be settled in cash, if held until the close of trading in the contract.
However, like any other futures contract, a position in the contract may be
closed out by purchase or sale of an offsetting contract for the same delivery
month prior to expiration of the contract.
Options on Debt Securities. The Trust may purchase or sell (write) options
on debt securities as a means of achieving additional return or hedging the
value of the Trust's portfolio. The Trust will only write covered call or
covered put options, or buy call or put options, which are listed on national
securities exchanges. The Trust may not write covered options in an amount
exceeding 20% of the value of its total assets. The Trust will not purchase
options if, as a result, the aggregate cost of all outstanding options
exceeds 10% of the Trust's total assets.
A call option is a contract that gives the holder of the option the right
to buy from the writer (seller) of the call option, in return for a premium
paid, the security underlying the option at a specified exercise price at any
time during the term of the option. The writer of the call option has the
obligation upon exercise of the option to deliver the underlying security
upon payment of the exercise price during the option period. A put option is
a contract that gives the holder of the option, in return for a premium paid,
the right to sell to the writer (seller) the underlying security at a
specified price during the term of the option. The writer of the put option,
who receives the premium, has the obligation to buy the underlying security
upon exercise, at the exercise price during the option period.
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If the Trust has written an option, it may terminate its obligation by
effecting a closing purchase transaction. This is accomplished by purchasing
an option of the same series as the option previously written. There can be
no assurance that either a closing purchase or sale transaction can be
effected when the Trust so desires.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although the Trust will
generally purchase or write only those options for which there appears to be
an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option.
New options and futures contracts and other financial products and various
combinations thereof continue to be developed. The Trust may invest in any
such options, futures and products as may be developed to the extent
consistent with its investment objective and the regulatory requirements
applicable to investment companies.
For further discussion of the use, risks and costs of options trading, see
Appendix B.
Variable Rate Obligations. The interest rates payable on certain Municipal
Obligations are not fixed and may fluctuate based upon changes in market
rates or indices, such as a tax-exempt money market or bank prime index.
Municipal Obligations of this type are called "variable rate" obligations.
The interest rate payable on a variable rate obligation is adjusted either at
predesignated periodic intervals or whenever there is a change in the market
rate of interest or index on which the interest rate payable is based. There
is no limit on the percentage of the Trust's assets which may be invested in
variable rate obligations.
When-Issued and Delayed Delivery Securities. The Trust may purchase
tax-exempt securities on a when-issued or delayed delivery basis; i.e.,
delivery and payment can take place a month or more after the date of the
transaction. The securities so purchased are subject to market fluctuation
during this period and no interest accrues to the purchaser prior to the date
of settlement. At the time the Trust makes the commitment to purchase
securities on a when-issued or delayed delivery basis, it will record the
transaction and thereafter reflect the value, each day, of such security in
determining the net asset value of the Trust. At the time of delivery of the
securities, the value may be more or less than the purchase price. Since the
Trust is dependent on the party issuing the when-issued or delayed delivery
security to complete the transaction, failure by the other party to deliver the
securities as arranged would result in the Trust losing an investment
opportunity. The Trust will also establish a segregated account with its
custodian bank in which it will maintain cash or high grade tax-exempt debt
obligations equal in value to commitments for such when-issued or delayed
delivery securities; subject to this requirement, the Trust may purchase
securities on such basis without limit. An increase in the percentage of the
Trust's assets committed to the purchase of securities on a when-issued or
delayed delivery basis may increase the volatility of the Trust's net asset
value. The Investment Manager and the Trustees do not believe that the
Trust's net asset value or income will be adversely affected by its purchase
of securities on such basis.
Repurchase Agreements. When cash may be available for only a few days, it
may be invested by the Trust in repurchase agreements until such time as it
may otherwise be invested or used for payments of obligations of the Trust.
These agreements, which may be viewed as a type of secured lending by the
Trust, typically involve the acquisition by the Trust of debt securities from
a selling financial institution such as a bank, savings and loan association
or broker-dealer. The agreement provides that the Trust will sell back to the
institution, and that the institution will repurchase, the underlying
security ("collateral"), which is held by the Trust's Custodian, at a
specified price and at a fixed time in the future,
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usually not more than seven days from the date of purchase. The Trust will
accrue interest from the institution until the time when the repurchase is to
occur. Although such date is deemed by the Trust to be the maturity date of a
repurchase agreement, the maturities of securities subject to repurchase
agreements are not subject to any limits and may exceed one year. While
repurchase agreements involve certain risks not associated with direct
investments in debt securities, the Trust will follow procedures designed to
minimize such risks. These procedures include effecting repurchase transactions
only with large, well-capitalized and well-established financial institutions,
whose financial condition will be continually monitored. In addition, the value
of the collateral underlying the repurchase agreement will always be at least
equal to the repurchase price, including any accrued interest earned on the
repurchase agreement. In the event of a default or bankruptcy by a selling
financial institution, the Trust will seek to liquidate such collateral.
However, the exercising of the Trust's right to liquidate such collateral
could involve certain costs or delays and, to the extent that proceeds from
any sale upon a default of the obligation to repurchase were less than the
repurchase price, the Trust could suffer a loss. In addition, to the extent
that the Trust's security interest in the collateral may not be properly
perfected, the Trust could suffer a loss up to the entire amount of the
collateral. It is the current policy of the Trust not to invest in repurchase
agreements that do not mature within seven days if any such investment
amounts to more than 10% of its total assets.
Borrowing. The Trust may borrow money from a bank for temporary or
emergency purposes or for the repurchase of its shares provided that
immediately after such borrowing the amount borrowed does not exceed 33 1/3 %
of the value of its total assets (including the amount borrowed) less its
liabilities (not including any borrowings but including the fair market value
at the time of computation of any other senior securities then outstanding).
If, due to market fluctuations or other reasons, the value of the Trust's
assets falls below the foregoing required coverage requirement, the Trust,
within three business days, will reduce its bank debt to the extent necessary
to comply with such requirement. To achieve such reduction, it is possible
that the Trust may be required to sell portfolio securities at a time when it
may be disadvantageous to do so.
Borrowings other than for temporary or emergency purposes would involve
additional risk to the Trust, since the interest expense may be greater than
the income from or appreciation of the securities carried by the borrowing.
Investment activity will continue while the borrowing is outstanding. The
purchase of additional securities while any borrowing is outstanding involves
the speculative factor known as "leverage," and will result in increased
volatility of the Trust's net asset value. The increased volatility resulting
from the use of such borrowings could have a negative effect on the Trust's
net asset value greater than would be the case with other funds having
similar objectives and policies but which do not utilize such borrowings.
Lending of Portfolio Securities. Consistent with applicable regulatory
requirements, the Trust may lend its portfolio securities to brokers, dealers
and financial institutions, provided that such loans are callable at any time
by the Trust (subject to notice provisions described below), and are at all
times secured by cash or cash equivalents, which are maintained in a
segregated account pursuant to applicable regulations and that are equal to
at least 102% of the market value, determined daily, of the loaned
securities. The advantage of such loans is that the Trust continues to
receive the income on the loaned securities while at the same time earning
interest on the cash amounts deposited as collateral, which will be invested
in short-term obligations. The Trust will not lend its portfolio securities
if such loans are not permitted by the laws or regulations of any state in
which its shares are qualified for sale and will not lend more than 10% of
the value of its total assets.
A loan may be terminated by the borrower on one business day's notice, or
by the Trust on four business days' notice. If the borrower fails to deliver
the loaned securities within four days after receipt
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of notice, the Trust could use the collateral to replace the securities while
holding the borrower liable for any excess of replacement cost over collateral.
As with any extensions of credit, there are risks of delay in recovery and in
some cases even loss of rights in the collateral should the borrower of the
securities fail financially. However, these loans of portfolio securities will
only be made to firms deemed by the Trust's management to be creditworthy and
when the income which can be earned from such loans justifies the attendant
risks. Upon termination of the loan, the borrower is required to return the
securities to the Trust. Any gain or loss in the market price during the loan
period would inure to the Trust. The creditworthiness of firms to which the
Trust lends its portfolio securities will be monitored on an ongoing basis by
the Investment Manager pursuant to procedures adopted and reviewed, on an
ongoing basis, by the Trustees of the Trust.
When voting or consent rights which accompany loaned securities pass to
the borrower, the Trust will follow the policy of calling the loaned
securities, to be delivered within one day after notice, to permit the
exercise of such rights if the matters involved would have a material effect
on the Trust's investment in such loaned securities. The Trust will pay
reasonable finder's, administrative and custodial fees in connection with a
loan of its securities.
Private Placements. The Trust may invest up to 15% of its total assets in
obligations customarily sold to institutional investors in private
transactions for which only a limited market may exist at the time of
purchase. This type of limited private offering is frequently utilized with
respect to smaller issues of Municipal Obligations or when issuers wish to
restrict the number of holders to reduce issuance costs and to permit maximum
flexibility in structuring the transactions and to facilitate the prompt
issuance of the securities. Although such securities are not restricted
securities unless they contain restrictions on resale, due to the limited
market for such issues, the Trust may be unable to dispose of such securities
promptly at reasonable prices. See "Determination of Net Asset Value."
Restricted Securities. The Trust may invest up to 15% of its total assets
in securities subject to contractual restrictions on resale. Contractual
limitations on the resale of such securities have an adverse effect on their
marketability and may prevent the Trust from disposing of them promptly.
Portfolio Management and Turnover Rate. The Trust's portfolio will be
managed by its Investment Manager with a view to achieving its investment
objective. Securities are purchased and sold principally in response to the
Investment Manager's current evaluation of an issuer's ability to meet its
debt obligations in the future, and the Investment Manager's current
assessment of future changes in the levels of interest rates on tax-exempt
securities of varying coupon rates and maturities. The Trust may engage in
short-term trading consistent with its investment objective. Securities may
be sold in anticipation of a market decline (a rise in interest rates) or
purchased in anticipation of a market rise (a decline in interest rates). In
addition, a security may be sold and another security of comparable quality
purchased at approximately the same time to take advantage of what the
Investment Manager believes to be a temporary disparity in the normal yield
relationship between the two securities. These yield disparities may occur
for reasons not directly related to the investment quality of particular
issues or the general movement of interest rates, such as changes in the
overall demand for, or supply of, various types of tax-exempt securities. In
general, purchases and sales may also be made to restructure the portfolio in
terms of average maturity, quality, coupon yield, or diversification for any
one or more of the following purposes: (a) to increase income, (b) to improve
portfolio quality, (c) to minimize capital depreciation, (d) to realize gains
or losses, or for such other reasons as the Investment Manager deems relevant
in light of economic and market conditions. Fluctuation in the supply of
Municipal Obligations at an acceptable price may affect the Trust's ability
to achieve its investment objective.
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Securities purchased by the Trust generally are sold by dealers acting as
principal for their own accounts. The Trust may incur brokerage commissions
on transactions conducted through DWR.
While it is not possible to predict turnover rates with any certainty, at
present it is anticipated that the Trust's portfolio turnover rate, under
normal circumstances, after the Trust's portfolio is invested in accordance
with its investment objective, will not exceed 100%. The Trust will incur
transaction costs commensurate with its portfolio turnover rate.
Additionally, see "Taxation" for a discussion of the tax policy of the Trust
and see "Portfolio Transactions and Brokerage" for a more extensive
discussion of the Trust's portfolio brokerage policies.
The portfolio manager of the Trust is Mr. James F. Willison and as such he
will be primarily responsible for the day-to-day management of the Trust's
portfolio. For a more detailed discussion of Mr. Willison's business
experience during the past five years, see "Trustees and Officers."
INVESTMENT RESTRICTIONS
- -----------------------------------------------------------------------------
The investment restrictions listed below have been adopted by the Trust as
fundamental policies which may not be changed without the vote of a majority,
as defined in the Act, of the outstanding voting securities of the Trust. For
purposes of the restrictions: (a) an "issuer" of a security is the entity
whose assets and revenues are committed to the payment of interest and
principal on that particular security; (b) a "taxable security" is any
security the interest on which is subject to federal income tax (which does
not include "private activity bonds" subject to the alternative minimum tax
discussed under "Taxation"); and (c) all percentage limitations apply
immediately after a purchase or initial investment, and any subsequent change
in any applicable percentage resulting from market fluctuations or other
changes in the amount of total or net assets does not require elimination of
any security from the portfolio.
The Trust may not:
1. As to 75% of its total assets, invest more than 5% of the value of its
total assets in the securities of any one issuer. This limitation shall not
apply to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or to the investment of 25% of the Trust's
total assets.
2. Purchase more than 10% of all outstanding taxable debt securities of
any one issuer (other than obligations issued, or guaranteed as to principal
and interest, by the U.S. Government, its agencies or instrumentalities).
3. Invest 25% or more of the value of its total assets in securities of
issuers in any one industry; provided, however, that such limitations shall
not be applicable to Municipal Obligations issued by governments or political
subdivisions of governments, and obligations issued or guaranteed by the
United States Government, its agencies or instrumentalities. In addition, the
Trust reserves the right to invest 25% or more of its assets in any of the
following types of Municipal Obligations, provided that the percentage of the
Trust's total assets in private activity bonds in any one category does not
exceed 25% of the Trust's total assets: health facility obligations, housing
obligations, single family mortgage revenue bonds, industrial revenue
obligations (including pollution control obligations), electric utility
obligations, airport facility revenue obligations, water and sewer
obligations, university and college revenue obligations, bridge authority and
toll road obligations and resource recovery obligations. A discussion of
certain risks associated with investing in such obligations is set forth in
Appendix C.
4. Invest more than 5% of the value of its total assets in taxable
securities of issuers having a record, together with predecessors, of less
than three years of continuous operation. This restriction shall not apply to
any obligation of the United States Government, its agencies or
instrumentalities.
5. Invest in common stock.
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6. Invest in securities of any issuer, other than securities of the Trust,
if, to the knowledge of the Trust, any officer or trustee of the Trust or any
officer or director of the Investment Manager owns more than 1/2 of 1% of the
outstanding securities of such issuer, and such officers, trustees and
directors who own more than 1/2 of 1% own in the aggregate more than 5% of
the outstanding securities of such issuer.
7. Purchase or sell real estate or interests therein, although it may
purchase securities secured by real estate or interests therein. This shall
not prohibit the Trust from purchasing, holding and selling real estate
acquired as a result of the ownership of such securities.
8. Purchase or sell commodities except that the Trust may purchase or sell
financial futures contracts and related options thereon.
9. Purchase oil, gas or other mineral leases, rights or royalty contracts,
or exploration or development programs.
10. Write, purchase or sell puts, calls, or combinations thereof, except
for options on futures contracts or options on debt securities.
11. Purchase securities of other investment companies, except in
connection with a merger, consolidation, reorganization or acquisition of
assets or, by purchase in the open market of securities of closed-end
investment companies where no underwriter's or dealer's commission or profit,
other than customary broker's commissions, is involved and only if
immediately thereafter not more than (i) 5% of the Trust's total assets,
taken at market value, would be invested in any one such company and (ii) 10%
of the Trust's total assets, taken at market value, would be invested in such
securities.
12. Borrow money, except that the Trust may borrow from a bank for
temporary or emergency purposes or for repurchase of its shares provided that
immediately after such borrowing the amount borrowed does not exceed 33 1/3 %
of the value of its total assets (including the amount borrowed) less its
liabilities (not including any borrowings but including the fair market value
at the time of computation of any other senior securities which are
outstanding at the time).
13. Pledge its assets or assign or otherwise encumber them except to
secure borrowings effected within the limitations set forth in Restriction
12. However, for the purpose of this restriction, collateral arrangements
with respect to the writing of options and collateral arrangements with
respect to initial margin for futures are not deemed to be pledges of assets.
14. Issue senior securities as defined in the Act, except insofar as the
Trust may be deemed to have issued a senior security by reason of: (a)
entering into any repurchase agreement; (b) purchasing any securities on a
when-issued or delayed delivery basis; (c) purchasing or selling any
financial futures contracts; (d) borrowing money in accordance with
restrictions described above; or (e) lending portfolio securities.
15. Make loans of money or securities, except: (a) by the purchase of debt
obligations in which the Trust may invest consistent with its investment
objective and policies; (b) by investment in repurchase agreements (provided
that no more than 10% of the Trust's total assets will be invested in
repurchase agreements that do not mature within seven days); and (c) by
lending its portfolio securities (provided that the Trust may not lend its
portfolio securities in excess of 10% of its total assets).
16. Make short sales of securities.
17. Purchase securities on margin, except for such short-term loans as are
necessary for the clearance of purchases of portfolio securities.
18. Engage in the underwriting of securities, except insofar as the Trust
may be deemed an underwriter under the Securities Act of 1933 in disposing of
a portfolio security.
19. Invest for the purpose of exercising control or management of any
other issuer.
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TRUSTEES AND OFFICERS
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The Trustees and Executive Officers of the Trust and their principal
occupations for at least the last five years and their affiliations, if any,
with InterCapital and with the Dean Witter Funds and with investment
companies to which TCW Funds Management, Inc. serves as investment adviser
and Dean Witter Services Inc. serves as manager (the "TCW/DW Funds") are set
forth below, with those Trustees who are "interested persons" of the Trust
(as defined in the Act) indicated by an asterisk.
<TABLE>
<CAPTION>
NAME, POSITION WITH THE TRUST AND PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS; AFFILIATIONS WITH
ADDRESS INTERCAPITAL AND THE DEAN WITTER FUNDS
- --------------------------------------- ------------------------------------------------------------------
<S> <C>
Jack F. Bennett Retired; Director or Trustee of the Dean Witter Funds; formerly
Trustee Senior Vice President and Director of Exxon Corporation
141 Taconic Road (1975-January, 1989) and Under Secretary of the U.S. Treasury for
Greenwich, Connecticut Monetary Affairs (1974-1975); Director of Philips Electronics
N.V., Tandem Computers Inc. and Massachusetts Mutual Life
Insurance Co.; Director or Trustee of various not-for-profit and
business organizations.
Michael Bozic President and Chief Executive Officer of Hills Department Stores
Trustee (since May, 1991); formerly Chairman and Chief Executive Officer
c/o Hills Stores Inc. (January, 1987-August, 1990) and President and Chief Operating
15 Dan Road Officer (August, 1990-February, 1991) of the Sears Merchandise
Canton, Massachusetts Group of Sears, Roebuck and Co.; Director or Trustee of the Dean
Witter Funds; Director of Harley Davidson Credit Inc., the United
Negro College Fund and Domain Inc. (home decor retailer).
Charles A. Fiumefreddo* Chairman, Chief Executive Officer and Director of InterCapital,
Chairman of the Board, Dean Witter Distributors Inc. and DWSC; Executive Vice President
President, Chief Executive and Director of DWR; Chairman, Director and/or Trustee, President
Officer and Trustee and Chief Executive Officer of the Dean Witter Funds; Chairman,
Two World Trade Center Chief Executive Officer and Trustee of the TCW/DW Funds; Chairman
New York, New York and Director of Dean Witter Trust Company (since October, 1989);
Director and/or officer of various DWDC subsidiaries; formerly
Executive Vice President and Director of DWDC (until February,
1993).
Edwin J. Garn Director or Trustee of the Dean Witter Funds; formerly United
Trustee States Senator (R-Utah) (1974-1992) and Chairman, Senate Banking
2000 Eagle Gate Tower Committee (1980-1986); formerly Mayor of Salt Lake City, Utah
Salt Lake City, Utah (1971-1974); formerly Astronaut, Space Shuttle Discovery (April
12-19, 1985); Vice Chairman, Huntsman Chemical Corporation (since
January, 1993); Member of the board of various civic and
charitable organizations.
21
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<PAGE>
NAME, POSITION WITH THE TRUST AND PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS; AFFILIATIONS WITH
ADDRESS INTERCAPITAL AND THE DEAN WITTER FUNDS
- --------------------------------------- ------------------------------------------------------------------
John R. Haire Chairman of the Audit Committee and Chairman of the Committee of
Trustee the Independent Directors or Trustees and Director or Trustee of
439 East 51st Street each of the Dean Witter Funds; Trustee of the TCW/DW Funds;
New York, New York formerly President, Council for Aid to Education (1978-October,
1989), and Chairman and Chief Executive Officer of Anchor
Corporation, an Investment Adviser (1964-1978); Director of
Washington National Corporation (insurance) and Bowne & Co., Inc.
(printing).
Dr. John E. Jeuck Retired; Director or Trustee of the Dean Witter Funds; formerly
Trustee Robert Law Professor of Business Administration, Graduate School
70 East Cedar Street of Business, University of Chicago (until July, 1989); Business
Chicago, Illinois consultant.
Dr. Manuel H. Johnson Senior Partner, Johnson Smick International, Inc., a consulting
Trustee firm (since June, 1985); Koch Professor of International Economics
7521 Old Dominion Dr. and Director of the Center for Global Market Studies at George
MacLean, Virginia Mason University (since September, 1990); Co-Chairman and a
founder of the Group of Seven Council (G7C), an international
economic commission (since September, 1990); Director or Trustee
of the Dean Witter Funds; Trustee of the TCW/DW Funds; Director of
Greenwich Capital Markets Inc. (broker-dealer); formerly Vice
Chairman of the Board of Governors of the Federal Reserve System
(February, 1986-August, 1990) and Assistant Secretary of the U.S.
Treasury (1982-1986).
Paul Kolton Director or Trustee of the Dean Witter Funds; Chairman of the
Trustee Audit Committee and Committee of the Independent Trustees and
9 Hunting Ridge Road Trustee of the TCW/DW Funds; formerly Chairman of the Financial
Stamford, Connecticut Accounting Standards Advisory Council and Chairman and Chief
Executive Officer of the American Stock Exchange; Director of UCC
Investors Holding Inc. (Uniroyal Chemical Company Inc.); director
or trustee of various not-for-profit organizations.
Michael E. Nugent General Partner, Triumph Capital, L.P., a private partnership
Trustee (since April, 1988); Director or Trustee of the Dean Witter Funds;
1465 Roosevelt Place Trustee of the TCW/DW Funds; formerly Vice President, Bankers
Pelham Manor, New York Trust Company and BT Capital Corporation (September, 1984-March,
1988); Director of various business organizations.
22
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<PAGE>
NAME, POSITION WITH THE TRUST AND PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS; AFFILIATIONS WITH
ADDRESS INTERCAPITAL AND THE DEAN WITTER FUNDS
- --------------------------------------- ------------------------------------------------------------------
Philip J. Purcell* Chairman of the Board of Directors and Chief Executive Officer of
Trustee DWDC, DWR and NOVUS Credit Services Inc.; Director of
Two World Trade Ccenter InterCapital, DWSC and Dean Witter Distributors Inc.; Director or
New York, New York Trustee of the Dean Witter Funds; Director and/or Officer of
various DWDC subsidiaries.
John L. Schroeder Executive Vice President and Chief Investment Officer of the Home
Trustee Insurance Company (since August, 1991); Director or Trustee of the
Northgate 3A Alger Court Dean Witter Funds; Director of Citizens Utilities Company;
Bronxville, New York formerly Chairman and Chief Investment Officer of Axe-Houghton
Management and the Axe-Houghton Funds (April, 1983-June, 1991) and
President of USF&G Financial Services, Inc. (June 1990-June,
1991).
Edward R. Telling* Retired; Director or Trustee of the Dean Witter Funds; formerly
Trustee Chairman of the Board of Directors and Chief Executive Officer
Sears Tower (until December, 1985) and President (from January, 1981-March,
Chicago, Illinois 1982 and from February, 1984-August, 1984) of Sears, Roebuck and
Co.; formerly Director of Sears, Roebuck and Co.
Sheldon Curtis Senior Vice President, Secretary and General Counsel of
Vice President, Secretary and InterCapital and DWSC; Senior Vice President, Assistant Secretary
General Counsel and Assistant General Counsel of Dean Witter Distributors Inc.;
Two World Trade Center Senior Vice President and Secretary of Dean Witter Trust Company
New York, New York (since October, 1989); Assistant Secretary of DWDC and DWR;
President, Secretary and General Counsel of the Dean Witter Funds
and the TCW/DW Funds.
James F. Willison Senior Vice President of InterCapital; Vice President of various
Vice President Dean Witter Funds.
Two World Trade Center
New York, New York
Thomas F. Caloia First Vice President (since May, 1991) and Assistant Treasurer
Treasurer (since January, 1993) of InterCapital; First Vice President and
Two World Trade Center Assistant Treasurer of DWSC and Treasurer of the Dean Witter Funds
New York, New York and the TCW/DW Funds; previously Vice President of InterCapital.
</TABLE>
- ------------
[FN]
* Denotes Trustees who are "interested persons" of the Trust, as defined
in the Act.
In addition, Robert M. Scanlan, President and Chief Operating Officer of
InterCapital, and DWSC, Executive Vice President of Dean Witter Distributors
Inc. and DWTC and Director of DWTC, David A. Hughey, Executive Vice President
and Chief Administrative Officer of InterCapital, DWSC and Dean Witter
Distributors Inc. and President and Director of DWTC, Edmund C. Puckhaber,
Executive Vice President of InterCapital, and Peter Avelar and Jonathan R.
Page, Senior Vice Presidents of InterCapital,
23
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<PAGE>
and Katherine H. Stromberg and Joseph Arcieri, Vice Presidents of
InterCapital, are Vice Presidents of the Trust, and Barry Fink and Marilyn K.
Cranney, First Vice Presidents and Assistant General Counsels of InterCapital
and DWSC, and Lawrence S. Lafer, Lou Anne D. McInnis, and Ruth Rossi, Vice
Presidents and Assistant General Counsels of InterCapital and DWSC, are
Assistant Secretaries of the Trust.
All Trustees will be subject to election by the shareholders at the first
meeting of shareholders. Thereafter, the Board of Trustees of the Trust will
be divided into three classes, each class having a term of three years. The
term of office of one class will expire each year. The Shareholders will have
the right to elect twelve Trustees of the Trust at the next annual meeting of
Shareholders. See "Description of Shares."
The Trust pays each Trustee who is not an employee or a retired employee
of the Investment Manager or an affiliated company, an annual fee of $1,200
plus $50 for each meeting of the Board of Trustees, the Audit Committee and
the Committee of the Independent Trustees attended by the Trustee in person
(the Trust pays the Chairman of the Audit Committee an additional annual fee
of $1,000 and pays the Chairman of the Committee of Independent Trustees an
additional annual fee of $2,400, in each case inclusive of the Committee
meeting fees). The Trust also reimburses such Trustees for travel and other
out-of-pocket expenses incurred by them in connection with attending such
meetings. Trustees and officers of the Trust who are or have been employed by
the Investment Manager or an affiliated company, or are retired from such
employment, receive no compensation or expense reimbursement from the Trust.
INVESTMENT MANAGEMENT AGREEMENT
- -----------------------------------------------------------------------------
The Trust has retained Dean Witter InterCapital Inc. (the "Investment
Manager" or "InterCapital"), to provide administrative services, manage its
business affairs and manage the Trust's assets, including the placing of
orders for the purchase and sale of portfolio securities, pursuant to an
Investment Management Agreement (the "Agreement").
The Investment Manager obtains and evaluates such information and advice
relating to the economy, securities markets, and specific securities as it
considers necessary or useful to continuously manage the assets of the Trust
in a manner consistent with its investment objective and policies. The
Trust's Board of Trustees reviews the various services provided by the
Investment Manager to ensure that the Trust's general investment policies and
programs are being properly carried out and that administrative services are
being provided to the Trust in a satisfactory manner.
Under the terms of the Agreement, in addition to managing the Trust's
investments, the Investment Manager maintains certain of the Trust's books
and records and furnishes, at its own expense, such office space, facilities,
equipment, clerical help, bookkeeping and certain legal services as the Trust
may reasonably require in the conduct of its business, including the
preparation of proxy statements and reports required to be filed with federal
and state securities commissions (except insofar as the participation or
assistance of independent accountants and attorneys is, in the opinion of the
Investment Manager, necessary or desirable). In addition, the Investment
Manager pays the salaries of all personnel, including officers of the Trust,
who are employees of the Investment Manager. The Investment Manager also
bears the cost of telephone service, heat, light, power and other utilities
provided to the Trust. InterCapital has retained Dean Witter Services Company
Inc., a wholly-owned subsidiary of InterCapital, to perform the
aforementioned administrative services for the Trust.
24
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Expenses not expressly assumed by the Investment Manager under the
Agreement will be paid by the Trust. The expenses borne by the Trust include,
but are not limited to: charges and expenses of any registrar, custodian,
stock transfer and dividend disbursing agent; brokerage commissions; taxes;
engraving and printing of share certificates; registration costs of the Trust
and its shares under federal and state securities laws; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees
or retired employees of the Investment Manager or any corporate affiliate of
either; all expenses incident to any dividend or distribution program;
charges and expenses of any outside service used for pricing of the Trust's
portfolio securities; fees and expenses of legal counsel, including counsel
to the Trustees who are not interested persons of the Trust or of the
Investment Manager (not including compensation or expenses of attorneys who
are employees of the Investment Manager) and independent accountants;
membership dues of industry associations; interest on Trust borrowings; fees
and expenses incident to the listing of the Trust's shares on any stock
exchange; postage; insurance premiums on property or personnel (including
officers and Trustees) of the Trust which inure to its benefit; extraordinary
expenses (including, but not limited to, legal claims and liabilities and
litigation costs and any indemnification relating thereto); and all other
costs of the Trust's operation.
As full compensation for the services furnished to the Trust, the Trust
pays the Investment Manager monthly compensation calculated weekly by
applying the annual rate of 0.35% to the Trust's average weekly net assets.
The Agreement provides that in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations thereunder,
the Investment Manager is not liable to the Trust or any of its shareholders
for any act or omission by the Investment Manager or for any losses sustained
by the Trust or its shareholders. The Agreement in no way restricts the
Investment Manager from acting as investment manager or adviser to others.
The Agreement was initially approved by the Trustees on July 14, 1994, and
by InterCapital as the sole shareholder on September , 1994. The Agreement
may be terminated at any time, without penalty, on thirty days' notice by the
Trustees of the Trust, by the holders of a majority, as defined in the Act,
of the outstanding shares of the Trust, or by the Investment Manager. The
Agreement will automatically terminate in the event of its assignment (as
defined in the Act).
Under its terms, the Agreement will continue in effect until April 30,
1996, and from year to year thereafter, provided continuance of the Agreement
is approved at least annually by the vote of the holders of a majority, as
defined in the Act, of the outstanding voting securities of the Trust, or by
the Trustees of the Trust; provided that in either event such continuance is
approved annually by the vote of a majority of the Trustees of the Trust who
are not parties to the Agreement or "interested persons" (as defined in the
Act) of any such party (the "Independent Trustees"), which vote must be cast
in person at a meeting called for the purpose of voting on such approval.
PORTFOLIO TRANSACTIONS AND BROKERAGE
- -----------------------------------------------------------------------------
Subject to the general supervision of the Board of Trustees, the
Investment Manager is responsible for decisions to buy and sell securities
and futures contracts for the Trust, the selection of brokers and dealers to
effect the transactions, and the negotiation of brokerage commissions, if
any. The Trust expects that the primary market for the securities in which it
intends to invest will generally be the over-the-counter market. Securities
are generally traded in the over-the-counter market on a "net" basis with
dealers acting as principal for their own accounts without charging a stated
commission, although
25
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<PAGE>
the price of the security usually includes a profit to the dealer. Options
and futures transactions will usually be effected through a broker and a
commission will be charged. The Trust also expects that securities will be
purchased at times in underwritten offerings, where the price includes a
fixed amount of compensation, generally referred to as the underwriter's
concession or discount. On occasion, the Trust may also purchase certain
money market instruments directly from an issuer, in which case no
commissions or discounts are paid.
The Investment Manager currently serves as investment manager to a number
of clients and may in the future act as investment manager or adviser to
others. It is the practice of the Investment Manager to cause purchase and
sale transactions to be allocated among the Trust and other investment
companies or other accounts whose assets it manages or advises in such manner
as it deems equitable. This allocation could adversely affect the size or
price of the position purchased or sold. In making such allocations among the
Trust and other client accounts, the main factors considered are the
respective investment objectives, the relative size of portfolio holdings of
the same or comparable securities, the availability of cash for investment,
the size of investment commitments generally held and the opinions of the
persons responsible for managing the portfolios of the Trust and other client
accounts.
The policy of the Trust regarding purchases and sales of securities and
futures contracts for its portfolio is that primary consideration will be
given to obtaining the most favorable prices and efficient execution of
transactions. In seeking to implement the Trust's policies, the Investment
Manager will effect transactions with those brokers and dealers who the
Investment Manager believes provide the most favorable prices and who are
capable of providing efficient executions. If the Investment Manager believes
such price and execution are obtainable from more than one broker or dealer,
it may give consideration to placing portfolio transactions with those
brokers and dealers who also furnish research and other services to the Trust
or the Investment Manager. Such services may include, but are not limited to,
any one or more of the following: information as to the availability of
securities for purchase or sale; statistical or factual information or
opinions pertaining to investments; wire services; and appraisals or
evaluations of portfolio securities. The Trust will not purchase at a higher
price or sell at a lower price in connection with transactions effected with
a dealer, acting as principal, who furnishes research services to the Trust
than would be the case if no weight were given by the Trust to the dealer's
furnishing of such services.
The information and services received by the Investment Manager from
brokers and dealers may be of benefit to the Investment Manager and its
affiliates in the management of other accounts and may not in all cases
benefit the Trust directly. While the receipt of such information and
services is useful in varying degrees and would generally reduce the amount
of research or services otherwise performed by the Investment Manager and
thus reduce its expenses, it is of indeterminable value and the advisory fee
paid to the Investment Manager is not reduced by any amount that may be
attributable to the value of such services.
Pursuant to an order of the Securities and Exchange Commission, the Trust
may effect principal transactions in certain money market instruments with
DWR. The Trust will limit its transactions with DWR to U.S. Government and
Government agency securities, bank money instruments (i.e., certificates of
deposit and bankers' acceptances) and commercial paper (not including
tax-exempt municipal paper). Such transactions will be effected with DWR only
when the price available from DWR is better than that available from other
dealers.
Consistent with the policy described above, brokerage transactions in
securities and futures contracts listed on exchanges or admitted to unlisted
trading privileges may be effected through DWR.
26
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<PAGE>
In order for DWR to effect portfolio transactions for the Trust, the
commissions, fees or other remuneration received by DWR must be reasonable
and fair compared to the commissions, fees or other remuneration paid to
other brokers in connection with comparable transactions involving similar
securities being purchased or sold on an exchange during a comparable period
of time. This standard would allow DWR to receive no more than the
remuneration which would be expected to be received by an unaffiliated broker
in a commensurate arm's-length transaction. Furthermore, the Trustees of the
Trust, including a majority of the independent Trustees, have adopted
procedures which are reasonably designed to provide that any commissions,
fees or other remuneration paid to DWR are consistent with the foregoing
standard.
Section 11(a) of the Securities Exchange Act of 1934 which generally
prohibits members of United States national securities exchanges from
executing exchange transactions for their affiliates and institutional
accounts which they manage, permits such exchange members to execute
securities transactions on an exchange only if the affiliate or account
expressly consents. To the extent Section 11(a) would apply to DWR acting as
a broker for the Trust in any of its portfolio transactions executed on any
such securities exchange of which DWR is a member, appropriate written
consents have been given.
DETERMINATION OF NET ASSET VALUE
- -----------------------------------------------------------------------------
The net asset value per share of the Trust's Shares will be determined as
of 4:00 p.m., New York time, on the last day of each week on which the New
York Stock Exchange is open for trading by taking the value of all assets of
the Trust, subtracting its liabilities, dividing by the number of Shares
outstanding and adjusting to the nearest cent.
In the calculation of the Trust's net asset value: (1) a portfolio
security listed or traded on the New York or American Stock Exchange is
valued at its last sale price on that exchange (if there were no sales that
day, the security is valued at the closing bid price); (2) all other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest bid price; and (3) when market quotations
are not readily available, portfolio securities are valued at their fair
value as determined in good faith under procedures established by and under
the general supervision of the Trust's Board of Trustees (valuation of
securities for which market quotations are not readily available may be based
upon current market prices of securities which are comparable in coupon,
rating and maturity or an appropriate matrix utilizing similar factors).
Portfolio securities for which market quotations are not readily available
(other than short-term debt securities and futures and options) are valued
for the Trust by an outside independent pricing service approved by the Board
of Trustees. The pricing service has informed the Trust that in valuing the
Trust's portfolio securities it uses both a computerized grid matrix of
tax-exempt securities and evaluations by its staff, in each case based on
information concerning market transactions and quotations from dealers which
reflect the bid side of the market each day. The Trust's portfolio securities
are thus valued by reference to a combination of transactions and quotations
for the same or other securities believed to be comparable in quality,
coupon, maturity, type of issue, call provisions, trading characteristics and
other features deemed to be relevant. The Trustees believe that timely and
reliable market quotations are generally not readily available to the Trust
for purposes of valuing tax-exempt securities and that the valuations
supplied by the pricing service, using the procedures outlined above and
subject to periodic review, are more likely to approximate the fair value of
such securities. The Investment Manager will periodically review and evaluate
the procedures, methods and quality of services provided by the pricing
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service then being used by the Trust and may, from time to time, recommend to
the Trustees the use of other pricing services or discontinuance of the use
of any pricing service in whole or in part. The Trustees may determine to
approve such recommendation or to make other provisions for pricing of the
Trust's portfolio securities.
Short-term taxable debt securities with remaining maturities of 60 days or
less at time of purchase are valued at amortized cost, unless the Trustees
determine such does not reflect the securities' fair value, in which case
these securities will be valued at their market value as determined by the
Trustees. Other short-term taxable debt securities will be valued on a
marked-to-market basis until such time as they reach a remaining maturity of
60 days, whereupon they will be valued at amortized cost using their value on
the 61st day unless the Trustees determine such does not reflect the
securities' fair value, in which case the securities will be valued at their
fair value as determined by the Trustees. Listed options are valued at the
latest sale price on the exchange on which they are listed unless no sales of
such options have taken place that day, in which case they will be valued at
the mean between their latest bid and asked prices. Unlisted options are
valued at the mean between their latest bid and asked prices. Futures are
valued at the latest sale price as of the close of the commodities exchange
on which they trade unless the Trustees determine that such price does not
reflect their fair value, in which case they will be valued at their fair
market value as determined by the Trustees. All other securities and other
assets are valued at their fair value as determined in good faith under
procedures established by and under the supervision of the Trustees.
DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN
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It is the Trust's present policy, which may be changed by the Board of
Trustees, to pay monthly dividends to Shareholders from net investment income
of the Trust. Initial distributions to Shareholders are expected to be
declared within approximately 60 days and paid within approximately 90 days
from the completion of this offering. Net investment income of the Trust
consists of all interest income accrued on portfolio assets less all expenses
of the Trust. Expenses of the Trust are accrued each day. The Trust will
distribute all of its net realized long-term and short-term capital gains, if
any, at least once per year but it may make such distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code of 1986, as amended, but will in all events make distributions
in a manner consistent with the Act.
All persons becoming registered holders of Shares of the Trust (other than
brokers and nominees of banks or other financial institutions) may elect to
have all dividends and capital gains distributions automatically reinvested
in additional Shares pursuant to the Trust's Dividend Reinvestment Plan (the
"Plan"), and will be deemed to have appointed Dean Witter Trust Company (the
"Transfer Agent") as their Plan agent to act on their behalf under the Plan.
All distributions under the Plan will automatically be reinvested in Shares
of the Trust in full and fractional Shares as described below. Shareholders
who do not participate in the Plan will receive all distributions in cash
paid by check mailed directly to the shareholder of record by the Transfer
Agent as dividend disbursing agent.
DETAILS OF THE PLAN
Whenever the Trust declares a dividend or other distribution, it will pay
the amount thereof in cash to the Transfer Agent on behalf of Shareholders
participating in the Plan, which the Transfer Agent must use to buy Shares in
the open market for the participants' accounts. Market price for the purpose
of the Plan will be the market price of the Shares on a national securities
exchange, or in the event that the Shares are not listed on a securities
exchange at the time, market price will be the asked price, or the mean of
the asked prices if more than one is available, of the Shares in the
over-the-counter market.
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Shareholders may terminate their participation in the Plan at any time and
elect to receive distributions in cash by notifying the Transfer Agent in
writing. Such notification must be received prior to the record date of any
distribution. There will be no charge or other penalty for such termination.
The Transfer Agent will maintain the Shareholder's account, hold the
certificates representing the additional Shares acquired through the Plan in
safekeeping and furnish the Shareholder with written confirmation of all
transactions in the account, including information needed for personal and
tax records. The Transfer Agent will vote shares in the Shareholder's account
in accordance with any proxy the Shareholder gives the Trust for Shares held
of record by him or her. On termination of the account, a certificate for
full shares in the account, plus a check for the market value of any
fractional interest, will be sent to the Shareholder.
Brokers and nominees of banks and financial institutions are advised to
contact the Transfer Agent to determine whether the beneficial holders of
Shares held in their names may participate in the Plan.
The automatic reinvestment of dividends and distributions will not relieve
participants of any income tax that may be payable on such dividends or
distributions. See "Taxation" for a discussion of the taxation of dividends
and distributions and for a discussion of certain possible tax consequences
of the Plan.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan.
There is no service charge to participants in the Plan; however, the Trust
reserves the right to amend the Plan to include a service charge payable by
the participants to the Transfer Agent to cover its expenses in administering
the Plan. Each participant will pay a pro rata share of brokerage commissions
incurred with respect to the Transfer Agent's open market purchases in
connection with the reinvestment of dividends or capital gains distributions.
All correspondence concerning the Plan should be directed to Dean Witter
Trust Company, Harborside Financial Center, Plaza Two, Jersey City, New
Jersey 07311.
TAXATION
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Because the Trust intends to distribute all of its net investment income
and capital gains to shareholders and intends to otherwise comply with all
the provisions of Subchapter M of the Internal Revenue Code of 1986 (the
"Code"), it is not expected that the Trust will be required to pay any
federal income tax on such income and capital gains.
The Trust currently intends to qualify to pay "exempt-interest dividends"
to its shareholders by maintaining, as of the close of each quarter of its
taxable year, at least 50% of the value of its total assets in securities
exempt from federal income tax. If the Trust satisfies such requirement,
distributions from net investment income to shareholders will be excludable
from gross income for federal income tax purposes to the extent properly
designated as exempt-interest dividends and to the extent net investment
income is derived from tax-exempt securities. Exempt-interest dividends are
included, however, in determining what portion, if any, of a person's Social
Security and railroad retirement benefits are subject to federal income tax.
As discussed below, such dividends may also be subject to the alternative
minimum tax. Interest on indebtedness incurred by shareholders to purchase or
carry shares of an investment company paying exempt-interest dividends, such
as the Trust, will not be deductible by the investor for federal income tax
purposes to the extent attributable to exempt-interest dividends.
Taxpayers who may have alternative minimum tax liability should note that
interest received on certain otherwise tax-exempt securities will increase
alternative minimum taxable income and, as a result, may increase or create
alternative minimum tax liability for such taxpayers. This alternative
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minimum tax applies to interest received on "private activity bonds" (in
general, bonds that benefit non-governmental entities) issued after August 7,
1986 which, although tax-exempt, are used for purposes other than those
generally performed by governmental units (e.g., bonds used for commercial or
housing purposes). Income received on such bonds is classified as a "tax
preference item," under the alternative minimum tax, for both individual and
corporate investors. The Trust may invest without limit in such "private
activity bonds" with the result that a substantial portion of the
exempt-interest dividends paid by the Trust may be an item of tax preference
to shareholders subject to the alternative minimum tax. The Trust will report
to shareholders the portion of its dividends declared during the year which
is a tax preference item for alternative minimum tax purposes, as well as the
overall percentage of dividend distributions which constitutes
exempt-interest dividends. Individual taxpayers are generally subject to the
alternative minimum tax if their "regular tax" liability is less than their
alternative minimum tax liability (which is based on graduated rates of 26%
and 28%) on their "alternative minimum taxable income" reduced by an
exemption amount ranging from $0 to $45,000 depending upon the taxpayer's
income and filing status. Alternative minimum taxable income is generally
equal to taxable income with certain adjustments and increased by certain
"tax preference items" which may include a portion of the Trust's dividends
as described above. In addition, the Code further provides that corporations
are subject to an alternative minimum tax based, in part, on 75% of any
excess of "adjusted current earnings" over taxable income as adjusted for
other tax preferences. Because an exempt-interest dividend paid by the Trust
will be included in computing adjusted current earnings, a corporate
shareholder may therefore be required to pay an increased alternative minimum
tax as the result of receiving exempt-interest dividends paid by the Trust.
Dividends on the Shares, to the extent payable from tax-exempt income
earned on the Trust's investments, will be exempt from federal income tax in
the hands of holders of such Shares, subject to the possible application of
the alternative minimum tax. Shareholders will normally be subject to federal
income tax at ordinary income rates on dividends paid from interest income
derived from taxable securities, and on distributions derived from an excess
of net short-term capital gains over long-term capital losses. No part of the
distributions to shareholders will qualify for the dividends received
deduction for corporations. Taxable long-term or short-term capital gains may
be generated by the sale of portfolio securities and by transactions in
options and futures contracts engaged in by the Trust. Distributions of
long-term capital gains, if any, are taxable as long-term capital gains,
regardless of how long the shareholder has held the Trust Shares and
regardless of whether the distribution is received in additional Shares or in
cash. Under the Revenue Reconciliation Act of 1993, all or a portion of the
Trust's gain from the sale or redemption of tax-exempt obligations purchased
at a market discount will be treated as ordinary income rather than capital
gain. This rule may increase the amount of ordinary income dividends received
by shareholders. For federal income tax purposes, any loss on a sale or
exchange of Shares held for six months or less will be treated as long-term
capital loss to the extent of any long-term capital gain distribution
received by the shareholder. In addition, with respect to a shareholder who
receives exempt-interest dividends on Shares held for less than six months
(unless regulations provide for a shorter period), any loss on the sale or
exchange of such Shares will, to the extent of the amount of such
exempt-interest dividends, be disallowed. If the Trust pays a dividend in
January which was declared in the previous October, November or December to
shareholders of record on a specified date in one of such months, then such
dividend will be treated for tax purposes as being paid by the Trust and
received by its shareholders on December 31 of the year in which such
dividend was declared.
The Code requires each regulated investment company to pay a nondeductible
4% excise tax to the extent the company does not distribute, during each
calendar year, 98% of its ordinary income, determined on a calendar year
basis, and 98% of its capital gains, determined in general on an October
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31 year end, plus certain undistributed amounts from previous years. The
required distributions, however, are based only on the taxable income of a
regulated investment company. The excise tax, therefore, will generally not
apply to the tax-exempt income of a regulated investment company such as the
Trust that pays exempt-interest dividends. The Trust anticipates that it will
make sufficient timely distributions to avoid imposition of the excise tax.
The Code provides that every person required to file a tax return must
include for information purposes on such return the amount of exempt-interest
dividends received from the Trust during the taxable year.
The Superfund Amendments and Reauthorization Act of 1986 (the "Superfund
Act") imposes a deductible tax on a corporation's alternative minimum taxable
income (computed without regard to the alternative minimum tax net operating
loss deduction) at a rate of $12 per $10,000 (0.12%) of alternative minimum
taxable income in excess of $2,000,000. The tax is imposed for taxable years
beginning after December 31, 1986 and before January 1, 1996. The tax is
imposed even if the corporation is not required to pay an alternative minimum
tax because the corporation's regular income tax liability exceeds its
minimum tax liability. Exempt-interest dividends paid by the Trust that
create alternative minimum tax preferences for corporate shareholders under
the Code (as described above) may be subject to the tax.
The tax treatment of listed put and call options written or purchased by
the Trust on debt securities and certain futures contracts and options
thereon entered into by the Trust will be governed by Section 1256 of the
Code. Absent a tax election to the contrary, each such position held by the
Trust will be marked to market (i.e., treated as if it were closed out) on
the last business day of each taxable year of the Trust, and all gain or loss
associated with transactions in such positions will be treated as 60%
long-term capital gain or loss and 40% short-term capital gain or loss.
Positions of the Trust which consist of at least one debt security and at
least one option or futures contract which substantially diminishes the
Trust's risk of loss with respect to such debt security could be treated as
"mixed straddles" which are subject to the straddle rules of Section 1092 of
the Code, the operation of which may cause deferral of losses, adjustments in
the holding periods of debt securities and conversion of short-term capital
losses into long-term capital losses. Certain tax elections exist for mixed
straddles which reduce or eliminate the operation of the straddle rules.
Furthermore, as a regulated investment company, the Trust is subject to the
requirement that less than 30% of its gross income be derived from the sale
or other disposition of securities held for less than three months. This
requirement, which would be eliminated by legislation that is currently under
consideration may limit the Trust's ability to engage in options and futures
transactions. The Trust will monitor its transactions in options and futures
contracts and may make certain tax elections in order to mitigate the effect
of these rules and prevent disqualification of the Trust as a regulated
investment company under Subchapter M of the Code. Such tax elections may
result in an increase in distributions of ordinary income (relative to
long-term capital gain) to shareholders.
Because the Trust may invest without limit in private activity bonds, or
industrial development bonds, the interest on which is not federally
tax-exempt to persons who are "substantial users" of the facilities financed
by such bonds or "related persons" of such "substantial users," the Trust may
not be an appropriate investment for shareholders who are considered either a
"substantial user" or a "related person." Such persons should consult their
tax advisers before investing in the Trust.
A loss realized on a sale or exchange of Shares of the Trust will be
disallowed if other Trust Shares are acquired (whether under the Trust's
Dividend Reinvestment Plan or otherwise) within a 61-day period beginning 30
days before and ending 30 days after the date that the Shares are disposed
of. In such a case, the basis of the Shares acquired will be adjusted to
reflect the disallowed loss.
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Under certain provisions of the Code, shareholders may be subject to 31%
withholding on certain ordinary income dividends, and on capital gains
distributions and redemption payments ("backup withholding"). Generally,
shareholders subject to backup withholding will be those for whom a taxpayer
identification number is not on file with the Trust or who, to the Trust's
knowledge, have furnished an incorrect number. When establishing an account,
an investor must certify under penalty of perjury that such number is correct
and that the investor is not subject to backup withholding.
Dividends paid by the Trust from its ordinary income and distributions of
the Trust's net short-term capital gains paid to shareholders who are
non-resident aliens or foreign entities will be subject to a 30% United
States withholding tax under existing provisions of the Code applicable to
foreign individuals and entities unless a reduced rate of withholding or a
withholding exemption is provided under applicable treaty law.
The exemption of interest income for federal income tax purposes does not
necessarily result in exemption under the income or other tax laws of any
state or local taxing authority. Thus, shareholders of the Trust may be
subject to state and local taxes on exempt-interest dividends as well as on
their ordinary income dividends and capital gains distributions.
Shareholders should consult their tax advisers as to the applicability of
the above to their own tax situation.
DESCRIPTION OF SHARES
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GENERAL
The Trust's Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional Shares of Beneficial Interest, of
$.01 par value. Share certificates will be issued upon request to the holder
of record of Trust Shares.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for its
obligations. However, the Declaration of Trust contains an express disclaimer
of shareholder liability for acts or obligations of the Trust and provides
for indemnification and reimbursement of expenses out of the Trust's property
for any shareholder held personally liable for the obligations of the Trust.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Trust itself
would be unable to meet its obligations. Given the nature of the Trust's
assets and operations, the possibility of the Trust being unable to meet its
obligations is remote and, in the opinion of Massachusetts counsel to the
Trust, the risk to Trust shareholders is remote.
The Declaration of Trust further provides that obligations of the Trust
are not binding upon the Trus-tees individually but only upon the property of
the Trust and that the Trustees will not be liable for errors of judgment or
mistakes of fact or law, but nothing in the Declaration of Trust protects a
Trustee against any liability 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.
The Trust may be terminated (i) by the affirmative vote of the holders of
not less than 80% of its outstanding Shares or (ii) by an instrument signed
by a majority of the Trustees and consented to by the holders of not less
than a majority of the Trust's outstanding Shares. Upon termination of the
Trust, the Trustees will wind up the affairs of the Trust, the Trust's
business will be liquidated and the Trust's net assets will be distributed to
the Trust's Shareholders on a pro rata basis. If not so terminated, the Trust
will continue indefinitely.
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The Trust's Declaration of Trust permits the Trustees to divide or combine
the Shares into a greater or lesser number of shares without thereby changing
the proportionate beneficial interests in the Trust. Each Share represents an
equal proportionate interest in the Trust with each other Share. The Trust
has no present intention of offering additional Shares. Other offerings of
its Shares, if made, will require approval of the Trust's Board of Trustees.
Any additional offering will be subject to the requirements of the Act that
Shares may not be sold at a price below the then current net asset value,
exclusive of underwriting discounts and commissions, except, among other
things, in connection with an offering to existing Shareholders or with the
consent of the holders of a majority of the outstanding Shares of the Trust.
Pursuant to the Declaration of Trust, the Trust will hold annual meetings
of shareholders. Shareholders are entitled to one vote for each Share held
and to vote in the election of Trustees and on other matters submitted to
meetings of shareholders. No material amendment may be made to the Trust's
Declaration of Trust without the affirmative vote of a majority or greater of
its Shares. Under certain circumstances the Trustees may be removed by action
of the Trustees. The shareholders also have the right under certain
circumstances to remove the Trustees. Shares have no pre-emptive or
conversion rights. Shares when issued are fully paid and non-assessable.
ANTI-TAKEOVER PROVISIONS
The Trust presently has certain anti-takeover provisions in its
Declaration of Trust which could have the effect of limiting the ability of
other entities or persons to acquire control of the Trust, to cause it to
engage in certain transactions or to modify its structure. Following the
first meeting of Shareholders, the Board of Trustees will be divided into
three classes, each having a term of three years. Each year the term of one
class expires. This provision could delay for up to two years the replacement
of a majority of the Board of Trustees. See "Trustees and Officers." In
addition, the affirmative vote or consent of the holders of 80% of the shares
of the Trust (a greater vote than that required by the Act and greater than
the required vote applicable to business corporations under state law) is
required to authorize the conversion of the Trust from a closed-end to an
open-end investment company, or generally to authorize any of the following
transactions:
(i) merger or consolidation of the Trust with or into any other
corporation;
(ii) issuance of any securities of the Trust to any person or entity for
cash;
(iii) sale, lease or exchange of all or any substantial part of the
assets of the Trust, to any entity or person (except assets having an
aggregate fair market value of less than $1,000,000);
(iv) sale, lease or exchange to the Trust, in exchange for securities of
the Trust, of any assets of any entity or person (except assets having an
aggregate fair market value of less than $1,000,000)
if such corporation, person or entity is directly, or indirectly through
affiliates, the beneficial owner of 5% or more of the outstanding shares of
the Trust. However, such 80% vote or consent will not be required with
respect to the foregoing transactions where the Board of Trustees under
certain conditions approves the transaction, in which case, with respect to
(i) and (iii) above, a majority shareholder vote or consent will be required,
and, with respect to (ii) and (iv) above, no shareholder vote or consent
would be required. Furthermore, any amendment to the provisions in the
Declaration of Trust requiring an 80% shareholder vote or consent for the
foregoing transactions similarly requires an 80% shareholder vote or consent.
Reference is made to the Declaration of Trust of the Trust, on file with the
Securities and Exchange Commission, for the full text of these provisions.
See "Further Information."
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The foregoing provisions will make more difficult a change in the Trust's
management, or consummation of the foregoing transactions without the
Trustees' approval, and could have the effect of depriving Shareholders of an
opportunity to sell their Shares at a premium over prevailing market prices
by discouraging a third party from seeking to obtain control of the Trust in
a tender offer or similar transaction. However, the Board of Trustees has
considered these anti-takeover provisions and believes that they are in the
shareholders' best interests and benefit shareholders by providing the
advantage of potentially requiring persons seeking control of the Trust to
negotiate with its management regarding the price to be paid and facilitating
the continuity of the Trust's management.
PRINCIPAL SHAREHOLDER
InterCapital provided the initial capital for the Trust by purchasing
Shares of the Trust for $ on September , 1994. As of the
date of this Prospectus, InterCapital owned 100% of the outstanding shares of
the Trust. InterCapital may be deemed to control the Trust until such time as
it owns less than 25% of the outstanding shares of the Trust.
SHARE REPURCHASES AND TENDERS
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Shares of closed-end investment companies frequently trade at a discount
from net asset value. In recognition of the possibility that the Trust's
Shares might similarly trade at a discount, the Trustees have determined that
it would be in the interest of Shareholders for the Trust to take action to
attempt to reduce or eliminate a market value discount from net asset value.
To that end, the Trustees presently contemplate that the Trust would from
time to time take action either to repurchase or redeem its Shares in the
open market, or to tender for the Shares at net asset value. The Board
presently intends, on an annual basis, to consider the making of a tender
offer for the Shares. At no time, however, will the Trustees be required to
make such repurchases or tender offers.
The Trust may repurchase its Shares in the open market or in privately
negotiated transactions, at a price not above market value, if any, or net
asset value, whichever is lower, at the time of such purchase. Such
repurchases will be done in accordance with applicable securities laws.
In addition, the Trustees have currently determined to consider, on an
annual basis, the making of an offer to each shareholder of record to
purchase shares owned by such shareholder at a price to be determined in
accordance with the terms and conditions described below.
There can be no assurance that repurchases and/or tenders will result in
the Trust's shares trading at a price which is equal to their net asset
value. The Trust anticipates that the market price of its Shares will vary
from time to time from net asset value. The market price of the Trust's
Shares will, among other things, be determined by the relative demand for and
supply of such Shares in the market, the Trust's investment performance, the
Trust's dividends and yield and investor perception of the Trust's overall
attractiveness as an investment as compared with other investment
alternatives. Nevertheless, the fact that the Trust's Shares may be the
subject of repurchases and/or tender offers from time to time may enhance
their attractiveness to investors and thus reduce the spread between market
price and net asset value that might otherwise exist. In the opinion of the
Investment Manager, sellers will be less inclined to accept a significant
discount if they have some prospect of being able to recover net asset value
in conjunction with a possible tender offer.
Although the Trustees believe that share repurchases and tenders generally
would have a favorable effect on the market price of the Trust's Shares, it
should be recognized that the acquisition of Shares by the Trust will
decrease the total assets of the Trust and therefore have the effect of
increasing the
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Trust's expense ratio. Because of the nature of the Trust's investment
objective, policies and portfolio, the Investment Manager does not anticipate
that repurchases and tenders should have an adverse effect on the Trust's
investment performance and does not anticipate any material difficulty in
disposing of portfolio securities in order to consummate share repurchases
and tenders.
Even if a tender offer has been made, it is the Trustees' announced
policy, which may be changed by the Trustees, not to accept tenders or effect
repurchases if (1) such transactions, if consummated, would (a) result in the
delisting of the Trust's Shares from the New York Stock Exchange (the
Exchange having advised the Trust that it would consider delisting if the
aggregate market value of the Trust's outstanding publicly held Shares is
less than $5,000,000, the number of publicly held Shares falls below 600,000
or the number of round lot holders falls below 1,200), or (b) impair the
Trust's status as a regulated investment company under the Code (which would
make the Trust a taxable entity, causing the Trust's income to be taxed at
the corporate level in addition to the taxation of shareholders who receive
dividends from the Trust); (2) the Trust would not be able to liquidate
portfolio securities in an orderly manner and consistent with the Trust's
investment objective and policies in order to repurchase Shares; or (3) there
is, in the judgment of the Trustees, any material (a) legal action or
proceeding instituted or threatened challenging such transactions or
otherwise materially adversely affecting the Trust, (b) suspension of or
limitation on prices for trading securities generally on the New York Stock
Exchange or any foreign exchange on which portfolio securities of the Trust
are traded, (c) declaration of a banking moratorium by federal, state or
foreign authorities or any suspension of payment by banks in the United
States, New York State or foreign countries in which the Trust invests, (d)
limitation affecting the Trust or the issuers of its portfolio securities
imposed by federal, state or foreign authorities on the extension of credit
by lending institutions or on the exchange of foreign currency, (e)
commencement of war, armed hostilities or other international or national
calamity directly or indirectly involving the United States or other
countries in which the Trust invests, or (f) other event or condition which
would have a material adverse effect on the Trust or its shareholders if
Shares were repurchased. The Trustees may modify these conditions in light of
experience.
It is currently anticipated that any tender offer made by the Trust will
be at a price equal to the net asset value of the Shares on a date subsequent
to the Trust's receipt of all tenders. A procedure will be established
whereby the current net asset value of the Shares is readily ascertainable to
the Shareholders throughout the offering period. Each offer will be made and
Shareholders notified in accordance with the requirements of the Securities
Exchange Act of 1934 and the Act, either by publication or mailing or both.
Each offering document will contain such information as is prescribed by such
laws and the rules and regulations promulgated thereunder. When a tender
offer is authorized to be made by the Trustees, the terms of such tender
offer will set forth the maximum number of Shares (if less than all) that the
Trust is willing to purchase pursuant to the tender offer. The Trust will
purchase, subject to such maximum number of Shares tendered in accordance
with the terms of the offer, all Shares tendered in accordance with the terms
of the offer unless it determines to accept none of them. In the event that a
number of Shares in excess of such maximum number of outstanding Shares are
tendered in accordance with the Trust's tender offer, the Trust intends to
purchase, on a pro rata basis, an amount of tendered Shares equal to such
maximum amount of the outstanding Shares to the Trust will be charged a
service charge, currently expected to be $25.00, to help defray certain
costs, including the processing of tender forms, effecting payment, postage
and handling. In accordance with the current SEC staff position, such service
charge may not be deducted from the proceeds of the tender. Accordingly,
payment of the proceeds to Shareholders tendering their shares will be
delayed until payment of the service charge is received by the Trust. The
Trust's transfer agent will receive the fee as an offset to these costs. The
Trust expects the cost to the Trust of effecting a tender offer will exceed
the aggregate of all service charges received from those who tender their
Shares. These excess costs, if any, will be charged against capital.
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Subject to its investment restrictions, the Trust may borrow money to
finance the repurchase of its Shares in the open market or pursuant to any
tender offer. Interest on any borrowings to finance share repurchase
transactions will reduce the Trust's net income. See "Investment
Practices--Borrowing" and "Investment Restrictions."
Tendered Shares that have been accepted and purchased by the Trust will be
held in the treasury ("Treasury Shares") until retired by the Trustees.
Treasury Shares will be recorded and reported as an offset to shareholders'
equity, and accordingly will reduce the Trust's total net asset value. If
Treasury Shares are retired, Shares issued and outstanding and capital in
excess of par will be reduced.
CUSTODIAN, DIVIDEND DISBURSING AGENT AND TRANSFER AGENT
- -----------------------------------------------------------------------------
The Bank of New York, 110 Washington Street, New York, New York 10286 is
the Custodian of the Trust's assets. The Custodian has no part in choosing
the Trust's investment policies or in deciding which securities are to be
purchased or sold for the Trust's portfolio. Any Trust cash balances with the
Custodian in excess of $100,000 are unprotected by Federal deposit insurance.
Such amounts may, at times, be substantial.
Dean Witter Trust Company, Harborside Financial Center, Plaza Two, Jersey
City, New Jersey 07311, an affiliate of Dean Witter InterCapital Inc., is the
Transfer Agent of the Trust's Shares, Dividend Disbursing Agent for payment
of dividends and distributions and Agent for Shareholders under the Plan. For
these services Dean Witter Trust Company receives an annual per shareholder
account fee from the Trust.
36
<PAGE>
<PAGE>
UNDERWRITING
- -----------------------------------------------------------------------------
The Underwriters named below, for whom Dean Witter Distributors Inc., Two
World Trade Center, New York, New York 10048, is acting as Representative,
have severally agreed, subject to the terms and conditions of the
Underwriting Agreement (a copy of which has been filed as an exhibit to the
Registration Statement), to purchase from the Trust the respective number of
Shares set forth opposite their names in the table below:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
- ----------------------------- ----------------
<S> <C>
Dean Witter Distributors Inc.
----------------
Total ....................... 7,000,000
================
</TABLE>
The nature of the Underwriters' obligation is such that they must purchase
all of the Shares offered hereby (other than those covered by the
over-allotment option described below) if any are purchased.
The Representative has advised the Trust that the Underwriters propose to
offer the Shares to the public at the initial offering price set forth on the
cover page of this Prospectus and to certain dealers at such price less a
concession not in excess of $ per Share of which $ per Share may be
reallowed to other dealers. The Representative has advised the Trust that it
may pay a commission not in excess of $ per Share to certain brokers who
arrange the sale of Shares on an agency basis. Additionally, the
Representative has advised the Trust that the Representative, at its
discretion, may pay out of the
37
<PAGE>
<PAGE>
management fee portion of the sales load an additional fee, not in excess of
$ per Share, to each Underwriter which sells in excess of a specified
number of Shares as set forth in each Underwriter's underwriting syndicate
invitation. If an Underwriter sells in excess of the specified number of
Shares, this additional fee will be payable on all Shares sold by such
Underwriter. The sales load of $ per Share is equal to % of the initial
public offering price. After the initial public offering, the public offering
price, concession and reallowance may be changed.
All monies for Shares purchased by Shareholders in the underwriting must
be received by September , 1994, five business days from the date of this
Prospectus.
The Trust has granted to the Underwriters an option, exercisable not later
than 45 days after the date of this Prospectus, to purchase up to 1,050,000
additional Shares of the Trust at the same price per share as the Trust will
receive for the 7,000,000 Shares which the Underwriters have agreed to
purchase. The Underwriters may exercise such option only to cover
over-allotments, if any, of Shares made in connection with the sale of Shares
offered hereby. If the Underwriters exercise their over-allotment option,
they have severally agreed, subject to certain conditions, to purchase
approximately the same percentage thereof that the number of Shares purchased
by each of them in the underwriting bears to the total number of Shares
indicated above. If purchased, the Underwriters will sell such additional
Shares on the same terms as those on which the initial Shares are being
offered.
The Trust and the Investment Manager have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the Underwriters may be
required to make in respect thereof.
Prior to this offering there has been no trading market for the Shares of
the Trust.
The Trust anticipates that certain Underwriters may from time to time act
as brokers or dealers in connection with the execution of the Trust's
portfolio transactions after they have ceased to be the Underwriters and,
subject to certain restrictions, may act as brokers while they are
Underwriters. An affiliate of the Representative is the Investment Manager of
the Trust and receives compensation from the Trust in connection with such
services. See "The Trust and its Management," "Investment Management
Agreement" and "Portfolio Transactions and Brokerage." Certain Trustees and
Executive Officers of the Trust are, or formerly were, officers and/or
directors of the Representative or DWR. See "Trustees and Officers."
The Trust's Shares have been approved for listing on the New York Stock
Exchange under the symbol "IMM." In order to meet the requirements for
listing, the Underwriters have undertaken to sell lots of 100 or more Shares
to a minimum of 2,000 beneficial owners.
REPORTS TO SHAREHOLDERS
- -----------------------------------------------------------------------------
The Trust will send to shareholders semi-annual reports showing the
Trust's portfolio and other information. An annual report, containing
financial statements audited by independent accountants, together with their
report thereon, will be sent to shareholders each year.
LEGAL OPINIONS AND EXPERTS
- -----------------------------------------------------------------------------
Certain legal matters in connection with the Shares offered hereby will be
passed upon for the Trust by Sheldon Curtis, Esq., who is an officer and the
General Counsel of the Trust and of Dean Witter InterCapital Inc., and for
the Underwriters by Brown & Wood, New York, New York. Both Sheldon Curtis,
Esq. and Brown & Wood may rely upon the opinion of Lane & Altman, Boston,
Massachusetts as to matters of Massachusetts law.
38
<PAGE>
<PAGE>
The statement of assets and liabilities of the Trust at September , 1994
included herein has been so included in reliance upon the report of Price
Waterhouse, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
FURTHER INFORMATION
- -----------------------------------------------------------------------------
This Prospectus does not contain all of the information set forth in the
Registration Statement that the Trust has filed with the Securities and
Exchange Commission. The complete Registration Statement may be obtained from
the Securities and Exchange Commission upon payment of the fee prescribed by
the Rules and Regulations of the Commission.
39
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------
To the Shareholder and Trustees of
InterCapital Managed Municipal Trust
In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of InterCapital
Managed Municipal Trust (the "Trust") at September , 1994, in conformity
with generally accepted accounting principles. This financial statement is
the responsibility of the Trust's management; our responsibility is to
express an opinion on this financial statement based on our audit. We
conducted our audit of this financial statement in accordance with generally
accepted auditing standards which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
September , 1994
40
<PAGE>
<PAGE>
INTERCAPITAL MANAGED MUNICIPAL TRUST
STATEMENT OF ASSETS AND LIABILITIES AT SEPTEMBER , 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Assets: Cash ................................................................$
Deferred organization expenses (Note 1) ....................................
------------
Total assets ..............................................................
Liabilities:
Organization expenses payable (Note 1) .....................................
Commitments (Notes 1 and 2) ................................................
------------
Net assets:
Shares of beneficial interest, $.01 par value; unlimited number of shares
authorized, shares issued and outstanding .............................
Paid-in surplus attributable to Shares ......................................
------------
$
============
Net asset value per Share ................................................... $
============
</TABLE>
[FN]
Note 1--InterCapital Managed Municipal Trust (the "Trust") was organized
as a Massachusetts business trust on June , 1994 and has had no operations
other than those relating to organizational matters and the issuance of
Shares of beneficial interest for $ to Dean Witter InterCapital Inc.
(the "Investment Manager"). The Trust is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified closed-end
management investment company.
Organization expenses relating to the Trust incurred and to be incurred by
the Investment Manager will be reimbursed by the Trust. Such expenses,
estimated at $ , will be deferred and amortized on the straight-line
method by the Trust against operations over a period not to exceed sixty
months from the commencement of operations of the Trust. Costs relating to
the public offering of its Shares, estimated to be $ , will be paid from
the proceeds of the offering and charged to capital at the time of issuance
of such Shares.
Note 2--The Trust will enter into an Investment Management Agreement with
the Investment Manager. Certain officers and/or Trustees of the Trust are
officers and/or directors of the Investment Manager. The Investment Manager
is a wholly-owned subsidiary of Dean Witter, Discover & Co.
The Investment Management Agreement provides for the Investment Manager to
receive a fee computed weekly and payable monthly at the annual rate of 0.35%
of the Trust's average weekly net assets. The Investment Manager will provide
portfolio management and certain administrative, clerical and bookkeeping
services for the Trust.
Dean Witter Trust Company (the "Transfer Agent"), an affiliate of the
Investment Manager, is the transfer agent of the Trust's Shares, Dividend
Disbursing Agent for payment of dividends and distributions and Agent for
shareholders under the Dividend Reinvestment Plan.
41
<PAGE>
<PAGE>
APPENDIX A
RATINGS OF INVESTMENTS
- -----------------------------------------------------------------------------
Moody's Investors Service Inc. ("Moody's")
MUNICIPAL BOND RATINGS
<TABLE>
<CAPTION>
<S> <C>
Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment
risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group
they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A Bonds which are rated A possess many favorable investment attributes and are to be considered as upper
medium grade obligations. Factors giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment sometime in the future.
Baa Bonds which are rated Baa are considered as medium grade obligations; i.e., they are neither highly protected
nor poorly secured. Interest payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as
well.
Bonds rated Aaa, Aa, A and Baa are considered investment grade bonds.
Ba Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as
well assured. Often the protection of interest and principal payments may be very moderate, and therefore
not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest
and principal payments or of maintenance of other terms of the contract over any long period of time may
be small.
Caa Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements
of danger with respect to principal or interest.
Ca Bonds which are rated Ca present obligations which are speculative in a high degree. Such issues are often
in default or have other marked shortcomings.
C Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing.
</TABLE>
A-1
<PAGE>
<PAGE>
Conditional Rating: Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operation experience,
(c) rentals which begin when facilities are completed, or (d) payments to
which some other limiting condition attaches. Parenthetical rating denotes
probable credit stature upon completion of construction or elimination of
basis of condition.
Rating Refinements: Moody's may apply numerical modifiers, 1, 2 and 3 in
each generic rating classification from Aa through B in its municipal bond
rating system. The modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and a modifier 3 indicates that the issue ranks in the lower end of
its generic rating category.
MUNICIPAL NOTE RATINGS
Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade (MIG). MIG 1 denotes best quality and
means there is present strong protection from established cash flows,
superior liquidity support or demonstrated broad-based access to the market
for refinancing. MIG 2 denotes high quality and means that margins of
protection are ample although not as large as in MIG 1. MIG 3 denotes
favorable quality and means that all security elements are accounted for but
that the undeniable strength of the previous grades, MIG 1 and MIG 2, is
lacking. MIG 4 denotes adequate quality and means that the protection
commonly regarded as required of an investment security is present and that
while the notes are not distinctly or predominantly speculative, there is
specific risk.
VARIABLE RATE DEMAND OBLIGATIONS
A short-term rating, in addition to the Bond or MIG ratings, designated
VMIG may also be assigned to an issue having a demand feature. The assignment
of the VMIG symbol reflects such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity. The VMIG rating criteria are identical to the MIG criteria
discussed above.
COMMERCIAL PAPER RATINGS
Moody's Commercial Paper ratings are opinions of the ability to repay
punctually promissory obligations not having an original maturity in excess
of nine months. These ratings apply to Municipal Commercial Paper as well as
taxable Commercial Paper. Moody's employs the following three designations,
all judged to be investment grade, to indicate the relative repayment
capacity of rated issuers: Prime-1, Prime-2, Prime-3.
Issuers rated Prime-1 have a superior capacity for repayment of short-term
promissory obligations. Issuers rated Prime-2 have a strong capacity for
repayment of short-term promissory obligations; and Issuers rated Prime-3
have an acceptable capacity for repayment of short-term promissory
obligations. Issuers rated Not Prime do not fall within any of the Prime
rating categories.
STANDARD & POOR'S CORPORATION ("STANDARD & POOR'S" OR "S&P")
MUNICIPAL BOND RATINGS
A Standard & Poor's municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers,
or lessees.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. The
ratings are based, in varying degrees, on the following considerations: (1)
likelihood of default-capacity and willingness of the obligor as to the
timely
A-2
<PAGE>
<PAGE>
payment of interest and repayment of principal in accordance with the terms
of the obligation; (2) nature of and provisions of the obligation; and (3)
protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
Standard & Poor's does not perform an audit in connection with any rating
and may, on occasion, rely on unaudited financial information. The ratings
may be changed, suspended or withdrawn as a result of changes in, or
unavailability of, such information, or for other reasons.
<TABLE>
<CAPTION>
<S> <C>
AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's. Capacity to pay interest and repay
principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay principal and differs from the highest-rated
issues only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal although it is somewhat more susceptible
to the adverse effects of changes in circumstances and economic conditions than debt in higher-rated categories.
BBB Debt rated "BBB" is regarded as having an adequate capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than
for debt in higher-rated categories.
Bonds rated AAA, AA, A and BBB are considered investment grade bonds.
BB Debt rated "BB" has less near-term vulnerability to default than other speculative grade debt. However, it
faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which
could lead to inadequate capacity to meet timely interest and principal payment.
B Debt rated "B" has a greater vulnerability to default but presently has the capacity to meet interest payments
and principal repayments. Adverse business, financial or economic conditions would likely impair capacity
or willingness to pay interest and repay principal.
CCC Debt rated "CCC" has a current identifiable vulnerability to default, and is dependent upon favorable business,
financial and economic conditions to meet timely payments of interest and repayments of principal. In the
event of adverse business, financial or economic conditions, it is not likely to have the capacity to pay
interest and repay principal.
CC The rating "CC" is typically applied to debt subordinated to senior debt which is assigned an actual or implied
"CCC" rating.
C The rating "C" is typically applied to debt subordinated to senior debt which is assigned an actual or implied
"CCC--" debt rating.
Cl The rating "Cl" is reserved for income bonds on which no interest is being paid.
D Debt rated "D" is in payment default. The 'D' rating category is used when interest payments or principal
payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The 'D' rating also will be used upon the filing
of a bankruptcy petition if debt service payments are jeopardized.
A-3
<PAGE>
<PAGE>
NR Indicates that no rating has been requested, that there is insufficient information on which to base a rating
or that Standard & Poor's does not rate a particular type of obligation as a matter of policy.
Bonds rated "BB," "B," "CCC," "CC" and "C" are regarded as having predominantly speculative characteristics
with respect to capacity to pay interest and repay principal. "BB" indicates the least degree of speculation
and "C" the highest degree of speculation. While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse conditions.
Plus (+) or minus (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign
to show relative standing within the major ratings categories.
The foregoing ratings are sometimes followed by a "p" which indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project being financed by bonds being rated and indicates
that payment of debt service requirements is largely or entirely dependent upon the successful and timely
completion of the project. This rating, however, while addressing credit quality subsequent to completion
of the project, makes no comment on the likelihood or risk of default upon failure of such completion.
</TABLE>
MUNICIPAL NOTE RATINGS
Commencing on July 27, 1984, Standard & Poor's instituted a new rating
category with respect to certain municipal note issues with a maturity of
less than three years. The new note ratings denote the following:
SP-1 denotes a very strong or strong capacity to pay principal and
interest. Issues determined to possess overwhelming safety characteristics
are given a plus (+) designation (SP-1+).
SP-2 denotes a satisfactory capacity to pay principal and interest.
SP-3 denotes a speculative capacity to pay principal and interest.
COMMERCIAL PAPER RATINGS
Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. The commercial paper rating is not a recommendation to
purchase or sell a security. The ratings are based upon current information
furnished by the issuer or obtained by S&P from other sources it considers
reliable. The ratings may be changed, suspended, or withdrawn as a result of
changes in or unavailability of such information. Ratings are graded into
group categories, ranging from "A" for the highest quality obligations to "D"
for the lowest. Ratings are applicable to both taxable and tax-exempt
commercial paper. The categories are as follows:
Issues assigned A ratings are regarded as having the greatest capacity for
timely payment. Issues in this category are further refined with the
designation 1, 2 and 3 to indicate the relative degree of safety.
A-1 indicates that the degree of safety regarding timely payment is very
strong.
A-2 indicates capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as overwhelming as
for issues designated "A-1."
A-3 indicates a satisfactory capacity for timely payment. Obligations
carrying this designation are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the
higher designations.
A-4
<PAGE>
<PAGE>
APPENDIX B
FUTURES AND OPTIONS
- -----------------------------------------------------------------------------
Interest Rate Futures Contracts. The Trust may purchase and sell interest
rate futures contracts ("futures contracts") that are traded on U.S.
commodity exchanges on such underlying securities as U.S. Treasury bonds,
notes, and bills. As a futures contract purchaser, the Trust incurs an
obligation to take delivery of a specified amount of the obligation
underlying the contract at a specified time in the future for a specified
price. As a seller of a futures contract, the Trust incurs an obligation to
deliver the specified amount of the underlying obligation at a specified time
in return for an agreed upon price.
The Trust will purchase or sell futures contracts only for the purpose of
hedging its portfolio (or anticipated portfolio) securities against changes
in prevailing interest rates. If the Investment Manager anticipates that
interest rates may rise, the Trust may sell a futures contract to protect
against the potential decline in the value of the securities held by the
Trust. However, it is possible that the futures market may advance and the
value of securities held in the Trust's portfolio may decline. If this were
to occur, the Trust would lose money on the futures contracts and also
experience a decline in value in its portfolio securities. However, while
this could occur for a very brief period or to a very small degree, over time
the value of a diversified portfolio will tend to move in the same direction
as the futures contracts. If declining interest rates are anticipated, the
Trust may purchase a futures contract to protect against a potential increase
in the price of securities the Trust intends to purchase. If the Trust
purchases a futures contract to hedge against the increase in value of
securities it intends to buy, and the value of such securities decreases,
then the Trust may determine not to invest in the securities as planned and
will realize a loss on the futures contract that is not offset by a reduction
in the price of the securities.
Although most interest rate futures contracts call for actual delivery or
acceptance of debt securities, the contracts usually are closed out before
the settlement date without the making or taking of delivery. A futures
contract sale is closed out by effecting a futures contract purchase for the
same aggregate amount of the specific type of debt security and the same
delivery date. If the sale price exceeds the offsetting purchase price, the
seller would be paid the difference and would realize a gain. If the
offsetting purchase price exceeds the sale price, the seller would pay the
difference and would realize a loss. Similarly, a futures contract purchase
is closed out by effecting a futures contract sale for the same aggregate
amount of the specific type of debt security and the same delivery date. If
the offsetting sale price exceeds the purchase price, the purchaser would
realize a gain whereas if the purchase price exceeds the offsetting sale
price, the purchaser would realize a loss. There is no assurance that the
Trust will be able to enter into a closing transaction.
When the Trust enters into a futures contract it is initially required to
deposit with its Custodian, in a segregated account in the name of the broker
performing the transaction, an "initial margin" of cash, U.S. Government
securities or other high-grade short-term debt obligations equal to
approximately 2% of the contract amount. Initial margin requirements are
established by the Exchanges on which futures contracts trade and may, from
time to time, change. In addition, brokers may establish margin deposit
requirements in excess of those required by the Exchanges.
Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing
of funds by a broker's client but is, rather, a good faith deposit on the
futures contract which will be returned to the Trust upon the proper
termination of the futures contract. The margin deposits made are marked to
market daily and the Trust may be required to make
B-1
<PAGE>
<PAGE>
subsequent deposits into the segregated account, maintained at its Custodian
for that purpose, of cash, U.S. Government securities or other high-grade
short-term debt obligations called "variation margin," in the name of the
broker, which are reflective of price fluctuations in the futures contract.
Options on Interest Rate Futures. The Trust may purchase and write call
and put options on futures contracts which are traded on an Exchange and
enter into closing transactions with respect to such options to terminate an
existing position. (Put and call options on financial futures have similar
characteristics as Exchange-traded options on debt securities. For a further
description of such options, see the "Options" section below.) Premiums
received from the writing of an option are included in initial margin
deposits. An option on a futures contract gives the purchaser the right, and
the writer the obligation, in return for the premium paid, to assume a
position in a futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise price at any
time during the term of the option. Upon exercise of the option, the delivery
of the futures position by the writer of the option to the holder of the
option is accompanied by delivery of the accumulated balance in the writer's
futures margin account, which represents the amount by which the market price
of the futures contract at the time of exercise exceeds, in the case of a
call, or is less than, in the case of a put, the exercise price of the option
on the futures contract. If the holder decides not to enter into the
contract, the premium paid for the contract is lost. Since the value of the
option is fixed at the point of sale, there are no daily payments of cash to
reflect the change in the value of the underlying contract, as discussed for
futures contracts. The value of the option changes and is reflected in the
net asset value of the Trust.
Limitations on Futures and Options Thereon. The Trust is required to
maintain margin deposits with brokerage firms through which it effects
futures contracts and options thereon. The initial margin requirements vary
according to the type of the underlying security. In addition, due to current
industry practice, daily variations in gains and losses on open contracts are
required to be reflected in cash in the form of variation margin payments.
The Trust may be required to make additional margin payments during the term
of the contract. Premiums received from the writing of an option on a futures
contract are included in initial margin deposits.
The Trust may not purchase and sell future contracts or purchase related
options thereon if, immediately thereafter, the amount committed to initial
margin plus the amount paid for premiums for unexpired options on futures
contracts for other than bona fide hedging purposes exceeds 5% of the value
of the Trust's total assets.
The Trust will only purchase and write options on futures contracts to
hedge a position or anticipated position in Municipal Obligations or to close
out a long or short position in futures contracts. If, for example, the
Investment Manager wished to protect against an increase in interest rates
and the resulting negative impact on the value of a portion of its portfolio,
it might write a call option on a futures contract, the underlying security
of which correlates with the portion of the portfolio the Investment Manager
seeks to hedge. Any premiums received in the writing of options on futures
contracts may, of course, augment the income of the Trust and thereby provide
a further hedge against losses resulting from price declines in portions of
the Trust's portfolio.
In instances involving the purchase of futures contracts by the Trust, an
amount of cash, Treasury bills or other high grade short-term debt
obligations equal to the market value of the futures contract will be
deposited in a segregated account with its custodian to collateralize the
position and thereby ensure that the use of such futures contract is
unleveraged. There is no overall limitation on the percentage of the Trust's
portfolio securities which may be subject to a hedge position. In addition,
the Trust will cover all purchases of futures contracts and options thereon
by maintaining a segregated account with its
B-2
<PAGE>
<PAGE>
custodian consisting of cash, Treasury bills or other high grade short-term
debt obligations in an amount equal to the value of the futures or option
position less than the amount of initial or variation margin for the
contracts.
Options. The Trust may purchase or sell (write) options on debt securities
as a means of achieving additional return or hedging the Trust's portfolio
securities. The Trust will only write covered call or covered put options,
and will only purchase options, which are listed on national securities
exchanges. Listed options are issued by the Options Clearing Corporation
("OCC"). Ownership of a listed call option gives the Trust the right to buy
from the OCC the underlying security covered by the option at the stated
exercise price (the price per unit of the underlying security) by filing an
exercise notice prior to the expiration date of the option. The writer
(seller) of the option would then have the obligation to sell to the OCC the
underlying security at that exercise price prior to the expiration date of
the option, regardless of its then current market price. Ownership of a
listed put option would give the Trust the right to sell the underlying
security to the OCC at the stated exercise price. Upon notice of exercise of
the put option, the writer of the put would have the obligation to purchase
the underlying security from the OCC at the exercise price.
Covered Call Writing. The Trust may write covered call options on debt
securities only, in order to achieve additional return. As a writer of a call
option, the Trust has the obligation, upon notice of exercise of the option,
to deliver the security underlying the option prior to the expiration date of
the option. Generally, a call option is "covered" if the Trust owns, or has
the right to acquire, without additional cash consideration (or for
additional cash consideration held for the Trust by its Custodian in a
segregated account) the underlying security subject to the option. A call
option is also covered if the Trust holds a call on the same security as the
underlying security of the written option, where the exercise price of the
call used for coverage is equal to or less than the exercise price of the
call written or greater than the exercise price of the call written if the
marked-to-market difference is maintained by the Trust in cash, U.S.
Government securities or other high-grade short-term debt obligations which
the Trust may hold in its portfolio in a segregated account maintained with
the Trust's custodian.
The Trust will receive from the purchaser, in return for a call it has
written, a "premium"; i.e., the price of the option. Furthermore, the income
received from the premium will offset a portion of any potential loss
incurred by the Trust if the securities underlying the option are ultimately
sold by the Trust at a loss. The income received from premiums will fluctuate
with varying economic market conditions. If the market value of the
securities upon which call options have been written increases, the Trust may
receive less total return from the portion of its portfolio upon which calls
have been written than it would have had such calls not been written.
As regards listed options, during the option period the Trust may be
required, at any time, to deliver the underlying security against payment of
the exercise price on any calls it has written. This obligation is terminated
upon the expiration of the option period or at such earlier time when the
writer effects a closing purchase transaction. A closing purchase transaction
is accomplished by purchasing an option of the same series as the option
previously written. However, once the Trust has been assigned an exercise
notice, the Trust will be unable to effect a closing purchase transaction.
Closing purchase transactions are ordinarily effected to realize a profit
on an outstanding call option, to prevent an underlying security from being
called, to permit the sale of an underlying security or to enable the Trust
to write another call option on the underlying security with either a
different exercise price or expiration date or both. Also, effecting a
closing purchase transaction will permit the cash or proceeds from the
concurrent sale of any securities subject to the option to be used for other
investments
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by the Trust. The Trust may realize a net gain or loss from a closing
purchase transaction depending upon whether the amount of the premium
received on the call option is more or less than the cost of effecting the
closing purchase transaction. Any loss incurred in a closing purchase
transaction may be wholly or partially offset by unrealized appreciation in
the market value of the underlying security. Conversely, a gain resulting
from a closing purchase transaction could be offset in whole or in part or
exceeded by a decline in the market value of the underlying security.
If a call option expires unexercised, the Trust realizes a gain in the
amount of the premium on the option less the commission paid. Such a gain,
however, may be offset by depreciation in the market value of the underlying
security during the option period. If a call option is exercised, the Trust
realizes a gain or loss from the sale of the underlying security equal to the
difference between the purchase price of the underlying security and the
proceeds of the sale of the security plus the premium received on the option
less the commission paid.
Options written by the Trust will normally have expiration dates of up to
nine months from the date written. The exercise price of a call option may be
below, equal to or above the current market value of the underlying security
at the time the option is written.
Covered Put Writing. As a writer of covered put options, the Trust incurs
an obligation to buy the security underlying the option from the purchaser of
the put, at the option's exercise price at any time during the option period,
at the purchaser's election. A put is "covered" if, at all times, the Trust
maintains, in a segregated account maintained on its behalf at the Trust's
Custodian, cash, U.S. Government securities or other high-grade short-term
debt obligations, in an amount equal to at least the exercise price of the
option, at all times during the option period. In writing puts, the Trust
assumes the risk of loss should the market value of the underlying security
decline below the exercise price of the option. During the option period, the
Trust may be required, at any time, to make payment of the exercise price
against delivery of the underlying security. The operation of and limitations
on covered put options in other respects are substantially identical to those
of call options.
The Trust will write put options for two purposes: (1) to receive the
income derived from the premiums paid by purchasers; and (2) when the
Investment Manager wishes to purchase the security underlying the option at a
price lower than its current market price, in which case it will write the
covered put at an exercise price reflecting the lower purchase price sought.
The potential gain on a covered put option is limited to the premium received
on the option (less the commissions paid on the transaction) while the
potential loss equals the difference between the exercise price of the option
and the current market price of the underlying securities when the put is
exercised, offset by the premium received (less the commissions paid on the
transaction).
Purchasing Call and Put Options. The Trust may purchase listed call and
put options on debt securities. The Trust may purchase call options only in
order to close out a covered call position (see "Covered Call Writing"
above).
The Trust may purchase put options on securities which it holds (or has
the right to acquire) in its portfolio only to protect itself against a
decline in the value of the security. If the value of the underlying security
were to fall below the exercise price of the put purchased in an amount
greater than the premium paid for the option, the Trust would incur no
additional loss. The Trust may also purchase put options to close out written
put positions in a manner similar to call options closing purchase
transactions. In addition, the Trust may sell a put option which it has
previously purchased prior to the sale of the securities underlying such
option. Such a sale would result in a net gain or loss depending on whether
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the amount received on the sale is more or less than the premium and other
transaction costs paid on the put option which is sold. Any such gain or loss
could be offset in whole or in part by a change in the market value of the
underlying security. If a put option purchased by the Trust expired without
being sold or exercised, the premium would be lost.
Risks of Options and Futures Transactions. During the option period, the
covered call writer has, in return for the premium on the option, given up
the opportunity for capital appreciation above the exercise price should the
market price of the underlying security increase, but has retained the risk
of loss should the price of the underlying security decline. The secured put
writer also retains the risk of loss should the market value of the
underlying security decline below the exercise price of the option. In both
cases, the writer has no control over the time when it may be required to
fulfill its obligation as a writer of the option. Once an option writer had
received an exercise notice, it cannot effect a closing purchase transaction
in order to terminate its obligation under the option and must deliver the
underlying securities at the exercise price.
Prior to exercise or expiration, an option position can only be terminated
by entering into a closing purchase or sale transaction. If a covered call
option writer is unable to effect a closing purchase transaction, it cannot
sell the underlying security until the option expires or the option is
exercised. Accordingly, a covered call option writer may not be able to sell
an underlying security at a time when it might otherwise be advantageous to
do so. A secured put option writer who is unable to effect a closing purchase
transaction would continue to bear the risk of decline in the market price of
the underlying security until the option expires or is exercised. In
addition, a secured put writer would be unable to utilize the amount held in
cash, U.S. Government securities or other high-grade short-term debt
obligations as security for the put option for other investment purposes
until the exercise or expiration of the option.
The Trust may close out its position as writer of an option only if a
liquid secondary market exists on options exchanges for options of that
series. There is no assurance that such a market will exist. However, the
Trust may be able to purchase an offsetting option which does not close out
its position as a writer but constitutes an asset of equal value to the
obligation under the option written. If the Trust is not able to either enter
into a closing purchase transaction or purchase an offsetting position, it
will be required to maintain the securities subject to the call, or the
collateral underlying the put, even though it might not be advantageous to do
so, until a closing transaction can be entered into (or the option is
exercised or expires). Among the possible reasons for the absence of a liquid
secondary market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange;
(iii) trading halts, suspensions or other restrictions imposed with respect
to particular classes or series of options or underlying securities; (iv)
interruption of the normal operations on an exchange; (v) inadequacy of the
facilities of an exchange or the OCC to handle current trading volume; or
(vi) a decision by one or more exchanges to discontinue the trading of
options (or a particular class or series of options), in which event the
secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been issued by the OCC as a result of trades on that exchange would generally
continue to be exercisable in accordance with their terms.
There is similarly no assurance that a liquid secondary market will exist
for futures contracts and related options in which the Trust may invest. In
the event a liquid market does not exist, it may not be possible to close out
a futures position, and in the event of adverse price movements, the Trust
would continue to be required to make daily cash payments of variation
margin. In addition, limitations imposed by an exchange on which futures
contracts are traded may compel or prevent the Trust from closing out a
contract which may result in reduced gain or increased loss to the Trust. The
absence of a liquid market in futures contracts might cause the Trust to make
or take delivery of the underlying securities at a time when it may be
disadvantageous to do so.
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Exchanges may limit the amount by which the price of a futures contract
may move on any day. If the price moves equal the daily limit on successive
days, then it may prove impossible to liquidate a futures position until the
daily limit movements have ceased. In the event of adverse price movements,
the Trust would continue to be required to make daily cash payments of
variation margin on open futures positions. In such situations, if the Trust
has insufficient cash, it may have to sell portfolio securities to meet daily
variation margin requirements at a time when it may be disadvantageous to do
so. In addition, the Trust may be required to make or take delivery of the
instruments underlying interest rate futures contracts it holds at a time
when it is disadvantageous to do so. The inability to close options and
futures positions could also have an adverse impact on the Trust's ability to
effectively hedge its portfolio.
In the event of the bankruptcy of a broker through which the Trust engages
in transactions in options, futures or options thereon, the Trust could
experience delays and/or losses in liquidating open positions purchased or
sold through the broker and/or incur a loss of all or part of its margin
deposits with the broker. Transactions are entered into by the Trust only
with brokers or financial institutions deemed creditworthy by the Investment
Manager.
Each of the exchanges has established limitations governing the maximum
number of call or put options on the same underlying security or futures
contract (whether or not covered) which may be written by a single investor,
whether acting alone or in concert with others (regardless of whether such
options are written on the same or different exchanges or are held or written
on one or more accounts or through one or more brokers). An exchange may
order the liquidation of positions found to be in violation of these limits
and it may impose other sanctions or restrictions. These position limits may
restrict the number of listed options which the Trust may write.
While the futures contracts and options transactions to be engaged in by
the Trust for the purpose of hedging the Trust's portfolio securities are not
speculative in nature, there are risks inherent in the use of such
instruments. One such risk which may arise in employing futures contracts to
protect against the price volatility of portfolio securities is that the
prices of securities subject to futures contracts (and thereby the futures
contract prices) may correlate imperfectly with the behavior of the cash
prices of the Trust's portfolio securities. The risk of imperfect correlation
may be increased by the fact that the Trust will invest in futures contracts
on taxable securities and there is no guarantee that the prices of taxable
securities will move in a similar manner to the prices of tax-exempt
securities. Another such risk is that the price of the futures contract may
not move in tandem with the change in prevailing interest rates against which
the Trust seeks a hedge. A correlation may be distorted by the fact that the
futures market is dominated by short-term traders seeking to profit from the
difference between a contract or security price objective and their cost of
borrowed funds. If participants in the futures market elect to close out
their contracts through offsetting transactions rather than meet margin
deposit requirements, distortions in the normal relationships between the
debt securities and futures market could result. Price distortions could also
result if investors in futures contracts opt to make or take delivery of
underlying securities rather than engage in closing transactions due to the
resultant reduction in the liquidity of the futures market. In addition, due
to the fact that, from the point of view of speculators, the deposit
requirements in the futures markets are less onerous than margin requirements
in the cash market, increased participation by speculators in the futures
market could cause distortions. Due to the possibility of price distortions
in the futures market and because of the imperfect correlation between
movements in the prices of debt securities and movements in the prices of
futures contracts, a correct forecast of interest rate trends by the
Investment Manager may still not result in a successful hedging transaction.
However, such distortions are generally minor and would diminish as the
contract approaches maturity.
Another risk is that the Investment Manager could be incorrect in its
expectations as to the direction or extent of various interest rate movements
or the time span within which the movements take place.
B-6
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<PAGE>
For example, if the Trust sold futures contracts for the sale of securities
in anticipation of an increase in interest rates, and then interest rates
went down instead, causing bond prices to rise, the Trust would lose money on
the sale.
Compared to the purchase or sale of futures contracts, the purchase of
call or put options on futures contracts involves less potential risk to the
Trust because the maximum amount at risk is the premium paid for the options
(plus transaction costs). However, there may be circumstances when a purchase
of a call or put option on a futures contract would result in a loss to the
Trust when the purchase or sale of a futures contract would not result in a
loss, such as when there is no movement in the prices of the underlying
securities. The writing of a put or call option on a futures contract
involves risks similar to those relating to transactions in futures contracts
as described above.
B-7
<PAGE>
<PAGE>
APPENDIX C
RISKS OF CERTAIN MUNICIPAL OBLIGATIONS
- -----------------------------------------------------------------------------
The following is a summary of the risks associated with certain Municipal
Obligations in which the Trust reserves the right to invest more than 25% of
its total assets:
Health Care Facility Obligations. Some of the Municipal Obligations in
which the Trust may invest are obligations of issuers whose revenues are
derived from services provided by hospitals or other health care facilities,
including nursing homes. Ratings of bonds issued for health care facilities
are often based on feasibility studies that contain projections of occupancy
levels, revenues and expenses. A facility's gross receipts and net income
available for debt service may be affected by future events and conditions
including, among other things, demand for services, the ability of the
facility to provide the services required, physicians' confidence in the
facility, management capabilities, economic developments in the service area,
competition from other similar providers, efforts by insurers and
governmental agencies to limit rates, legislation establishing state
rate-setting agencies, expenses, government regulation, the cost and possible
unavailability of malpractice insurance, and the termination or restriction
of governmental financial assistance, including that associated with
Medicare, Medicaid and other similar third party payor programs. Medicare
reimbursements are currently calculated on a prospective basis utilizing a
single nationwide schedule of rates and are not based on a provider's actual
costs. Such method of reimbursement may adversely affect reimbursements to
hospitals and other facilities for services provided under the Medicare
program and thereby may have an adverse effect on the ability of such
institutions to satisfy debt service requirements.
Certain health care facility bonds provide for redemption at par at any
time upon the sale by the issuer of the health care facilities to a
non-affiliated entity or in other special circumstances. In the event of a
default upon a bond secured by health care facilities, the limited
alternative uses for such facilities may result in the recovery upon such
collateral not providing sufficient funds to fully repay the bonds.
Various proposals for comprehensive changes in the national health care
system are pending before Congress and, if enacted, may materially effect the
sources of payment for health care facility obligations.
Housing Obligations. Some of the Municipal Obligations in which the Trust
may invest are obligations of issuers whose revenues are primarily derived
from mortgage loans to housing projects for low to moderate income families.
Such issues are generally characterized by mandatory redemption at par or
accreted value in the event of economic defaults and in the event of a
failure of the operator of a project to comply with certain covenants as to
the operation of the project. The ability of such issuers to make debt
service payments will be affected by events and conditions affecting financed
projects, including, among other things, the achievement and maintenance of
sufficient occupancy levels and adequate rental income, employment and income
conditions prevailing in local labor markets, increases in taxes, utility
costs and other operating expenses, the managerial ability of project
managers, changes in laws and governmental regulations, the appropriation of
subsidies and social and economic trends affecting the localities in which
the projects are located. Occupancy of such housing projects may be adversely
affected by high rent levels and income limitations imposed under federal and
state programs.
Single Family Mortgage Revenue Bonds. Some of the Municipal Obligations in
which the Trust may invest are single family mortgage revenue bonds, which
are issued for the purpose of making mortgages on or acquiring from
originating financial institutions notes secured by mortgages on, residences
located within the issuer's boundaries and owned by persons of low or
moderate income.
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Mortgage loans are generally partially or completely prepaid prior to their
final maturities as a result of events such as sale of the mortgaged
premises, default, condemnation or casualty loss. Because these bonds are
subject to extraordinary mandatory redemption in whole or in part from such
prepayments of mortgage loans, a substantial portion of such bonds will
probably be redeemed prior to their scheduled maturities or even prior to
their ordinary call dates. Extraordinary mandatory redemption without premium
could also result from the failure of the issuer or the originating financial
institutions to make mortgage loans in sufficient amounts within a specified
time period. The redemption price of such issues may be more or less than the
offering price of such bonds. Additionally, unusually high rates of default
on the underlying mortgage loans may reduce revenues available for the
payment of principal of or interest on such mortgage revenue bonds.
Industrial Revenue Obligations. Some of the Municipal Obligations in which
the Trust may invest are industrial revenue bonds ("IRBs"), which are
tax-exempt securities issued by states, municipalities, public authorities or
similar entities to finance the cost of acquiring, constructing or improving
various industrial projects. These projects are usually operated by corporate
entities. Issuers are obligated only to pay amounts due on the IRBs to the
extent that funds are available from the unexpended proceeds of the IRBs or
receipts or revenues of the issuer under an arrangement between the issuer
and the corporate operator of a project. The arrangement may be in the form
of a lease, installment sale agreement, conditional sale agreement or loan
agreement, but in each case the payments to the issuer are designed to be
sufficient to meet the payments of amounts due on the IRBs. Regardless of the
structure, payment of IRBs is solely dependent upon the creditworthiness of
the corporate operator of the project and, if applicable, corporate
guarantor. Corporate operators or guarantors may be affected by many factors
which may have an adverse impact on the credit quality of the particular
company or industry. These include cyclicality of revenues and earnings,
regulatory and environmental restrictions, litigation resulting from
accidents or environmentally-caused illnesses, technological developments,
extensive competition and financial deterioration resulting from leveraged
buy-outs or takeovers. The IRBs may be subject to special or extraordinary
redemption provisions which may provide for redemption at par or accreted
value, plus, if applicable, a premium. The Trust cannot predict the causes or
likelihood of the redemption of IRBs prior to the stated maturity of such
bonds.
Electric Utility Obligations. Some of the Municipal Obligations in which
the Trust may invest are obligations of issuers whose revenues are primarily
derived from the sale of electric energy. The problems faced by such issuers
include the difficulty in obtaining approval for timely and adequate rate
increases from the applicable public utility commissions, the difficulty of
financing large construction programs, increased competition, reductions in
estimates of future demand for electricity in certain areas of the country,
the limitations on operations and increased costs and delays attributable to
environmental considerations, the difficulty of the capital market in
absorbing utility debt, the difficulty in obtaining fuel at reasonable prices
and the effect of energy conservation. All of such issuers have been
experiencing certain of these problems in varying degrees. In addition,
federal, state and municipal governmental authorities may from time to time
review existing, and impose additional, regulations governing the licensing,
construction and operation of nuclear power plants, which may adversely
affect the ability of the issuers of certain of the Municipal Obligations to
make payments on such bonds.
Airport Facility Revenue Bonds. Some of the Municipal Obligations in which
the Trust may invest are obligations of issuers which are payable from and
secured by revenues derived from the ownership and operation of airports,
including airports under construction. The major portion of an airport's
gross operating income is generally derived from landing fees or fees
received from signatory airlines pursuant to use agreements which consist of
annual payments for airport use, occupancy of certain terminal
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space, service fees and leases. Airport operating income may therefore be
affected by construction and operating costs and by local economic conditions
and air traffic or the ability of the airlines to meet their obligations
under the use agreements. The air transport industry is experiencing
significant variations in earnings and traffic, due to increased competition,
excess capacity, increased costs, deregulation, traffic constraints and other
factors, and several airlines are experiencing severe financial difficulties.
In particular, facilities with use agreements involving airlines experiencing
financial difficulty may experience a reduction in revenue due to the
possible inability of these airlines to meet their use agreement obligations
because of such financial difficulties and possible bankruptcy. The Trust
cannot predict what effect these industry conditions may have on airport
revenues which are dependent for payment on the financial condition of the
airlines and their usage of the particular airport facility.
Water and/or Sewerage Obligations. Some of the Municipal Obligations in
which the Trust may invest are obligations of issuers whose revenues are
derived from the sale of water and/or sewerage services. Such bonds are
generally payable from user fees. The problems of such issuers include the
ability to obtain timely and adequate rate increases, population decline
resulting in decreased user fees, the difficulty of financing large
construction programs, the limitations on operations and increased costs and
delays attributable to environmental considerations, the increasing
difficulty of obtaining or discovering new supplies of fresh water, the
effect of conservation programs and the impact of "no-growth" zoning
ordinances. All of such issuers have been experiencing certain of these
problems in varying degrees.
University and College Revenue Obligations. Some of the Municipal
Obligations in which the Trust may invest are obligations of issuers which
are, or which govern the operation of, colleges and universities and whose
revenues are derived mainly from tuition, dormitory revenues, grants and
endowments. General problems of such issuers include the prospect of a
declining percentage of the population consisting of "college" age
individuals, possible inability to raise tuitions and fees sufficiently to
cover increased operating costs, the uncertainty of continued receipt of
federal grants and state funding, and government legislation or regulations
which may adversely affect the revenues or costs of such issuers. All of such
issuers have been experiencing certain of these problems in varying degrees.
Bridge Authority and Tollroad Obligations. Some of the Municipal
Obligations in which the Trust may invest are obligations of issuers which
derive their payments from bridge, road or tunnel toll revenues. The problems
faced by such issuers include competition from toll-free vehicular
facilities, reduction in the availability of fuel to motorists or significant
increases in the costs thereof, increased costs and delays attributable to
environmental considerations and the difficulty in obtaining approval for
timely and adequate toll increases.
Resource Recovery Obligations. Some of the Municipal Obligations in which
the Trust may invest are obligations of issuers whose revenues are primarily
derived from the disposal of solid waste products and the sale of energy
generated by such disposal. Resource recovery plants in the United States
have experienced several well-publicized failures, in response to which
municipal entities wanting to solve their disposal problem by resource
recovery have been unwilling to accept the technological risk, turning
instead to equipment vendors to provide guarantees to cover that risk. The
municipal revenue streams pledged under these obligations can vary
considerably, and may involve a mixture of special taxes, user fees, and the
municipal entity's credit. Local ordinances attempting to control the flow of
solid waste are subject to constitutional limitations. A general fund pledge
can be equal to or less than a full faith and credit pledge. Economics and
financial feasibility of any project depend on a number of factors, including
whether (1) project cost estimates are commensurate with industry averages,
(2) solid waste to obtain full operating capacity is available, given
population growth and historical waste generation trends, (3)
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alternative disposal facilities will not pose any competitive threat to waste
flow, (4) the price at which energy produced by such facilities may be sold
is consistent with market assumptions, (5) facility and landfill options have
a useful life corresponding to the life of the bonds, and (6) management is
capable of construction, start-up, and plant operation. Judicial decisions
and changes in legislation and governmental regulations could affect the
continued operation of the resource recovery facilities.
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<PAGE>
APPENDIX D
TAXABLE EQUIVALENT YIELDS FOR 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAXABLE INCOME* A TAX-FREE YIELD OF
- ------------------------------------- -------------------------------
SINGLE JOINT 1994 FEDERAL 5.25% 5.50% 5.75% 6.00% 6.25%
RETURN RETURN TAX BRACKET** IS EQUAL TO A TAXABLE YIELD OF
<S> <C> <C> <C>
- ----------------- ------------------ --------------- -------------------------------
$22,751- $55,100 $38,001- $91,850 28.00% 7.29% 7.64% 7.99% 8.33% 8.68%
$55,101-$115,000 $91,851-$140,000 31.00% 7.61% 7.97% 8.33% 8.70% 9.06%
$115,001-$250,000 $140,001-$250,000 36.00% 8.20% 8.59% 8.98% 9.38% 9.77%
Over $250,000 Over $250,000 39.60% 8.69% 9.11% 9.52% 9.93% 10.35%
- ----------------- ------------------ --------------- -------------------------------
<FN>
* The above table is based on the federal income tax brackets, which are
adjusted annually for inflation.
** The taxable yields shown above assume that an investor pays regular
Federal tax rather than the alternative minimum tax. The reduction, or
possible elimination, of the personal exemption deductions for
high-income taxpayers and the overall limit on itemized deductions may
cause an investor's actual marginal rate on income from taxable
investments to exceed the rates used in the above table. Additionally,
income may be subject to state and local taxes. The tax rates shown
above do not apply to corporate taxpayers. The tax characteristics of
the Trust are described more fully elsewhere in this Prospectus. Consult
your tax adviser for further details. This chart is for illustrative
purposes only and cannot be taken as an indication of anticipated Trust
performance.
</TABLE>
D-1
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APPENDIX E
COMPARISON OF COMPOUNDED YIELDS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
5.70% TAX-EXEMPT 8.66% TAXABLE
YEAR INVESTMENT INVESTMENT
- ------ --------------------- ------------------
<S> <C> <C>
0 $10,000 $10,000
1 10,570 10,523
2 11,172 11,073
3 11,809 11,653
4 12,482 12,262
5 13,194 12,904
6 13,946 13,579
7 14,741 14,289
8 15,581 15,036
9 16,469 15,823
10 17,408 16,650
11 18,400 17,521
12 19,449 18,438
13 20,558 19,402
14 21,730 20,417
15 22,968 21,485
16 24,277 22,609
17 25,661 23,791
18 27,124 25,036
19 28,670 26,345
20 30,304 27,723
</TABLE>
<TABLE>
<CAPTION>
ASSUMPTIONS
- ----------------------------------------------------
<S> <C>
Yield and Reinvestment Rate on Tax-Exempt Investment 5.70%.
Yield and Reinvestment Rate on Taxable Investment .. 8.66%.
</TABLE>
The 8.66% Taxable Investment column reflects a reduction for federal
income taxes at the 39.6% federal tax bracket. An investor's tax rate may
differ from the 39.6% rate assumption depending on the amount of the
investor's income and the reduction, or possible elimination, of the personal
exemption deduction for high-income taxpayers and an overall limit on
itemized deductions. Additionally, income may be subject to certain state and
local taxes and the federal alternative minimum tax. The tax characteristics
of the Trust are described more fully elsewhere in the Prospectus. Consult
your tax adviser for further details.
The above table does not apply to corporate investors.
E-1
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<PAGE>
37896
INTERCAPITAL MANAGED
MUNICIPAL TRUST
7,000,000 SHARES OF
BENEFICIAL INTEREST
PROSPECTUS
DEAN WITTER DISTRIBUTORS INC.
SEPTEMBER , 1994
<PAGE>
INTERCAPITAL MANAGED MUNICIPAL TRUST
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
i. Report of Independent Accountant (contained in
Prospectus)
ii. Statement of Assets and Liabilities as of September ,
1994
(b) Exhibits:
Exhibit
Number Description
1.(a) -- Declaration of Trust of Registrant*
2. -- By-Laws of Registrant*
3. -- None
4. -- Not Applicable
5. -- Copy of Trust's Dividend Reinvestment Plan
6. -- Not Applicable
7. -- Form of Investment Management Agreement between
Registrant and Dean Witter InterCapital Inc.
8.(a) -- Form of Master Agreement Among Underwriters
(b) -- Form of Underwriting Agreement
(c) -- Form of Selected Dealers Agreement
(d) -- Form of Agency Agreement
9. -- Not Applicable
10.(a) -- Form of Custodian Agreement
(b) -- Form of Amended and Restated Transfer Agency
Agreement
(c) -- Form of Services Agreement with Dean Witter
Services Company Inc.
11. -- Not Applicable
1
<PAGE>
Exhibit
Number Description
12. -- Opinion of Sheldon Curtis, Esq.**
13. -- Not Applicable
14. -- Consent of Price Waterhouse**
15. -- None
16. -- Investment Letter of Dean Witter InterCapital
Inc.**
Other -- Powers of Attorney
* Filed with Registrant's initial Registration Statement on June
15, 1994.
** To be filed by Amendment.
Item 25. Marketing Arrangements.
Reference is made to the Underwriting Agreement to be
filed by Amendment as Exhibit 8(b) to this Registration
Statement.
Item 26. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission
Registration Fee $ 41,637.93
New York Stock Exchange listed fee $ 12,575.00
NASD registration fee $
Blue Sky Fees and Expenses $
(including fees of counsel)
Transfer Agent Fee $
Accounting fees and expenses $
Legal fees and expenses $
Printing and engraving $
Miscellaneous $
-----------
$
===========
2
<PAGE>
Item 27. Persons Controlled by or Under Common Control With
Registrant.
Prior to the effectiveness of this Registration Statement, the
Registrant will sell 7,113 of its shares of beneficial interest to
Dean Witter InterCapital Inc., a Delaware corporation. Dean Witter
InterCapital Inc. is a wholly-owned subsidiary of Dean Witter,
Discover & Co. ("DWDC"), a Delaware corporation, that is a balanced
financial services organization providing a broad range of
nationally marketed credit and investment products.
Item 28. Number of Holders of Securities.
(1) (2)
Number of Record Holders
Title of Class at September , 1994
-------------- ------------------------
Shares of Beneficial Interest 1
Item 29. Indemnification.
Pursuant to Section 5.3 of the Registrant's Declaration of
Trust and under Section 4.8 of the Registrant's By-Laws, the
indemnification of the Registrant's trustees, officers, employees
and agents is permitted if it is determined that they acted under
the belief that their actions were in or not opposed to the best
interest of the Registrant, and, with respect to any criminal
proceeding, they had reasonable cause to believe their conduct was
not unlawful. In addition, indemnification is permitted only if it
is determined that the actions in question did not render them
liable by reason of willful misfeasance, bad faith or gross
negligence in the performance of their duties or by reason of
reckless disregard of their obligations and duties to the
Registrant. Trustees, officers, employees and agents will be
indemnified for the expense of litigation if it is determined that
they are entitled to indemnification against any liability
established in such litigation. The Registrant may also advance
money for these expenses provided that they give their undertakings
to repay the Registrant unless their conduct is later determined to
permit indemnification.
Pursuant to Section 5.2 of the Registrant's Declaration of
Trust and paragraph 8 of the Registrant's Investment Management
Agreement, neither the Investment Manager nor any trustee, officer,
employee or agent of the Registrant shall be liable for any action
or failure to act, except in the case of bad faith, willful
misfeasance, gross negligence or reckless disregard of duties to
the Registrant.
3
<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to trustees,
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 Securities and Exchange Commission 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 trustee, officer,
or controlling person of the Registrant in connection with the
successful defense of any action, suit or proceeding) is asserted
against the Registrant by such trustee, officer or controlling
person in connection with the shares 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.
The Registrant hereby undertakes that it will apply the
indemnification provision of its by-laws in a manner consistent
with Release 11330 of the Securities and Exchange Commission under
the Investment Company Act of 1940, so long as the interpretation
of Sections 17(h) and 17(i) of such Act remains in effect.
Registrant, in conjunction with the Investment Manager,
Registrant's Trustees, and other registered investment management
companies managed by the Investment Manager, maintains insurance on
behalf of any person who is or was a Trustee, officer, employee, or
agent of Registrant, or who is or was serving at the request of
Registrant as a trustee, director, officer, employee or agent of
another trust or corporation, against any liability asserted
against him and incurred by him or arising out of his position.
However, in no event will Registrant maintain insurance to
indemnify any such person for any act for which Registrant itself
is not permitted to indemnify him.
Item 30. Business and Other Connections of Investment Adviser.
See "The Fund and Its Management" in the Prospectus regarding the
business of the investment adviser. The following information is
given regarding officers of Dean Witter InterCapital Inc. The term
"Dean Witter Funds" used below refers to the Registrant and the
following other Funds: (1) InterCapital Income Securities Inc.,
(2) High Income Advantage Trust, (3) High Income Advantage Trust
II, (4) High Income Advantage Trust III, (5) Municipal Income
Trust, (6) Municipal Income Trust II, (7) Municipal Income Trust
III, (8) Dean Witter Government Income Trust, (9) Municipal Premium
Income Trust, (10) Municipal Income Opportunities Trust, (11)
Municipal Income Opportunities Trust II, (12) Municipal Income
Opportunities Trust III, (13) Prime Income Trust, (14) InterCapital
Insured Municipal Bond Trust, (15) InterCapital Quality Municipal
4
<PAGE>
Income Trust, (16) InterCapital Quality Municipal Investment Trust,
(17) InterCapital Insured Municipal Income Trust, (18) InterCapital
California Insured Municipal Income Trust, (19) InterCapital
Insured Municipal Trust, (20) InterCapital Quality Municipal
Securities, (21) InterCapital California Quality Municipal
Securities, (22) InterCapital New York Quality Municipal
Securities, (23) InterCapital Insured Municipal Securities and (24)
InterCapital Insured California Municipal Securities, registered
closed-end investment companies, and (1) Dean Witter Global
Utilities Fund, (2) Dean Witter Tax-Exempt Securities Trust, (3)
Dean Witter Tax-Free Daily Income Trust, (4) Dean Witter Dividend
Growth Securities Inc., (5) Dean Witter Convertible Securities
Trust, (6) Dean Witter Liquid Asset Fund Inc., (7) Dean Witter
Developing Growth Securities Trust, (8) Dean Witter Retirement
Series, (9) Dean Witter Federal Securities Trust, (10) Dean Witter
World Wide Investment Trust, (11) Dean Witter U.S. Government
Securities Trust, (12) Dean Witter Select Municipal Reinvestment
Fund, (13) Dean Witter High Yield Securities Inc., (14) Dean Witter
Intermediate Income Securities, (15) Dean Witter New York Tax-Free
Income Fund, (16) Dean Witter California Tax-Free Income Fund, (17)
Dean Witter Health Sciences Trust, (18) Dean Witter California Tax-
Free Daily Income Trust, (19) Dean Witter Managed Assets Trust,
(20) Dean Witter U.S. Government Money Market Trust, (21) Dean
Witter American Value Fund, (22) Dean Witter Strategist Fund, (23)
Dean Witter Utilities Fund, (24) Dean Witter Value-Added Market
Series, (25) Dean Witter World Wide Income Trust, (26) Dean Witter
New York Municipal Money Market Trust, (27) Dean Witter Capital
Growth Securities, (28) Dean Witter Precious Metals and Minerals
Trust, (29) Dean Witter European Growth Fund Inc., (30) Dean Witter
Global Short-Term Income Fund Inc., (31) Dean Witter Pacific Growth
Fund Inc., (32) Dean Witter Multi-State Municipal Series Trust,
(33) Dean Witter Premier Income Trust, (34) Dean Witter Short-Term
U.S. Treasury Trust, (35) Dean Witter Diversified Income Trust,
(36) Dean Witter Health Sciences Trust, (37) Dean Witter Global
Dividend Growth Securities, (38) Active Assets Tax-Free Trust, (39)
Active Assets Money Trust, (40) Active Assets Government Securities
Trust, (41) Active Assets California Tax-Free Income Trust, (42)
Dean Witter Natural Resource Development Securities Inc., (43) Dean
Witter Variable Investment Series, (44) Dean Witter Limited Term
Municipal Trust, (45) Dean Witter Short-Term Bond Fund, (46) Dean
Witter National Municipal Trust, (47) Dean Witter High Income
Securities and (48) Dean Witter International SmallCap Fund,
registered open-end investment companies. InterCapital is a wholly-
owned direct subsidiary of Dean Witter, Discover & Co. The
principal address of the Dean Witter Funds is Two World Trade
Center, New York, New York 10048. The term "TCW/DW Funds" refers
to the following Funds: (1) TCW/DW Core Equity Trust, (2) TCW/DW
North American Government Income Trust, (3) TCW/DW Latin American
Growth Fund, (4) TCW/DW Income and Growth Fund, (5) TCW/DW Small
Cap Growth Fund, (6) TCW/DW Balanced Fund and (7) TCW/DW North
American Intermediate Income Trust, registered open-end investment
companies, and (8) TCW/DW Term Trust 2000, (9) TCW/DW Term Trust
5
<PAGE>
2002, (10) TCW/DW Term Trust 2003 and (11) TCW/DW Emerging Markets
Opportunities Trust, registered closed-end investment companies.
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- --------------- --------------------------
Charles A. Chairman, Chief Executive Vice
Fiumefreddo Executive Officer President and Director
and Director of Dean Witter
Reynolds Inc.
("DWR"); Chairman,
Director or Trustee,
President and
Chief Executive
Officer of the Dean
Witter Funds;
Chairman, Chief
Executive Officer and
Trustee of the TCW/DW
Funds; Chairman and
Director of Dean
Witter Trust
Company("DWTC");
Chairman, Chief
Executive Officer and
Director of Dean
Witter Distributors
Inc. ("Distributors")
and Dean Witter
Services Company
Inc.("DWSC"); Formerly
Executive Vice
President and Director
of Dean Witter,
Discover & Co.
("DWDC"); Director
and/or officer of DWDC
subsidiaries.
Philip J. Director Chairman, Chief
Purcell Executive Officer and
Director of DWDC and
DWR; Director of DWSC
and Distributors.
6
<PAGE>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- -------------- ------------------------
Richard M. Director President and Chief
DeMartini Operating Officer of
Dean Witter Capital
and Direector of DWR,
DWSC and Distributors.
James F. Director President and Chief
Higgins Operating Officer of
Dean Witter Financial;
Director of DWR, DWSC
and Distributors.
Thomas C. Executive Vice Executive Vice
Schneider President, Chief President, Chief
Financial Officer Financial Officer
and Director and Director of
DWR, DWSC and
Distributors.
Christine A. Director Executive Vice
Edwards President, Secretary,
General Counsel and
Director of DWR
DWSC and Distributors.
Robert M. Scanlan President and Vice President of
Chief Operating the Dean Witter Funds
Officer and the TCW/DW Funds;
President of DWSC;
Executive Vice
President of
Distributors;
Executive Vice
President and
Director of DWTC.
David A. Hughey Executive Vice Vice President of the
President and Dean Witter Funds and
Chief Administrative the TCW/DW Funds;
Officer Executive Vice
President, Chief
7
<PAGE>
Other Substantial
Business, Profession,
Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- ------------------------
Administrative Officer
and Director of DWTC;
Executive Vice President
and Chief Administrative
Officer of Distributors.
Edmund C. Executive Vice Vice President of the
Puckhaber President Dean Witter Funds.
John Van Heuvelen Executive Vice President and Chief
President Executive Officer of
DWTC.
Sheldon Curtis Senior Vice Vice President,
President, Secretary and General
General Counsel Counsel of the
and Secretary Dean Witter Funds and
the TCW/DW Funds; Senior
Vice President and
Secretary of DWTC;
Assistant Secretary
of DWR and DWDC; Senior
Vice President, General
Counsel and Secretary of
DWSC; Senior Vice
President, Assistant
General Counsel and
Assistant Secretary
of Distributors.
Peter M. Avelar Senior Vice Vice President of
President various Dean Witter
Funds.
Mark Bavoso Senior Vice Vice President of
President various Dean Witter
Funds.
Thomas H. Connelly Senior Vice Vice President of
President various Dean Witter
Funds.
Edward Gaylor Senior Vice Vice President of
President various Dean Witter
Funds.
Rajesh K. Gupta Senior Vice Vice President of
President various Dean Witter
Funds.
8
<PAGE>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- -------------- -----------------------
Kenton J. Senior Vice Vice President of
Hinchliffe President various Dean Witter
Funds.
John B. Kemp, III Senior Vice Director of the
President Provident Savings
Bank, Jersey City,
New Jersey.
Anita Kolleeny Senior Vice Vice President of
President various Dean Witter
Funds.
Jonathan R. Page Senior Vice Vice President of
President various Dean Witter
Funds.
Ira Ross Senior Vice Vice President of
President various Dean Witter
Funds.
Rochelle G. Siegel Senior Vice Vice President of
President various Dean Witter
Funds.
Paul D. Vance Senior Vice Vice President of
President various Dean Witter
Funds.
Elizabeth A. Senior Vice
Vetell President
James F. Senior Vice Vice President of
Willison President various Dean Witter
Funds.
Ronald Worobel Senior Vice Vice President of
President various Dean Witter
Funds.
Thomas F. Caloia First Vice Treasurer of the
President and Dean Witter Funds
Assistant and the TCW/DW Funds;
Treasurer Assistant Treasurer
of DWSC; Assistant
Treasurer of
Distributors.
9
<PAGE>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- -------------- -----------------------
Marilyn K. Cranney First Vice Assistant Secretary
President and of the Dean Witter
Assistant Funds and the TCW/DW
Secretary Funds; Vice President
and Assistant
Secretary of DWSC;
Assistant Secretary
of DWR and DWDC.
Barry Fink First Vice Assistant Secretary
President, of the Dean Witter
Assistant Funds and TCW/DW
General Counsel Funds; First Vice
and Assistant President and
Secretary Assistant Secretary
of DWSC.
Michael First Vice First Vice President
Interrante President and and Controller of
Controller DWSC; Assistant
Treasurer of
Distributors.
Robert Zimmerman First Vice
President
Joan G. Allman Vice President
Joseph Arcieri Vice President
Terence P. Brennan, II Vice President
Stephen Brophy Vice President
Douglas Brown Vice President
Rosalie Clough Vice President
B. Catherine Vice President
Connelly
Salvatore DeSteno Vice President Vice President of
DWSC.
Frank J. DeVito Vice President Vice President of
DWSC.
Dwight Doolan Vice President
Bruce Dunn Vice President
10
<PAGE>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- ------------------------
Geoffrey D. Flynn Vice President Vice President of
DWSC.
Bette Freedman Vice President
Jeffrey D. Geffen Vice President
Deborah Genovese Vice President
Peter W. Gurman Vice President
Shant Harootunian Vice President
John Hechtlinger Vice President
David T. Hoffman Vice President
David Johnson Vice President
Christopher Jones Vice President
Stanley Kapica Vice President
Konrad J. Krill Vice President
Paula LaCosta Vice President Vice President of
various Dean Witter
Funds.
Lawrence S. Lafer Vice President, Assistant Secretary
Assistant of the Dean Witter
General Counsel Funds and the TCW/DW
and Assistant Funds; Vice President
Secretary and Assistant
Secretary of DWSC.
Thomas Lawlor Vice President
Lou Anne D. McInnis Vice President, Assistant Secretary
Assistant of the Dean Witter
General Counsel Funds and the TCW/DW
and Assistant Funds; Vice President
Secretary and Assistant
Secretary of DWSC.
Sharon K. Milligan Vice President
James Mulcahy Vice President
James Nash Vice President
11
<PAGE>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- -----------------------
Hugh Rose Vice President
Ruth Rossi Vice President, Assistant Secretary
Assistant of the Dean Witter
General Counsel Funds and the TCW/DW
and Assistant Funds; Vice President
Secretary and Assistant
Secretary of DWSC.
Carl F. Sadler Vice President
Howard A. Schloss Vice President
Rafael Scolari Vice President
Rose Simpson Vice President
Stuart Smith Vice President
Diane Lisa Sobin Vice President Vice President of
various Dean Witter
Funds.
Kathleen Stromberg Vice President Vice President of
various Dean Witter
Funds.
Vinh Q. Tran Vice President Vice President of
various Dean Witter
Funds.
Alice Weiss Vice President Assistant Vice
President of various
Dean Witter Funds.
Jayne M. Wolff Vice President
Marianne Zalys Vice President
Item 31. Location of Accounts and Records
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder
are maintained by the Investment Manager at its offices, except records
relating to holders of shares issued by the Registrant, which are maintained by
the Registrant's Transfer Agent, at its place of business as shown in the
Statement of Additional Information.
12
<PAGE>
Item 32. Management Services
Registrant is not a party to any such management-related
service contract.
Item 33. Undertakings.
(a) Registrant undertakes to suspend offering of the shares
covered hereby until it amends its prospectus contained herein if (1)
subsequent to the effective date of this Registration Statement, its net asset
value per share declines more than 10 per cent from its net asset value per
share as of the effective date of this Registration Statement, or (2) its net
asset value increases to an amount greater than its net proceeds as stated in
the prospectus contained herein.
(b) Not applicable
(c) Not applicable
The undersigned Registrant undertakes to assist shareholders
in communicating with other shareholders for the purpose of removing trustees
by providing the support specified in Section 16(c) of the 1940 Act as though
such Section applied.
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 a Registration Statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the Registrant pursuant to rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of the Registration Statement as of the time it was declared effective.
(2) For 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.
fr:\ce13\partc
13
<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
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and the State of New York
on the 28th day of July, 1994.
INTERCAPITAL MANAGED MUNICIPAL TRUST
By: /s/ Sheldon Curtis
Sheldon Curtis
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been signed
below by the following persons in the capacities and on the date indicated.
Signatures Title Date
(1) Principal Executive Officer Chairman, President,
Chief Executive
Officer and Trustee
By:/s/ Charles A. Fiumefreddo 07/28/94
Charles A. Fiumefreddo
(2) Principal Financial Officer Treasurer and Principal
Accounting Officer
By:/s/ Thomas F. Caloia 07/28/94
Thomas F. Caloia
(3) Majority of the Trustees Trustee
Charles A. Fiumefreddo (Chairman)
Philip J. Purcell
Edward R. Telling
By:/s/ Sheldon Curtis 07/28/94
Sheldon Curtis
Attorney-in-Fact
Jack F. Bennett Paul Kolton
John R. Haire Michael E. Nugent
John E. Jeuck Albert T. Sommers
Manuel H. Johnson Edwin J. Garn
Michael Bozic John L. Schroeder
By:/s/ David M. Butowsky 07/28/94
David M. Butowsky
Attorney-in-Fact
<PAGE>
Exhibit Index
1.(a) -- Declaration of Trust of Registrant*
2. -- By-Laws of Registrant*
3. -- None
4. -- Not Applicable
5. -- Copy of Trust's Dividend Reinvestment Plan
6. -- Not Applicable
7. -- Form of Investment Management Agreement between
Registrant and Dean Witter InterCapital Inc.
8.(a) -- Form of Master Agreement Among Underwriters
(b) -- Form of Underwriting Agreement
(c) -- Form of Selected Dealers Agreement
(d) -- Form of Agency Agreement
9. -- Not Applicable
10.(a) -- Form of Custodian Agreement
(b) -- Form of Amended and Restated Transfer Agency
Agreement
(c) -- Form of Services Agreement with Dean Witter
Services Company Inc.
11. -- Not Applicable
12. -- Opinion of Sheldon Curtis, Esq.**
13. -- Not Applicable
14. -- Consent of Price Waterhouse**
15. -- None
16. -- Investment Letter of Dean Witter InterCapital
Inc.**
Other -- Powers of Attorney
----------------------
* Filed with Registrant's initial Registration Statement on June
15, 1994.
** To be filed by Amendment.
<PAGE>
INTERCAPITAL MANAGED
MUNICIPAL TRUST
Two World Trade Center
New York, N.Y. 10048
Tel. (212) 392-1600
INTERCAPITAL MANAGED
MUNICIPAL TRUST
Dear
Shareholder:
This brochure details the provisions of the Dividend Reinvestment Plan (the
"Plan") for common shares of beneficial interest ("Shares") of InterCapital
Managed Municipal Trust (the "Trust").
We believe that you will find this service, offered through the Trust's
Transfer Agent, Dean Witter Trust Company (the "Transfer Agent"), a convenient
way to increase your investment in the Trust through reinvestment of the
Trust's monthly dividends and other distributions.
If you are not already enrolled in the Plan and wish to participate and
your shares are held in your own name, simply complete and mail the
enrollment form in the enclosed business reply envelope. IF YOUR SHARES ARE
HELD IN THE NAME OF A BROKERAGE FIRM, BANK OR OTHER NOMINEE, YOU SHOULD
CONTACT YOUR NOMINEE TO PARTICIPATE IN THE PLAN.
Participation in the Plan is entirely voluntary and, subject to the
terms of the Plan, you may enroll or withdraw at any time.
<PAGE>
<PAGE>
HIGHLIGHTS OF THE
- -----------------------------------------------------------------------------
Dividend Reinvestment Plan
- -----------------------------------------------------------------------------
The Dividend Reinvestment Plan provides shareholders with an effective and
efficient program to put their distributions from the Trust to work through
reinvestment in additional Trust Shares each month.
1. Participation
- -----------------------------------------------------------------------------
All persons (except as noted below) who become registered shareholders of the
Trust may participate in the Plan. Owners of Shares held in the names of
brokers and nominees of banks and other financial institutions who wish to
participate in the Plan must notify their broker or nominee of their desire
to participate in the Plan and such broker or nominee is then advised to
contact Dean Witter Trust Company.
2. Operation of the Plan
- -----------------------------------------------------------------------------
Whenever the Trust declares a dividend or other distribution, it will pay the
amount thereof in cash to the Transfer Agent on behalf of shareholders
participating in the Plan which the Transfer Agent will forward to the Plan
agent to buy Shares in the open market for the participants' accounts. Market
price for the purpose of the Plan will be the market price of the Shares on a
national securities exchange or, in the event that the Shares are not listed
on a securities exchange at the time, market price will be the asked price,
or the mean of the asked prices if more than one is available, of the Shares
in the over-the-counter market.
3. Dividend Information
- -----------------------------------------------------------------------------
Each Dividend Reinvestment Plan shareholder will receive a quarterly
confirmation of his or her account detailing the current dividend rate, total
amount of the dividend (or other distribution), number of Shares purchased
through reinvestment, average cost and total number of Shares held in the
account. You will receive tax information annually for your
<PAGE>
<PAGE>
personal records and to help you prepare your tax return. The automatic
reinvestment of dividends or distributions will not relieve participants of
any income tax that may be payable on such dividends or distributions.
4. Certificates
- -----------------------------------------------------------------------------
The Transfer Agent will hold the Shares it has purchased for each shareholder
as long as the shareholder remains a participant in the Plan. However,
certificates for full Shares held by the Agent will be issued to the
shareholder upon his or her written request.
5. Fractional Shares
- -----------------------------------------------------------------------------
The full amount of a shareholder's distribution will be reinvested, in full
and fractional Shares carried out to three decimal places. Upon termination
of the Dividend Reinvestment Plan, the fractional Shares will not be issued,
but will be liquidated and the cash proceeds will be sent to the shareholder.
6. Withdrawal from the Plan
- -----------------------------------------------------------------------------
Shareholders may elect to terminate their participation in the Dividend
Reinvestment Plan and thereafter receive dividends in cash by giving written
notice to Dean Witter Trust Company, P.O. Box 1040, Jersey City, New Jersey
07303. The attached form may be used for purposes of giving such written
notice. For this written notice to be effective for any dividend or
distribution it must be received by the Agent prior to the record date for
any such dividend or distribution. Such notice shall be effective for all
further dividends or distributions. Shareholders may resume participation in
the Plan at any time by written request to the Transfer Agent. On termination
of his or her participation in the Plan, the shareholder will receive a
certificate for full Shares in his or her account plus a check for the market
value of any fractional Shares.
<PAGE>
<PAGE>
TERMS & PROVISIONS OF THE
- -----------------------------------------------------------------------------
Dividend Reinvestment Plan
- -----------------------------------------------------------------------------
(A) Shareholders of the Trust (except brokers, and nominees of banks and
financial institutions) may participate in the Dividend Reinvestment Plan
("the Plan") and will be deemed to have appointed Dean Witter Trust Company,
Harborside Financial Center, Plaza Two, Jersey City, New Jersey 07311 (the
"Transfer Agent") as their Transfer Agent to act on their behalf under the
Plan. Under the Plan, dividends and distributions ("distributions") will be
reinvested in additional Shares of the Trust. The Plan will continue in
effect for each shareholder as to all future distributions until terminated.
(B) The payment date for distributions will generally be approximately two
weeks after the record date.
(C) Whenever the Trust declares a dividend or other distribution, it will pay
the amount thereof to the Transfer Agent on behalf of shareholders under the
Plan in cash which the Transfer Agent will forward to the Plan agent to buy
Shares in the open market for the participants' accounts. Market price for
the purpose of the Plan will be the market price of the Shares on a national
securities exchange or, in the event the Shares are not listed on a
securities exchange at the time, market price will be the asked price, or the
mean of the asked prices if more than one is available, of the Shares in the
over-the-counter market.
(D) The cost of full and fractional Shares acquired for each shareholder's
account in connection with a particular distribution shall be determined by
the average cost per share of the Shares acquired by the Transfer Agent in
connection with that distribution. Shareholders will receive a confirmation
showing the average cost of Shares acquired as soon as practicable after the
Transfer Agent has received the Shares purchased by the Plan agent. The
Transfer Agent may mingle the cash in a shareholder's account with similar
funds of other shareholders of the Trust for whom it acts as Transfer Agent
under the Plan.
(E) As used herein, the term "market price" means the closing price of the
Trust's Shares on a national securities exchange plus expected brokerage
commissions.
<PAGE>
<PAGE>
(F) There is no service charge by the Transfer Agent to shareholders who
participate in the Plan. However, the Trust reserves the right to amend the
Plan in the future to include a service charge. Each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Transfer
Agent's open market purchases in connection with the reinvestment of
dividends or capital gains distributions.
(G) The Transfer Agent will maintain the shareholder's account, hold the
additional Shares acquired through the Plan in safekeeping and furnish him or
her with written confirmation of all trans- actions in the account. Upon
written request to the Transfer Agent signed by the shareholder, a
certificate for all full Shares in a shareholder's account will be sent to
the shareholder, but the shareholder will continue to be a participant in the
Plan unless he requests termination.
(H) Shareholders may terminate their participation in the Plan at any time
and elect to receive distributions in cash by notifying the Transfer Agent in
writing. Such notification must be received prior to the record date of any
distribution. There will be no charge or other penalty for such termination.
Upon termination, the Transfer Agent will send the shareholder a share
certificate for the number of full Shares in his or her account and a check
for the market value of any fractional Share unless otherwise instructed by
the shareholder.
(I) Brokers and nominees of banks and financial institutions are advised to
contact the Transfer Agent in the event any beneficial owners of the Shares
held in their names desire to participate in the Plan.
(J) Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan, or
change the Transfer Agent. Any material change in the Plan will be applied to
any distribution paid subsequent to notice thereof sent to participants in
the Plan at least thirty days before the record date for such distribution.
The Transfer Agent is to be liable only for wilful misconduct or negligence
in acting as Transfer Agent under the Plan.
<PAGE>
<PAGE>
DIVIDEND REINVESTMENT PLAN
(This form is for shareholders who hold Shares in their own names. If your
Shares are held through a brokerage firm, bank or other nominee and you wish
to participate in the Plan, you should instruct your broker or nominee to
contact Dean Witter Trust Company.)
INTERCAPITAL MANAGED MUNICIPAL TRUST
AUTHORIZATION FOR REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
(PLEASE READ CAREFULLY BEFORE SIGNING.)
I hereby authorize InterCapital Managed Municipal Trust (the "Trust") to
pay to Dean Witter Trust Company for my account all income dividends and
capital gains distributions payable to me on Shares of the Trust now or
hereafter registered in my name, and hereby elect to receive in Shares all
such dividends and distributions payable in cash, except as set forth below.
I hereby appoint Dean Witter Trust Company as my Agent, subject to the
Terms and Conditions of Dividend Reinvestment Plan (the "Plan") set forth in
the accompanying brochure, and authorize Dean Witter Trust Company, as such
Agent, in accordance with such Terms and Conditions to apply all such income
dividends and capital gains distributions payable solely in cash, after
deducting the charges as provided in such Terms and Conditions, to the
purchase of Shares of the Trust.
This authorization and appointment is given with the understanding that I
may terminate it at any time by terminating my account under the Plan as
provided in such Terms and Conditions.
Name(s): Signature:
---------------------- ------------------------------
Signature:
---------------------- ------------------------------
(Please Print) (Two signatures if joint tenancy)
Social Security Number:
-----------------
Brokerage Firm's Name:
------------------
Address, City and State:
Including Zip Code: --------------------------
-----------
Brokerage Firm's
- ------------------------------- Account Number:
--------------------------
- ------------------------------- Date:
-----------------------------------
YOU SHOULD NOT RETURN THIS FORM IF YOU WISH TO RECEIVE YOUR DIVIDENDS OR
DISTRIBUTIONS IN CASH.
This authorization form, when signed, should be mailed to:
DEAN WITTER TRUST COMPANY
P.O. BOX 1040
JERSEY CITY, NJ 07303
<PAGE>
<PAGE>
(USE THIS FORM TO TERMINATE PARTICIPATION IN THE DIVIDEND REINVESTMENT PLAN)
INTERCAPITAL MANAGED MUNICIPAL TRUST
Date: _______________ , 19___
To Dean Witter Trust Company
I hereby terminate my participation in the Dividend Reinvestment Plan and
request that all dividends and distributions on my InterCapital Managed
Municipal Trust account be paid in cash.
Name(s): Signature:
---------------------- ------------------------------
Signature:
---------------------- ------------------------------
(Please Print) (Two signatures if joint tenancy)
Social Security Number:
-----------------
Brokerage Firm's Name:
------------------
Address, City and State:
Including Zip Code: --------------------------
-----------
- ------------------------------- Brokerage Firm's
- ------------------------------- Account Number:
--------------------------
Important: Check one below
[ ] Send certificate for Shares in
Reinvestment Plan and check for any
fractional Share
or
[ ] Hold all Shares, full and fractional, in my account
Send to: Dean Witter Trust Company
P.O. Box 1040
Jersey City, New Jersey 07303
<PAGE>
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the th day of September, 1994, by and between
InterCapital Managed Municipal Trust, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (hereinafter
called the "Fund"), and Dean Witter InterCapital Inc., a Delaware corporation
(hereinafter called the "Investment Manager"):
WHEREAS, The Fund intends to engage in business as a closed-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, The Investment Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, and engages in the business of
acting as investment adviser; and
WHEREAS, The Fund desires to retain the Investment Manager to render
management and investment advisory services in the manner and on the terms
and conditions hereinafter set forth; and
WHEREAS, The Investment Manager desires to be retained to perform services
on said terms and conditions:
Now, Therefore, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Manager agree as follows:
1. The Fund hereby retains the Investment Manager to act as investment
manager of the Fund and, subject to the supervision of the Trustees, to
supervise the investment activities of the Fund as hereinafter set forth.
Without limiting the generality of the foregoing, the Investment Manager
shall obtain and evaluate such information and advice relating to the
economy, securities and commodities markets and securities and commodities as
it deems necessary or useful to discharge its duties hereunder; shall
continuously manage the assets of the Fund in a manner consistent with the
investment objectives and policies of the Fund; shall determine the
securities and commodities to be purchased, sold or otherwise disposed of by
the Fund and the timing of such purchases, sales and dispositions; and shall
take such further action, including the placing of purchase and sale orders
on behalf of the Fund, as the Investment Manager shall deem necessary or
appropriate. The Investment Manager shall also furnish to or place at the
disposal of the Fund such of the information, evaluations, analyses and
opinions formulated or obtained by the Investment Manager in the discharge of
its duties as the Fund may, from time to time, reasonably request.
2. The Investment Manager shall, at its own expense, maintain such staff
and employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Investment
Manager shall be deemed to include persons employed or otherwise retained by
the Investment Manager to furnish statistical and other factual data, advice
regarding economic factors and trends, information with respect to technical
and scientific developments, and such other information, advice and
assistance as the Investment Manager may desire. The Investment Manager
shall, as agent for the Fund, maintain the Fund's records and books of
account (other than those maintained by the Fund's Transfer agent, registrar,
custodian and other agencies). All such books and records so maintained shall
be the property of the Fund and, upon request therefor, the Investment
Manager shall surrender to the Fund such of the books and records so
requested.
3. The Fund will, from time to time, furnish or otherwise make available
to the Investment Manager such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the
Investment Manager may reasonably require in order to discharge its duties
and obligations hereunder.
4. The Investment Manager shall bear the cost of rendering the investment
management and supervisory services to be performed by it under this
Agreement, and shall, at its own expense, pay the
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<PAGE>
compensation of the officers and employees, if any, of the Fund, and provide
such office space, facilities and equipment and such clerical help and
bookkeeping services as the Fund shall reasonably require in the conduct of
its business. The Investment Manager shall also bear the cost of telephone
service, heat, light, power and other utilities provided to the Fund.
5. The Fund assumes and shall pay or cause to be paid all other expenses
of the Fund, including without limitation: the charges and expenses of any
registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities or commodities and other
property, and any stock transfer or dividend agent or agents appointed by the
Fund; brokers' commissions chargeable to the Fund in connection with
portfolio transactions to which the Fund is a party; all taxes, including
securities or commodities issuance and transfer taxes, and fees payable by
the Fund to federal, state or other governmental agencies; the cost and
expense of engraving or printing of certificates representing shares of the
Fund, all costs and expenses in connection with the registration and
maintenance of registration of the Fund and its shares with the Securities
and Exchange Commission and various states and other jurisdictions (including
filing fees and legal fees and disbursements of counsel) the cost and expense
of printing, including typesetting, and distributing prospectuses for such
purposes; all expenses of shareholders' and trustees' meetings and of
preparing, printing and mailing of proxy statements and reports to
shareholders; fees and travel expenses of trustees or members of any advisory
board or committee who are not employees of the Investment Manager or any
corporate affiliate of the Investment Manager; all expenses incident to the
payment of any dividend or distribution program; charges and expenses of any
outside service used for pricing of the Fund's shares; charges and expenses
of legal counsel, including counsel to the Trustees of the Fund who are not
interested persons (as defined in the Act) of the Fund or the Investment
Manager, and of independent accountants, in connection with any matter
relating to the Fund; membership dues of industry associations; interest
payable on Fund borrowings; fees and expenses incident to the listing of the
Fund's shares on any stock exchange; postage; insurance premiums on property
or personnel (including officers and Trustees) of the Fund which inure to its
benefit; extraordinary expenses (including but not limited to, legal claims
and liabilities and litigation costs and any indemnification related
thereto); and all other charges and costs of the Fund's operation unless
otherwise explicitly provided herein.
6. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Investment Manager, the Fund shall pay to the
Investment Manager monthly compensation, calculated from the day following
effectiveness hereof, determined by applying the annual rate of % to the
Fund's average weekly net assets. Except as hereinafter set forth,
compensation under this Agreement shall be calculated and accrued weekly and
paid monthly by applying the annual rates to the average weekly net assets of
the Fund determined as of the close of the last business day of each week. At
the request of the Investment Manager, compensation hereunder shall be
calculated and accrued at more frequent intervals in a manner consistent with
the calculation of fees on a weekly basis. If this Agreement becomes
effective subsequent to the first day of a month or shall terminate before
the last day of a month, compensation for that part of the month this
Agreement is in effect shall be prorated in a manner consistent with the
calculation of the fees as set forth above.
7. The Investment Manager will use its best efforts in the supervision and
management of the investment activities of the Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Investment Manager shall not be liable to the Fund
or any of its investors for any error of judgment or mistake of law of for
any act or omission by the Investment Manager or for any losses sustained by
the Fund or its investors.
8. Nothing contained in this Agreement shall prevent the Investment
Manager or any affiliated person of the Investment Manager from acting as
investment adviser or manager for any other person, firm or corporation and
shall not in any way bind or restrict the Investment Manager or any such
affiliated person from buying, selling or trading any securities or
commodities for their own accounts or for the account of others for whom they
may be acting. Nothing in this Agreement shall limit or restrict the right of
any Trustee, officer of employee of the Investment Manager to engage in any
other business or to devote his time and attention in part to the management
or other aspects of any other business whether of a similar or dissimilar
nature.
2
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<PAGE>
9. This Agreement shall remain in effect until April 30, 1996 and from
year to year thereafter provided such continuance is approved at least
annually by the vote of holders of a majority, as defined in the Act, of the
outstanding voting securities of the Fund or by the Trustees of the Fund;
provided, that in either event such continuance is also approved annually by
the vote of a majority of the Trustees of the Fund who are not parties to
this Agreement or "interested persons" (as defined in the Act) of any such
party, which vote must be cast in person at a meeting called for the purpose
of voting on such approval; provided, however, that (a) the Fund may, at any
time and without the payment of any penalty, terminate this Agreement upon
thirty days' written notice to the Investment Manager, either by majority
vote of the Trustees of the Fund or by the vote of a majority of the
outstanding voting securities of the Fund; (b) this Agreement shall
immediately terminate in the event of its assignment (to the extent required
by the Act and the rules thereunder) unless such automatic terminations shall
be prevented by an exemptive order of the Securities and Exchange Commission;
and (c) the Investment Manager may terminate this Agreement without payment
of penalty on thirty days' written notice to the Fund. Any notice under this
Agreement shall be given in writing, addressed and delivered, or mailed
post-paid, to the other party at the principal office of such party.
10. This Agreement may be amended by the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal laws or regulations, but neither the Fund
nor the Investment Manager shall be liable for failing to do so.
11. This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control.
12. The Declaration of Trust, as amended, establishing InterCapital
Managed Municipal Trust, dated June 10, 1994, a copy of which, together with
all amendments thereto (the "Declaration"), is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name
InterCapital Managed Municipal Trust, as amended, refers to the Trustees
under the Declaration collectively as Trustees, but not as individuals or
personally; and no Trustee, shareholder, officer, employee or agent of
InterCapital Managed Municipal Trust shall be held to any personal liability,
nor shall resort be had to their private property for the satisfaction of any
obligation or claim or otherwise, in connection with the affairs of said
InterCapital Managed Municipal Trust, but the Trust Estate only shall be
liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.
INTERCAPITAL MANAGED MUNICIPAL TRUST
By .................................
Attest:
......................................
DEAN WITTER INTERCAPITAL INC.
By .................................
Attest:
......................................
3
<PAGE>
DEAN WITTER DISTRIBUTORS INC.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550
January 12, 1993
Re: Master Agreement Among Underwriters
Dear Sirs:
Reference is made to the (Master Agreement Among Underwriters) dated March
2, 1987 (the "Master Agreement"), between you and Dean Witter Reynolds Inc.
("DWR"). As a result of an internal reorganization of DWR, all underwritings
of closed-end investment companies sponsored by DWR and its affiliates are
being done through a newly organized subsidiary of DWR, Dean Witter
Distributors Inc., a Delaware corporation ("DWD"). Consequently, it is
necessary that we confirm that the terms of the Master Agreement be
applicable to transactions involving DWD and you to the same extent as
transactions involving DWR and you.
In light of the foregoing, DWD hereby agrees to be bound by the terms and
conditions of the Master Agreement to the same extent as the Master Agreement
is applicable to DWR. Please confirm your agreement to be bound by the terms
and conditions of the Master Agreement with DWD to the same extent as the
Master Agreement is applicable to you with respect to DWR by signing and
returning to us the enclosed copy of this letter.
Very truly yours,
Dean Witter Distributors Inc.
By: _________________________
Chairman
CONFIRMED: as of the date first
written above, , 1993.
- ----------------------------------
Name of Firm
By:
-------------------------------
Title:
----------------------------
(If signer is not an officer or partner,
please attach evidence of authorization)
<PAGE>
<PAGE>
DEAN WITTER REYNOLDS INC.
MASTER AGREEMENT AMONG UNDERWRITERS
March 2, 1987
Dear Sirs:
In connection with certain public offerings of securities after the date
hereof for which we are acting as representative or one of the
representatives of the members of an underwriting syndicate, you may be
offered the opportunity to join the underwriting syndicate. This will confirm
our mutual agreement as to the general terms and conditions applicable to
your participation in any such underwriting syndicate as follows:
1. APPLICABILITY OF THIS AGREEMENT. The terms and conditions of this
Agreement shall be applicable to any public offering of securities
("Securities"), pursuant to a registration statement filed under the
Securities Act of 1933 (the "Securities Act"), or exempt from registration
thereunder (other than an offering of Securities effected wholly outside the
United States of America), wherein we are responsible for managing or
otherwise implementing the sale of the Securities and organizing an
underwriting syndicate (including any such offering where we are acting with
others as representatives of the underwriters) and have expressly informed
you that the terms and conditions of this Agreement shall be applicable. Any
such offering in which you have been invited to participate as an underwriter
and with respect to which we have informed you that the terms and conditions
of this Agreement apply is hereinafter called an "Offering."
We shall advise you by telegram, telex, Graphic Scanning communication or
other written form of communication (a "written communication") that you have
been invited to participate in an Offering and we shall also advise you, to
the extent applicable and then determined, of the principal terms of the
Securities to be offered, the issuer and whether there is a seller or are
sellers of such Securities other than the issuer, the guarantor of the
Securities, the amount of Securities to be underwritten by you, the expected
offering date, the expected closing date, the initial offering price or
prices, if any, the interest or dividend rate (or the method by which such
rate is to be determined), the conversion price, the gross spread and
breakdown of the management fee, underwriting compensation and selling
concession, and the dealers' reallowance, except that, if the initial
offering price of the Securities is to be determined by a formula based upon
the market price of certain securities (such procedure being hereinafter
called "Formula Pricing"), we shall so indicate in lieu of specifying an
initial offering price or prices (and other applicable terms of the
Securities) and shall specify only the maximum gross spread and maximum
management fee, instead of the initial fixed amounts and components thereof.
If applicable, we also shall identify the trustee for the indenture under
which such Securities will be issued. Such information may be conveyed to you
in one or more separate written communications (collectively, the
"Invitation"). The Invitation will include instructions for advising us of
your acceptance (the "Acceptance") of the Invitation. If the issuer of the
Securities proposes to authorize the Underwriters (as hereinafter defined) to
solicit offers to purchase Securities from the issuer pursuant to delayed
delivery contracts (such contracts being hereinafter called "Delayed Delivery
Contracts" and such an Offering being hereinafter called a "Delayed Delivery
Offering"), we shall so advise you in the Invitation. In the event that the
Underwriting Agreement (as hereinafter defined) provides for the granting by
a seller to the Underwriters of an option to purchase additional Securities
(the "Over-Allotment Securities"), we shall notify you, in the Invitation, of
such option and of your maximum obligation upon exercise of such option. The
Invitation may also contain additional provisions which supplement or amend
the terms of this Agreement as they apply to the Offering.
The terms and conditions of this Agreement, as amended or supplemented by
the Invitation, shall become effective with respect to your participation in
an Offering if we have received your Acceptance before the date and time
specified in the Invitation.
<PAGE>
<PAGE>
The following provisions of this Agreement shall apply separately to each
Offering. This Agreement may be supplemented or amended by us by written
notice to you and, except for supplements or amendments set forth in an
Invitation relating to a particular Offering, any such supplement or
amendment to this Agreement shall be effective with respect to any Offering
to which this Agreement applies after this Agreement is so amended or
supplemented.
2. UNDERWRITING AGREEMENT AND MASTER UNDERWRITERS' QUESTIONNAIRE. In
connection with each Offering, the issuer, any other seller and any guarantor
of the Securities shall enter into an underwriting agreement and may enter
into an associated terms agreement or similar agreement (collectively, the
"Underwriting Agreement"), in the form (with all such additions,
modifications and deletions as we, in our sole discretion, shall deem
appropriate) of an underwriting agreement which shall have been filed with,
and be publicly available from, the Securities and Exchange Commission (the
"Commission") or such other regulatory authority as we shall specify in the
Invitation or which we shall as soon as practicable send to you (or make
available for your review in our office), with us acting alone or with others
as representative ("Representative") of the underwriters named in the
Underwriting Agreement (the "Underwriters"). By your Acceptance, you agree
and authorize us to agree on your behalf to purchase, in accordance with the
terms of the Underwriting Agreement, the amount of the Securities set forth
opposite your name in the Underwriting Agreement (which amount will be the
amount set forth in the Invitation) plus such amount of Securities, if any,
which you may become obligated to purchase pursuant to Section 5 hereof (your
"Initial Commitment"), as well as such amount of Over-Allotment Securities,
if any, which you may become obligated to purchase by reason of the exercise
of the option provided in the Underwriting Agreement, less such amount, if
any, of Securities as are contracted to be sold pursuant to any Delayed
Delivery Contracts ("Contract Securities") allocated to you in accordance
with the last paragraph of Section 6 hereof. The Securities which, after any
such increase or reduction of your Initial Commitment, you are obligated to
purchase pursuant to the Underwriting Agreement are referred to herein as
"your Securities."
Your Acceptance shall also constitute (i) your representation that your
commitment to purchase your Securities will not result in a violation of the
financial responsibility requirements of Rule 15c3-1 under the Securities
Exchange Act of 1934 (the "Exchange Act"), of the National Association of
Securities Dealers, Inc. ("NASD"), if you are a member, or of any securities
exchange to which you belong; (ii) your confirmation that the information
that you have given or are deemed to have given in response to the Master
Underwriters' Questionnaire, attached as Exhibit A hereto, is correct; and
(iii) your consent to being named in the prospectus or offering documents as
one of the Underwriters of the Securities. You agree to notify us immediately
of any development before the termination of this Agreement with respect to
any Offering which makes untrue or incomplete any information that you have
given or are deemed to have given in response to the Master Underwriters'
Questionnaire.
In the event that the Securities consist in whole or in part of debt
obligations maturing serially, the serial Securities being purchased by each
Underwriter pursuant to the Underwriting Agreement will consist, subject to
adjustment as provided in the Underwriting Agreement, of serial Securities of
each maturity in a principal amount which bears the same proportion to the
aggregate principal amount of serial Securities of such maturity to be
purchased by all the Underwriters as the respective principal amount of
serial Securities set forth opposite such Underwriter's name in the
Underwriting Agreement bears to the aggregate principal amount of the serial
Securities to be purchased by all the Underwriters.
3. OFFERING DOCUMENTS.
(a) Registered Offerings. In the case of an Invitation regarding any
Offering of Securities registered under the Securities Act (a "Registered
Offering"), we shall either provide you with the file number of the
registration statement filed with the Commission with respect to the
Securities or as soon as practicable send to you (or make available for your
review in our office) a copy of such registration statement and of each
amendment thereto (other than exhibits and any documents incorporated therein
by reference). You understand that it is your responsibility to examine the
Registration Statement, the Prospectus, any amendment or supplement thereto
relating to the offering of the Securities, any preliminary prospectus and
the material, if any, incorporated by reference therein and you will
familiarize
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yourself with the terms of the Securities and the other terms of the offering
thereof which are reflected in the Prospectus and the Invitation. You
authorize us, with the approval of counsel for the Underwriters, to approve
on your behalf any amendments or supplements to the Registration Statement or
the Prospectus. Your Acceptance shall constitute your representation that the
information to be set forth in such amendment, prospectus or prospectus
supplement is correct and is not misleading insofar as it relates to you and
your consent to being named as an Underwriter therein. By your Acceptance you
agree that, if requested by us as Representative, you will furnish a copy of
an amended preliminary prospectus, prospectus or prospectus supplement to
each person to whom you shall have furnished a previous preliminary
prospectus, prospectus or prospectus supplement. By your Acceptance you
confirm that you have delivered and agree that you will deliver all
preliminary and final prospectuses required for compliance with the
provisions of Securities Act Release No. 4968 and Rule 15c2-8 (or any
successor provision) under the Exchange Act.
(b) Offerings Pursuant to an Offering Circular. In the case of an
Invitation regarding any Offering (other than a Registered Offering) which is
made pursuant to any offering circular or other document comparable to a
prospectus in a Registered Offering (an "offering circular"), we shall
provide you with either information as to the availability of a preliminary
offering circular through a specified regulatory authority or a copy of the
preliminary offering circular or a proof of the final offering circular (or
we shall make such preliminary offering circular or proof of the final
offering circular available for your review in our office). You understand
that it is your responsibility to examine any preliminary offering circular
or offering circular and you will familiarize yourself with the terms of the
Securities and the other terms of the offering thereof which are reflected in
any preliminary offering circular or offering circular and the Invitation.
Your Acceptance shall constitute your representation that the information to
be set forth in the final offering circular is correct and is not misleading
insofar as it relates to you and your consent to being named as an
Underwriter therein. By your Acceptance you agree that, if requested by us as
Representative, you will furnish a copy of any amended preliminary offering
circular or offering circular to each person to whom you shall have furnished
a previous preliminary offering circular or offering circular. By your
Acceptance you confirm that you have delivered and you agree that you will
deliver all preliminary and final offering circulars required for compliance
with the applicable Federal and state laws and the applicable rules and
regulations of any regulatory body promulgated thereunder governing the use
and distribution of offering circulars by underwriters and, to the extent
consistent with such laws, rules and regulations, you confirm that you have
delivered and agree that you will deliver all preliminary and final offering
circulars which would be required if the provisions of Rule 15c2-8 (or any
successor provision) under the Exchange Act applied to such Offering.
4. AUTHORITY OF THE REPRESENTATIVE. You authorize us, acting as
Representative, to execute and deliver on your behalf the Underwriting
Agreement and to agree to any variation of its terms except as to the
purchase price (unless the initial offering price of the Securities is to be
determined by Formula Pricing) and the amount of your Securities. If the
initial offering price of the Securities is to be determined by Formula
Pricing, you also authorize us to determine the initial offering price of the
Securities and the underwriting discount. You also authorize us to exercise
all the authority and discretion vested in the Underwriters or in us by the
provisions of the Underwriting Agreement and to take all such action as we
may believe desirable to carry out the provisions of the Underwriting
Agreement and of this Agreement. You will be bound by all the terms of the
Underwriting Agreement as executed. You understand that changes may be made
in those who are to be Underwriters, but the amount of Securities to be
purchased by you in accordance with the terms of this Agreement, including
the maximum amount of Over- Allotment Securities, if any, which you may
become obligated to purchase by reason of the exercise of any over-allotment
option provided in the Underwriting Agreement, shall not be changed without
your consent except as provided in the Underwriting Agreement.
You authorize us to take such action as in our discretion may be necessary
or desirable to effect the sale and distribution of the Securities, including
the right to determine the terms of the proposed Offering, the concession to
Selected Dealers (as hereinafter defined) and the reallowance, if any, to
other dealers, the right to exercise any option in the Underwriting Agreement
relating to the purchase of Over- Allotment Securities and the right to make
any judgment relating to the satisfaction of the conditions to
3
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the obligations of the Underwriters under the Underwriting Agreement,
including the waiver of any such conditions or the termination of the
Underwriting Agreement. You agree to cooperate with us to the extent possible
in order to satisfy any undertakings we may make to any national securities
exchange in connection with the listing and distribution of the Securities.
If, for Federal income tax purposes, the Underwriters should be deemed to
constitute a partnership, then you elect to be excluded from the application
of Subchapter K, Chapter 1, Subtitle A, of the Internal Revenue Code of 1954,
as amended, and agree not to take any position inconsistent with such
election, and you authorize us, as Representative, in our discretion, to
execute on your behalf such evidence of such election as may be required by
the Internal Revenue Service. If we are acting with others in an Offering as
Representatives of the Underwriters, your representations and agreements set
forth herein with us as Representative shall also be for the benefit of such
other persons, and such other persons shall have the same authority which you
have granted to us pursuant to this Agreement; provided, however, that any
action which you hereby authorize us to take with such other persons may be
taken by us on their behalf.
You agree that public advertisement of the Offering may be made by us on
behalf of the Underwriters on such date as we shall determine. Your
Acceptance shall constitute your representation that you have not advertised
the Offering and you agree that you will not do so until after the earlier of
the Closing Date (as defined in the Underwriting Agreement) or such date as
we shall publicly advertise the Offering. You understand that any
advertisement you may then make will be on your own responsibility and at
your own expense.
5. AUTHORITY OF REPRESENTATIVE AS TO DEFAULTING UNDERWRITERS. Until such
time as the terms of this Agreement shall cease to be applicable to an
Offering, you authorize us to arrange for the purchase by other persons, who
may include any of the Underwriters, of any Securities not taken up by any
defaulting Underwriter. In the event that such arrangements are made, the
respective amounts of the Initial Commitments of the nondefaulting
Underwriters and the amounts of the Securities to be purchased by such other
person or persons, if any, shall be taken as the basis for all rights and
obligations hereunder, but this shall not in any way affect the liability of
any defaulting Underwriter to the other Underwriters for damages resulting
from its default, nor shall any such default relieve any other Underwriter of
any of its obligations hereunder or under the Underwriting Agreement except
as herein or therein provided.
In the event of default by one or more Underwriters in respect of their
obligations under this Agreement to take up and pay for any securities
purchased, or to deliver any securities sold or over-allotted, by us for the
respective accounts of the Underwriters pursuant to Section 10 hereof, or to
bear their underwriting proportion of expenses or liabilities pursuant to
Sections 12, 14 and 15 hereof, and to the extent that arrangements shall not
have been made by us for any persons to assume the obligations of such
defaulting Underwriter or Underwriters, you agree to assume your
proportionate share, based upon your Initial Commitment, of the obligations
of each defaulting Underwriter without relieving any such defaulting
Underwriter of its liability therefor. In addition, in the event of default
by one or more Underwriters in respect of their obligations under the
Underwriting Agreement to purchase the Securities agreed to be purchased by
them thereunder and, to the extent that arrangements shall not have been made
by us for any person to assume the obligations of such defaulting Underwriter
or Underwriters, you agree, if provided in the Underwriting Agreement, to
assume your proportionate share, based upon your Initial Commitment, of the
obligations of each such defaulting Underwriter (subject to the limitations
contained in the Underwriting Agreement) without relieving such defaulting
Underwriter of its liability therefor.
6. OFFERING OF SECURITIES. We will notify you when the initial offering of
the Securities is to be made and of the initial offering price or prices, if
any. You hereby authorize us in our discretion to change the offering price
or prices, the concession and the reallowance. The offering price or prices
at any time in effect is hereinafter referred to as the "offering price or
prices." You agree that any of the Securities released to you for public
offering and not reserved by us for sale to dealers (the "Selected Dealers")
to be selected by us (including any Underwriter) and retail purchasers shall
be promptly reoffered at the offering price or prices, and you will not allow
any discount therefrom except as herein otherwise provided.
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You authorize us, for your account, to reserve and offer for sale to
others, including institutions, retail purchasers and Selected Dealers such
of your Securities as we shall determine. Reservations for sales to Selected
Dealers for your account need not be in proportion to your Initial
Commitment, but sales of Securities reserved for your account for sale to
Selected Dealers shall be made as nearly as practicable in the ratio which
your reserved Securities bear to the aggregate amount of Securities reserved
for the account of all Underwriters, as calculated from day to day. Any such
offering to Selected Dealers may be made pursuant to the terms and conditions
of our Master Selected Dealer Agreement (copies of which are available from
us upon request), or otherwise, as we may determine.
You authorize us to make purchases and sales of the Securities from or to
any Selected Dealer or Underwriter at the offering price or prices less all
or any part of the concession set forth in the Invitation. With our consent,
any Underwriter may make purchases or sales of the Securities from or to any
Selected Dealer or Underwriter at the offering price or prices less all or
any part of the concession. Upon our request, you will notify us of the
identity of any dealer to whom you allow such a discount and any Underwriter
or Selected Dealer from whom you received such a discount. The concession and
reallowance may be allowed only as consideration for services rendered in
distribution to dealers who are actually engaged in the investment banking or
securities business, who execute the written agreement prescribed by Section
24(c) of Article III of the NASD's Rules of Fair Practice and who are either
members in good standing of the NASD, or foreign banks, dealers or
institutions not eligible for membership in the NASD who agree to make no
sales within the United States, its territories or possessions or to persons
who are citizens thereof or residents therein, and in making other sales to
comply with the NASD's interpretation with respect to free-riding and
withholding. In connection with any purchase or sale of any of the Securities
wherein a selling concession, discount or other allowance is received or
granted, (1) each Underwriter (including you and the Representative) agrees
to comply with the provisions of Section 24 of Article III of the NASD's
Rules of Fair Practice and (2) in the case of Underwriters that are non-NASD
member brokers or dealers in a foreign country, each such Underwriter also
agrees (a) to comply, as though such Underwriter were an NASD member, with
the provisions of Sections 8 and 36 thereof and (b) to comply with Section 25
thereof as that section applies to non-NASD member brokers or dealers in a
foreign country.
We will notify each Underwriter promptly upon the release of the
Securities for offering as to the amount of Securities reserved for sale to
Selected Dealers and retail purchasers (including, in the case of a Delayed
Delivery Offering, institutional investors who shall enter into Delayed
Delivery Contracts). Securities not so reserved may be sold by each
Underwriter for its own account, except that from time to time we may, in our
discretion, add to the Securities reserved for sale to Selected Dealers and
retail purchasers (including institutional investors, as aforesaid) any
Securities retained by an Underwriter remaining unsold. You agree to notify
us from time to time upon request of the amount of your Securities retained
by you for direct sale remaining unsold and, upon our request, to deliver to
us for your account, or sell to us for the account of one or more of the
Underwriters, such amount of unsold securities as we may designate at the
public offering price less an amount determined by us not in excess of the
concession to Selected Dealers. We may also repurchase Securities from all
Underwriters or Selected Dealers, for the account of one or more of the
Underwriters, at prices determined by us not in excess of the public offering
price less the concession to Selected Dealers. If all the Securities reserved
for offering to Selected Dealers and retail purchasers are not promptly sold
by us, any Underwriter may from time to time, with our consent, obtain a
release of all or any Securities of such Underwriter then remaining unsold,
and Securities so released shall thereafter be deemed not to have been
reserved. Securities of any Underwriter so reserved which remain unsold or,
if sold, have not been paid for at any time prior to the time that the terms
of this Agreement cease to apply to an Offering may, in our discretion or
upon the request of such Underwriter, be delivered to such Underwriter for
carrying purposes or for sale by such Underwriter, but such Securities shall
remain subject to disposition by us until delivered for sale by such
Underwriter or the time that the terms of this Agreement cease to apply to an
Offering. To the extent Securities are so delivered for sale by such
Underwriter, the amount of Securities then reserved for the account of such
Underwriter shall be correspondingly reduced. Securities delivered for
carrying purposes only shall be returned to us upon demand. If the aggregate
amount of Securities so reserved at the time that the terms
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of this Agreement cease to apply to an Offering does not exceed 20% of the
aggregate amount of Securities, we may, in our discretion, sell for the
accounts of the several Underwriters any such Securities so reserved, at such
prices, on such terms and in such manner as we may determine.
The Underwriters and Selected Dealers may, with our consent, purchase
Securities from and sell Securities to each other at the public offering
price less a concession not in excess of the concession to Selected Dealers.
In the case of a Delayed Delivery Offering, you authorize us to make all
arrangements for the solicitation of offers to purchase Securities from the
issuer pursuant to Delayed Delivery Contracts and you agree that all such
arrangements will be made only through us (directly or through Underwriters
or Selected Dealers). To the extent that we, in our sole discretion, shall
determine, Contract Securities which have been directed by institutional
investors to particular Underwriters or which were contracted for pursuant to
arrangements made by particular Underwriters through us shall be allocated to
such Underwriters and all other Contract Securities shall be allocated to the
accounts of the respective Underwriters as nearly as practicable in their
respective underwriting proportions; provided, however, that the principal
amount of Contract Securities so allocated to any Underwriter shall not
exceed such Underwriter's Initial Commitment, and any Contract Securities
which would otherwise have been allocated to such Underwriter ("Excess
Contract Securities") shall be allocated among the other Underwriters in such
manner as we shall, in our sole discretion, determine to be equitable and
practicable. We may pay a commission to any Selected Dealer for services
rendered in respect of Contract Securities.
7. COMPENSATION TO REPRESENTATIVE. As compensation for our services, you
agree to pay to us, and authorize us to charge your account with, an amount
not in excess of such management fee as we shall advise you in the
Invitation. If there is more than one representative, such compensation shall
be divided among such representatives in such proportions as they may
determine.
8. PAYMENT AND DELIVERY. At or before such time, on such dates and at such
places as we may specify in the Invitation, you agree to deliver to us a
certified or official bank check payable in New York Clearing House (next
day) funds to our order (unless otherwise specified in the Invitation) in an
amount equal to the initial offering price or prices plus accrued interest,
amortization of original issue discount or dividends, if any, required to be
paid to the seller or sellers pursuant to the Underwriting Agreement less the
concession to the Selected Dealers in respect of either (i) that portion of
your Securities which has been retained by or released to you for direct sale
or (ii) the Securities to be purchased by you, as we shall advise. You
authorize us to make payment for your Securities against delivery to us of
your Securities (which, in the case of Securities which are debt obligations,
may be in temporary form), and the difference between such purchase price of
the Securities and the amount of your funds delivered to us therefor shall be
credited to your account. You authorize us to accept delivery of your
Securities in definitive form upon exchange of any Securities in temporary
form received by us on the Closing Date pursuant to the preceding sentence.
You authorize us to hold and deliver against payment any of your
Securities which have been sold or reserved for sale to Selected Dealers or
retail purchasers. Any of your Securities not sold or reserved by us as
aforesaid will be available for delivery to you at your office as soon as
practicable after such Securities have been delivered to us.
In the case of a Delayed Delivery Offering, the commission payable by the
issuer in respect of Contract Securities allocated to you pursuant to the
last paragraph of Section 6 hereof shall be credited (after deducting any
commissions paid by us to any Selected Dealer for services rendered in
respect of such Contract Securities) to your account, and in addition you
shall be treated as a Selected Dealer in respect of your Excess Contract
Securities, if any.
At such time as this Agreement shall cease to apply to an Offering, or
prior thereto at our discretion, we will deliver to you any of your
Securities reserved by us for sale to Selected Dealers or retail purchasers
but not sold and paid for, against your payment of an amount equal to the
initial offering price or prices of such Securities plus accrued interest,
amortization of original issue discount or dividends, if any, as you
determine, less the concession to the Selected Dealers in respect thereof.
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If the Underwriting Agreement for an Offering provides for the payment of
a commission or other compensation to the Underwriters, you authorize us to
receive such commission or other compensation for your account.
Notwithstanding the foregoing provisions of this Section 8, if
transactions in the Securities can be settled through the facilities of The
Depository Trust Company, payment for and delivery of your Securities will be
made through such facilities, if you are a member, unless you have otherwise
notified us within two days after the date of the Underwriting Agreement, or,
if you are not a member, settlement may be made through a correspondent who
is a member pursuant to instructions you may send to us on or before the
third business day preceding the Closing Date.
9. AUTHORITY TO BORROW. You authorize us (to the extent permitted by law)
to arrange loans for your account and to execute and deliver any notes or
other instruments in connection therewith, and to pledge as security therefor
all or any part of your Securities or of any securities purchased for the
accounts of the several Underwriters pursuant to Section 10 hereof, as we may
deem necessary or advisable to carry out the purchase, carrying and
distribution of the Securities, and to advance our own funds, charging
current interest rates. The obligations of the Underwriters under loans
arranged on their behalf shall be several in proportion to their respective
participations in such loans, and not joint. Any lender is authorized to
accept our instructions as to the disposition of the proceeds of any such
loans. We shall credit each Underwriter with the proceeds of any loans made
for its account.
10. OVER-ALLOTMENT; STABILIZATION. You authorize us, in our discretion,
for the account of each Underwriter, prior to such time as this Agreement
shall cease to be applicable to an Offering, and for such longer period as
may be necessary to cover any short position incurred for the accounts of the
several Underwriters pursuant to this Agreement, (a) to over-allot in
arranging for sales of Securities to Selected Dealers and others and, if
necessary, to purchase Securities at such prices as we may determine for the
purpose of covering such over-allotments, and (b) for the purpose of
stabilizing the market in the Securities, to make purchases and sales of
Securities or of any other securities of the issuer or any guarantor as we
may advise by the Invitation or otherwise, on the open market or otherwise,
for long or short account, on a when-issued basis or otherwise, at such
prices, in such amounts and in such manner as we may determine; provided,
however, that at no time shall your net commitment, either for long or short
account (your net commitment in the case of short account being computed on
the assumption that all Over-Allotment Securities, if any, are acquired),
under this Section 10 exceed 15% (or such other amount as may be specified in
the Invitation) of the aggregate initial offering price of your Initial
Commitment, except that such percentage may be increased with the approval of
a majority in interest of the Underwriters. Such purchases, sales and
over-allotments shall be made for the respective accounts of the several
Underwriters as nearly as practicable to their respective underwriting
proportions. It is understood that, in connection with any particular
Offering, we may make purchases of the securities of the issuer or securities
of any guarantor of the Securities for stabilizing purposes before the time
you become one of the Underwriters, and you agree that any such securities so
purchased shall be treated as having been purchased for the respective
accounts of the Underwriters pursuant to the foregoing authorization. You
agree to take up on demand at cost any securities so purchased for your
account and deliver on demand any securities so sold or over-allotted for
your account. You authorize us to sell for the account of the Underwriters
any securities purchased pursuant to this Section 10, upon such terms as we
may deem advisable, and any Underwriter, including us, may purchase such
securities. You authorize us to charge the respective accounts of the
Underwriters with broker's commissions or dealer's markups on purchases and
sales effected by us. If we effect any stabilizing purchase pursuant to this
Section, we will promptly notify you of the date and time of the first
stabilizing purchase and the date and time when stabilizing was terminated.
You agree to transmit to us for filing with the Commission any report
required to be made by you pursuant to the Exchange Act as a result of any
transactions in connection with the Offering.
If pursuant to the provisions of the preceding paragraph and prior to such
time as the terms of this Agreement shall cease to be applicable to an
Offering (or prior to such earlier date as we may have determined) we
purchase or contract to purchase for the account of any Underwriter in the
open market or otherwise any Securities which were retained by, or released
to, you for direct sale, or any Securities
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which may have been issued in exchange for such Securities, you authorize us
either to charge your account with an amount equal to the concession to
Selected Dealers with respect thereto, which amount shall be credited against
the cost of such Securities, or to require you to repurchase such Securities
at a price equal to the total cost of such purchase, including accrued
interest, amortization of original issue discount or dividends, transfer
taxes and broker's commissions or dealer's markups, if any. In lieu of such
action, we may, in our discretion, sell for your account the Securities so
purchased and debit or credit your account for the loss or profit resulting
from such sale.
11. OPEN MARKET TRANSACTIONS. Each Underwriter represents and agrees that
in connection with each Offering to which this Agreement applies, it will
comply with the provisions of Rule 10b-6 under the Exchange Act with regard,
among other things, to trading by underwriters. By your Acceptance, you
represent that you have not, since you became a "prospective underwriter" of
the Securities (as defined in Rule 10b-6 under the Exchange Act),
participated in any transaction prohibited by said Rule and you will comply
with the provisions of said Rule applicable to the Offering. You agree that,
in addition to the Securities, other securities specified in the Invitation
shall be considered securities of the same class and series as the Securities
to which this Agreement relates unless we shall otherwise determine and so
inform you.
12. ALLOCATION AND PAYMENT OF EXPENSES. All expenses of a general nature
incurred by us as Representative, in connection with the purchase, carrying,
marketing and sale of the Securities and, in the case of a Delayed Delivery
Offering, in connection with the solicitation of offers to purchase
Securities pursuant to Delayed Delivery Contracts, shall be borne by the
Underwriters in accordance with their respective underwriting proportions.
You authorize us to charge your account with any transfer taxes on sales of
Securities made for your account and with your share, based on the ratio
which your Initial Commitment bears to the aggregate amount of Securities
(exclusive of any Over-Allotment Securities) being offered ("your
underwriting proportion"), of the aforesaid expenses.
As promptly as possible after such time as this Agreement shall no longer
be applicable to an Offering, the accounts arising pursuant hereto shall be
settled and paid, but we may reserve such amount as we deem advisable for
additional expenses. Our ascertainment of all expenses and the apportionment
thereof shall be conclusive. We may at any time make partial distributions of
credit balances or call for payment of debit balances. Any of your funds in
our hands may be held with our general funds without accountability for
interest. Notwithstanding any settlement or settlements hereunder, you will
remain liable for any transfer taxes on transfers for your account and for
your underwriting proportion of all expenses and liabilities which may be
incurred by or for the accounts of the Underwriters, including any expenses
and liabilities referred to in Sections 14 and 15 hereof, which shall be
determined as provided in this Section 12.
13. TERMINATION; AMENDMENTS. (a) This Agreement may be terminated by
either party hereto upon five business days' written notice to the other
party; provided, however, that with respect to any Offering, if we receive
any such notice from you after your Acceptance, this Agreement shall remain
in full force and effect as to such Offering and shall terminate with respect
to such Offering and all previous Offerings in accordance with the provisions
of paragraph (b) of this Section.
(b) Unless this Agreement or any provision hereof is earlier terminated by
us and except for provisions herein that contemplate obligations surviving
the termination of the effectiveness hereof, the terms and conditions of this
Agreement will cease to be applicable to your participation in an Offering at
the close of business on the 30th day after the date the Securities are first
released for public offering, but in our discretion may be extended by us by
written communication for a further period or periods not exceeding an
aggregate of 30 days; provided, however, that the provisions of Sections 12,
14 and 15 hereof shall survive the termination of the effectiveness of this
Agreement with respect to any Offering.
14. LIABILITY OF REPRESENTATIVE AND UNDERWRITERS. Neither as
Representative nor individually shall we be under any liability whatsoever to
any other Underwriter nor shall we be under any liability in respect of any
matters connected herewith or actions taken by us pursuant hereto, except for
the obligations expressly assumed by us in this Agreement. We do not waive
any rights that we may have under the Securities Act or the Exchange Act or
the rules and regulations promulgated thereunder.
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Nothing herein contained shall constitute the several Underwriters an
association, or partners with you or with each other, or, except as herein
expressly provided, render any Underwriter liable for the obligation of any
other Underwriter. The rights, obligations and liabilities of each of such
Underwriters are several, in accordance with their respective obligations,
and not joint. Notwithstanding any settlement of accounts under this
Agreement, you agree to pay your underwriting proportion of the amount of any
claim, demand or liability which may be asserted against and discharged by
the Underwriters, or any of them, based on the claim that the Underwriters
constitute an association, unincorporated business or other entity, and also
to pay your underwriting proportion of expenses approved by us incurred by
the Underwriters, or any of them, in contesting any such claims, demands or
liabilities.
Unless you promptly notify us in writing otherwise, your name as it should
appear in the Prospectus or offering circular and your address are as set
forth on the signature pages hereof.
15. INDEMNIFICATION AND FUTURE CLAIMS. (a) You agree to indemnify and hold
harmless us and each other Underwriter, and each person who controls us and
any such other Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act or the Exchange Act, or other Federal
or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
a material fact contained in any preliminary or final prospectus (in the case
of a Registered Offering) or any preliminary or final offering circular (in
the case of an Offering other than a Registered Offering), or are contained
in any other selling or advertising material approved by us for use by the
Underwriters, or in any amendment thereof or supplement thereto, including,
in each case, any document incorporated by reference, or arise out of or
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and agree to reimburse each such indemnified party for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
but only with reference to written information relating to you furnished to
the issuer by or on your behalf specifically for use in the preparation of
the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which you may otherwise have.
(b) In the event that any claim or claims shall be asserted against us, as
Representative, or otherwise involving the Underwriters generally, relating
to the registration statement or any preliminary prospectus or the final
prospectus (in the case of a Registered Offering) or relating to any
preliminary offering circular or the final offering circular (in the case of
an Offering other than a Registered Offering) as from time to time amended or
supplemented, including in each case, any document incorporated by reference,
you authorize us to make such investigation, to retain such counsel,
including in our discretion separate counsel for any particular Underwriter
or group of Underwriters, and to take such other action as we shall deem
necessary or desirable under the circumstances, including settlement of any
such claim or claims if such course of action shall be recommended by counsel
whom we retain and approved by a majority in interest of the Underwriters.
You agree to pay, on request, your underwriting proportion of any losses,
damages or liabilities, joint or several, paid or incurred by any Underwriter
(including us) to any person other than an Underwriter arising out of or
based upon such claims, whether such losses, damages or liabilities shall be
the result of a judgment or settlement, and you agree to pay your
underwriting proportion of any legal or other expenses incurred by us or with
our consent in investigating or defending any such claim. In determining the
amount of your obligation under this paragraph, we may make appropriate
adjustment for any amounts received by you in respect of such claim from the
issuer, any other seller or any guarantor of the Securities pursuant to the
Underwriting Agreement or otherwise. There shall be credited against any
amount paid or payable by you pursuant to this paragraph any loss, damage,
liability or expense which is incurred by you subsequent to any payment by
you pursuant to this paragraph, and appropriate provision shall be made to
effect such credit, by refund or otherwise. In determining amounts payable
pursuant to this paragraph, any loss, damage, liability or expense incurred
by any person controlling any Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act which has been incurred
by reason of such control relationship shall be
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deemed to have been incurred by such Underwriter. You may elect to retain at
your own expense your own counsel. Whenever we receive notice of the
assertion of any claim to which the provisions of this paragraph would be
applicable, we will give prompt notice thereof to each Underwriter. We will
also furnish each Underwriter with periodic reports, at such times as we deem
appropriate, as to the status of such claim and the action taken by us in
connection therewith.
16. TITLE TO SECURITIES. The Securities purchased by, or on behalf of, the
respective Underwriters shall remain the property of such Underwriters until
sold, and title to any such Securities shall not in any event pass to the
Representative by virtue of any of the provisions of this Agreement.
17. LEGAL QUALIFICATIONS. It is understood that we assume no
responsibility with respect to the right of any Underwriter or other person
to offer or to sell Securities in any jurisdiction, notwithstanding any
information which we may furnish as to the jurisdictions under the securities
laws of which it is believed the Securities may be sold. You authorize us to
file with the Department of State of the State of New York a Further State
Notice with respect to the Securities, if necessary.
If you propose to offer Securities outside the United States, its
territories or its possessions, you will take, at your own expense, such
action, if any, as may be necessary to comply with the laws of each foreign
jurisdiction in which you propose to offer Securities.
If we inform you that the NASD views the Securities as interests in a
direct participation program, you agree that you will, to the extent
required, offer the Securities in compliance with the NASD's interpretation
of Appendix F of its Rules of Fair Practice ("Appendix F").
18. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
19. MISCELLANEOUS. Any notice from us to you shall be deemed to have been
duly given if mailed, telephoned or telegraphed to you at the address set
forth at the end of this Agreement, or at such other address as you shall
have advised us in writing. Any notice from you to us shall be deemed to have
been duly given if mailed, telephoned, or telegraphed to us at Two World
Trade Center, 16th Floor, New York, New York 10048. Attention: Syndicate
Department.
You represent that you are actually engaged in the investment banking or
securities business and that you are either a member in good standing of the
NASD or, if you are not such a member, you are a foreign bank, dealer, or
institution not eligible for membership in the NASD which agrees to make no
sales within the United States, its territories, or possessions or to persons
who are citizens thereof or residents therein (except that you may
participate in group sales under Section 6 hereof) and in making other sales
to comply with the NASD's interpretation with respect to free-riding and
withholding.
In connection with any Registered Offering of Securities of an issuer that
was not, immediately prior to the filing of the registration statement with
respect to the Securities, subject to the requirements of Section 13(a) or
15(d) of the Exchange Act, you agree that you will not make sales to any
account over which you exercise discretionary authority.
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Please confirm by signing and returning to us the enclosed copy of this
Agreement that your Acceptance of an Invitation with respect to an Offering
shall constitute (1) acceptance of and agreement to the terms and conditions
of this Agreement (as supplemented and amended pursuant to Section 13
hereof), together with and subject to any supplementary terms and conditions
contained in the Invitation and any other written communication from us in
connection with such Offering, all of which shall constitute a binding
agreement between you and us as Representative of the Underwriters and among
you and the Underwriters, (2) confirmation that your representations and
warranties set forth in Sections 2, 3, and 19 are true and correct at that
time, (3) confirmation that your agreements set forth in Sections 2, 3, 4, 5,
6, 7, 8, 10, 11, 14, 15 and 19 hereof have been and will be performed by you
to the extent and at the times required thereby, and (4) acknowledgment of
familiarity with the offering documents, as set forth in Section 3 hereof,
with respect to such Offering.
Very truly yours,
DEAN WITTER REYNOLDS INC.
By:
Hayter W. Haynes
Senior Vice President
CONFIRMED: as of the date first
written above, .............. , 19 .
......................................
(Name of Firm)
By: ..................................
Title: ...............................
(If signer is not an officer or partner,
please attach evidence of authorization.)
Address: .............................
......................................
......................................
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EXHIBIT A
Unless otherwise defined, capitalized terms used herein have the meanings
assigned thereto in the Master Agreement Among Underwriters dated March 2,
1987, between Dean Witter Reynolds Inc. ("DWR") and you (such agreement, as
amended or supplemented from time to time, being hereinafter called the
"Agreement"). Reference will be made to this Master Underwriters'
Questionnaire in each Invitation described in Section 1 of the Agreement
received by you from DWR in connection with offerings of securities in which
DWR is acting as representative or the manager of the representatives of the
several Underwriters. Your Acceptance of any such Invitation should respond
to this Master Underwriters' Questionnaire.
(1) Neither you nor any of your directors, officers or partners has a
material relationship (as "material" is defined in Regulation C under the
Securities Act) with the issuer, its parent (if any), any other seller of
the Securities or any guarantor of the Securities;
(2) Neither you nor any of your directors, officers or partners, separately
or as a "group" (as that term is defined in Section 13(d)(3) of the
Exchange Act), owns of record or beneficially more than 5% of any class of
voting securities of the issuer, its parent (if any), any other seller of
the Securities or any guarantor of the Securities nor does it have any
knowledge that more than 5% of any class of voting securities of the
issuer is held or to be held subject to any voting trust or other similar
agreement;
(3) You have not prepared any report or memorandum for external use in
connection with the proposed offering;
(4) If the Securities are to be issued under an indenture qualified under the
Trust Indenture Act of 1939:
(a) neither you nor any of your directors, officers or partners is an
affiliate (as defined in Rule 0-2(b) under the Trust Indenture Act of
1939) of the Trustee, or its parent (if any) and neither the Trustee nor
its parent (if any) nor any of their directors or executive officers is a
director, officer, partner, employee, appointee or representative of yours
as those terms are defined in the 1939 Act or in the relevant instructions
to Form T-1 thereunder;
(b) neither you nor any of your directors, partners or executive officers,
separately or as a group, owns beneficially more than 1% of any class of
voting securities of the Trustee or its parent, if any; and
(c) if you are a corporation, you do not have outstanding nor have you
assumed or guaranteed any securities otherwise than in your corporate
name, and neither the Trustee nor its parent (if any) is a holder of such
securities.
(5) Other than as stated or to be stated in the Agreement, the Dean Witter
Reynolds Inc. Master Selected Dealer Agreement, or the Underwriting
Agreement relating to the proposed Offering, you do not know of or have
reason to believe that (a) there are any discounts or commissions to be
allowed or paid to underwriters or any other items that would be deemed by
the NASD to constitute underwriting compensation for purposes of the
NASD's Rules of Fair Practice, (b) there are any discounts or commissions
to be allowed or paid to dealers, including all cash, securities,
contracts or other considerations to be received by any dealer in
connection with the sale of the Securities, (c) there is an intention to
over-allot or (d) the price of any security may be stabilized to
facilitate the offering of the Securities.
(6) In the case of a Registered Offering where the Registration Statement is
on Form S-1, you have not prepared any engineering, management or similar
reports or memoranda relating to broad aspects of the business, operations
or products of the issuer, its parent (if any) or any guarantor within the
past 12 months (except for reports solely comprised of recommendations to
buy, sell or hold the securities of the issuer, its parent (if any) or any
guarantor, unless such recommendations have changed within the past six
months). If any such report or memorandum has been prepared, furnish to
DWR (a) three copies thereof and (b) a statement as to the actual or
proposed use, identifying (i) each class of persons (institutional mailing
lists, retail clients, etc.) who have received or will receive the report
or memorandum, (ii) the number of copies distributed to each such class
and (iii) the period of distribution.
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(7) If the issuer is a public utility, you are not a "holding company" or a
"subsidiary company" or an "affiliate" of a "holding company" or of a
"public utility company", each as defined in the Public Utility Holding
Company Act of 1935.
(8) Neither you nor any of your directors, officers, partners or "persons
associated with" you (as defined in the By-Laws of the NASD) nor, to your
knowledge, any "related person" (defined by the NASD to include counsel,
financial consultants and advisors, finders, members of the selling or
distribution group and any other persons associated with or related to
any of the foregoing) nor any other broker-dealer (a) within the last 18
months have purchased in private transactions, or intend before, at or
within six months after the commencement of the public offering of the
Securities, to purchase in private transactions, any securities of the
issuer or any subsidiary thereof, or (2) within the last 12 months had
any dealings with the issuer, any selling security holder or any
subsidiary or controlling person thereof (other than relating to the
proposed Underwriting Agreement) as to which documents or information are
required to be filed with the NASD pursuant to its Statement of Policy
Concerning Venture Capital and Other Investments by Broker/Dealers Prior
to Public Offerings or its Interpretation with Respect to Review of
Corporate Financing.
(9) You may, in accordance with and pursuant to the financial responsibility
requirements of Rule 15c3-1 under the Exchange Act, agree to purchase the
amount of Securities to be purchased by you.
(10) If the issuer of the Securities has not had a registration statement
effective under the Securities Act and does not intend to register any
securities under Section 12 of the Exchange Act, you do not intend to
confirm sales of the Securities to any accounts over which you exercise
discretionary authority.
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EXHIBIT 8(b)
Proof of July 29, 1994
INTERCAPITAL MANAGED MUNICIPAL TRUST
7,000,000 SHARES OF BENEFICIAL INTEREST
(PAR VALUE $.01 PER SHARE)
UNDERWRITING AGREEMENT
September , 1994
DEAN WITTER DISTRIBUTORS INC.
As Representative of the several Underwriters
Two World Trade Center
New York, New York 10048
Dear Sirs:
1. Introductory. InterCapital Managed Municipal Trust, a Massachusetts
business trust (the "Trust"), proposes to issue and sell, pursuant to the
terms of this Agreement, to the several Underwriters named in Schedule A
hereto (the "Underwriters" which term also shall include any underwriter
substituted as hereinafter provided in Section 11), an aggregate of 7,000,000
Shares of Beneficial Interest of the Trust, par value $.01 per share (the
"Beneficial Shares"), as set forth in Schedule A, except as may be provided
otherwise in the Pricing Agreement, as hereinafter defined. The aggregate of
7,000,000 Beneficial Shares so to be sold by the Trust is herein called the
"Firm Shares". The Trust also proposes to sell severally to the Underwriters,
on a pro rata basis, at the option of the Underwriters, an aggregate of not
more than 1,050,000 additional Beneficial Shares as provided in Section 3 of
this Agreement. The aggregate of 1,050,000 Beneficial Shares so proposed to
be sold is herein called the "Optional Shares". The Firm Shares and the
Optional Shares are collectively referred to herein as the "Shares". Dean
Witter Distributors Inc. is acting as representative of the several
Underwriters and in such capacity is hereinafter referred to as the
"Representative".
Before the purchase and public offering of the Shares by the several
Underwriters, the Trust and the Representative, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form
of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may take
the form of an exchange of any standard form of written telecommunication
between the Trust and the Representative and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Shares
will be governed by this Agreement, as supplemented by the Pricing Agreement.
From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.
2. (a) Representations and Warranties. The Trust and Dean Witter
InterCapital Inc., a Delaware corporation (the "Adviser"), each severally
represents and warrants to, and agrees with, the several Underwriters, as of
the date hereof and as of the date of the Pricing Agreement (such latter date
being hereinafter referred to as the "Representation Date"), that:
(i) A registration statement on Form N-2 (File No. 33-54139) with
respect to the Shares has heretofore been delivered to the Underwriters,
has been carefully prepared by the Trust in conformity with the
requirements of the Securities Act of 1933, as amended (the "1933 Act"),
and the Investment Company Act of 1940, as amended (the "1940 Act"), and a
notification on Form N-8A of the registration of the Trust as an
investment company has been similarly prepared by the Trust under the 1940
Act, and, in the case of both such documents, the published rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the 1933 Act and the 1940 Act, and
have been filed with the Commission under the 1933 Act and the 1940
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Act. One or more amendments to such registration statement, including an
amended preliminary prospectus, copies of which have heretofore been
delivered to the Underwriters, have been so prepared and filed; and the
Trust has so prepared and proposes so to file prior to the effective date
of such registration statement an amendment to such registration statement
including the final form of prospectus. Such registration statement as
amended at the time such registration statement becomes effective and the
prospectus constituting a part thereof (including in each case the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b)
of the Rules and Regulations) are hereinafter referred to as the
"Registration Statement" and the "Prospectus", respectively, except that
if any revised prospectus shall be provided to the Underwriters by the
Trust for use in connection with the offering of the Shares which differs
from the prospectus on file at the Commission at the time the Registration
Statement becomes effective (whether such prospectus is required to be
filed by the Trust pursuant to Rule 497(c) or Rule 497(h) of the Rules and
Regulations), the term "Prospectus" shall refer to such revised prospectus
from and after the time it is first provided to the Underwriters for such
use.
(ii) When the Registration Statement becomes effective and as of the
Representation Date, the Registration Statement and the Prospectus will
conform in all material respects to the requirements of the 1933 Act, the
1940 Act and the Rules and Regulations. At the time the Registration
Statement becomes effective and at the Representation Date, the
Registration Statement will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus,
at the time the Registration Statement becomes effective and as of the
Representation Date (unless the term "Prospectus" refers to a prospectus
which has been provided to the Underwriters by the Trust for use in
connection with the offering of the Shares which differs from the
prospectus on file at the Commission at the time the Registration
Statement becomes effective, in which case at the time it is first
provided to the Underwriters for such use) and at the First Closing Date
and the Option Closing Date referred to in Section 3, will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representations, warranties and agreements
shall not apply to information contained in or omitted from the
Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon, and in conformity with, written information
furnished to the Trust by or on behalf of any Underwriter, directly or
through the Representative, specifically for use in the preparation
thereof.
(iii) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, of the Trust, or in the earnings, business affairs
or business prospects of the Trust, whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into by
the Trust which are material to the Trust other than those in the ordinary
course of business, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Trust on any class of its capital
shares.
(iv) The statement of assets and liabilities, together with the
related notes, included in the Registration Statement presents fairly the
financial position of the Trust as at the date indicated and said
statement has been prepared in conformity with generally accepted
accounting principles.
(v) Price Waterhouse, who have expressed their opinions on the
statement of assets and liabilities included in the Registration
Statement, are independent public accountants as required by the 1933 Act
and the Rules and Regulations.
(vi) The Trust has been duly organized and is validly existing as a
voluntary association (commonly referred to as a business trust) in good
standing under the laws of The Commonwealth of Massachusetts; the
Declaration of Trust of the Trust pursuant to which the Trust was
established, confers on the Trustees named therein, and their successors
in trust, power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus; the Trust is duly qualified to transact business and is in
good standing in each jurisdiction in which such qualification is
required; and the Trust has no subsidiaries.
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(vii) The Trust is registered with the Commission under the 1940 Act
as a closed-end diversified management investment company.
(viii) The authorized, issued and outstanding capital shares of the
Trust are as set forth in the Prospectus under the caption "Description of
Shares"; the Shares have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by
the Trust pursuant to this Agreement against payment of the consideration
set forth in the Pricing Agreement, will be validly issued and fully paid
and non-assessable; the Shares conform in all material respects to all
statements relating thereto contained in the Prospectus; and the issuance
of the Shares to be purchased by the Underwriters is not subject to
preemptive rights.
(ix) The Trust is not in violation of its Declaration of Trust or its
by-laws (the "By-laws") or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it or its properties
may be bound; and the execution and delivery of this Agreement and the
Pricing Agreement and the Investment Management Agreement and the
Custodian Agreement referred to in the Registration Statement (as used
herein, the "Management Agreement" and the "Custodian Agreement",
respectively) and the consummation of the transactions contemplated herein
and therein have been duly authorized by all necessary Trust action and
will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Trust pursuant to, any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Trust is a party or by which it may be bound or to
which any of the property or assets of the Trust is subject, nor will such
action result in any violation of the provisions of the Declaration of
Trust or By-laws or, to the best of its knowledge, any law, administrative
regulation or administrative or court decree; and no consent, approval,
authorization or order of any court or governmental authority or agency is
required for the consummation by the Trust of the transactions
contemplated by this Agreement, the Pricing Agreement, the Management
Agreement or the Custodian Agreement, except such as has been obtained
under the 1940 Act or as may be required under the 1933 Act, or state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(x) The Trust owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease or own, as the case may be, and to
operate its properties and to carry on its businesses as contemplated in
the Prospectus.
(xi) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Trust, threatened against or affecting the Trust, which
might result in any material adverse change in the condition, financial or
otherwise, business affairs or business prospects of the Trust, or might
materially and adversely affect the properties or assets of the Trust; and
there are no material contracts or documents of the Trust which are
required to be filed as exhibits to the Registration Statement by the 1933
Act, the 1940 Act or by the Rules and Regulations which have not been so
filed.
(xii) The Trust owns or possesses, or can acquire on reasonable terms,
by license or otherwise, adequate trademarks, service marks and trade
names necessary to conduct the business now operated by it, and the Trust
has not received any notice of infringement of or conflict with asserted
rights of others with respect to any trademarks, service marks or trade
names which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially adversely affect the conduct
of the business, operations, financial condition or income of the Trust.
(xiii) Any advertisement or other marketing materials approved by the
Trust or the Adviser for use in the public offering of the Shares pursuant
to Rule 482 under the Rules and Regulations (the "Omitting Prospectus")
complies with the requirements of such Rule 482.
(xiv) Any advertisement or other marketing materials approved by the
Trust or the Adviser for use by the Underwriters and other securities
firms in the public offering of the Shares do 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 not
misleading.
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(xv) The Shares have been approved for listing on the New York Stock
Exchange upon notice of issuance.
(b) The Adviser represents and warrants to each Underwriter as of the date
hereof and as of the Representation Date, as follows:
(i) The Adviser has been duly incorporated and is validly existing and
in good standing as a corporation under the laws of the State of Delaware
with corporate power and authority to conduct its business as described in
the Prospectus.
(ii) The Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and is
not prohibited by the Advisers Act or the 1940 Act, or the rules and
regulations under such acts, from acting under the Management Agreement
for the Trust as contemplated by the Prospectus.
(iii) The description of the Adviser in the Prospectus is true and
correct and does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading.
(iv) This Agreement has been duly authorized, executed and delivered
by the Adviser; the Management Agreement has been duly authorized,
executed and delivered by the Adviser and constitutes a valid and binding
obligation of the Adviser, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization or
other laws relating to or affecting creditors' rights and to general
equity principles; and neither the execution and delivery of this
Agreement or the Advisory Agreement nor the performance by the Adviser of
its respective obligations hereunder and thereunder, as the case may be,
will conflict with, or result in a breach of, any of the terms and
provisions of, or constitute, with or without giving notice or lapse of
time or both, a default under, any agreement or instrument to which the
Adviser is a party or by which it is bound, or any law, order, rule or
regulation applicable to it of any jurisdiction, court, federal or state
regulatory body, administrative agency or other governmental body, stock
exchange or securities association having jurisdiction over the Adviser or
its properties or operations.
(v) The Adviser has the financial resources available to it necessary
for the performance of its services and obligations as contemplated in the
Registration Statement and the Prospectus.
(c) Any certificate signed by any officer of the Trust or the Adviser and
delivered to the Representative or to counsel for the Underwriters shall be
deemed a representation and warranty by the Trust or the Adviser, as the case
may be, to each Underwriter as to the matters covered thereby.
3. Purchase by, and Sale and Delivery to, Underwriters; Closing Date. On
the basis of the representations, warranties, covenants and agreements herein
contained, and subject to the terms and conditions herein set forth, the
Trust agrees to sell to the Underwriters the Firm Shares, and subject to the
terms and conditions herein set forth, the Underwriters agree, severally and
not jointly, to purchase from the Trust at the price per share set forth in
the Pricing Agreement, the number of Firm Shares set opposite their name in
Schedule A (except as otherwise provided in the Pricing Agreement), subject
to adjustment in accordance with Section 11 hereof.
If the Trust has elected not to rely upon Rule 430A under the Rules and
Regulations, the initial public offering price and the purchase price per
share to be paid by the several Underwriters for the Firm Shares each have
been determined and set forth in the Pricing Agreement, dated the date
hereof, and an amendment to the Registration Statement and the Prospectus
will be filed before the Registration Statement becomes effective.
If the Trust has elected to rely upon Rule 430A under the Rules and
Regulations, the purchase price per share to be paid by the several
Underwriters for the Firm Shares shall be an amount equal to the initial
public offering price, less an amount per share to be determined by agreement
between the Representative and the Trust. The initial public offering price
and the purchase price, when so determined, shall be set forth in the Pricing
Agreement. In the event that such prices have not been agreed upon and the
Pricing
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Agreement has not been executed and delivered by all parties thereto by the
close of business on the fourth business day following the date of this
Agreement, this Agreement shall terminate forthwith, without liability of any
party to any other party, unless otherwise agreed to by the Trust and the
Representative.
The Trust will deliver the Firm Shares to the Representative for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representative may direct by notice in writing to the Trust given at or prior
to 12:00 Noon, New York Time, on the second full business day preceding the
Closing Date or, if no such direction is received, in the names of the
respective Underwriters), against payment of the purchase price therefor by
check or checks in New York Clearing House or similar next day funds, payable
to the order of the Trust, all at the offices of Brown & Wood, One World
Trade Center, New York, New York 10048. The time and date of delivery and
closing shall be at 10:00 A.M., on the fifth full business day after the
Registration Statement becomes effective (or, if the Trust has elected to
rely upon Rule 430A, the fifth full business day after execution of the
Pricing Agreement); provided, however, that such date and time may be
accelerated or extended by agreement between the Trust and the Representative
or postponed pursuant to the provisions of Section 11 hereof. The time and
date of such payment and delivery are herein referred to as the "First
Closing Date". The Trust shall make the certificates for the Shares available
to the Representative for examination on behalf of the Underwriters not later
than 10:00 A.M., New York Time, on the business day preceding the Closing
Date at the offices of Dean Witter Trust Company in New York, New York.
In addition, for the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Shares as contemplated by the
Prospectus, the Trust hereby grants the Underwriters an option to purchase,
severally and not jointly, up to 1,050,000 shares in the aggregate of the
Optional Shares. The purchase price per share to be paid for the Optional
Shares shall be the same price per share as for the Firm Shares. The option
granted hereby may be exercised as to all or any part of the Optional Shares
at any time not more than 45 days subsequent to the effective date of this
Agreement (or if the Trust has elected to rely on Rule 430A, not more than 45
days subsequent to the date of the Pricing Agreement). No Optional Shares
shall be sold and delivered unless the Firm Shares previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional
Shares or any portion thereof may be surrendered and terminated at any time
upon notice by the Representative to the Trust.
The option granted hereby may be exercised by the Representative on behalf
of the Underwriters by giving written notice to the Trust setting forth the
number of Optional Shares to be purchased by them and the date and time for
delivery of and payment for the Optional Shares. Such date and time for
delivery of and payment for the Optional Shares (which may be the First
Closing Date) is herein called the "Option Closing Date" and shall not be
later than seven full business days after written notice is given. Optional
Shares shall be purchased for the account of each Underwriter in the same
proportion as the number of Firm Shares set forth opposite such Underwriter's
name in Schedule A hereto bears to the total number of Firm Shares (except as
otherwise provided in the Pricing Agreement and subject to adjustment by the
Representative to eliminate odd lots). Upon exercise of the option by the
Representative the Trust agrees to sell to the Underwriters the number of
Optional Shares set forth in the written notice of exercise and the
Underwriters agree, severally and not jointly, subject to the terms and
conditions herein set forth, to purchase such Optional Shares.
The Trust will deliver the Optional Shares to the Representative for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representative may direct by notice in writing to the Trust given at or prior
to 12:00 Noon, New York Time, on the second full business day preceding the
Option Closing Date or, if no such direction is received, in the names of the
respective Underwriters), against payment of the purchase price therefor by
check or checks in New York Clearing House or similar next day funds, payable
to the order of the Trust, all at the offices of Brown & Wood. The Trust
shall make the certificates for the Optional Shares available to the
Representative for examination on behalf of the Underwriters not later than
10:00 A.M., New York Time, on the business day preceding the Option Closing
Date at the offices of Dean Witter Trust Company in New York, New York.
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It is understood that Dean Witter Distributors Inc., individually and not
as Representative of the several Underwriters, may (but shall not be
obligated to) make payment to the Trust on behalf of any Underwriter or
Underwriters, for the Shares to be purchased by such Underwriter or
Underwriters. Any such payment by Dean Witter Distributors Inc. shall not
relieve such Underwriter or Underwriters from any of its or their other
obligations hereunder.
After the Registration Statement becomes effective, the several
Underwriters propose to make an initial public offering of the Shares at the
initial public offering price. The Representative shall promptly advise the
Trust of the making of the initial public offering.
4. Covenants and Agreements of the Trust. The Trust covenants and agrees
with the several Underwriters that:
(a) The Trust will use its best efforts to cause the Registration
Statement to become effective under the 1933 Act, will advise the
Representative promptly as to the time at which the Registration Statement
becomes effective, will, if required, cause the issuance of any orders
exempting the Trust from any provisions of the 1940 Act and will advise
the Representative promptly as to the time at which any such orders are
granted, will advise the Representative promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, and will use its best efforts to prevent the issuance of any such
stop order and to obtain as soon as possible the lifting thereof, if
issued. The Trust will advise the Representative promptly of any request
by the Commission for any amendment of or supplement to the Registration
Statement or the Prospectus or for additional information, and will not at
any time file any amendment to the Registration Statement or supplement to
the Prospectus which shall not previously have been submitted to the
Representative a reasonable time prior to the proposed filings thereof or
to which the Representative shall reasonably object in writing or which is
not in compliance with the 1933 Act, the 1940 Act and the Rules and
Regulations. The Trust will advise the Representative promptly when the
Prospectus has been timely filed pursuant to Rule 497(c) or Rule 497(h) of
the Rules and Regulations, or when the certification in lieu of filing
pursuant to Rule 497(c) has been timely filed pursuant to Rule 497(j) of
the Rules and Regulations, whichever is applicable under the Rules and
Regulations.
(b) The Trust will prepare and file with the Commission, promptly upon
the request of the Representative, any amendments or supplements to the
Registration Statement or the Prospectus (including any revised prospectus
which the Trust proposes for use by the Underwriters in connection with
the offering of the Shares which differs from the prospectus on file at
the Commission at the time the Registration Statement becomes effective,
whether such revised prospectus is required to be filed pursuant to Rule
497(c) or Rule 497(h) of the Rules and Regulations) which in the opinion
of the Representative may be necessary to enable the several Underwriters
to continue the distribution of the Shares and will use its best efforts
to cause the same to become effective as promptly as possible.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Shares is required to be
delivered under the 1933 Act any event relating to or affecting the Trust
occurs as a result of which the Prospectus would include an untrue
statement of a material fact, or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary, at any time
to amend the Prospectus to comply with the 1933 Act, the Trust will
promptly notify the Representative thereof and will prepare an amended or
supplemented prospectus (in form and substance satisfactory to counsel to
the Underwriters) which will correct such statement or omission; and, in
case any Underwriter is required to deliver a prospectus relating to the
Shares nine months or more after the effective date of the Registration
Statement, the Trust upon the request of the Representative and at the
expense of such Underwriter will prepare promptly such prospectus or
prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the 1933 Act.
(d) The Trust will deliver to the Representative, at or before the
First Closing Date, signed copies of the Registration Statement and all
amendments thereto including all financial statements and
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exhibits thereto and will deliver to the Representative such number of
copies of the Registration Statement, including such financial statements
but without exhibits, and of all amendments thereto, as the Representative
may reasonably request. The Trust will deliver or mail to or upon the
order of the Representative on the date of the initial public offering,
and thereafter from time to time during the period when delivery of a
prospectus relating to the Shares is required under the 1933 Act, as many
copies of the Prospectus, in final form or as thereafter amended or
supplemented as the Representative may reasonably request; provided,
however, that the expense of the preparation and delivery of any
prospectus required for use nine months or more after the effective date
of the Registration Statement shall be borne by the Underwriters required
to deliver such prospectus.
(e) The Trust will make generally available to its security holders as
soon as practicable, but in any event not later than 60 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the 1933 Act) which will
be in reasonable detail (but which need not be audited) and which will
comply with Section 11(a) of the 1933 Act, covering a period of at least
twelve months beginning not later than the first day of the Trust's fiscal
quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(f) The Trust will cooperate with the Representative to enable the
Shares to be qualified for sale under the securities laws of such
jurisdictions as the Representative may designate and at the request of
the Representative will make such applications and furnish such
information as may be required of it as the issuer of the Shares for that
purpose; provided, however, that the Trust shall not be required to
qualify to do business or to file a general consent to service of process
in any such jurisdiction. The Trust will, from time to time, prepare and
file such statements and reports as are or may be required of it as the
issuer of the Shares to continue such qualifications in effect for so long
a period as the Representative may reasonably request for the distribution
of the Shares.
(g) The Trust will furnish to its shareholders annual reports
containing financial statements certified by independent public
accountants and, at least semi-annually, reports containing summary
financial information in reasonable detail which may be unaudited. During
the period of five years from the date hereof, the Trust will deliver to
the Representative and, upon request, to each of the other Underwriters,
copies of each annual report of the Trust and each other report furnished
by the Trust to its shareholders; and will deliver to the Representative,
as soon as they are available, copies of any other reports (financial or
other) which the Trust shall publish or otherwise make available to any of
its security holders as such, and as soon as they are available, copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange.
(h) The Trust will use the net proceeds received by it from the sale
of the Shares in the manner specified in the Prospectus under "Use of
Proceeds".
(i) Between the date of this Agreement and the termination of any
trading restrictions or the First Closing Date, whichever is later, the
Trust will not, without the Representative's prior consent, offer or sell,
or enter into any agreement to sell, any equity or equity-related
securities of the Trust other than the Shares.
(j) If, at the time that the Registration Statement becomes effective,
any information shall have been omitted therefrom in reliance upon Rule
430A of the Rules and Regulations, then immediately following the
execution of the Pricing Agreement, the Trust will prepare, and file or
transmit for filing with the Commission in accordance with such Rule 430A
and Rule 497(h) of the Rules and Regulations, copies of an amended
Prospectus, or, if required by such Rule 430A, a post-effective amendment
to the Registration Statement (including an amended prospectus),
containing all information so omitted.
5. Payment of Expenses. The Trust will pay (directly or by reimbursement)
all expenses incident to the performance of its obligations under this
Agreement, including but not limited to all expenses and taxes incident to
delivery of the Shares to the Representative, all expenses incident to the
registration of the Shares under the 1933 Act and the 1940 Act and the
printing of copies of the Registration Statement, each preliminary
prospectus, each Omitting Prospectus, the Prospectus, any amendments or
supplements
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thereto, all expenses incident to the preparation, printing and delivery of
all marketing materials and any audio-visual materials made available to all
Underwriters, all communications to potential investors, the "Blue Sky"
memorandum, this Agreement and the Pricing Agreement and furnishing the same
to the Underwriters and dealers except as otherwise provided in Sections 4(c)
and 4(d), the fees and disbursements of the Trust's counsel and accountants,
all filing and printing fees and expenses (including legal fees and
disbursements of counsel for the Underwriters) incurred in connection with
qualification of the Shares for sale under the laws of such jurisdictions as
the Representative may designate, all fees and expenses paid or incurred in
connection with filings made with the National Association of Securities
Dealers, Inc., the fees and expenses incurred in connection with the listing
of the Shares on the New York Stock Exchange, the costs of preparing Share
certificates, the costs and fees of any registrar or transfer agent and all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
6. Indemnification and Contribution. (a) The Trust and the Adviser,
jointly and severally, agree to indemnify and hold harmless each Underwriter,
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act, against any losses, claims, damages, liabilities
or expenses (including the reasonable cost of investigating and defending
against any claims therefor and counsel fees incurred in connection
therewith), joint or several, as incurred, which may be based upon the 1933
Act, or any other statute or at common law, arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the information
deemed to be part of the Registration Statement pursuant to Rule 430A(b) of
the Rules and Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Omitting Prospectus, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless such statement or omission was made in reliance upon, and
in conformity with, written information furnished to the Trust by any
Underwriter, directly or through the Representative, specifically for use in
the preparation thereof; provided, however, that the Trust or the Adviser
shall not be liable with respect to any claims made against any Underwriter
or any such controlling person under this subsection unless such Underwriter
or controlling person shall have notified the Trust or the Adviser in writing
within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon
such Underwriter or controlling person, but failure to notify the Trust or
the Adviser of any such claim shall not relieve either of them from any
liability which they may have to such Underwriter or controlling person
otherwise than on account of the indemnity agreement contained in this
paragraph. The Trust and the Adviser will be entitled to participate at their
own expense in the defense, or, if they so elect, to assume the defense of
any suit brought to enforce any such liability, but, if the Trust or the
Adviser elects to assume the defense, such defense shall be conducted by
counsel chosen by it or them. In the event the Trust or the Adviser elects to
assume the defense of any such suit and retain such counsel, the Underwriter
or Underwriters or controlling person or persons, defendant or defendants in
the suit, may retain additional counsel but shall bear the fees and expenses
of such counsel unless (i) the Trust or the Adviser shall have specifically
authorized the retaining of such counsel or (ii) the parties to such suit
include such Underwriter or Underwriters or controlling person or persons and
the Trust or the Adviser and such Underwriter or Underwriters or controlling
person or persons have been advised by counsel that one or more legal
defenses may be available to it or them which may not be available to the
Trust or the Adviser, in which case the Trust and the Adviser shall not be
entitled to assume the defense of such suit notwithstanding their obligation
to bear the fees and expenses of such counsel. The Trust and the Adviser
shall not be liable to indemnify any person for any settlement of any such
claim effected without the Trust's and the Adviser's written consent. This
indemnity agreement will be in addition to any liability which the Trust or
the Adviser might otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Trust and the Adviser, their respective trustees and directors, each of the
Trust's officers who signed the Registration Statement and each person, if
any, who controls the Trust or the Adviser within the meaning of Section 15
of the 1933
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Act against any losses, claims, damages, liabilities or expenses (including
the reasonable cost of investigating and defending against any claims
therefor and counsel fees incurred in connection therewith), joint or
several, as incurred, which may be based upon the 1933 Act, or any other
statute or at common law, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto) including the information deemed to be part of the
Registration Statement pursuant to Rule 430A(b) of the Rules and Regulations,
if applicable, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Omitting Prospectus, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but only insofar as
any such statement or omission was made in reliance upon, and in conformity
with, written information furnished to the Trust or the Adviser by such
Underwriter, directly or through the Representative, specifically for use in
the preparation thereof; provided, however, that an Underwriter shall not be
liable with respect to any claims made against the Trust or the Adviser or
any person against whom the action is brought unless the Trust or the Adviser
or such person shall have notified such Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Trust
or the Adviser or such person, but failure to notify such Underwriter of such
claim shall not relieve it from any liability which it may have to the Trust
or the Adviser or such person otherwise than on account of its indemnity
agreement contained in this paragraph. Such Underwriter shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but, if such
Underwriter elects to assume the defense, such defense shall be conducted by
counsel chosen by it. In the event that any Underwriter elects to assume the
defense of any such suit and retain such counsel, the Trust, the Adviser,
said officers, trustees and directors and any other Underwriter or
Underwriters or controlling person or persons, defendant or defendants in the
suit, shall bear the fees and expenses of any additional counsel retained by
them, respectively, unless (i) such Underwriter shall have specifically
authorized the retaining of such counsel or (ii) the parties to such suit
include any indemnified party and such Underwriter, and any such indemnified
party has been advised by counsel that one or more legal defenses may be
available to it which may not be available to such Underwriter, in which case
such Underwriter shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
The Underwriter against whom indemnity may be sought shall not be liable to
indemnify any person for any settlement of any such claim effected without
such Underwriter's consent. This indemnity agreement will be in addition to
any liability which such Underwriter might otherwise have.
(c) In addition to the foregoing indemnification provided for in this
Section 6, the Trust and the Adviser, jointly and severally, also agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act, to
the same extent as the indemnity from the Trust and the Adviser to each
Underwriter contained in paragraph (a) of this Section 6, with respect to any
advertisement or other marketing material prepared by the Trust or the
Adviser for use by the Underwriters and other securities firms in the public
offering of the Shares. If any action or claim shall be brought or asserted
against the Underwriter (or any such controlling person), in respect to which
indemnity may be sought against the Trust or the Adviser pursuant to the
provisions of this paragraph, the Trust and the Adviser shall have the rights
and duties given to the Trust and the Adviser, and the Underwriters and any
such controlling person shall have the rights and duties given to the
Underwriters, by paragraph (a) of this Section 6.
(d) If the indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to herein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof), as incurred, in such proportion as
is appropriate to reflect the relative benefits received by the Trust on the
one hand and the Underwriters on the other from the offering of the Shares.
If, however, the allocation provided by the immediately
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preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified
party, as incurred, in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Trust and the
Adviser on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Trust and the Adviser on the one hand 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 Trust bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault 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 Trust and the Adviser or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Trust, the Adviser, and the
Underwriters agree that it would not be just and equitable if contribution
were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such claim. Notwithstanding the provisions of
this subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute are
several in proportion to their respective underwriting obligations and not
joint.
7. Survival of Indemnities, Representations, Warranties, etc. The
respective indemnities, covenants, agreements, representations, warranties
and other statements of the Trust, the Adviser and the several Underwriters,
as set forth in this Agreement or made by them respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, the Trust or the
Adviser or any of their officers, trustees or directors or any controlling
person, and shall survive delivery of and payment for the Shares.
8. Conditions of Underwriters' Obligations. The respective obligations of
the several Underwriters hereunder shall be subject to the accuracy, at and
(except as otherwise stated herein) as of the date hereof, the Representation
Date, the First Closing Date and the Option Closing Date, of the
representations and warranties made herein by the Trust and the Adviser, to
the accuracy of the statements of the Trust's officers or trustees in any
certificate furnished pursuant to the provisions hereof, to compliance at and
as of such Closing Date by the Trust and the Adviser, with their covenants
and agreements herein contained and other provisions hereof to be satisfied
at or prior to such Closing Date, and to the following additional conditions:
(a) The Registration Statement shall become effective not later than
5:30 P.M., New York Time, on the date hereof or, with the consent of the
Representative, at a later time and date, not later, however, than 5:30
P.M. on the first business day following the date hereof, or at such later
date as may be approved by a majority in interest of the Underwriters, and
at such Closing Date (i) no stop order suspending the effectiveness
thereof shall have been issued and no proceedings for that purpose shall
have been initiated or, to the knowledge of the Trust, the Adviser or the
Representative, threatened by the Commission, and any request for
additional information on the part of the Commission (to be included in
the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representative, and
(ii) there shall not have come to the attention of the Representative any
facts that would cause it to believe that the Prospectus, at the time it
was
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required to be delivered to a purchaser of the Shares, contained any
untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the Trust has
elected to rely upon Rule 430A of the Rules and Regulations, the price of
the Shares and any price related information previously omitted from the
effective Registration Statement pursuant to Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 497(h) of the
Rules and Regulations within the prescribed time period, and before the
First Closing Date the Trust shall have provided evidence satisfactory to
the Representative of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the Rules
and Regulations.
(b) At the time of execution of this Agreement, the Representative
shall have received from Price Waterhouse a letter, dated the date of such
execution, in form and substance previously approved by the
Representative, and to the effect that:
(i)They are independent public accountants with respect to the
Trust within the meaning of the 1933 Act and the 1940 Act and the
Rules and Regulations as they relate to registration statements on
Form N-2.
(ii) In their opinion, the statement of assets and liabilities
examined by them and included in the Registration Statement complies
as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations as they relate to registration statements on Form N-2.
(iii) They have performed specified procedures, not constituting an
audit, including a reading of the latest available interim financial
statements of the Trust, if any, a reading of the minute books of the
Trust, inquiries of officials of the Trust responsible for financial
and accounting matters and such other inquiries and procedures as may
be specified in such letter, and on the basis of such inquiries and
procedures nothing came to their attention that caused them to believe
that at the date of the latest available statement of assets and
liabilities read by such accountants, or at a subsequent specified
date not more than five days prior to the date of such letter, there
was any change in the shares of beneficial interest or net assets of
the Trust as compared with amounts shown on the statement of assets
and liabilities included in the Prospectus.
(c) The Representative shall have received from Price Waterhouse a
letter, dated the First Closing Date, to the effect that such accountants
reaffirm, as of such First Closing Date, and as though made on such First
Closing Date, the statements made in the letter furnished by such
accountants pursuant to paragraph (b) of this Section 8, except that the
specified date will be a date not more than five days prior to the Closing
Date.
(d) The Representative shall have received from Sheldon Curtis, Esq.,
General Counsel for the Trust, an opinion, dated the First Closing Date,
to the effect that:
(i) The Trust has been duly organized and is validly existing as a
business trust in good standing under the laws of The Commonwealth of
Massachusetts.
(ii) The Trust has power and authority to own, lease and operate
its properties and conduct its business as described in the
Registration Statement and the Prospectus.
(iii) The Trust is duly qualified to transact business and is in
good standing in each jurisdiction in which such qualification is
required.
(iv) The Shares have been duly authorized for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued and
delivered by the Trust pursuant to this Agreement against payment of
the consideration set forth in the Pricing Agreement, will be validly
issued and fully paid and non-assessable (except for certain possible
liability of shareholders described in the Prospectus under
"Description of Shares--General"); the issuance of the Shares is not
subject to preemptive rights; and the authorized capital shares of the
Trust conform in all material respects to the description thereof in
the Registration Statement.
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(v) Each of this Agreement and the Pricing Agreement has been duly
authorized, executed and delivered by the Trust and complies with all
applicable provisions of the 1940 Act.
(vi) The Registration Statement is effective under the 1933 Act
and, to the best of such counsel's knowledge and information, no stop
order suspending the effectiveness of the Registration Statement has
been issued under the 1933 Act and no order suspending the Trust's
registration has been issued under Section 8(e) of the 1940 Act, or
proceedings therefor initiated or threatened by the Commission.
(vii) At the time the Registration Statement became effective and
at the Representation Date, the Registration Statement (other than the
statement of assets and liabilities included therein, as to which no
opinion need be rendered) complied as to form in all material respects
with the requirements of the 1933 Act and the 1940 Act and the Rules
and Regulations; and nothing has come to such counsel's attention that
would lead him to believe that the Registration Statement, at the time
it became effective or at the Representation Date, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the Representation
Date (unless the term "Prospectus" refers to the Prospectus which has
been provided to the Underwriters by the Trust for use in connection
with the offering of the Shares which differs from the Prospectus on
file at the Commission at the time the Registration Statement becomes
effective, in which case at the time it is provided to the
Underwriters for such use) or at the First Closing Date, included an
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statement therein, in light of the
circumstances under which they were made, not misleading.
(viii) To the best of such counsel's knowledge and information,
there are no legal or governmental proceedings pending or threatened
against the Trust which are required to be disclosed in the
Registration Statement, other than those disclosed therein.
(ix) To the best of such counsel's knowledge and information, there
are no contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments of the Trust required to be described or
referred to in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to therein or filed as
exhibits thereto, the descriptions thereof or references thereto are
correct, and no default exists in the due performance or observance of
any material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or
other instrument so described, referred to or filed.
(x) No consent, approval, authorization or order of any court or
governmental authority or agency is required in connection with the
sale of the Shares to the Underwriters, except such as has been
obtained under the 1933 Act, the 1940 Act or the Rules and Regulations
or such as may be required under state securities laws; and to the
best of such counsel's knowledge and information, the execution and
delivery of this Agreement, the Pricing Agreement, the Management
Agreement and the Custodian Agreement and the consummation of the
transactions contemplated herein and therein will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Trust pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Trust is
a party or by which it may be bound or to which any of the property or
assets of the Trust is subject, nor will such action result in any
violation of the provisions of the Declaration of Trust, as amended,
or By-Laws of the Trust, or any law, administrative regulation or
administrative or court decree.
(xi) The Management Agreement and the Custodian Agreement each has
been duly authorized and approved by the Trust and complies with all
applicable provisions of the 1940 Act, and each of said agreements has
been duly executed and delivered by the Trust.
(xii) The Trust is registered with the Commission under the 1940
Act as a closed-end diversified management investment company, and all
required action has been taken by the Trust
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under the 1933 Act, the 1940 Act and the Rules and Regulations to make
the public offering and consummate the sale of the Shares pursuant to
this Agreement; the provisions of the Declaration of Trust, as
amended, and By-Laws of the Trust comply as to form in all material
respects with the requirements of the 1940 Act.
(xiii) The information in the Prospectus under the caption
"Taxation", to the extent that it constitutes matters of law or legal
conclusions, has been reviewed by such counsel and is correct.
(e) The representative shall have received from Sheldon Curtis, Esq.,
General Counsel for the Adviser, an opinion dated the First Closing Date
to the effect that:
(i) The Adviser has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of
Delaware with corporate power and authority to conduct its business as
described in the Prospectus.
(ii) The Adviser is duly registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act or the 1940
Act, or the rules and regulations under such Acts, from acting under
the Management Agreement for the Trust as contemplated by the
Prospectus.
(iii) This Agreement and the Management Agreement each has been
duly authorized, executed and delivered by the Adviser, and the
Management Agreement constitutes a valid and binding obligation of the
Adviser, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization or other laws
relating to or affecting creditors' rights and to general equity
principles, and, to the best of such counsel's knowledge and
information, neither the execution and delivery of this Agreement or
the Management Agreement, nor the performance by the Adviser of its
obligations hereunder or thereunder, will conflict with, or result in
a breach of, any of the terms and provisions of, or constitute, with
or without giving notice or lapse of time or both, a default under,
any agreement or instrument to which the Adviser is a party or by
which the Adviser is bound, or any law, order, rule or regulation
applicable to the Adviser of any jurisdiction, court, federal or state
regulatory body, administrative agency or other governmental body,
stock exchange or securities association having jurisdiction over the
Adviser or its properties or operations.
(iv) To the best of such counsel's knowledge and information, the
description of the Adviser in the Registration Statement and the
Prospectus does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated herein or
necessary to make the statements therein not misleading.
(f) The Representative shall have received from Brown & Wood, counsel
for the Underwriters, their opinion or opinions dated the First Closing
Date with respect to the organization of the Trust, the validity of the
Shares, registration under and compliance with the 1933 Act and the 1940
Act, this Agreement and the Pricing Agreement, the Registration Statement
and the Prospectus and such other related matters as the Representative
may require, and the Trust shall have furnished to such counsel such
documents as they may request for the purpose of enabling them to pass
upon such matters.
In giving their opinions, Sheldon Curtis, Esq. and Brown & Wood may rely
as to matters involving the laws of The Commonwealth of Massachusetts upon
the opinion of Lane & Altman. In giving their opinions, Sheldon Curtis, Esq.
and Brown & Wood may rely (i) as to the qualification of the Trust and the
Adviser to do business in any state or jurisdiction, upon certificates of
appropriate government officials, and (ii) as to matters of fact, upon
certificates and written statements of officers and employees of and
accountants for the Trust and the Adviser.
(g) At the First Closing Date (i) the Registration Statement and the
Prospectus shall contain all statements which are required to be stated
therein in accordance with the 1933 Act, the 1940 Act and the Rules and
Regulations and in all material respects shall conform to the requirements
of the 1933 Act, the 1940 Act and the Rules and Regulations and neither
the Registration Statement nor the Prospectus shall contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading and no
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action, suit or proceeding at law or in equity shall be pending or, to the
knowledge of the Trust or the Adviser, threatened against the Trust or the
Adviser which would be required to be set forth in the Prospectus other
than as set forth therein, (ii) there shall not have been, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, of the Trust or in its earnings,
business affairs or business prospects, whether or not arising in the
ordinary course of business, from that set forth in the Registration
Statement and Prospectus, (iii) the Adviser shall have the financial
resources available to it necessary for the performance of its services
and obligations as contemplated in the Registration Statement and the
Prospectus, (iv) no proceedings shall be pending or, to the knowledge of
the Trust or the Adviser, threatened against the Trust or the Adviser
before or by any Federal, state or other commission, board or
administrative agency wherein an unfavorable decision, ruling or finding
would materially and adversely affect the business, property, financial
condition or income of either the Trust or the Adviser other than as set
forth in the Prospectus, (v) neither the Trust nor the Adviser shall be in
material default in the performance or observance of any contract to which
it is a party, (vi) no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act and no
proceeding therefor shall have been instituted or threatened by the
Commission and (vii) no proceedings shall have been instituted or
threatened by the Commission which would adversely affect the Trust's
standing as a registered investment company under the 1940 Act or the
Adviser's standing as a registered investment adviser under the Advisers
Act; and the Representative shall have received, at such First Closing
Date, a certificate of the President or a Vice President and the chief
financial or accounting officer of the Trust and of the Adviser, dated as
of such First Closing Date, evidencing compliance with the appropriate
provisions of this subsection (g).
(h) The Representative shall have received certificates, dated the
First Closing Date (i) of the President or a Vice President and the chief
financial or accounting officer of the Trust to the effect that the
representations and warranties of the Trust contained in Section 2(a) are
true and correct with the same force and effect as though expressly made
at and as of such First Closing Date and (ii) of the Chief Executive
Officer, President or a Vice President and the chief financial or
accounting officer of the Adviser to the effect that the representations
and warranties of the Adviser contained in Sections 2(a) and (b) are true
and correct with the same force and effect as though expressly made at and
as of such First Closing Date.
(i) The Trust and the Adviser shall have furnished to the
Representative such additional certificates as the Representative may have
reasonably requested as to the accuracy, at and as of the First Closing
Date, of the representations and warranties made herein by them as to
compliance at and as of the First Closing Date by them with their
covenants and agreements herein contained and other provisions hereof to
be satisfied at or prior to the First Closing Date and as to other
conditions to the obligations of the Underwriters hereunder.
(j) In the event the Underwriters exercise the option granted in
Section 3 hereof to purchase all or any portion of the Optional Shares,
the representations and warranties of the Trust and the Adviser contained
herein and the statements in any certificates furnished by the Trust and
the Adviser hereunder shall be true and correct as of the Option Closing
Date, and the Representative shall have received:
(i) A letter from Price Waterhouse, in form and substance
satisfactory to the Representative and dated the Option Closing Date,
substantially the same in scope and substance as the letter furnished
to the Representative pursuant to Section 8(b), except that the
specified date in the letter furnished pursuant to this Section 8(j)
shall be a date not more than five days prior to the Option Closing
Date.
(ii) The opinion of Sheldon Curtis, Esq., General Counsel for the
Trust, in form and substance satisfactory to counsel for the
Underwriters, dated the Option Closing Date, relating to the Optional
Shares and otherwise to the same effect as the opinion required by
Section 8(d).
(iii) The opinion of Sheldon Curtis, Esq., General Counsel for the
Adviser, in form and substance satisfactory to counsel for the
Underwriters, dated the Option Closing Date, to the same effect as the
opinion required by Section 8(e).
14
<PAGE>
<PAGE>
(iv) The opinion of Brown & Wood, counsel for the Underwriters,
dated the Option Closing Date, relating to the Optional Shares and
otherwise to the same effect as the opinion required by Section 8(f).
(v) A certificate, dated the Option Closing Date, of the President
or a Vice President and the chief financial or accounting officer of
the Trust confirming that the certificate or certificates delivered at
the First Closing Date pursuant to Section 8(g) and Section 8(h)
remains or remain true as of the Option Closing Date.
(vi) A certificate, dated the Option Closing Date, of the Adviser
confirming that the certificate or certificates delivered at the First
Closing Date pursuant to Section 8(g) and Sec- tion 8(h) remains or
remain true as of the Option Closing Date.
(vii) Such additional certificates, dated the Option Closing Date,
as the Representative may have reasonably requested pursuant to
Section 8(i).
If any of the conditions hereinabove provided for in this Section shall
not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by the Representative by notifying the Trust of
such termination in writing or by telegram at or prior to the First Closing
Date, but the Representative shall be entitled to waive any of such
conditions.
9. Termination. This Agreement may be terminated by the Representative by
notice to the Trust if at or prior to the First Closing Date (i) trading in
securities on the New York or American Stock Exchanges shall have been
suspended or minimum or maximum prices shall have been established on either
such exchange, or a banking moratorium shall have been declared by New York
or United States authorities; (ii) there shall have been any material adverse
change in the financial markets in the United States or any outbreak or
escalation of hostilities between the United States and any foreign power, or
of any other insurrection or armed conflict involving the United States
which, in the judgment of the Representative, makes it impracticable or
inadvisable to offer or sell the Shares; (iii) there shall have been, since
the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse
change in the condition (financial or otherwise), or in the earnings,
business affairs or business prospects of the Trust; or (iv) there shall be
any litigation, pending or threatened, which, in the judgment of the
Representative, makes it impracticable or inadvisable to offer or deliver the
Shares on the terms contemplated by the Prospectus.
10. Reimbursement of Underwriters. Notwithstanding any other provisions
hereof, if this Agreement shall be terminated by the Representative under
Section 8, Section 9 or Section 12, the Trust and the Adviser will bear and
pay the expenses specified in Section 5 hereof and, in addition to their
obligations pursuant to Section 6 hereof, except when the Representative
terminates this Agreement pursuant to clause (i) or (ii) of Section 9, the
Trust and the Adviser will reimburse the reasonable out-of-pocket expenses of
the several Underwriters (including reasonable fees and disbursements of
counsel for the Underwriters) incurred in connection with this Agreement and
the proposed purchase of the Shares, and promptly upon demand the Trust and
the Adviser will pay such amounts to you as Representative. In addition, the
provisions of Section 6 shall survive any such termination.
11. Default By Underwriters. If any Underwriter or Underwriters shall
default in its or their obligations to purchase Firm Shares hereunder on the
First Closing Date and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total number of Shares which the Underwriters are obligated
to purchase at the First Closing Date, the other Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder,
to purchase the Firm Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase. If any Underwriter or Underwriters shall so
default and the aggregate number of Firm Shares with respect to which such
default or defaults occur is more than 10% of the total number of shares
underwritten and arrangements satisfactory to the Representative and the
Trust for the purchase of such shares of Firm Shares by other persons are not
made within 48 hours after such default, this Agreement shall terminate.
15
<PAGE>
<PAGE>
If the remaining Underwriters or substituted underwriters are required
hereby or agree to take up all or part of the Firm Shares of a defaulting
Underwriter or Underwriters as provided in this Section 11, (i) the Trust
shall have the right to postpone the First Closing Date for a period of not
more than five full business days, in order that the Trust may effect
whatever changes may thereby be made necessary in the Registration Statement
or the Prospectus, or in any other documents or arrangements, and the Trust
agrees promptly to file any amendments to the Registration Statement or
supplements to the Prospectus which may thereby be made necessary, and (ii)
the respective numbers of Firm Shares to be purchased by the remaining
Underwriters or substituted underwriters shall be taken as the basis of their
underwriting obligation for all purposes of this Agreement. Nothing herein
contained shall relieve any defaulting Underwriter of its liability to the
Trust or the Underwriters for damages occasioned by its default hereunder.
Any termination of this Agreement pursuant to this Section 11 shall be
without liability on the part of any non-defaulting Underwriter or the Trust,
except for expenses to be paid or reimbursed pursuant to Section 5 and except
for the provisions of Section 6.
12. Default By the Trust. If the Trust shall fail at the First Closing
Date to sell and deliver the number of Shares which it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the
part of any non-defaulting party, other than obligations under Section 10
hereof. No action taken pursuant to this Section 12 shall relieve the Trust
from liability, if any, in respect of such default.
13. Notices. All communications hereunder shall be in writing and, if sent
to the Underwriters shall be mailed, delivered or telegraphed and confirmed
to you, as their Representative, at Two World Trade Center, 64th Floor, New
York, New York 10048, except that notices given to an Underwriter pursuant to
Section 6 hereof shall be sent to such Underwriter at the address furnished
by the Representative or if sent to the Trust or the Adviser shall be mailed,
delivered or telegraphed and confirmed at Two World Trade Center, New York,
New York 10048, attention: Sheldon Curtis, Esq., General Counsel.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Trust, the Adviser and their
respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person other than the persons mentioned in the preceding sentence any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that
the representations, warranties, covenants, agreements and indemnities of the
Trust and the Adviser contained in this Agreement shall also be for the
benefit of the person or persons, if any, who control any Underwriter or
Underwriters within the meaning of Section 15 of the Act, and the indemnities
of the several Underwriters shall also be for the benefit of each trustee or
director of the Trust and the Adviser, each of the Trust's officers who has
signed the Registration Statement and the person or persons, if any, who
control the Trust and the Adviser within the meaning of Section 15 of the
1933 Act.
15. Liability of Shareholders, Trustees and Officers. This Agreement is
executed by or on behalf of the trustees of the Trust solely in their
capacity as such trustees, and shall not constitute their personal obligation
either jointly or severally in their individual capacities. No trustee,
officer or shareholder of the Trust shall be liable for any obligations of
the Trust under this instrument and the Trust shall be solely liable
therefor; all parties hereto shall look solely to the Trust for the payment
of any claim, or the performance of any obligation, hereunder.
16. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
made and to be performed in said state. Specified times of day refer to New
York City time.
17. Authority of the Representative. In connection with this Agreement,
the Representative will act for and on behalf of the several Underwriters,
and any action taken under this Agreement by the Representative, as
representative of the several Underwriters, will be binding on all the
Underwriters.
16
<PAGE>
<PAGE>
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding
agreement between us.
Very truly yours,
INTERCAPITAL MANAGED MUNICIPAL TRUST
By: .................................
Authorized Signature
DEAN WITTER INTERCAPITAL INC.
By: .................................
Authorized Signature
Accepted and delivered,
as of the date first above written:
DEAN WITTER DISTRIBUTORS INC.
Acting on its own behalf and as
Representative of the several Underwriters
referred to in the foregoing Agreement.
By: .................................
Authorized Signature
17
<PAGE>
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
NUMBER OF FIRM
SHARES TO BE
NAME PURCHASED
- ---- ----------------
<S> <C>
Dean Witter Distributors Inc. ...
----------
Total .......................... 7,000,000
==========
</TABLE>
18
<PAGE>
<PAGE>
EXHIBIT A
INTERCAPITAL MANAGED MUNICIPAL TRUST
7,000,000 SHARES OF BENEFICIAL INTEREST
(PAR VALUE $.01 PER SHARE)
PRICING AGREEMENT
September , 1994
DEAN WITTER DISTRIBUTORS INC.
As Representative of the several Underwriters
Two World Trade Center
New York, New York 10048
Dear Sirs:
Reference is made to the Underwriting Agreement, dated September , 1994
(the "Underwriting Agreement"), relating to the purchase by the several
Underwriters named in Schedule A thereto, for whom Dean Witter Distributors
Inc. is acting as representative (the "Representative"), of the above Shares
of Beneficial Interest (the "Firm Shares") of InterCapital Managed Municipal
Trust (the "Trust") and relating to the option granted to such Underwriters
to purchase up to an additional 1,050,000 Shares of Beneficial Interest of
the Trust to cover over-allotments in connection with the sale of the Firm
Shares (the "Optional Shares"). The Firm Shares and all or any part of the
Optional Shares are collectively herein referred to as the "Shares."
Pursuant to Section 3 of the Underwriting Agreement, the Trust agrees with
each Underwriter as follows:
1. The initial public offering price per share for the Shares,
determined as provided in Section 3, shall be $15.00.
2. The purchase price per share for the Shares to be paid by the
several Underwriters shall be $ , being an amount equal to the initial
public offering price set forth above less $ per share.
This Agreement is executed by or on behalf of the trustees of the Trust
solely in their capacity as such trustees, and shall not constitute their
personal obligation either jointly or severally in their individual
capacities. No trustee, officer or shareholder of the Trust shall be liable
for any obligations of the Trust under this instrument and the Trust shall be
solely liable therefor; all parties hereto shall look solely to the Trust
estate for the payment of any claim, or the performance of any obligation,
hereunder.
A-1
<PAGE>
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust in accordance with its
terms.
Very truly yours,
INTERCAPITAL MANAGED MUNICIPAL TRUST
By: .................................
Authorized Signature
Accepted and delivered,
as of the date first above written:
DEAN WITTER DISTRIBUTORS INC.
Acting on its own behalf and as Representative
of the several Underwriters referred to in the
within-mentioned Underwriting Agreement.
By: .................................
Authorized Signature
A-2
<PAGE>
EXHIBIT 8(c)
DEAN WITTER DISTRIBUTORS INC.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550
January 12, 1993
Re: Master Selected Dealer Agreement
Dear Sirs:
Reference is made to the (Master Selected Dealer Agreement) dated March 2,
1987 (the "Master Agreement"), between you and Dean Witter Reynolds Inc.
("DWR"). As a result of an internal reorganization of DWR, all underwritings
of closed-end investment companies sponsored by DWR and its affiliates are
being done through a newly organized subsidiary of DWR, Dean Witter
Distributors Inc., a Delaware corporation ("DWD"). Consequently, it is
necessary that we confirm that the terms of the Master Agreement be
applicable to transactions involving DWD and you to the same extent as
transactions involving DWR and you.
In light of the foregoing, DWD hereby agrees to be bound by the terms and
conditions of the Master Agreement to the same extent as the Master Agreement
is applicable to DWR. Please confirm your agreement to be bound by the terms
and conditions of the Master Agreement with DWD to the same extent as the
Master Agreement is applicable to you with respect to DWR by signing and
returning to us the enclosed copy of this letter.
Very truly yours,
Dean Witter Distributors Inc.
By: _________________________
Chairman
CONFIRMED: as of the date first
written above, , 1993.
..................................
Name of Firm
By:
...............................
Title:
............................
(If signer is not an officer or partner,
please attach evidence of authorization)
<PAGE>
<PAGE>
DEAN WITTER REYNOLDS INC.
MASTER SELECTED DEALER AGREEMENT
March 2, 1987
Dear Sirs:
In connection with certain public offerings of securities after the date
hereof for which we are acting as representative or one of the
representatives of an underwriting syndicate or are otherwise responsible for
the distribution of securities to the public by means of an offering of
securities for sale to selected dealers, you may be offered the right as such
a selected dealer to purchase as principal a portion of such securities. This
will confirm our mutual agreement as to the general terms and conditions
applicable to your participation in any such selected dealer group organized
by us as follows:
1. APPLICABILITY OF THIS AGREEMENT. The terms and conditions of this
Agreement shall be applicable to any public offering of securities
("Securities"), pursuant to a registration statement filed under the
Securities Act of 1933 (the "Securities Act"), or exempt from registration
thereunder (other than an offering of Securities effected wholly outside the
United States of America), wherein we (acting for our own account or for the
account of any underwriting or similar group or syndicate) are responsible
for managing or otherwise implementing the sale of the Securities to selected
dealers ("Selected Dealers") and have expressly informed you that such terms
and conditions shall be applicable. Any such offering in which you have been
invited to participate as a Selected Dealer and with respect to which we have
informed you that the terms and conditions of this Agreement apply is
hereinafter called an "Offering". In the case of any Offering where we are
acting for the account of any underwriting or similar group or syndicate
("Underwriters"), the terms and conditions of this Agreement shall be for the
benefit of, and binding upon, such Underwriters, including, in the case of
any Offering in which we are acting with others as representatives of
Underwriters, such other representatives.
The following provisions of this Agreement shall apply separately to each
Offering. This Agreement may be supplemented or amended by us by written
notice to you and, except for supplements or amendments relating solely to a
particular Offering, any such supplement or amendment to this Agreement
applies after this Agreement is so supplemented or amended.
2. CONDITIONS OF OFFERING; ACCEPTANCE AND PURCHASE. Any Offering will be
subject to delivery of the Securities and their acceptance by us and any
other Underwriters, may be subject to the approval of all legal matters by
counsel and the satisfaction of other conditions, and may be made on the
basis of reservation of Securities or an allotment against subscription. We
shall advise you by telegram, telex, Graphic Scanning Communication, or other
written form of communication (a "written communication", which term, in the
case of any Offering described in Section 3(a) or 3(b) hereof, may include a
prospectus or offering circular) of the particular method and supplementary
terms and conditions (including, without limitation, the information as to
prices and offering date referred to in Section 3(c) hereof) of any Offering
in which you are invited to participate. To the extent such supplementary
terms and conditions are inconsistent with any provision herein, such terms
and conditions shall supersede any such provision. Unless otherwise indicated
in any such written communication, acceptances and other communications by
you with respect to an Offering should be sent to Dean Witter Reynolds Inc.,
Two World Trade Center, 16th Floor, New York, New York 10048: Attention:
Syndicate Department. We reserve the right to reject any acceptance in whole
or in part. Unless notified otherwise by us, Securities purchased by you
shall be paid for on such date as we shall determine, on one day's prior
notice to you, by certified or official bank check, in an amount equal to the
Public Offering Price (as hereinafter defined) or, if we shall so advise you,
at such Public Offering Price less the Concession (as hereinafter defined),
payable in New York Clearing House funds to the order of Dean Witter Reynolds
Inc., Five World Trade Center, New York, New York 10048, against delivery of
the Securities. If Securities are purchased and paid for at such Public
Offering Price, such Concession will be paid after the termination of the
provisions of Section 3(c) hereof with respect to such Securities.
<PAGE>
<PAGE>
Unless notified otherwise by us, payment for and delivery of Securities
purchased by you shall be made through the facilities of The Depository Trust
Company, if you are a member, unless you have otherwise notified us prior to
the date specified in a written communication to you from us or, if you are
not a member, settlement may be made through a correspondent who is a member
pursuant to instructions which you will send to us prior to such specified
date.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) Registered Offerings. In the case of any Offering of Securities which
are registered under the Securities Act ("Registered Offering"), we shall
provide you with such number of copies of any preliminary prospectus and of
the final prospectus relating thereto as you may reasonably request for the
purposes contemplated by the Securities Act and the Securities Exchange Act
of 1934 (the "Exchange Act") and the applicable rules and regulations of the
Securities and Exchange Commission (the "Commission") thereunder. You
represent and warrant that you are familiar with Securities Act Release No.
4968 and Rule 15c2-8 (or any successor provision) under the Exchange Act
relating to the distribution of preliminary and final prospectuses and agree
that you will deliver all preliminary and final prospectuses required for
compliance therewith. You agree to make a record of your distribution of each
preliminary prospectus and, when furnished with copies of any amended
preliminary prospectus, prospectus or prospectus supplement, you will, upon
our request, furnish a copy of an amended preliminary prospectus, prospectus
or prospectus supplement to each person to whom you shall have furnished a
previous preliminary prospectus, prospectus or prospectus supplement. You
agree that in purchasing Securities in a Registered Offering you will rely
upon no statements whatsoever, written or oral, other than the statements in
the final prospectus delivered to you by us. You will not be authorized by
the issuer or other seller of Securities offered pursuant to a prospectus or
by any Underwriters to give any information or to make any representation not
contained in the prospectus in connection with the sale of such Securities.
(b) Offerings Pursuant to an Offering Circular. In the case of any
Offering of Securities, other than a Registered Offering, we shall provide
you with such number of copies of any preliminary offering circular and of
the final offering circular relating thereto as you may reasonably request.
You agree to make a record of your distribution of each preliminary offering
circular and, when furnished with copies of an amended preliminary offering
circular or offering circular, you will, upon our request, furnish a copy of
an amended offering circular or offering circular to each person to whom you
shall have furnished a previous preliminary offering circular or offering
circular. You agree that you will comply with the applicable Federal and
state laws, and the applicable rules and regulations of any regulatory body
promulgated thereunder, governing the use and distribution of offering
circulars by brokers or dealers. You agree that in purchasing Securities
pursuant to an offering circular you will rely upon no statements whatsoever,
written or oral, other than the statements in the final offering circular
delivered to you by us. You will not be authorized by the issuer or other
seller of Securities offered pursuant to an offering circular or by any
Underwriters to give any information or to make any representation not
contained in the offering circular in connection with the sale of such
Securities.
(c) Offer and Sale to the Public. With respect to any Offering of
Securities, we will inform you by a written communication of the initial
public offering price, if any, the selling concession, the reallowance (if
any) to dealers and the time when you may commence selling Securities to the
public. After such public offering has commenced, we may change the public
offering price, the selling concession and the reallowance to dealers. The
offering price, selling concession and reallowance (if any) to dealers at any
time in effect with respect to an Offering are hereinafter referred to,
respectively, as the "Public Offering Price", the "Concession" and the
"Reallowance". With respect to each Offering of Securities, until the
provisions of this Section 3(c) shall be terminated pursuant to Section 4
hereof, you agree to offer Securities to the public only at the Public
Offering Price, except that if a Reallowance is in effect, a reallowance from
the Public Offering Price not in excess of such Reallowance may be allowed as
consideration for services rendered in distribution to dealers who are
actually engaged in the investment banking or securities business, who
execute the written agreement prescribed by Section 24(c) of 2 Article III of
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc. (the "NASD") and who are either members in good standing of the NASD, or
foreign banks, dealers or institutions not eligible for membership in the
NASD who represent to you that they will promptly reoffer such Securities at
the Public Offering Price and will abide by the conditions with respect to
foreign banks, dealers and institutions set forth in Section 3(e) hereof.
2
<PAGE>
<PAGE>
(d) Over-allotment; Stabilization; Unsold Allotments. We may, with respect
to any Offering, be authorized (a) to over-allot in arranging for sales of
Securities to Selected Dealers and others and, if necessary, to purchase
Securities at such prices as we may determine for the purpose of covering
such over-allotments, and (b) for the purpose of stabilizing the market in
the Securities or of any other securities of the issuer or any guarantor as
we may advise by written communication or otherwise, in the open market or
otherwise, for long or short account, on a when-issued basis or otherwise, at
such prices, in such amounts and in such manner as we may determine. You
agree that upon our request at any time and from time to time prior to the
termination of the provisions of Section 3(c) thereof with respect to any
Offering, you will report to us the amount of Securities purchased by you
pursuant to such Offering which then remain unsold by you and will, upon our
request at any such time, sell to us for our account or the account of one or
more Underwriters such amount of such unsold Securities as we may designate
at the Public Offering Price less an amount to be determined by us not in
excess of the Concession. If, prior to the later of (a) the termination of
the provisions of Section 3(c) hereof with respect to any Offering, or (b)
the covering by us of any short position created by us in connection with
such Offering for our account or the account of one or more Underwriters, we
purchase or contract to purchase for our account or the account of one or
more Underwriters in the open market or otherwise any Securities purchased by
you under this Agreement as part of such Offering, you agree to pay us on
demand an amount equal to the Concession with respect to such Securities
(unless you shall have purchased such Securities pursuant to Section 2 hereof
at the Public Offering Price, in which case we shall not be obligated to pay
such Concession to you pursuant to Section 2) plus transfer taxes and
broker's commissions or dealer's mark-up, if any, paid in connection with
such purchase or contract to purchase.
(e) NASD. You represent and warrant that you are a dealer actually engaged
in the investment banking or securities business and you are either a member
in good standing of the NASD or, if you are not such a member, you are a
foreign bank, dealer or institution not eligible for membership in the NASD
which agrees to make no sales within the United States, its territories or
its possessions or to persons who are citizens thereof or residents therein,
and in making other sales to comply with the NASD's interpretation with
respect to free riding and withholding. You agree that, in connection with
any purchase or sale of the Securities wherein a selling concession, discount
or other allowance is received or granted, (1) you will comply with the
provisions of section 24 of Article III of the NASD's Rules of Fair Practice
and (2) if you are a non-NASD member broker or dealer in a foreign country,
you will also comply, (a) as though you were an NASD member, with the
provisions of sections 8 and 26 thereof and (b) with section 25 thereof as
that section applies to a non-NASD member broker or dealer in a foreign
country. You represent that you are fully familiar with the above provisions
of the Rules of Fair Practice of the NASD.
If we inform you that the NASD views the Securities as interest in a
direct participation program, you agree that you will offer the Securities in
compliance with the NASD's interpretation of Appendix F of its Rules of Fair
Practice ("Appendix F").
(f) Relationship among Underwriters and Selected Dealers. We may buy
Securities from or sell Securities to any Underwriter or Selected Dealer and,
with our consent, the Underwriters (if any) and the Selected Dealers may
purchase Securities from and sell Securities to each other at the Public
Offering Price less all or any part of the Concession. You are not authorized
to act as agent for us or any Underwriter or the issuer or other seller of
any Securities in offering Securities to the public or otherwise. Nothing
contained herein or in any written communication from us shall constitute the
Selected Dealers partners with us or any Underwriter or with one another.
Neither we nor any Underwriter shall be under any obligation to you except
for obligations assumed hereby or in any written communication from us in
connection with any Offering. In connection with any Offering you shall be
liable for your proportionate amount of any claim, demand or liability which
may be asserted against you alone or against one or more Selected Dealers
participating in such Offering, or against us or the Underwriters, if any,
based upon the claim that the Selected Dealers, or any of them, constitute an
association, an unincorporated business or other entity.
(g) Legal Qualifications. It is understood that we assume no
responsibility with respect to the right of any Selected Dealer to offer or
to sell Securities in any jurisdiction, notwithstanding any information
3
<PAGE>
<PAGE>
which we may furnish as to the jurisdictions under the securities laws of
which it is believed the Securities may be sold. You authorized us to file
with the Department of State of the State of New York a Further State Notice
with respect to the Securities, if necessary.
If you propose to offer Securities outside the United States, its
territories or its possessions, you will take, at your own expense, such
action, if any, as may be necessary to comply with the laws of each foreign
jurisdiction in which you propose to offer Securities.
(h) Compliance with Law. You agree that in selling Securities pursuant to
any Offering (which agreement shall also be for the benefit of the issuer or
other seller of such Securities) you will comply with the applicable
provisions of the Securities Act and the Exchange Act, the applicable rules
and regulations of the Commission thereunder, the applicable rules and
regulations of the NASD, the applicable rules and regulations of any
securities exchange having jurisdiction over the Offering and the applicable
laws, rules and regulations specified in Section 3(b) hereof.
(i) If we are acting as representative of the Underwriters of Securities
of an issuer that is not required to file reports under the Exchange Act, you
agree that you will not sell any of the Securities to any account over which
you have discretionary authority.
(j) You represent and agree that in connection with each offering to which
this Agreement applies, you will comply with the provisions of Rule 10b-6
under the Exchange Act.
4. TERMINATION.
(a) This Agreement may be terminated by either party hereto upon five
business days' written notice to the other party; provided, however, that
with respect to any Offering, if we receive any such notice from you after
you have agreed to participate as a Selected Dealer in any Offering, this
Agreement shall remain in full force and effect as to such Offering and shall
terminate with respect to such Offering and all previous Offerings in
accordance with the provisions of paragraph (b) of this Section.
(b) Unless this Agreement or any provision hereof is earlier terminated by
us and except for provisions herein that contemplate obligations surviving
the termination of the effectiveness hereof, the terms and conditions of this
Agreement will cease to be applicable to your participation in an Offering at
the close of business of the 30th day after the date the Securities are first
released for public offering, but in our discretion may be extended by us by
written communication for a further period or periods not exceeding an
aggregate of 30 days.
5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on, and inure
to the benefit of, the parties hereto and other persons specified in Section
1 hereof, and the respective successors and assigns of each of them.
6. GOVERNING LAW. This Agreement and the terms and conditions set forth
herein with respect to any Offering together with such supplementary terms
and conditions with respect to such Offering as may be contained in any
written communication from us to you in connection therewith shall be
governed by, and construed in accordance with, the laws of the State of New
York.
4
<PAGE>
<PAGE>
Please confirm by signing and returning to us the enclosed copy of this
Agreement that your subscription to, or your acceptance of any reservation of
any Securities pursuant to an Offering shall constitute (i) acceptance of and
agreement to the terms and conditions of this Agreement (as supplemented and
amended) together with and subject to any supplementary terms and conditions
contained in any written communication from us in connection with such
Offering, all of which shall constitute a binding agreement between you and
us, individually or as representative of any Underwriters, (ii) confirmation
that your representations and warranties set forth in Section 3 hereof are
true and correct at that time, (iii) confirmation that your agreements set
forth in Sections 2 and 3 hereof have been and will be fully performed by you
to the extent and at the times required thereby and (iv) in the case of any
Offering described in Section 3(a) or 3(b) hereof, acknowledgment that you
have requested and received from us sufficient copies of the final prospectus
or offering circular, as the case may be, with respect to such Offering in
order to comply with your undertakings in Section 3(a) or 3(b) hereof.
Very truly yours,
DEAN WITTER REYNOLDS INC.
By:
Hayter W. Haynes
Senior Vice President
CONFIRMED: as of the date first
written above, .............. , 19 .
......................................
(Name of Dealer)
By: ..................................
Title: ...............................
(If signer is not an officer or partner,
please attach evidence of authorization.)
Address: .............................
......................................
......................................
5
DEAN WITTER DISTRIBUTORS INC.
Two World Trade Center
New York, New York 10048
(212) 392-2550
_____________, 1994
Gentlemen:
Dean Witter Distributors Inc. (the "DWD") has entered into an
underwriting agreement (the "Underwriting Agreement") with
InterCapital Managed Municipal Trust, a Massachusetts business
trust (the "Fund"), pursuant to which it acts as an underwriter and
representative of the underwriters (the "Underwriters") for the
sale of the Fund's shares of beneficial interest, par value $0.01
per share (the "Shares").
The Fund is a closed-end management investment company
registered under the Investment Company Act of 1940, as amended,
and the Shares being offered to the public are registered under the
Securities Act of 1933, as amended (the "Securities Act"). You
have received a copy of the Underwriting Agreement between us and
the Fund and reference is made herein to certain provisions of such
Underwriting Agreement. The terms used herein, including
"Prospectus" and "Registration Statement" of the Fund shall have
the same meaning in this Agreement as in the Underwriting
Agreement. As principal, we offer to sell Shares to your
customers, upon the following terms and conditions:
1. In all sales of Shares to the public you shall act on
behalf of your customers, and in no transaction shall you have any
authority to act as agent for the Fund, for us or for any
Underwriter or selected dealer of the Fund.
2. Orders received from you will be accepted through us or
on our behalf only at the public offering price as set forth in the
Prospectus, unless we inform you otherwise in writing. The
procedure relating to the handling of orders shall be subject to
instructions which we shall forward from time to time to you. All
orders are subject to acceptance or rejection by DWD in its sole
discretion.
3. You shall not place orders for any Shares unless you have
already received purchase orders for such Shares at the public
offering price and subject to the terms hereof and of the
Underwriting Agreement and the Prospectus. You agree that you will
not offer or sell any of the Shares except under circumstances that
will result in compliance with the applicable Federal and state
<PAGE>
securities laws and that in connection with sales and offers to
sell Shares you will furnish to each person to whom any such sale
or offer is made a copy of the preliminary prospectus, any amended
preliminary prospectus and the Prospectus (as then amended or
supplemented) and will not furnish to any person any information
relating to the Shares which is not contained in the preliminary
prospectus, any amended preliminary prospectus and the Prospectus
(as then amended or supplemented) or cause any advertisement to be
published by radio or television or in any newspaper or posted in
any public place or use any sales promotional material without our
consent and the consent of the Fund.
4. DWD will compensate you for sales of shares of the Fund
by paying you a commission (which may be in the form of a gross
sales credit) of $________ per Share.
5. If any Shares sold to your customers under the terms of
this Agreement are repurchased by us for the account of
Underwriters, it is agreed that you shall forfeit your right to,
and refund to us, any commission received by you with respect to
such Shares.
6. You represent and warrant that you are familiar with
Securities Act Release No. 4968 and Rule 15c2-8 (or any successor
provision) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), relating to the distribution of preliminary
and final prospectuses and agree that you will deliver all
preliminary and final prospectuses required for compliance
therewith. You agree to make a record of your distribution of each
preliminary prospectus and, when furnished with copies of any
amended preliminary prospectus, Prospectus or Prospectus
supplement, you will, upon our request, furnish a copy of an
amended preliminary prospectus, Prospectus or Prospectus supplement
to each person to whom you shall have furnished a previous
preliminary prospectus, Prospectus or Prospectus supplement. You
agree that you will rely upon no statements whatsoever, written or
oral, other than the statements in the Prospectus delivered to you
by us. You are not authorized by the Fund or by any Underwriters
to give any information or to make any representation not contained
in the Prospectus (as then amended or supplemented) in connection
with the sale of the Shares.
7. You agree to deliver to each of the purchasers making
purchases a copy of the Prospectus at or prior to the time of
offering or sale. Additional copies of the Prospectus will be
supplied to you in reasonable quantities upon request.
8. We reserve the right in our discretion, without notice,
to suspend sales or withdraw the offering of Shares entirely.
Unless this Agreement is earlier terminated by us, the terms and
2
<PAGE>
conditions of this Agreement will cease to be applicable at the
close of business on the 30th day after the date the Shares are
first released for sale to the public, but in our discretion may be
extended by us by written communication for a further period or
periods not exceeding an aggregate of 60 days.
9. We shall have full authority to take such action as we
may deem advisable in respect of all matters pertaining to the
distribution of Fund shares. We shall be under no liability to you
except for lack of good faith and for obligations expressly assumed
by us herein. Nothing contained in this paragraph is intended to
operate as, and the provisions of this paragraph shall not in any
way whatsoever constitute, a waiver by you of compliance with any
provision of the Securities Act or of the rules and regulations of
the Securities and Exchange Commission (the "Commission") issued
thereunder.
10. You represent that you are a member in good standing of
the National Association of Securities Dealers, Inc. (the "NASD")
and, with respect to any sales, you hereby agree to abide by the
Rules of Fair Practice of the NASD, including, but not limited to,
the provisions of Section 24 of Article III of such Rules of Fair
Practice. You represent that you are fully familiar with the above
provisions of the Rules of Fair Practice of the NASD.
11. Upon application to us, we will inform you as to the
states in which we believe the Shares have been qualified for sale
under, or are exempt from the requirements of, the respective
securities laws of such states, but we assume no responsibility or
obligation as to your right to sell Shares in any jurisdiction.
12. You agree that in selling the Shares you will comply with
the applicable provisions of the Securities Act and the Exchange
Act, the applicable rules and regulations of the Commission
thereunder, the applicable rules and regulations of the NASD, and
the applicable rules and regulations of any securities exchange
having jurisdiction over the offering of the Shares.
13. All communications to us should be sent to the address
shown above. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below.
14. Each of us agrees that you are an agent selling Shares
exclusively on an agency basis, and are not an underwriter, member
of the selling group, selected dealer or principal in connection
with the sale of the Shares.
3
<PAGE>
15. This Agreement shall become effective as of the date
written above.
DEAN WITTER DISTRIBUTORS INC.
By_____________________________
(Authorized Signature)
Please return one signed copy
of this agreement to:
Dean Witter Distributors Inc.
Two World Trade Center
New York, New York 10048
Confirmed and Accepted:
NATIONS SECURITIES
4201 Congress Street
Suite 245
Charlotte, North Carolina 28209
By:__________________________
(Authorized Signature)
4
<PAGE>
EXHIBIT 10(a)
CUSTODY AGREEMENT
Agreement made as of this day of , 1994,
between INTERCAPITAL MANAGED MUNICIPAL TRUST, a Massachusetts
business trust organized and existing under the laws of the
Commonwealth of Massachusetts, having its principal office and
place of business at 2 World Trade Center, New York, New York
10048 (hereinafter called the "Fund"), and THE BANK OF NEW
YORK, a New York corporation authorized to do a banking
business, having its principal office and place of business at
48 Wall Street, New York, New York 10286 (hereinafter called
the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises
hereinafter set forth, the Fund and the Custodian agree as
follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, shall have the following meanings:
1. "Agreement" shall mean this Custody Agreement and all
Appendices and Certifications described in the Exhibits
delivered in connection herewith.
2. "Authorized Person" shall mean any person, whether
or not such person is an Officer or employee of the Fund, duly
authorized by the Board of Trustees of the Fund to give Oral
Instructions and Written Instructions on behalf of the Fund
and listed in the Certificate annexed hereto as Appendix A or
such other Certificate as may be received by the Custodian
from time to time, provided that each person who is designated
in any such Certificate as an "Officer of DWTC" shall be an
Authorized Person only for purposes of Articles XII and XIII
hereof.
3. "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and
federal agency securities, its successor or successors and its
nominee or nominees.
<PAGE>
4. "Call Option" shall mean an exchange traded option
with respect to Securities other than Index, Futures
Contracts, and Futures Contract Options entitling the holder,
upon timely exercise and payment of the exercise price, as
specified therein, to purchase from the writer thereof the
specified underlying instruments, currency, or Securities.
5. "Certificate" shall mean any notice, instruction, or
other instrument in writing, authorized or required by this
Agreement to be given to the Custodian which is actually
received (irrespective of constructive receipt) by the
Custodian and signed on behalf of the Fund by any two Offic-
ers. The term Certificate shall also include instructions by
the Fund to the Custodian communicated by a Terminal Link.
6. "Clearing Member" shall mean a registered
broker-dealer which is a clearing member under the rules of
O.C.C. and a member of a national securities exchange
qualified to act as a custodian for an investment company, or
any broker-dealer reasonably believed by the Custodian to be
such a clearing member.
7. "Collateral Account" shall mean a segregated account
so denominated which is specifically allocated to a Series and
pledged to the Custodian as security for, and in consideration
of, the Custodian's issuance of any Put Option guarantee let-
ter or similar document described in paragraph 8 of Article V
herein.
8. "Covered Call Option" shall mean an exchange traded
option entitling the holder, upon timely exercise and payment
of the exercise price, as specified therein, to purchase from
the writer thereof the specified underlying instruments, cur-
rency, or Securities (excluding Futures Contracts) which are
owned by the writer thereof.
9. "Depository" shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and
Exchange Commission, its successor or successors and its
nominee or nominees. The term "Depository" shall further mean
and include any other person authorized to act as a depository
under the Investment Company Act of 1940, its successor or
successors and its nominee or nominees, specifically identi-
fied in a certified copy of a resolution of the Fund's Board
of Trustees specifically approving deposits therein by the
Custodian.
10. "Financial Futures Contract" shall mean the firm
commitment to buy or sell financial instruments on a U.S. com-
modities exchange or board of trade at a specified future time
at an agreed upon price.
11. "Futures Contract" shall mean a Financial Futures
Contract and/or Index Futures Contracts.
- 2 -
<PAGE>
12. "Futures Contract Option" shall mean an option with
respect to a Futures Contract.
13. "Investment Company Act of 1940" shall mean the
Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
14. "Index Futures Contract" shall mean a bilateral
agreement pursuant to which the parties agree to take or make
delivery of an amount of cash equal to a specified dollar
amount times the difference between the value of a particular
index at the close of the last business day of the contract
and the price at which the futures contract is originally
struck.
15. "Index Option" shall mean an exchange traded option
entitling the holder, upon timely exercise, to receive an
amount of cash determined by reference to the difference
between the exercise price and the value of the index on the
date of exercise.
16. "Margin Account" shall mean a segregated account in
the name of a broker, dealer, futures commission merchant, or
a Clearing Member, or in the name of the Fund for the benefit
of a broker, dealer, futures commission merchant, or Clearing
Member, or otherwise, in accordance with an agreement between
the Fund, the Custodian and a broker, dealer, futures commis-
sion merchant or a Clearing Member (a "Margin Account Agree-
ment"), separate and distinct from the custody account, in
which certain Securities and/or money of the Fund shall be
deposited and withdrawn from time to time in connection with
such transactions as the Fund may from time to time
determine. Securities held in the Book-Entry System or a
Depository shall be deemed to have been deposited in, or
withdrawn from, a Margin Account upon the Custodian's effect-
ing an appropriate entry in its books and records.
17. "Money Market Security" shall mean all instruments
and obligations commonly known as a money market instruments,
where the purchase and sale of such securities normally
requires settlement in federal funds on the same day as such
purchase or sale, including, without limitation, certain
Reverse Repurchase Agreements, debt obligations issued or
guaranteed as to interest and/or principal by the government
of the United States or agencies or instrumentalities thereof,
any tax, bond or revenue anticipation note issued by any state
or municipal government or public authority, commercial paper,
certificates of deposit and bankers' acceptances, repurchase
agreements with respect to Securities and bank time deposits.
18. "O.C.C." shall mean the Options Clearing Corpora-
tion, a clearing agency registered under Section 17A of the
- 3 -
<PAGE>
Securities Exchange Act of 1934, its successor or successors,
and its nominee or nominees.
19. "Officers" shall mean the President, any Vice
President, the Secretary, the Clerk, the Treasurer, the
Controller, any Assistant Secretary, any Assistant Clerk, any
Assistant Treasurer, and any other person or persons, whether
or not any such other person is an officer or employee of the
Fund, but in each case only if duly authorized by the Board of
Trustees of the Fund to execute any Certificate, instruction,
notice or other instrument on behalf of the Fund and listed in
the Certificate annexed hereto as Appendix B or such other
Certificate as may be received by the Custodian from time to
time; provided that each person who is designated in any such
Certificate as holding the position of "Officer of DWTC" shall
be an Officer only for purposes of Articles XII and XIII
hereof.
20. "Option" shall mean a Call Option, Covered Call Op-
tion, Index Option and/or a Put Option.
21. "Oral Instructions" shall mean verbal instructions
actually received (irrespective of constructive receipt) by
the Custodian from an Authorized Person or from a person
reasonably believed by the Custodian to be an Authorized
Person.
22. "Put Option" shall mean an exchange traded option
with respect to instruments, currency, or Securities other
than Index Options, Futures Contracts, and Futures Contract
Options entitling the holder, upon timely exercise and tender
of the specified underlying instruments, currency, or Securi-
ties, to sell such instruments, currency, or Securities to the
writer thereof for the exercise price.
23. "Reverse Repurchase Agreement" shall mean an agree-
ment pursuant to which the Fund sells Securities and agrees to
repurchase such Securities at a described or specified date
and price.
24. "Security" shall be deemed to include, without
limitation, Money Market Securities, Call Options, Put Op-
tions, Index Options, Index Futures Contracts, Index Futures
Contract Options, Financial Futures Contracts, Financial
Futures Contract Options, Reverse Repurchase Agreements, over
the counter options on Securities, common stocks and other
securities having characteristics similar to common stocks,
preferred stocks, debt obligations issued by state or
municipal governments and by public authorities, (including,
without limitation, general obligation bonds, revenue bonds,
industrial bonds and industrial development bonds), bonds,
debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments
representing rights to receive, purchase, sell or subscribe
- 4 -
<PAGE>
for the same, or evidencing or representing any other rights
or interest therein, or rights to any property or assets.
25. "Senior Security Account" shall mean an account
maintained and specifically allocated to a Series under the
terms of this Agreement as a segregated account, by recorda-
tion or otherwise, within the custody account in which certain
Securities and/or other assets of the Fund specifically al-
located to such Series shall be deposited and withdrawn from
time to time in accordance with Certificates received by the
Custodian in connection with such transactions as the Fund may
from time to time determine.
26. "Series" shall mean the various portfolios, if any,
of the Fund as described from time to time in the current and
effective prospectus for the Fund, except that if the Fund
does not have more than one portfolio, "Series" shall mean the
Fund or be ignored where a requirement would be imposed on the
Fund or the Custodian which is unnecessary if there is only
one portfolio.
27. "Shares" shall mean the shares of beneficial inter-
est of the Fund and its Series.
28. "Terminal Link" shall mean an electronic data
transmission link between the Fund and the Custodian requiring
in connection with each use of the Terminal Link the use of an
authorization code provided by the Custodian and at least two
access codes established by the Fund, provided, that the Fund
shall have delivered to the Custodian a Certificate
substantially in the form of Appendix C.
29. "Transfer Agent" shall mean Dean Witter Trust
Company, a New Jersey limited purpose trust company, its suc-
cessors and assigns.
30. "Transfer Agent Account" shall mean any account in
the name of the Transfer Agent maintained with The Bank of New
York pursuant to a Cash Management and Related Services Agree-
ment between The Bank of New York and the Transfer Agent.
31. "Written Instructions" shall mean written communica-
tions actually received (irrespective of constructive receipt)
by the Custodian from an Authorized Person or from a person
reasonably believed by the Custodian to be an Authorized
Person by telex or any other such system whereby the receiver
of such communications is able to verify by codes or otherwise
with a reasonable degree of certainty the identity of the
sender of such communication.
- 5 -
<PAGE>
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the
Custodian as custodian of the Securities and moneys at any
time owned by the Fund during the period of this Agreement.
2. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as
hereinafter set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, the Fund will deliver or cause to
be delivered to the Custodian all Securities and all moneys
owned by it, at any time during the period of this Agreement,
and shall specify with respect to such Securities and money
the Series to which the same are specifically allocated, and
the Custodian shall not be responsible for any Securities or
money not so delivered. The Custodian shall physically
segregate, keep and maintain the Securities of the Series
separate and apart from each other Series and from other as-
sets held by the Custodian. Except as otherwise expressly
provided in this Agreement, the Custodian will not be
responsible for any Securities and moneys not actually
received by it, unless the Custodian has been negligent or has
engaged in willful misconduct with respect thereto. The
Custodian will be entitled to reverse any credits of money
made on the Fund's behalf where such credits have been previ-
ously made and moneys are not finally collected, unless the
Custodian has been negligent or has engaged in willful
misconduct with respect thereto. The Fund shall deliver to the
Custodian a certified resolution of the Board of Trustees of
the Fund, substantially in the form of Exhibit A hereto, ap-
proving, authorizing and instructing the Custodian on a
continuous and on-going basis to deposit in the Book-Entry
System all Securities eligible for deposit therein, regardless
of the Series to which the same are specifically allocated and
to utilize the Book-Entry System to the extent possible in
connection with its performance hereunder, including, without
limitation, in connection with settlements of purchases and
sales of Securities, loans of Securities and deliveries and
returns of Securities collateral. Prior to a deposit of
Securities specifically allocated to a Series in any
Depository, the Fund shall deliver to the Custodian a certi-
fied resolution of the Board of Trustees of the Fund,
substantially in the form of Exhibit B hereto, approving,
- 6 -
<PAGE>
authorizing and instructing the Custodian on a continuous and
ongoing basis until instructed to the contrary by a
Certificate to deposit in such Depository all Securities
specifically allocated to such Series eligible for deposit
therein, and to utilize such Depository to the extent possible
with respect to such Securities in connection with its
performance hereunder, including, without limitation, in con-
nection with settlements of purchases and sales of Securities,
loans of Securities, and deliveries and returns of Securities
collateral. Securities and moneys deposited in either the
Book-Entry System or a Depository will be represented in ac-
counts which include only assets held by the Custodian for
customers, including, but not limited to, accounts in which
the Custodian acts in a fiduciary or representative capacity
and will be specifically allocated on the Custodian's books to
the separate account for the applicable Series. Prior to the
Custodian's accepting, utilizing and acting with respect to
Clearing Member confirmations for Options and transactions in
Options for a Series as provided in this Agreement, the
Custodian shall have received a certified resolution of the
Fund's Board of Trustees, substantially in the form of Exhibit
C hereto, approving, authorizing and instructing the Custodian
on a continuous and on-going basis, until instructed to the
contrary by a Certificate, to accept, utilize and act in ac-
cordance with such confirmations as provided in this Agreement
with respect to such Series. All securities are to be held or
disposed of by the Custodian for, and subject at all times to
the instructions of, the Fund pursuant to the terms of this
Agreement. The Custodian shall have no power or authority to
assign, hypothecate, pledge or otherwise dispose of any
Securities except as provided by the terms of this Agreement,
and shall have the sole power to release and deliver Securi-
ties held pursuant to this Agreement.
2. The Custodian shall establish and maintain separate
accounts, in the name of each Series, and shall credit to the
separate account for each Series all moneys received by it for
the account of the Fund with respect to such Series. Such
moneys will be held in such manner and account as the Fund and
the Custodian shall agree upon in writing from time to time.
Money credited to a separate account for a Series shall be
subject only to drafts, orders, or charges of the Custodian
pursuant to this Agreement and shall be disbursed by the
Custodian only:
(a) As hereinafter provided;
(b) Pursuant to Resolutions of the Fund's Board of
Trustees certified by an Officer and by the Secretary or As-
sistant Secretary of the Fund setting forth the name and ad-
dress of the person to whom the payment is to be made, the
Series account from which payment is to be made, the purpose
for which payment is to be made, and declaring such purpose to
be a proper corporate purpose; provided, however, that amounts
- 7 -
<PAGE>
representing dividends or distributions with respect to
Shares shall be paid only to the Transfer Agent Account;
(c) In payment of the fees and in reimbursement of
the expenses and liabilities of the Custodian attributable to
such Series and authorized by this Agreement; or
(d) Pursuant to Certificates to pay interest,
taxes, management fees or operating expenses (including,
without limitation thereto, Board of Trustees' fees and
expenses, and fees for legal accounting and auditing
services), which Certificates set forth the name and address
of the person to whom payment is to be made, state the purpose
of such payment and designate the Series for whose account the
payment is to be made.
3. Promptly after the close of business on each day,
the Custodian shall furnish the Fund with confirmations and a
summary, on a per Series basis, of all transfers to or from
the account of the Fund for a Series, either hereunder or with
any co-custodian or sub-custodian appointed in accordance with
this Agreement during said day. Where Securities are
transferred to the account of the Fund for a Series but held
in a Depository, the Custodian shall upon such transfer also
by book-entry or otherwise identify such Securities as
belonging to such Series in a fungible bulk of Securities
registered in the name of the Custodian (or its nominee) or
shown on the Custodian's account on the books of the
Book-Entry System or the Depository. At least monthly and
from time to time, the Custodian shall furnish the Fund with a
detailed statement, on a per Series basis, of the Securities
and moneys held under this Agreement for the Fund.
4. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, all Securities held by the
Custodian hereunder, which are issued or issuable only in
bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that
form; all other Securities held hereunder may be registered in
the name of the Fund, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may from
time to time determine, or in the name of the Book-Entry
System or a Depository or their successor or successors, or
their nominee or nominees. The Fund agrees to furnish to the
Custodian appropriate instruments to enable the Custodian to
hold or deliver in proper form for transfer, or to register in
the name of its registered nominee or in the name of the
Book-Entry System or a Depository any Securities which it may
hold hereunder and which may from time to time be registered
in the name of the Fund. The Custodian shall hold all such
Securities specifically allocated to a Series which are not
held in the Book-Entry System or in a Depository in a separate
account in the name of such Series physically segregated at
all times from those of any other person or persons.
- 8 -
<PAGE>
5. Except as otherwise provided in this Agreement and
unless otherwise instructed to the contrary by a Certificate,
the Custodian by itself, or through the use of the Book-Entry
System or a Depository with respect to Securities held
hereunder and therein deposited, shall with respect to all
Securities held for the Fund hereunder in accordance with
preceding paragraph 4:
(a) Promptly collect all income and dividends due
or payable;
(b) Promptly give notice to the Fund and promptly
present for payment and collect the amount of money or other
consideration payable upon such Securities which are called,
but only if either (i) the Custodian receives a written notice
of such call, or (ii) notice of such call appears in one or
more of the publications listed in Appendix D annexed hereto,
which may be amended at any time by the Custodian without the
prior consent of the Fund, provided the Custodian gives prior
notice of such amendment to the Fund;
(c) Promptly present for payment and collect for
the Fund's account the amount payable upon all Securities
which mature;
(d) Promptly surrender Securities in temporary form
in exchange for definitive Securities;
(e) Promptly execute, as custodian, any necessary
declarations or certificates of ownership under the Federal
Income Tax Laws or the laws or regulations of any other taxing
authority now or hereafter in effect;
(f) Hold directly, or through the Book-Entry System
or the Depository with respect to Securities therein
deposited, for the account of a Series, all rights and similar
securities issued with respect to any Securities held by the
Custodian for such Series hereunder; and
(g) Promptly deliver to the Fund all notices, prox-
ies, proxy soliciting materials, consents and other written
information (including, without limitation, notices of tender
offers and exchange offers, pendency of calls, maturities of
Securities and expiration of rights) relating to Securities
held pursuant to this Agreement which are actually received by
the Custodian, such proxies and other similar materials to be
executed by the registered holder (if Securities are
registered otherwise than in the name of the Fund), but
without indicating the manner in which proxies or consents are
to be voted.
- 9 -
<PAGE>
6. Upon receipt of a Certificate and not otherwise, the
Custodian, directly or through the use of the Book-Entry
System or the Depository, shall:
(a) Promptly execute and deliver to such persons as
may be designated in such Certificate proxies, consents,
authorizations, and any other instruments whereby the author-
ity of the Fund as owner of any Securities held hereunder for
the Series specified in such Certificate may be exercised;
(b) Promptly deliver any Securities held hereunder
for the Series specified in such Certificate in exchange for
other Securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger,
consolidation or recapitalization of any corporation, or the
exercise of any right, warrant or conversion privilege and
receive and hold hereunder specifically allocated to such
Series any cash or other Securities received in exchange;
(c) Promptly deliver any Securities held hereunder
for the Series specified in such Certificate to any protective
committee, reorganization committee or other person in connec-
tion with the reorganization, refinancing, merger, consolida-
tion, recapitalization or sale of assets of any corporation,
and receive and hold hereunder specifically allocated to such
Series in exchange therefor such certificates of deposit,
interim receipts or other instruments or documents as may be
issued to it to evidence such delivery or such Securities as
may be issued upon such delivery; and
(d) Promptly present for payment and collect the
amount payable upon Securities which may be called as
specified in the Certificate.
7. Notwithstanding any provision elsewhere contained
herein, the Custodian shall not be required to obtain posses-
sion of any instrument or certificate representing any Futures
Contract, any Option, or any Futures Contract Option until
after it shall have determined, or shall have received a
Certificate from the Fund stating, that any such instruments
or certificates are available. The Fund shall deliver to the
Custodian such a Certificate no later than the business day
preceding the availability of any such instrument or
certificate. Prior to such availability, the Custodian shall
comply with Section 17(f) of the Investment Company Act of
1940 in connection with the purchase, sale, settlement, clos-
ing out or writing of Futures Contracts, Options, or Futures
Contract Options by making payments or deliveries specified in
Certificates in connection with any such purchase, sale,
writing, settlement or closing out upon its receipt from a
broker, dealer, or futures commission merchant of a statement
or confirmation reasonably believed by the Custodian to be in
the form customarily used by brokers, dealers, or future
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commission merchants with respect to such Futures Contracts,
Options, or Futures Contract Options, as the case may be,
confirming that such Security is held by such broker, dealer
or futures commission merchant, in book-entry form or
otherwise, in the name of the Custodian (or any nominee of the
Custodian) as custodian for the Fund, provided, however, that
notwithstanding the foregoing, payments to or deliveries from
the Margin Account and payments with respect to Securities to
which a Margin Account relates, shall be made in accordance
with the terms and conditions of the Margin Account
Agreement. Whenever any such instruments or certificates are
available, the Custodian shall, notwithstanding any provision
in this Agreement to the contrary, make payment for any
Futures Contract, Option, or Futures Contract Option for which
such instruments or such certificates are available only
against the delivery to the Custodian of such instrument or
such certificate, and deliver any Futures Contract, Option or
Futures Contract Option for which such instruments or such
certificates are available only against receipt by the
Custodian of payment therefor. Any such instrument or
certificate delivered to the Custodian shall be held by the
Custodian hereunder in accordance with, and subject to, the
provisions of this Agreement.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each execution of a purchase of
Securities by the Fund, other than a purchase of an Option, a
Futures Contract, or a Futures Contract Option, the Fund shall
deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a
Certificate, and (ii) with respect to each purchase of Money
Market Securities, a Certificate, Oral Instructions or Writ-
ten Instructions, specifying with respect to each such
purchase: (a) the Series to which such Securities are to be
specifically allocated; (b) the name of the issuer and the
title of the Securities; (c) the number of shares or the
principal amount purchased and accrued interest, if any; (d)
the date of purchase and settlement; (e) the purchase price
per unit; (f) the total amount payable upon such purchase; (g)
the name of the person from whom or the broker through whom
the purchase was made, and the name of the clearing broker, if
any; and (h) the name of the broker to whom payment is to be
made. The Custodian shall, upon receipt of such Securities
purchased by or for the Fund, pay to the broker specified in
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the Certificate out of the moneys held for the account of such
Series the total amount payable upon such purchase, provided
that the same conforms to the total amount payable as set
forth in such Certificate, Oral Instructions or Written
Instructions.
2. Promptly after each execution of a sale of Securi-
ties by the Fund, other than a sale of any Option, Futures
Contract, Futures Contract Option, or any Reverse Repurchase
Agreement, the Fund shall deliver such to the Custodian (i)
with respect to each sale of Securities which are not Money
Market Securities, a Certificate, and (ii) with respect to
each sale of Money Market Securities, a Certificate, Oral
Instructions or Written Instructions, specifying with respect
to each such sale: (a) the Series to which such Securities
were specifically allocated; (b) the name of the issuer and
the title of the Security; (c) the number of shares or
principal amount sold, and accrued interest, if any; (d) the
date of sale and settlement; (e) the sale price per unit; (f)
the total amount payable to the Fund upon such sale; (g) the
name of the broker through whom or the person to whom the sale
was made, and the name of the clearing broker, if any; and (h)
the name of the broker to whom the Securities are to be
delivered. On the settlement date, the Custodian shall
deliver the Securities specifically allocated to such Series
to the broker in accordance with generally accepted street
practices and as specified in the Certificate upon receipt of
the total amount payable to the Fund upon such sale, provided
that the same conforms to the total amount payable as set
forth in such Certificate, Oral Instructions or Written
Instructions.
ARTICLE V
OPTIONS
1. Promptly after each execution of a purchase of any
Option by the Fund other than a closing purchase transaction
the Fund shall deliver to the Custodian a Certificate specify-
ing with respect to each Option purchased: (a) the Series to
which such Option is specifically allocated; (b) the type of
Option (put or call); (c) the instrument, currency, or
Security underlying such Option and the number of Options, or
the name of the in the case of an Index Option, the index to
which such Option relates and the number of Index Options
purchased; (d) the expiration date; (e) the exercise price;
(f) the dates of purchase and settlement; (g) the total amount
payable by the Fund in connection with such purchase; and (h)
the name of the Clearing Member through whom such Option was
purchased. The Custodian shall pay, upon receipt of a Clear-
ing Member's statement confirming the purchase of such Option
held by such Clearing Member for the account of the Custodian
(or any duly appointed and registered nominee of the
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Custodian) as custodian for the Fund, out of moneys held for
the account of the Series to which such Option is to be
specifically allocated, the total amount payable upon such
purchase to the Clearing Member through whom the purchase was
made, provided that the same conforms to the total amount pay-
able as set forth in such Certificate.
2. Promptly after the execution of a sale of any Option
purchased by the Fund, other than a closing sale transaction,
pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to each such
sale: (a) the Series to which such Option was specifically
allocated; (b) the type of Option (put or call); (c) the
instrument, currency, or Security underlying such Option and
the number of Options, or the name of the issuer and the title
and number of shares subject to such Option or, in the case of
a Index Option, the index to which such Option relates and the
number of Index Options sold; (d) the date of sale; (e) the
sale price; (f) the date of settlement; (g) the total amount
payable to the Fund upon such sale; and (h) the name of the
Clearing Member through whom the sale was made. The Custodian
shall consent to the delivery of the Option sold by the Clear-
ing Member which previously supplied the confirmation
described in preceding paragraph 1 of this Article with
respect to such Option against payment to the Custodian of the
total amount payable to the Fund, provided that the same
conforms to the total amount payable as set forth in such
Certificate.
3. Promptly after the exercise by the Fund of any Call
Option purchased by the Fund pursuant to paragraph 1 hereof,
the Fund shall deliver to the Custodian a Certificate specify-
ing with respect to such Call Option: (a) the Series to which
such Call Option was specifically allocated; (b) the name of
the issuer and the title and number of shares subject to the
Call Option; (c) the expiration date; (d) the date of exercise
and settlement; (e) the exercise price per share; (f) the
total amount to be paid by the Fund upon such exercise; and
(g) the name of the Clearing Member through whom such Call
Option was exercised. The Custodian shall, upon receipt of
the Securities underlying the Call Option which was exercised,
pay out of the moneys held for the account of the Series to
which such Call Option was specifically allocated the total
amount payable to the Clearing Member through whom the Call
Option was exercised, provided that the same conforms to the
total amount payable as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put
Option purchased by the Fund pursuant to paragraph 1 hereof,
the Fund shall deliver to the Custodian a Certificate specify-
ing with respect to such Put Option: (a) the Series to which
such Put Option was specifically allocated; (b) the name of
the issuer and the title and number of shares subject to the
Put Option; (c) the expiration date; (d) the date of exercise
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and settlement; (e) the exercise price per share; (f) the
total amount to be paid to the Fund upon such exercise; and
(g) the name of the Clearing Member through whom such Put Op-
tion was exercised. The Custodian shall, upon receipt of the
amount payable upon the exercise of the Put Option, deliver or
direct a Depository to deliver the Securities specifically
allocated to such Series, provided the same conforms to the
amount payable to the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any Index
Option purchased by the Fund pursuant to paragraph 1 hereof,
the Fund shall deliver to the Custodian a Certificate specify-
ing with respect to such Index Option: (a) the Series to which
such Index Option was specifically allocated; (b) the type of
Index Option (put or call); (c) the number of Options being
exercised; (d) the index to which such Option relates; (e) the
expiration date; (f) the exercise price; (g) the total amount
to be received by the Fund in connection with such exercise;
and (h) the Clearing Member from whom such payment is to be
received.
6. Whenever the Fund writes a Covered Call Option, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Covered Call Option: (a) the
Series for which such Covered Call Option was written; (b) the
name of the issuer and the title and number of shares for
which the Covered Call Option was written and which underlie
the same; (c) the expiration date; (d) the exercise price; (e)
the premium to be received by the Fund; (f) the date such
Covered Call Option was written; and (g) the name of the
Clearing Member through whom the premium is to be received.
The Custodian shall deliver or cause to be delivered, in
exchange for receipt of the premium specified in the
Certificate with respect to such Covered Call Option, such
receipts as are required in accordance with the customs
prevailing among Clearing Members dealing in Covered Call Op-
tions and shall impose, or direct a Depository to impose, upon
the underlying Securities specified in the Certificate
specifically allocated to such Series such restrictions as may
be required by such receipts. Notwithstanding the foregoing,
the Custodian has the right, upon prior written notification
to the Fund, at any time to refuse to issue any receipts for
Securities in the possession of the Custodian and not
deposited with a Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund
and described in the preceding paragraph of this Article is
exercised, the Fund shall promptly deliver to the Custodian a
Certificate instructing the Custodian to deliver, or to direct
the Depository to deliver, the Securities subject to such
Covered Call Option and specifying: (a) the Series for which
such Covered Call Option was written; (b) the name of the is-
suer and the title and number of shares subject to the Covered
Call Option; (c) the Clearing Member to whom the underlying
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Securities are to be delivered; and (d) the total amount pay-
able to the Fund upon such delivery. Upon the return and/or
cancellation of any receipts delivered pursuant to paragraph 6
of this Article, the Custodian shall deliver, or direct a
Depository to deliver, the underlying Securities as specified
in the Certificate against payment of the amount to be
received as set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund
shall promptly deliver to the Custodian a Certificate specify-
ing with respect to such Put Option: (a) the Series for which
such Put Option was written; (b) the name of the issuer and
the title and number of shares for which the Put Option is
written and which underlie the same; (c) the expiration date;
(d) the exercise price; (e) the premium to be received by the
Fund; (f) the date such Put Option is written; (g) the name of
the Clearing Member through whom the premium is to be received
and to whom a Put Option guarantee letter is to be delivered;
(h) the amount of cash, and/or the amount and kind of Securi-
ties, if any, specifically allocated to such Series to be
deposited in the Senior Security Account for such Series; and
(i) the amount of cash and/or the amount and kind of Securi-
ties specifically allocated to such Series to be deposited
into the Collateral Account for such Series. The Custodian
shall, after making the deposits into the Collateral Account
specified in the Certificate, issue a Put Option guarantee
letter substantially in the form utilized by the Custodian on
the date hereof, and deliver the same to the Clearing Member
specified in the Certificate against receipt of the premium
specified in said Certificate. Notwithstanding the foregoing,
the Custodian shall be under no obligation to issue any Put
Option guarantee letter or similar document if it is unable to
make any of the representations contained therein.
9. Whenever a Put Option written by the Fund and
described in the preceding paragraph is exercised, the Fund
shall promptly deliver to the Custodian a Certificate specify-
ing: (a) the Series to which such Put Option was written; (b)
the name of the issuer and title and number of shares subject
to the Put Option; (c) the Clearing Member from whom the
underlying Securities are to be received; (d) the total amount
payable by the Fund upon such delivery; (e) the amount of cash
and/or the amount and kind of Securities specifically al-
located to such Series to be withdrawn from the Collateral
Account for such Series and (f) the amount of cash and/or the
amount and kind of Securities, specifically allocated to such
Series, if any, to be withdrawn from the Senior Security Ac-
count. Upon the return and/or cancellation of any Put Option
guarantee letter or similar document issued by the Custodian
in connection with such Put Option, the Custodian shall pay
out of the moneys held for the account of the Series to which
such Put Option was specifically allocated the total amount
payable to the Clearing Member specified in the Certificate as
set forth in such Certificate, against delivery of such
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Securities, and shall make the withdrawals specified in such
Certificate.
10. Whenever the Fund writes an Index Option, the Fund
shall promptly deliver to the Custodian a Certificate specify-
ing with respect to such Index Option: (a) the Series for
which such Index Option was written; (b) whether such Index
Option is a put or a call; (c) the number of options written;
(d) the index to which such Option relates; (e) the expiration
date; (f) the exercise price; (g) the Clearing Member through
whom such Option was written; (h) the premium to be received
by the Fund; (i) the amount of cash and/or the amount and kind
of Securities, if any, specifically allocated to such Series
to be deposited in the Senior Security Account for such
Series; (j) the amount of cash and/or the amount and kind of
Securities, if any, specifically allocated to such Series to
be deposited in the Collateral Account for such Series; and
(k) the amount of cash and/or the amount and kind of Securi-
ties, if any, specifically allocated to such Series to be
deposited in a Margin Account, and the name in which such ac-
count is to be or has been established. The Custodian shall,
upon receipt of the premium specified in the Certificate, make
the deposits, if any, into the Senior Security Account
specified in the Certificate, and either (1) deliver such
receipts, if any, which the Custodian has specifically agreed
to issue, which are in accordance with the customs prevailing
among Clearing Members in Index Options and make the deposits
into the Collateral Account specified in the Certificate, or
(2) make the deposits into the Margin Account specified in the
Certificate.
11. Whenever an Index Option written by the Fund and
described in the preceding paragraph of this Article is
exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to such Index Option: (a)
the Series for which such Index Option was written; (b) such
information as may be necessary to identify the Index Option
being exercised; (c) the Clearing Member through whom such
Index Option is being exercised; (d) the total amount payable
upon such exercise, and whether such amount is to be paid by
or to the Fund; (e) the amount of cash and/or amount and kind
of Securities, if any, to be withdrawn from the Margin
Account; and (f) the amount of cash and/or amount and kind of
Securities, if any, to be withdrawn from the Senior Security
Account for such Series; and the amount of cash and/or the
amount and kind of Securities, if any, to be withdrawn from
the Collateral Account for such Series. Upon the return
and/or cancellation of the receipt, if any, delivered pursuant
to the preceding paragraph of this Article, the Custodian
shall pay out of the moneys held for the account of the Series
to which such Stock Index Option was specifically allocated to
the Clearing Member specified in the Certificate the total
amount payable, if any, as specified therein.
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12. Promptly after the execution of a purchase or sale
by the Fund of any Option identical to a previously written
Option described in paragraphs, 6, 8 or 10 of this Article in
a transaction expressly designated as a "Closing Purchase
Transaction" or a "Closing Sale Transaction", the Fund shall
promptly deliver to the Custodian a Certificate specifying
with respect to the Option being purchased: (a) that the
transaction is a Closing Purchase Transaction or a Closing
Sale Transaction; (b) the Series for which the Option was
written; (c) the instrument, currency, or Security subject to
the Option, or, in the case of an Index Option, the index to
which such Option relates and the number of Options held; (d)
the exercise price; (e) the premium to be paid by or the
amount to be paid to the Fund; (f) the expiration date; (g)
the type of Option (put or call); (h) the date of such
purchase or sale; (i) the name of the Clearing Member to whom
the premium is to be paid or from whom the amount is to be
received; and (j) the amount of cash and/or the amount and
kind of Securities, if any, to be withdrawn from the
Collateral Account, a specified Margin Account, or the Senior
Security Account for such Series. Upon the Custodian's
payment of the premium or receipt of the amount, as the case
may be, specified in the Certificate and the return and/or
cancellation of any receipt issued pursuant to paragraphs 6, 8
or 10 of this Article with respect to the Option being
liquidated through the Closing Purchase Transaction or the
Closing Sale Transaction, the Custodian shall remove, or
direct a Depository to remove, the previously imposed
restrictions on the Securities underlying the Call Option.
13. Upon the expiration, exercise or consummation of a
Closing Purchase Transaction with respect to any Option
purchased or written by the Fund and described in this
Article, the Custodian shall delete such Option from the
statements delivered to the Fund pursuant to paragraph 3
Article III herein, and upon the return and/or cancellation of
any receipts issued by the Custodian, shall make such
withdrawals from the Collateral Account, and the Margin Ac-
count and/or the Senior Security Account as may be specified
in a Certificate received in connection with such expiration,
exercise, or consummation.
14. Securities acquired by the Fund through the exercise
of an Option described in this Article shall be subject to
Article IV hereof.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures
Contract, the Fund shall deliver to the Custodian a
Certificate specifying with respect to such Futures Contract,
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(or with respect to any number of identical Futures
Contract(s)): (a) the Series for which the Futures Contract is
being entered; (b) the category of Futures Contract (the name
of the underlying index or financial instrument); (c) the
number of identical Futures Contracts entered into; (d) the
delivery or settlement date of the Futures Contract(s); (e)
the date the Futures Contract(s) was (were) entered into and
the maturity date; (f) whether the Fund is buying (going long)
or selling (going short) such Futures Contract(s); (g) the
amount of cash and/or the amount and kind of Securities, if
any, to be deposited in the Senior Security Account for such
Series; (h) the name of the broker, dealer, or futures commis-
sion merchant through whom the Futures Contract was entered
into; and (i) the amount of fee or commission, if any, to be
paid and the name of the broker, dealer, or futures commission
merchant to whom such amount is to be paid. The Custodian
shall make the deposits, if any, to the Margin Account in ac-
cordance with the terms and conditions of the Margin Account
Agreement. The Custodian shall make payment out of the moneys
specifically allocated to such Series of the fee or commis-
sion, if any, specified in the Certificate and deposit in the
Senior Security Account for such Series the amount of cash
and/or the amount and kind of Securities specified in said
Certificate.
2. (a) Any variation margin payment or similar payment
required to be made by the Fund to a broker, dealer, or
futures commission merchant with respect to an outstanding
Futures Contract shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account Agree-
ment.
(b) Any variation margin payment or similar payment
from a broker, dealer, or futures commission merchant to the
Fund with respect to an outstanding Futures Contract shall be
received and dealt with by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian
hereunder is retained by the Fund until delivery or settlement
is made on such Futures Contract, the Fund shall deliver to
the Custodian prior to the delivery or settlement date a
Certificate specifying: (a) the Futures Contract and the
Series to which the same relates; (b) with respect to an Index
Futures Contract, the total cash settlement amount to be paid
or received, and with respect to a Financial Futures Contract,
the Securities and/or amount of cash to be delivered or
received; (c) the broker, dealer, or futures commission
merchant to or from whom payment or delivery is to be made or
received; and (d) the amount of cash and/or Securities to be
withdrawn from the Senior Security Account for such Series.
The Custodian shall make the payment or delivery specified in
the Certificate, and delete such Futures Contract from the
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statements delivered to the Fund pursuant to paragraph 3 of
Article III herein.
4. Whenever the Fund shall enter into a Futures
Contract to offset a Futures Contract held by the Custodian
hereunder, the Fund shall deliver to the Custodian a
Certificate specifying: (a) the items of information required
in a Certificate described in paragraph 1 of this Article, and
(b) the Futures Contract being offset. The Custodian shall
make payment out of the money specifically allocated to such
Series of the fee or commission, if any, specified in the
Certificate and delete the Futures Contract being offset from
the statements delivered to the Fund pursuant to paragraph 3
of Article III herein, and make such withdrawals from the
Senior Security Account for such Series as may be specified in
such Certificate. The withdrawals, if any, to be made from
the Margin Account shall be made by the Custodian in ac-
cordance with the terms and conditions of the Margin Account
Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the execution of a purchase of any
Futures Contract Option by the Fund, the Fund shall deliver to
the Custodian a Certificate specifying with respect to such
Futures Contract Option: (a) the Series to which such Option
is specifically allocated; (b) the type of Futures Contract
Option (put or call); (c) the type of Futures Contract and
such other information as may be necessary to identify the
Futures Contract underlying the Futures Contract Option
purchased; (d) the expiration date; (e) the exercise price;
(f) the dates of purchase and settlement; (g) the amount of
premium to be paid by the Fund upon such purchase; (h) the
name of the broker or futures commission merchant through whom
such option was purchased; and (i) the name of the broker, or
futures commission merchant, to whom payment is to be made.
The Custodian shall pay out of the moneys specifically al-
located to such Series the total amount to be paid upon such
purchase to the broker or futures commissions merchant through
whom the purchase was made, provided that the same conforms to
the amount set forth in such Certificate.
2. Promptly after the execution of a sale of any
Futures Contract Option purchased by the Fund pursuant to
paragraph 1 hereof, the Fund shall deliver to the Custodian a
Certificate specifying with respect to each such sale: (a)
Series to which such Futures Contract Option was specifically
allocated; (b) the type of Future Contract Option (put or
call); (c) the type of Futures Contract and such other
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information as may be necessary to identify the Futures
Contract underlying the Futures Contract Option; (d) the date
of sale; (e) the sale price; (f) the date of settlement; (g)
the total amount payable to the Fund upon such sale; and (h)
the name of the broker of futures commission merchant through
whom the sale was made. The Custodian shall consent to the
cancellation of the Futures Contract Option being closed
against payment to the Custodian of the total amount payable
to the Fund, provided the same conforms to the total amount
payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the
Fund pursuant to paragraph 1 is exercised by the Fund, the
Fund shall promptly deliver to the Custodian a Certificate
specifying: (a) the Series to which such Futures Contract Op-
tion was specifically allocated; (b) the particular Futures
Contract Option (put or call) being exercised; (c) the type of
Futures Contract underlying the Futures Contract Option; (d)
the date of exercise; (e) the name of the broker or futures
commission merchant through whom the Futures Contract Option
is exercised; (f) the net total amount, if any, payable by the
Fund; (g) the amount, if any, to be received by the Fund; and
(h) the amount of cash and/or the amount and kind of Securi-
ties to be deposited in the Senior Security Account for such
Series. The Custodian shall make, out of the moneys and
Securities specifically allocated to such Series, the payments
of money, if any, and the deposits of Securities, if any, into
the Senior Security Account as specified in the Certificate.
The deposits, if any, to be made to the Margin Account shall
be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
4. Whenever the Fund writes a Futures Contract Option,
the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Futures Contract Option: (a)
the Series for which such Futures Contract Option was written;
(b) the type of Futures Contract Option (put or call); (c) the
type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the
Futures Contract Option; (d) the expiration date; (e) the
exercise price; (f) the premium to be received by the Fund;
(g) the name of the broker or futures commission merchant
through whom the premium is to be received; and (h) the amount
of cash and/or the amount and kind of Securities, if any, to
be deposited in the Senior Security Account for such Series.
The Custodian shall, upon receipt of the premium specified in
the Certificate, make out of the moneys and Securities
specifically allocated to such Series the deposits into the
Senior Security Account, if any, as specified in the
Certificate. The deposits, if any, to be made to the Margin
Account shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
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5. Whenever a Futures Contract Option written by the
Fund which is a call is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying: (a) the
Series to which such Futures Contract Option was specifically
allocated; (b) the particular Futures Contract Option
exercised; (c) the type of Futures Contract underlying the
Futures Contract Option; (d) the name of the broker or futures
commission merchant through whom such Futures Contract Option
was exercised; (e) the net total amount, if any, payable to
the Fund upon such exercise; (f) the net total amount, if any,
payable by the Fund upon such exercise; and (g) the amount of
cash and/or the amount and kind of Securities to be deposited
in the Senior Security Account for such Series. The Custodian
shall, upon its receipt of the net total amount payable to the
Fund, if any, specified in such Certificate make the payments,
if any, and the deposits, if any, into the Senior Security
Account as specified in the Certificate. The deposits, if any,
to be made to the Margin Account shall be made by the
Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
6. Whenever a Futures Contract Option which is written
by the Fund and which is a put is exercised, the Fund shall
promptly deliver to the Custodian a Certificate specifying:
(a) the Series to which such Option was specifically al-
located; (b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying such Futures
Contract Option; (d) the name of the broker or futures commis-
sion merchant through whom such Futures Contract Option is
exercised; (e) the net total amount, if any, payable to the
Fund upon such exercise; (f) the net total amount, if any,
payable by the Fund upon such exercise; and (g) the amount and
kind of Securities and/or cash to be withdrawn from or
deposited in, the Senior Security Account for such Series, if
any. The Custodian shall, upon its receipt of the net total
amount payable to the Fund, if any, specified in the
Certificate, make out of the moneys and Securities
specifically allocated to such Series, the payments, if any,
and the deposits, if any, into the Senior Security Account as
specified in the Certificate. The deposits to and/or
withdrawals from the Margin Account, if any, shall be made by
the Custodian in accordance with the terms and conditions of
the Margin Account Agreement.
7. Promptly after the execution by the Fund of a
purchase of any Futures Contract Option identical to a previ-
ously written Futures Contract Option described in this
Article in order to liquidate its position as a writer of such
Futures Contract Option, the Fund shall deliver to the
Custodian a Certificate specifying with respect to the Futures
Contract Option being purchased: (a) the Series to which such
Option is specifically allocated; (b) that the transaction is
a closing transaction; (c) the type of Future Contract and
such other information as may be necessary to identify the
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Futures Contract underlying the Futures Option Contract; (d)
the exercise price; (e) the premium to be paid by the Fund;
(f) the expiration date; (g) the name of the broker or futures
commission merchant to whom the premium is to be paid; and (h)
the amount of cash and/or the amount and kind of Securities,
if any, to be withdrawn from the Senior Security Account for
such Series. The Custodian shall effect the withdrawals from
the Senior Security Account specified in the Certificate. The
withdrawals, if any, to be made from the Margin Account shall
be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a
closing transaction with respect to, any Futures Contract Op-
tion written or purchased by the Fund and described in this
Article, the Custodian shall (a) delete such Futures Contract
Option from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein and, (b) make such withdraw-
als from and/or in the case of an exercise such deposits into
the Senior Security Account as may be specified in a
Certificate. The deposits to and/or withdrawals from the
Margin Account, if any, shall be made by the Custodian in ac-
cordance with the terms and conditions of the Margin Account
Agreement.
9. Futures Contracts acquired by the Fund through the
exercise of a Futures Contract Option described in this
Article shall be subject to Article VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after the execution of any short sales of
Securities by any Series of the Fund, the Fund shall deliver
to the Custodian a Certificate specifying: (a) the Series for
which such short sale was made; (b) the name of the issuer and
the title of the Security; (c) the number of shares or
principal amount sold, and accrued interest or dividends, if
any; (d) the dates of the sale and settlement; (e) the sale
price per unit; (f) the total amount credited to the Fund upon
such sale, if any, (g) the amount of cash and/or the amount
and kind of Securities, if any, which are to be deposited in a
Margin Account and the name in which such Margin Account has
been or is to be established; (h) the amount of cash and/or
the amount and kind of Securities, if any, to be deposited in
a Senior Security Account, and (i) the name of the broker
through whom such short sale was made. The Custodian shall
upon its receipt of a statement from such broker confirming
such sale and that the total amount credited to the Fund upon
such sale, if any, as specified in the Certificate is held by
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such broker for the account of the Custodian (or any nominee
of the Custodian) as custodian of the Fund, issue a receipt or
make the deposits into the Margin Account and the Senior
Security Account specified in the Certificate.
2. Promptly after the execution of a purchase to
close-out any short sale of Securities, the Fund shall
promptly deliver to the Custodian a Certificate specifying
with respect to each such closing out: (a) the Series for
which such transaction is being made; (b) the name of the is-
suer and the title of the Security; (c) the number of shares
or the principal amount, and accrued interest or dividends, if
any, required to effect such closing-out to be delivered to
the broker; (d) the dates of closing-out and settlement; (e)
the purchase price per unit; (f) the net total amount payable
to the Fund upon such closing-out; (g) the net total amount
payable to the broker upon such closing-out; (h) the amount of
cash and the amount and kind of Securities to be withdrawn, if
any, from the Margin Account; (i) the amount of cash and/or
the amount and kind of Securities, if any, to be withdrawn
from the Senior Security Account; and (j) the name of the
broker through whom the Fund is effecting such closing-out.
The Custodian shall, upon receipt of the net total amount pay-
able to the Fund upon such closing-out, and the return and/ or
cancellation of the receipts, if any, issued by the Custodian
with respect to the short sale being closed-out, pay out of
the moneys held for the account of the Fund to the broker the
net total amount payable to the broker, and make the withdraw-
als from the Margin Account and the Senior Security Account,
as the same are specified in the Certificate.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase
Agreement with respect to Securities and money held by the
Custodian hereunder, the Fund shall deliver to the Custodian a
Certificate, or in the event such Reverse Repurchase Agreement
is a Money Market Security, a Certificate, Oral Instructions,
or Written Instructions specifying: (a) the Series for which
the Reverse Repurchase Agreement is entered; (b) the total
amount payable to the Fund in connection with such Reverse
Repurchase Agreement and specifically allocated to such
Series; (c) the broker, dealer, or financial institution with
whom the Reverse Repurchase Agreement is entered; (d) the
amount and kind of Securities to be delivered by the Fund to
such broker, dealer, or financial institution; (e) the date of
such Reverse Repurchase Agreement; and (f) the amount of cash
and/or the amount and kind of Securities, if any, specifically
allocated to such Series to be deposited in a Senior Security
Account for such Series in connection with such Reverse
Repurchase Agreement. The Custodian shall, upon receipt of
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the total amount payable to the Fund specified in the
Certificate, Oral Instructions, or Written Instructions make
the delivery to the broker, dealer, or financial institution
and the deposits, if any, to the Senior Security Account,
specified in such Certificate, Oral Instructions, or Written
Instructions.
2. Upon the termination of a Reverse Repurchase Agree-
ment described in preceding paragraph 1 of this Article, the
Fund shall promptly deliver a Certificate or, in the event
such Reverse Repurchase Agreement is a Money Market Security,
a Certificate, Oral Instructions, or Written Instructions to
the Custodian specifying: (a) the Reverse Repurchase Agreement
being terminated and the Series for which same was entered;
(b) the total amount payable by the Fund in connection with
such termination; (c) the amount and kind of Securities to be
received by the Fund and specifically allocated to such Series
in connection with such termination; (d) the date of termina-
tion; (e) the name of the broker, dealer, or financial
institution with whom the Reverse Repurchase Agreement is to
be terminated; and (f) the amount of cash and/or the amount
and kind of Securities to be withdrawn from the Senior Securi-
ties Account for such Series. The Custodian shall, upon
receipt of the amount and kind of Securities to be received by
the Fund specified in the Certificate, Oral Instructions, or
Written Instructions, make the payment to the broker, dealer,
or financial institution and the withdrawals, if any, from the
Senior Security Account, specified in such Certificate, Oral
Instructions, or Written Instructions.
3. The Certificates, Oral Instructions, or Written
Instructions described in paragraphs 1 and 2 of this Article
may with respect to any particular Reverse Repurchase Agree-
ment be combined and delivered to the Custodian at the time of
entering into such Reverse Repurchase Agreement.
ARTICLE X
LOANS OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities
specifically allocated to a Series held by the Custodian
hereunder, the Fund shall deliver or cause to be delivered to
the Custodian a Certificate specifying with respect to each
such loan: (a) the Series to which the loaned Securities are
specifically allocated; (b) the name of the issuer and the
title of the Securities, (c) the number of shares or the
principal amount loaned, (d) the date of loan and delivery,
(e) the total amount to be delivered to the Custodian against
the loan of the Securities, including the amount of cash col-
lateral and the premium, if any, separately identified, and
(f) the name of the broker, dealer, or financial institution
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<PAGE>
to which the loan was made. The Custodian shall deliver the
Securities thus designated to the broker, dealer or financial
institution to which the loan was made upon receipt of the
total amount designated in the Certificate as to be delivered
against the loan of Securities. The Custodian may accept pay-
ment in connection with a delivery otherwise than through the
Book-Entry System or a Depository only in the form of a certi-
fied or bank cashier's check payable to the order of the Fund
or the Custodian drawn on New York Clearing House funds.
2. In connection with each termination of a loan of
Securities by the Fund, the Fund shall deliver or cause to be
delivered to the Custodian a Certificate specifying with
respect to each such loan termination and return of Securi-
ties: (a) the Series to which the loaned Securities are
specifically allocated; (b) the name of the issuer and the
title of the Securities to be returned, (c) the number of
shares or the principal amount to be returned, (d) the date of
termination, (e) the total amount to be delivered by the
Custodian (including the cash collateral for such Securities
minus any offsetting credits as described in said
Certificate), and (f) the name of the broker, dealer, or
financial institution from which the Securities will be
returned. The Custodian shall receive all Securities returned
from the broker, dealer, or financial institution to which
such Securities were loaned and upon receipt thereof shall
pay, out of the moneys held for the account of the Fund, the
total amount payable upon such return of Securities as set
forth in the Certificate.
ARTICLE XI
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall establish a Senior Security Ac-
count and from time to time make such deposits thereto, or
withdrawals therefrom, as specified in a Certificate. Such
Certificate shall specify the Series for which such deposit or
withdrawal is to be made and the amount of cash and/or the
amount and kind of Securities specifically allocated to such
Series to be deposited in, or withdrawn from, such Senior
Security Account for such Series. In the event that the Fund
fails to specify in a Certificate the Series, the name of the
issuer, the title and the number of shares or the principal
amount of any particular Securities to be deposited by the
Custodian into, or withdrawn from, a Senior Securities Ac-
count, the Custodian shall be under no obligation to make any
such deposit or withdrawal and shall promptly notify the Fund
that no such deposit has been made.
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<PAGE>
2. The Custodian shall make deliveries or payments from
a Margin Account to the broker, dealer, futures commission
merchant or Clearing Member in whose name, or for whose
benefit, the account was established as specified in the
Margin Account Agreement.
3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any
Margin Account shall be dealt with in accordance with the
terms and conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and
security interest in and to any property at any time held by
the Custodian in any Collateral Account described herein. In
accordance with applicable law the Custodian may enforce its
lien and realize on any such property whenever the Custodian
has made payment or delivery pursuant to any Put Option
guarantee letter or similar document or any receipt issued
hereunder by the Custodian. In the event the Custodian should
realize on any such property net proceeds which are less than
the Custodian's obligations under any Put Option guarantee
letter or similar document or any receipt, such deficiency
shall be a debt owed the Custodian by the Fund within the
scope of Article XIV herein.
5. On each business day the Custodian shall furnish the
Fund with a statement with respect to each Margin Account in
which money or Securities are held specifying as of the close
of business on the previous business day: (a) the name of the
Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The
Custodian shall make available upon request to any broker,
dealer, or futures commission merchant specified in the name
of a Margin Account a copy of the statement furnished the Fund
with respect to such Margin Account.
6. The Custodian shall establish a Collateral Account
and from time to time shall make such deposits thereto as may
be specified in a Certificate. Promptly after the close of
business on each business day in which cash and/or Securities
are maintained in a Collateral Account for any Series, the
Custodian shall furnish the Fund with a statement with respect
to such Collateral Account specifying the amount of cash
and/or the amount and kind of Securities held therein. No
later than the close of business next succeeding the delivery
to the Fund of such statement, the Fund shall furnish to the
Custodian a Certificate or Written Instructions specifying the
then market value of the Securities described in such state-
ment. In the event such then market value is indicated to be
less than the Custodian's obligation with respect to any
outstanding Put Option guarantee letter or similar document,
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the Fund shall promptly specify in a Certificate the ad-
ditional cash and/or Securities to be deposited in such Col-
lateral Account to eliminate such deficiency.
ARTICLE XII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of
the resolution of the Board of Trustees of the Fund, certified
by the Secretary, the Clerk, any Assistant Secretary or any
Assistant Clerk, either (i) setting forth with respect to the
Series specified therein the date of the declaration of a
dividend or distribution, the date of payment thereof, the
record date as of which shareholders entitled to payment shall
be determined, the amount payable per Share of such Series to
the shareholders of record as of that date and the total
amount payable to the Dividend Agent and any sub-dividend
agent or co-dividend agent of the Fund on the payment date, or
(ii) authorizing with respect to the Series specified therein
and the declaration of dividends and distributions thereon
the Custodian to rely on Oral Instructions, Written Instruc-
tions, or a Certificate setting forth the date of the declara-
tion of such dividend or distribution, the date of payment
thereof, the record date as of which shareholders entitled to
payment shall be determined, the amount payable per Share of
such Series to the shareholders of record as of that date and
the total amount payable to the Dividend Agent on the payment
date.
2. Upon the payment date specified in such resolution,
Oral Instructions, Written Instructions, or Certificate, as
the case may be, the Custodian shall pay to the Transfer Agent
Account out of the moneys held for the account of the Series
specified therein the total amount payable to the Dividend
Agent and any sub-dividend agent or co-dividend agent of the
Fund with respect to such Series.
ARTICLE XIII
SALE OF SHARES
1. Whenever the Fund shall sell any Shares, it shall
deliver or cause to be delivered, to the Custodian a
Certificate duly specifying:
(a) The Series, the number of Shares sold, trade
date, and price; and
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(b) The amount of money to be received by the
Custodian for the sale of such Shares and specifically al-
located to the separate account in the name of such Series.
2. Upon receipt of such money from the Transfer Agent,
the Custodian shall credit such money to the separate account
in the name of the Series for which such money was received.
3. Upon issuance of any Shares of any Series the
Custodian shall pay, out of the money held for the account of
such Series, all original issue or other taxes required to be
paid by the Fund in connection with such issuance upon the
receipt of a Certificate specifying the amount to be paid.
ARTICLE XIV
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian, should in its sole discretion
advance funds on behalf of any Series which results in an
overdraft because the moneys held by the Custodian in the
separate account for such Series shall be insufficient to pay
the total amount payable upon a purchase of Securities
specifically allocated to such Series, as set forth in a
Certificate, Oral Instructions, or Written Instructions or
which results in an overdraft in the separate account of such
Series for some other reason, or if the Fund is for any other
reason indebted to the Custodian with respect to a Series,
(except a borrowing for investment or for temporary or
emergency purposes using Securities as collateral pursuant to
a separate agreement and subject to the provisions of
paragraph 2 of this Article), such overdraft or indebtedness
shall be deemed to be a loan made by the Custodian to the Fund
for such Series payable on demand and shall bear interest from
the date incurred at a rate per annum (based on a 360-day year
for the actual number of days involved) equal to the Federal
Funds Rate plus 1/2%, such rate to be adjusted on the effec-
tive date of any change in such Federal Funds Rate but in no
event to be less than 6% per annum. In addition, the Fund
hereby agrees that the Custodian shall have a continuing lien
and security interest in the aggregate amount of such
overdrafts and indebtedness as may from time to time exist in
and to any property specifically allocated to such Series at
any time held by it for the benefit of such Series or in which
the Fund may have an interest which is then in the Custodian's
possession or control or in possession or control of any third
party acting in the Custodian's behalf. The Fund authorizes
the Custodian, in its sole discretion, at any time to charge
any such overdraft or indebtedness together with interest due
thereon against any money balance of account standing to such
Series' credit on the Custodian's books. In addition, the
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Fund hereby covenants that on each Business Day on which
either it intends to enter a Reverse Repurchase Agreement and/
or otherwise borrow from a third party, or which next succeeds
a Business Day on which at the close of business the Fund had
outstanding a Reverse Repurchase Agreement or such a borrow-
ing, it shall prior to 9 a.m., New York City time, advise the
Custodian, in writing, of each such borrowing, shall specify
the Series to which the same relates, and shall not incur any
indebtedness, including pursuant to any Reverse Repurchase
Agreement, not so specified other than from the Custodian.
2. The Fund will cause to be delivered to the Custodian
by any bank (including, if the borrowing is pursuant to a
separate agreement, the Custodian) from which it borrows money
for investment or for temporary or emergency purposes using
Securities held by the Custodian hereunder as collateral for
such borrowings, a notice or undertaking in the form currently
employed by any such bank setting forth the amount which such
bank will loan to the Fund against delivery of a stated amount
of collateral. The Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to each such
borrowing: (a) the Series to which such borrowing relates; (b)
the name of the bank, (c) the amount and terms of the borrow-
ing, which may be set forth by incorporating by reference an
attached promissory note, duly endorsed by the Fund, or other
loan agreement, (d) the time and date, if known, on which the
loan is to be entered into, (e) the date on which the loan
becomes due and payable, (f) the total amount payable to the
Fund on the borrowing date, (g) the market value of Securities
to be delivered as collateral for such loan, including the
name of the issuer, the title and the number of shares or the
principal amount of any particular Securities, and (h) a
statement specifying whether such loan is for investment
purposes or for temporary or emergency purposes and that such
loan is in conformance with the Investment Company Act of 1940
and the Fund's prospectus. The Custodian shall deliver on the
borrowing date specified in a Certificate the specified col-
lateral and the executed promissory note, if any, against
delivery by the lending bank of the total amount of the loan
payable, provided that the same conforms to the total amount
payable as set forth in the Certificate. The Custodian may,
at the option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all rights
therein given the lending bank by virtue of any promissory
note or loan agreement. The Custodian shall deliver such
Securities as additional collateral as may be specified in a
Certificate to collateralize further any transaction described
in this paragraph. The Fund shall cause all Securities
released from collateral status to be returned directly to the
Custodian, and the Custodian shall receive from time to time
such return of collateral as may be tendered to it. In the
event that the Fund fails to specify in a Certificate the
Series, the name of the issuer, the title and number of shares
or the principal amount of any particular Securities to be
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delivered as collateral by the Custodian, to any such bank,
the Custodian shall not be under any obligation to deliver any
Securities.
ARTICLE XV
CONCERNING THE CUSTODIAN
1. The Custodian shall use reasonable care in the
performance of its duties hereunder, and, except as
hereinafter provided, neither the Custodian nor its nominee
shall be liable for any loss or damage, including counsel
fees, resulting from its action or omission to act or
otherwise, either hereunder or under any Margin Account Agree-
ment, except for any such loss or damage arising out of its
own negligence, bad faith, or willful misconduct or that of
its officers, employees, or agents. The Custodian may, with
respect to questions of law arising hereunder or under any
Margin Account Agreement, apply for and obtain the advice and
opinion of counsel to the Fund, at the expense of the Fund,
or of its own counsel, at its own expense, and shall be fully
protected with respect to anything done or omitted by it in
good faith in conformity with such advice or opinion. The
Custodian shall be liable to the Fund for any loss or damage
resulting from the use of the Book-Entry System or any
Depository arising by reason of any negligence or willful
misconduct on the part of the Custodian or any of its
employees or agents.
2. Notwithstanding the foregoing, the Custodian shall
be under no obligation to inquire into, and shall not be li-
able for:
(a) The validity (but not the authenticity) of the
issue of any Securities purchased, sold, or written by or for
the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received
therefor, as specified in a Certificate, Oral Instructions, or
Written Instructions;
(b) The legality of the sale or redemption of any
Shares, or the propriety of the amount to be received or paid
therefor, as specified in a Certificate;
(c) The legality of the declaration or payment of
any dividend by the Fund, as specified in a resolution,
Certificate, Oral Instructions, or Written Instructions;
(d) The legality of any borrowing by the Fund using
Securities as collateral;
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<PAGE>
(e) The legality of any loan of portfolio Securi-
ties, nor shall the Custodian be under any duty or obligation
to see to it that the cash collateral delivered to it by a
broker, dealer, or financial institution or held by it at any
time as a result of such loan of portfolio Securities of the
Fund is adequate collateral for the Fund against any loss it
might sustain as a result of such loan, except that this sub-
paragraph shall not excuse any liability the Custodian may
have for failing to act in accordance with Article X hereof or
any Certificate, Oral Instructions, or Written Instructions
given in accordance with this Agreement. The Custodian
specifically, but not by way of limitation, shall not be under
any duty or obligation periodically to check or notify the
Fund that the amount of such cash collateral held by it for
the Fund is sufficient collateral for the Fund, but such duty
or obligation shall be the sole responsibility of the Fund.
In addition, the Custodian shall be under no duty or obliga-
tion to see that any broker, dealer or financial institution
to which portfolio Securities of the Fund are lent pursuant to
Article X of this Agreement makes payment to it of any
dividends or interest which are payable to or for the account
of the Fund during the period of such loan or at the termina-
tion of such loan, provided, however, that the Custodian shall
promptly notify the Fund in the event that such dividends or
interest are not paid and received when due; or
(f) The sufficiency or value of any amounts of
money and/or Securities held in any Margin Account, Senior
Security Account or Collateral Account in connection with
transactions by the Fund, except that this sub-paragraph shall
not excuse any liability the Custodian may have for failing to
establish, maintain, make deposits to or withdrawals from such
accounts in accordance with this Agreement. In addition, the
Custodian shall be under no duty or obligation to see that any
broker, dealer, futures commission merchant or Clearing Member
makes payment to the Fund of any variation margin payment or
similar payment which the Fund may be entitled to receive from
such broker, dealer, futures commission merchant or Clearing
Member, to see that any payment received by the Custodian from
any broker, dealer, futures commission merchant or Clearing
Member is the amount the Fund is entitled to receive, or to
notify the Fund of the Custodian's receipt or non-receipt of
any such payment.
3. The Custodian shall not be liable for, or considered
to be the Custodian of, any money, whether or not represented
by any check, draft, or other instrument for the payment of
money, received by it on behalf of the Fund until the
Custodian actually receives such money directly or by the
final crediting of the account representing the Fund's inter-
est at the Book-Entry System or the Depository.
4. With respect to Securities held in a Depository,
except as otherwise provided in paragraph 5(b) of Article III
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<PAGE>
hereof, the Custodian shall have no responsibility and shall
not be liable for ascertaining or acting upon any calls,
conversions, exchange offers, tenders, interest rate changes
or similar matters relating to such Securities, unless the
Custodian shall have actually received timely notice from the
Depository in which such Securities are held. In no event
shall the Custodian have any responsibility or liability for
the failure of a Depository to collect, or for the late col-
lection or late crediting by a Depository of any amount pay-
able upon Securities deposited in a Depository which may
mature or be redeemed, retired, called or otherwise become
payable. However, upon receipt of a Certificate from the Fund
of an overdue amount on Securities held in a Depository the
Custodian shall make a claim against the Depository on behalf
of the Fund, except that the Custodian shall not be under any
obligation to appear in, prosecute or defend any action suit
or proceeding in respect to any Securities held by a
Depository which in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all
expense and liability be furnished as often as may be
required, or alternatively, the Fund shall be subrogated to
the rights of the Custodian with respect to such claim against
the Depository should it so request in a Certificate. This
paragraph shall not, however, excuse any failure by the
Custodian to act in accordance with a Certificate, Oral
Instructions, or Written Instructions given in accordance with
this Agreement.
5. The Custodian shall not be under any duty or obliga-
tion to take action to effect collection of any amount due to
the Fund from the Transfer Agent of the Fund nor to take any
action to effect payment or distribution by the Transfer Agent
of the Fund of any amount paid by the Custodian to the
Transfer Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or obliga-
tion to take action to effect collection of any amount if the
Securities upon which such amount is payable are in default,
or if payment is refused after the Custodian has timely and
properly, in accordance with this Agreement, made due demand
or presentation, unless and until (i) it shall be directed to
take such action by a Certificate and (ii) it shall be assured
to its satisfaction of reimbursement of its costs and expenses
in connection with any such action, but the Custodian shall
have such a duty if the Securities were not in default on the
payable date and the Custodian failed to timely and properly
make such demand for payment and such failure is the reason
for the non-receipt of payment.
7. The Custodian may appoint one or more banking
institutions as Sub-Custodian or Sub-Custodians, or as
Co-Custodian or Co-Custodians including, but not limited to,
banking institutions located in foreign countries, of
Securities and moneys at any time owned by the Fund, upon such
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terms and conditions as may be approved in a Certificate or
contained in an agreement executed by the Custodian, the Fund
and the appointed institution.
8. The Custodian agrees to indemnify the Fund against
and save the Fund harmless from all liability, claims, losses
and demands whatsoever, including attorney's fees, howsoever
arising or incurred because of the negligence, bad faith or
willful misconduct of any Sub-Custodian of the Securities and
moneys owned by the Fund, provided such Sub-Custodian is a
banking institution located in a foreign country and appointed
by the Custodian pursuant to paragraph 7 of this Article.
9. The Custodian shall not be under any duty or obliga-
tion (a) to ascertain whether any Securities at any time
delivered to, or held by it, for the account of the Fund and
specifically allocated to a Series are such as properly may be
held by the Fund or such Series under the provisions of its
then current prospectus, or (b) to ascertain whether any
transactions by the Fund, whether or not involving the
Custodian, are such transactions as may properly be engaged in
by the Fund.
10. The Custodian shall be entitled to receive and the
Fund agrees to pay to the Custodian all reasonable
out-of-pocket expenses and such compensation as may be agreed
upon from time to time between the Custodian and the Fund.
The Custodian may charge such compensation, and any such
expenses with respect to a Series incurred by the Custodian in
the performance of its duties under this Agreement against any
money specifically allocated to such Series. The Custodian
shall also be entitled to charge against any money held by it
for the account of a Series the amount of any loss, damage,
liability or expense, including counsel fees, for which it
shall be entitled to reimbursement under the provisions of
this Agreement attributable to, or arising out of, its serving
as Custodian for such Series. The expenses for which the
Custodian shall be entitled to reimbursement hereunder shall
include, but are not limited to, the expenses of
sub-custodians and foreign branches of the Custodian incurred
in settling outside of New York City transactions involving
the purchase and sale of Securities of the Fund.
Notwithstanding the foregoing or anything else contained in
this Agreement to the contrary, the Custodian shall, prior to
effecting any charge for compensation, expenses, or any
overdraft or indebtedness or interest thereon, submit an
invoice therefor to the Fund.
11. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing, Oral
Instructions, or Written Instructions received by the
Custodian and reasonably believed by the Custodian to be
genuine. The Fund agrees to forward to the Custodian a
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<PAGE>
Certificate or facsimile thereof confirming Oral Instructions
or Written Instructions in such manner so that such
Certificate or facsimile thereof is received by the Custodian,
whether by hand delivery, telecopier or other similar device,
or otherwise, by the close of business of the same day that
such Oral Instructions or Written Instructions are given to
the Custodian. The Fund agrees that the fact that such
confirming instructions are not received by the Custodian
shall in no way affect the validity of the transactions or
enforceability of the transactions thereby authorized by the
Fund. The Fund agrees that the Custodian shall incur no li-
ability to the Fund in acting upon Oral Instructions or Writ-
ten Instructions given to the Custodian hereunder concerning
such transactions provided such instructions reasonably appear
to have been received from an Authorized Person.
12. The Custodian shall be entitled to rely upon any
instrument, instruction or notice received by the Custodian
and reasonably believed by the Custodian to be given in ac-
cordance with the terms and conditions of any Margin Account
Agreement. Without limiting the generality of the foregoing,
the Custodian shall be under no duty to inquire into, and
shall not be liable for, the accuracy of any statements or
representations contained in any such instrument or other
notice including, without limitation, any specification of any
amount to be paid to a broker, dealer, futures commission
merchant or Clearing Member. This paragraph shall not excuse
any failure by the Custodian to have acted in accordance with
any Margin Agreement it has executed or any Certificate, Oral
Instructions, or Written Instructions given in accordance with
this Agreement.
13. The books and records pertaining to the Fund, as
described in Appendix E hereto, which are in the possession of
the Custodian shall be the property of the Fund. Such books
and records shall be prepared and maintained by the Custodian
as required by the Investment Company Act of 1940, as amended,
and other applicable securities laws and rules and regula-
tions. The Fund, or the Fund's authorized representatives,
shall have access to such books and records during the
Custodian's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records
shall be provided by the Custodian to the Fund or the Fund's
authorized representative, and the Fund shall reimburse the
Custodian its expenses of providing such copies. Upon reason-
able request of the Fund, the Custodian shall provide in hard
copy or on micro-film, whichever the Custodian elects, any
records included in any such delivery which are maintained by
the Custodian on a computer disc, or are similarly maintained,
and the Fund shall reimburse the Custodian for its expenses of
providing such hard copy or micro-film.
14. The Custodian shall provide the Fund with any report
obtained by the Custodian on the system of internal accounting
- 34 -
<PAGE>
control of the Book-Entry System, each Depository or O.C.C.,
and with such reports on its own systems of internal account-
ing control as the Fund may reasonably request from time to
time.
15. The Custodian shall furnish upon request annually to
the Fund a letter prepared by the Custodian's accountants with
respect to the Custodian's internal systems and controls in
the form generally provided by the Custodian to other invest-
ment companies for which the Custodian acts as custodian.
16. The Fund agrees to indemnify the Custodian against
and save the Custodian harmless from all liability, claims,
losses and demands whatsoever, including attorney's fees,
howsoever arising out of, or related to, the Custodian's
performance of its obligations under this Agreement, except
for any such liability, claim, loss and demand arising out of
the Custodian's own negligence, bad faith, or willful
misconduct or that of its officers, employees, or agents.
17. Subject to the foregoing provisions of this Agree-
ment, the Custodian shall deliver and receive Securities, and
receipts with respect to such Securities, and shall make and
receive payments only in accordance with the customs prevail-
ing from time to time among brokers or dealers in such Securi-
ties and, except as may otherwise be provided by this
Agreement or as may be in accordance with such customs, shall
make payment for Securities only against delivery thereof and
deliveries of Securities only against payment therefor.
18. The Custodian shall have no duties or
responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this Agree-
ment, and no covenant or obligation shall be implied in this
Agreement against the Custodian.
ARTICLE XVI
TERMINATION
1. Except as provided in paragraph 3 of this Article,
this Agreement shall continue until terminated by either the
Custodian giving to the Fund, or the Fund giving to the
Custodian, a notice in writing specifying the date of such
termination, which date shall be not less than 60 days after
the date of the giving of such notice. In the event such
notice or a notice pursuant to paragraph 3 of this Article is
given by the Fund, it shall be accompanied by a copy of a
resolution of the Board of Trustees of the Fund, certified by
an Officer and the Secretary or an Assistant Secretary of the
Fund, electing to terminate this Agreement and designating a
successor custodian or custodians, each of which shall be
eligible to serve as a custodian for the securities of a
- 35 -
<PAGE>
management investment company under the Investment Company Act
of 1940. In the event such notice is given by the Custodian,
the Fund shall, on or before the termination date, deliver to
the Custodian a copy of a resolution of the Board of Trustees
of the Fund, certified by the Secretary, the Clerk, any
Assistant Secretary or any Assistant Clerk, designating a
successor custodian or custodians. In the absence of such
designation by the Fund, the Custodian may designate a
successor custodian which shall be a bank or trust company
having not less than $2,000,000 aggregate capital, surplus and
undivided profits. Upon the date set forth in such notice
this Agreement shall terminate, and the Custodian shall upon
receipt of a notice of acceptance by the successor custodian
on that date deliver directly to the successor custodian all
Securities and moneys then owned by the Fund and held by it as
Custodian, after deducting all fees, expenses and other
amounts for the payment or reimbursement of which it shall
then be entitled.
2. If a successor custodian is not designated by the
Fund or the Custodian in accordance with the preceding
paragraph, the Fund shall upon the date specified in the
notice of termination of this Agreement and upon the delivery
by the Custodian of all Securities (other than Securities held
in the Book-Entry System which cannot be delivered to the
Fund) and moneys then owned by the Fund be deemed to be its
own custodian and the Custodian shall thereby be relieved of
all duties and responsibilities pursuant to this Agreement,
other than the duty with respect to Securities held in the
Book Entry System which cannot be delivered to the Fund to
hold such Securities hereunder in accordance with this Agree-
ment.
3. Notwithstanding the foregoing, the Fund may
terminate this Agreement upon the date specified in a written
notice in the event of the "Bankruptcy" of The Bank of New
York. As used in this sub-paragraph, the term "Bankruptcy"
shall mean The Bank of New York's making a general assignment,
arrangement or composition with or for the benefit of its
creditors, or instituting or having instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or
the entry of a order for relief under any applicable
bankruptcy law or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors'
rights, or if a petition is presented for the winding up or
liquidation of the party or a resolution is passed for its
winding up or liquidation, or it seeks, or becomes subject to,
the appointment of an administrator, receiver, trustee,
custodian or other similar official for it or for all or
substantially all of its assets or its taking any action in
furtherance or, or indicating its consent to approval of, or
acquiescence in, any of the foregoing.
- 36 -
<PAGE>
ARTICLE XVII
TERMINAL LINK
1. At no time and under no circumstances shall the Fund
be obligated to have or utilize the Terminal Link, and the
provisions of this Article shall apply if, but only if, the
Fund in its sole and absolute discretion elects to utilize the
Terminal Link to transmit Certificates to and to receive
notices from the Custodian.
2. The parties hereto shall utilize the Terminal Link
only for the purpose of the Fund providing Certificates to the
Custodian and the Custodian providing notices to the Fund and
only after the Fund and the Custodian shall have established
access codes and internal safekeeping procedures to safeguard
and protect the confidentiality and availability of such
access codes. Each use of the Terminal Link by the Fund shall
constitute a representation and warranty that at least two
such access codes have been utilized and that such procedures
have been established.
3. Each party shall obtain and maintain at its own cost
and expense all equipment and services, including, but not
limited to communications services, necessary for it to
utilize the Terminal Link, and the other party shall not be
responsible for the reliability or availability of any such
equipment or services, except that the Custodian shall not pay
any communications costs of any line leased by the Fund, even
if such line is also used by the Custodian.
4. The Fund acknowledges that any data bases made
available as part of, or through the Terminal and any
proprietary data, software, processes, information and
documentation (other than any such which are or become part of
the public domain or are legally required to be made available
to the public) (collectively, the "Information"), are the
exclusive and confidential property of the Custodian. The
Fund shall, and shall cause others to which it discloses the
Information, to keep the Information confidential by using the
same care and discretion it uses with respect to its own
confidential property and trade secrets, and shall neither
make nor permit any disclosure without the express prior writ-
ten consent of the Custodian.
5. Upon termination of this Agreement for any reason,
each Fund shall return to the Custodian any and all copies of
the Information which are in the Fund's possession or under
its control, or which the Fund distributed to third parties.
The provisions of this Article shall not affect the copyright
status of any of the Information which may be copyrighted and
shall apply to all Information whether or not copyrighted.
- 37 -
<PAGE>
6. The Custodian reserves the right to modify the
Terminal Link from time to time without notice to the Fund,
except that the Custodian shall give the Fund notice not less
than 75 days in advance of any modification which would
materially adversely affect the Fund's operation, and the Fund
agrees not to modify or attempt to modify the Terminal Link
without the Bank's prior written consent. The Fund
acknowledges that the Terminal Link is the property of the
Custodian and, accordingly, the Fund agrees that any
modifications to the Terminal Link, whether by the Fund or the
Custodian and whether with or without the Custodian's consent,
shall become the property of the Custodian.
7. Neither the Custodian nor any manufacturers and sup-
pliers it utilizes or the Fund utilizes in connection with the
Terminal Link makes any warranties or representations, express
or implied, in fact or in law, including but not limited to
warranties of merchantability and fitness for a particular
purpose.
8. Each party will, and will cause its officers and
employees to, treat the user and authorization codes,
passwords and authentication keys applicable to Terminal Link
with extreme care. Each party hereby irrevocably authorizes
the other to act in accordance with and rely on Certificates
and notices received by it through the Terminal Link. Each
party acknowledges that it is its responsibility to assure
that only its authorized persons use the Terminal Link on its
behalf, and that a party shall not be responsible nor liable
for use of the Terminal Link on its behalf of the other party
by unauthorized persons except that the other party shall be
liable for such use thereof by unauthorized persons who have
obtained access thereto as a result of the bad faith or
willful misconduct of such party or any of its officers or
employees.
9. Notwithstanding anything else in this Agreement to
the contrary, neither party shall have any liability to the
other for any losses, damages, injuries, claims, costs or
expenses arising as a result of a delay, omission or error in
the transmission of a Certificate or notice by use of the
Terminal Link except for money damages for those suffered as
the result of the negligence, bad faith or willfull misconduct
of such party or its officers, employees or agents in an
amount not exceeding for any incident $100,000, provided,
however, that a party shall have no liability under this
Section 9 if the other party fails to comply with the
provisions of Section 11.
10. Without limiting the generality of the foregoing, it
is hereby agreed that in no event shall either party or any
manufacturer or supplier of its computer equipment, software
or services relating to the Terminal Link be responsible for
any special, indirect, incidental or consequential damages
- 38 -
<PAGE>
which the other party may incur or experience by reason of its
use of the Terminal Link even if such party, manufacturer or
supplier has been advised of the possibility of such damages,
nor with respect to the use of the Terminal Link shall either
party or any such manufacturer or supplier be liable for acts
of God, or with respect to the following to the extent beyond
such person's reasonable control: machine or computer
breakdown or malfunction, interruption or malfunction of
communication facilities, labor difficulties or any other
similar or dissimilar cause.
11. The Fund shall notify the Custodian of any errors,
omissions or interruptions in, or delay or unavailability of,
the Terminal Link as promptly as practicable, and in any event
within 24 hours after the earliest of (i) discovery thereof,
(ii) the business day on which discovery should have occurred
through the exercise of reasonable care and (iii) in the case
of any error, the date of actual receipt of the earliest
notice which reflects such error, it being agreed that
discovery and receipt of notice may only occur on a business
day. The Custodian shall promptly advise the Fund whenever the
Custodian learns of any errors, omissions or interruption in,
or delay or unavailability of, the Terminal Link.
12. Each party shall, as soon as practicable after its
receipt of a Certificate or of any notice transmitted by the
Terminal Link, verify to the other party by use of the
Terminal Link its receipt of such Certificate or notice, and
in the absence of such verification a party to whom a
Certificate or notice is sent shall not be liable for any
failure to act in accordance with such Certificate or notice,
and the sending party may not claim that such Certificate or
notice was received by the other.
ARTICLE XVIII
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed
by two of the present Officers of the Fund under its seal,
setting forth the names and the signatures of the present
Authorized Persons. The Fund agrees to furnish to the
Custodian a new Certificate in similar form in the event that
any such present Authorized Person ceases to be an Authorized
Person or in the event that other or additional Authorized
Persons are elected or appointed. Until such new Certificate
shall be received, the Custodian shall be entitled to rely and
to act upon Oral Instructions, Written Instructions, or
signatures of the present Authorized Persons as set forth in
the last delivered Certificate to the extent provided by this
Agreement.
- 39 -
<PAGE>
2. Annexed hereto as Appendix B is a Certificate signed
by two of the present Officers of the Fund under its seal,
setting forth the names and the signatures of the present Of-
ficers of the Fund. The Fund agrees to furnish to the
Custodian a new Certificate in similar form in the event any
such present Officer ceases to be an Officer of the Fund, or
in the event that other or additional Officers are elected or
appointed. Until such new Certificate shall be received, the
Custodian shall be entitled to rely and to act upon the
signatures of the Officers as set forth in the last delivered
Certificate to the extent provided by this Agreement.
3. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the
Custodian, other than any Certificate or Written Instructions,
shall be sufficiently given if addressed to the Custodian and
mailed or delivered to it at its offices at 90 Washington
Street, New York, New York 10286, or at such other place as
the Custodian may from time to time designate in writing.
4. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the
Fund shall be sufficiently given if addressed to the Fund and
mailed or delivered to it at its office at the address for the
Fund first above written, or at such other place as the Fund
may from time to time designate in writing.
5. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties
with the same formality as this Agreement and approved by a
resolution of the Board of Trustees of the Fund, except that
Appendices A and B may be amended unilaterally by the Fund
without such an approving resolution.
6. This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be
assignable by the Fund without the written consent of the
Custodian, or by the Custodian or The Bank of New York without
the written consent of the Fund, authorized or approved by a
resolution of the Fund's Board of Trustees. For purposes of
this paragraph, no merger, consolidation, or amalgamation of
the Custodian, The Bank of New York, or the Fund shall be
deemed to constitute an assignment of this Agreement.
7. This Agreement shall be construed in accordance with
the laws of the State of New York without giving effect to
conflict of laws principles thereof. Each party hereby
consents to the jurisdiction of a state or federal court
situated in New York City, New York in connection with any
dispute arising hereunder and hereby waives its right to trial
by jury.
- 40 -
<PAGE>
8. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one
instrument.
9. A copy of the Declaration of Trust of the Fund is on
file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on
behalf of the Board of Trustees of the Fund as Trustees and
not individually and that the obligations of this instrument
are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property
of the Fund; provided, however, that the Declaration of Trust
of the Fund provides that the assets of a particular Series of
the Fund shall under no circumstances be charged with li-
abilities attributable to any other Series of the Fund and
that all persons extending credit to, or contracting with or
having any claim against a particular Series of the Fund shall
look only to the assets of that particular Series for payment
of such credit, contract or claim.
- 41 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective Officers,
thereunto duly authorized and their respective seals to be
hereunto affixed, as of the day and year first above written.
INTERCAPITAL MANAGED
MUNICIPAL TRUST
[SEAL] By:_______________________
Attest:
_______________________
THE BANK OF NEW YORK
[SEAL] By:_______________________
Attest:
_______________________
- 42 -
<PAGE>
APPENDIX A
I, , President and I,
, of Intercapital Managed
Municipal Trust, a Massachusetts business trust (the "Fund"),
do hereby certify that:
The following individuals have been duly authorized by
the Board of Trustees of the Fund in conformity with the
Fund's Declaration of Trust and By-Laws to give Oral Instruc-
tions and Written Instructions on behalf of the Fund, except
that those persons designated as being an "Officer of DWTC"
shall be an Authorized Person only for purposes of Articles
XII and XIII. The signatures set forth opposite their
respective names are their true and correct signatures:
Name Position Signature
_________________ ________________ _________________
<PAGE>
APPENDIX B
I, , President and I,
, of
Intercapital Managed Municipal Trust, a Massachusetts business
trust (the "Fund"), do hereby certify that:
The following individuals for whom a position other than
"Officer of DWTC" is specified serve in the following posi-
tions with the Fund and each has been duly elected or ap-
pointed by the Board of Trustees of the Fund to each such
position and qualified therefor in conformity with the Fund's
Declaration of Trust and By-Laws. With respect to the
following individuals for whom a position of "Officer of DWTC"
is specified, each such individual has been designated by a
resolution of the Board of Trustees of the Fund to be an
Officer for purposes of the Fund's Custody Agreement with The
Bank of New York, but only for purposes of Articles XII and
XIII thereof and a certified copy of such resolution is
attached hereto. The signatures of each individual below set
forth opposite their respective names are their true and
correct signatures:
Name Position Signature
____________________ ___________________ _________________
<PAGE>
APPENDIX C
The undersigned, hereby
certifies that he or she is the duly elected and acting
of Intercapital Managed Municipal Trust (the
"Fund"), further certifies that the following resolutions were
adopted by the Board of Trustees of the Fund at a meeting duly
held on , 1994, at which a quorum at all times
present and that such resolutions have not been modified or
rescinded and are in full force an effect as of the date
hereof.
RESOLVED, that The Bank New York, as Custodian pursuant
to a Custody Agreement between The Bank of New York and the
Fund dated as of , 1994 (the "Custody Agree-
ment") is authorized and instructed on a continuous and ongo-
ing basis to act in accordance with, and to rely on instruc-
tions by the Fund to the Custodian communicated by a Terminal
Link as defined in the Custody Agreement.
RESOLVED, that the Fund shall establish access codes and
grant use of such access codes only to officers of the Fund as
defined in the Custody Agreement, and shall establish internal
safekeeping procedures to safeguard and protect the
confidentiality and availability of such access codes.
RESOLVED, that Officers of the Fund as defined in the
Custody Agreement shall, following the establishment of such
access codes and such internal safekeeping procedures, advise
the Custodian that the same have been established by deliver-
ing a Certificate, as defined in the Custody Agreement, and
the Custodian shall be entitled to rely upon such advice.
IN WITNESS WHEREOF, I hereunto set my hand in the seal of
Intercapital Managed Municipal Trust, as of the day of
, 1994.
[SEAL] ---------------
<PAGE>
APPENDIX D
I, Vincent Blazewicz, a Vice President with THE BANK OF
NEW YORK do hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
JJ Kenney Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
<PAGE>
APPENDIX E
The following books and records pertaining to Fund shall
be prepared and maintained by the Custodian and shall be the
property of the Fund:
<PAGE>
EXHIBIT A
CERTIFICATION
The undersigned, , hereby certifies
that he or she is the duly elected and acting
of Intercapital Managed
Municipal Trust, a Massachusetts business trust (the "Fund"),
and further certifies that the following resolution was
adopted by the Board of Trustees of the Fund at a meeting duly
held on , 1994, at which a quorum was at all
times present and that such resolution has not been modified
or rescinded and is in full force and effect as of the date
hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund dated as of , 1994, (the
"Custody Agreement") is authorized and instructed on a
continuous and ongoing basis to deposit in the Book-Entry
System, as defined in the Custody Agreement, all securi-
ties eligible for deposit therein, regardless of the
Series to which the same are specifically allocated, and
to utilize the Book-Entry System to the extent possible
in connection with its performance thereunder, including,
without limitation, in connection with settlements of
purchases and sales of securities, loans of securities,
and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of Intercapital Managed Municipal Trust, as of the day of
, 1994.
[SEAL] -------------
<PAGE>
EXHIBIT B
CERTIFICATION
The undersigned, , hereby
certifies that he or she is the duly elected and acting
of Intercapital Managed Municipal Trust, a
Massachusetts business Trust (the "Fund"), and further
certifies that the following resolution was adopted by the
Board of Trustees of the Fund at a meeting duly held on
, 1994, at which a quorum was at all times
present and that such resolution has not been modified or
rescinded and is in full force and effect as of the date
hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund dated as of , 1994, (the
"Custody Agreement") is authorized and instructed on a
continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agree-
ment, to the contrary to deposit in The Depository Trust
Company ("DTC"), as a "Depository" as defined in the
Custody Agreement, all securities eligible for deposit
therein, regardless of the Series to which the same are
specifically allocated, and to utilize DTC to the extent
possible in connection with its performance thereunder,
including, without limitation, in connection with
settlements of purchases and sales of securities, loans
of securities, and deliveries and returns of securities
collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the
seal of Intercapital Managed Municipal Trust, as of the
day of , 1994.
[SEAL] ---------------
<PAGE>
EXHIBIT B-1
CERTIFICATION
The undersigned, , hereby certifies
that he or she is the duly elected and acting
of Intercapital Managed Municipal Trust, a
Massachusetts business Trust (the "Fund"), and further
certifies that the following resolution was adopted by the
Board of Trustees of the Fund at a meeting duly held on
, 1994, at which a quorum was at all times
present and that such resolution has not been modified or
rescinded and is in full force and effect as of the date
hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund dated as of , 1994,
(the "Custody Agreement") is authorized and instructed on
a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agree-
ment, to the contrary to deposit in the Participants
Trust Company as a Depository, as defined in the Custody
Agreement, all securities eligible for deposit therein,
regardless of the Series to which the same are
specifically allocated, and to utilize the Participants
Trust Company to the extent possible in connection with
its performance thereunder, including, without limita-
tion, in connection with settlements of purchases and
sales of securities, loans of securities, and deliveries
and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the
seal of Intercapital Managed Municipal Trust, as of the
day of , 1994.
[SEAL] --------------
<PAGE>
EXHIBIT C
CERTIFICATION
The undersigned, , hereby certifies
that he or she is the duly elected and acting
of Intercapital Managed Municipal Trust, a Massachusetts
business trust (the "Fund"), and further certifies that the
following resolution was adopted by the Board of Trustees of
the Fund at a meeting duly held on , 1994, at
which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full
force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund dated as of , 1994, (the
"Custody Agreement") is authorized and instructed on a
continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agree-
ment, to the contrary, to accept, utilize and act with
respect to Clearing Member confirmations for Options and
transaction in Options, regardless of the Series to which
the same are specifically allocated, as such terms are
defined in the Custody Agreement, as provided in the
Custody Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the
seal of Intercapital Managed Municipal Trust, as of the
day of , 1994.
[SEAL] --------------
AMENDED AND RESTATED
TRANSFER AGENCY AND SERVICE AGREEMENT
with
DEAN WITTER TRUST COMPANY
<PAGE>
(closed-end funds)
TABLE OF CONTENTS
Page
Article 1 Terms of Appointment; Duties of DWTC . . . . . 2
Article 2 Fees and Expenses. . . . . . . . . . . . . . . 5
Article 3 Representations and Warranties of DWTC . . . . 6
Article 4 Representations and Warranties of the Fund . . 7
Article 5 Duty of Care and Indemnification . . . . . . . 8
Article 6 Documents and Covenants of the Fund andDWTC. . 11
Article 7 Duration and Termination of Agreement. . . . . 15
Article 8 Assignment . . . . . . . . . . . . . . . . . . 16
Article 9 Affiliations . . . . . . . . . . . . . . . . . 17
Article 10 Amendment. . . . . . . . . . . . . . . . . . . 18
Article 11 Applicable Law . . . . . . . . . . . . . . . . 18
Article 12 Miscellaneous. . . . . . . . . . . . . . . . . 18
Article 13 Merger of Agreement. . . . . . . . . . . . . . 20
Article 14 Personal Liability . . . . . . . . . . . . . . 20
AMENDEND AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT
AMENDED AND RESTATED AGREEMENT made as of the first day of
August, 1993 by and between each of the Dean Witter Funds listed on the
signature page hereof, each of such Funds acting severally on its own behalf
and not jointly with any of such other Funds (each such Fund hereinafter
referred to as the "Fund"), each such Fund having its principal office and
place of business at Two World Trade Center, New York, New York, 10048, and
DEAN WITTER TRUST COMPANY, a trust company organized under the laws of New
Jersey, having its principal office and place of business at Harborside
Financial Center, Plaza Two, Jersey City, New Jersey 07311 ("DWTC").
WHEREAS, the Fund desires to appoint DWTC as its transfer
agent, dividend disbursing agent, shareholder servicing agent, registrar and
agent in connection with the Fund's Dividend Reinvestment Plan and DWTC desires
to accept such appointment;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Article 1 Terms of Appointment; Duties of DWTC
1.1 Subject to the terms and conditions set forth in
this Agreement, the Fund hereby employs and appoints DWTC to act as, and DWTC
agrees to act as, the transfer agent for each series and class of shares of the
Fund ("Shares"), dividend disbursing agent, shareholder servicing agent,
registrar and agent in connection with the Fund's Dividend Reinvestment Plan
(the "Plan").
1.2 DWTC agrees that it will perform the following
services:
(a) In accordance with procedures established from
time to time by agreement between the Fund and DWTC shall:
(i) In accordance with instructions from the Fund
given by Certificate of the Secretary of the Fund, issue Shares upon receipt of
payment therefor, and issue certificates therefore or hold such Shares in book
form in the appropriate Shareholder account;
(ii) Effect transfers of Shares by the registered
owners thereof upon receipt of appropriate instructions;
(iii) Prepare and transmit payments for dividends and
distributions declared by the Fund in accordance with instructions and serve as
the plan agent for the Plan and purchase and issue shares in accordance with
such Plan;
(iv) Maintain records of account for and advise the
Fund and its Shareholders as to the foregoing;
(v) Record the issuance of Shares of the Fund and
maintain pursuant to Rule 17Ad-10(e) under the Securities Exchange Act of 1934
("1934 Act") a record of the total number of Shares of the Fund which are
<PAGE>
authorized, based upon data provided to it by the Fund, and issued and
outstanding. DWTC shall also provide to the Fund on a regular basis the total
number of Shares which are authorized, issued and outstanding and shall notify
the Fund in case any proposed issue of Shares by the Fund would result in an
overissue. In case any issue of Shares would result in an overissue, DWTC
shall refuse to issue such Shares and shall not countersign and issue any
certificates requested for such Shares. When recording the issuance of Shares,
DWTC shall have no obligation to take cognizance of any Blue Sky laws relating
to the issue of sale of such Shares, which functions shall be the sole
responsibility of the Fund.
(b) In addition to and not in lieu of the services set
forth in the above paragraph (a), DWTC shall: (i) perform all of the customary
services of a transfer agent, dividend disbursing agent, registrar and, as
relevant, shareholder servicing agent, including but not limited to,
maintaining all Shareholder accounts, preparing Shareholder meeting lists,
mailing proxies, receiving and tabulating proxies, mailing shareholder reports,
withholding taxes on U.S. resident and non-resident alien accounts, preparing
and filing appropriate forms required with respect to dividends and
distributions by federal tax authorities for all Shareholders, and providing
Shareholder account information; (ii) open any and all bank accounts which may
be necessary or appropriate in order to provide the foregoing services; and
(iii) provide a system which will enable the Fund to monitor the total number
of Shares sold in each State or other jurisdiction.
(c) DWTC shall provide such additional services and
functions not specifically described herein as may be mutually agreed
between DWTC and the Fund. Procedures applicable to such services may be
established from time to time by agreement between the Fund and DWTC.
Article 2 Fees and Expenses
2.1 For performance by DWTC pursuant to this
Agreement, each Fund agrees to pay DWTC an annual mainten- ance fee for each
Shareholder account and certain trans- actional fees, if applicable, as set out
in the respective fee schedule attached hereto as Schedule A. Such fees and
out-of-pocket expenses and advances identified under Section 2.2 below may be
changed from time to time subject to mutual written agreement between the Fund
and DWTC.
2.2 In addition to the fees paid under Section 2.1
above, the Fund agrees to reimburse DWTC for out-of-pocket expenses or advances
incurred by DWTC in connection with the services rendered by DWTC hereunder.
In addition, any other expenses incurred by DWTC at the request or with the
consent of the Fund will be reimbursed by the Fund.
2.3 The Fund agrees to pay all fees and reimbursable
expenses within a reasonable period of time following the mailing of the
respective billing notice. Postage for mailing of dividends, proxies, Fund
reports and other mailings to all Shareholder accounts shall be advanced to
DWTC by the Fund upon request prior to the mailing date of such materials.
Article 3 Representations and Warranties of DWTC
DWTC represents and warrants to the Fund that:
3.1 It is a trust company duly organized and existing
and in good standing under the laws of New Jersey and it is duly qualified to
carry on its business in New Jersey.
3.2 It is and will remain registered with the U.S.
Securities and Exchange Commission ("SEC") as a Transfer Agent pursuant to the
requirements of Section 17A of the 1934 Act.
3.3 It is empowered under applicable laws and by its
charter and By-Laws to enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been
taken to authorize it to enter into and perform this Agreement.
3.5 It has and will continue to have access to the
necessary facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
3.6 It complies and will continue to comply with New
York Stock Exchange Rule 496.
Article 4 Representations and Warranties of the Fund
The Fund represents and warrants to DWTC that:
4.1 It is a corporation duly organized and existing
and in good standing under the laws of Maryland or a trust duly organized and
existing and in good standing under the laws of Massachusetts, as the case may
be.
4.2 It is empowered under applicable laws and by its
Articles of Incorporation or Declaration of Trust, as the case may be, and
under its By-Laws to enter into and perform this Agreement.
4.3 All corporate proceedings necessary to authorize
it to enter into and perform this Agreement have been taken.
4.4 It is a closed-end investment company registered
with the SEC under the Investment Company Act of 1940, as amended (the "1940
Act").
Article 5 Duty of Care and Indemnification
5.1 DWTC shall not be responsible for, and the Fund
shall indemnify and hold DWTC harmless from and against, any and all losses,
<PAGE>
damages, costs, charges, counsel fees, payments, expenses and liability arising
out of or attributable to:
(a) All actions of DWTC or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that such actions are
taken in good faith and without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of
this Agreement, or which arise out of the Fund's lack of good faith, negligence
or willful misconduct or which arise out of breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by DWTC or its agents or
subcontractors of information, records and documents which (i) are received by
DWTC or its agents or subcontractors and furnished to it by or on behalf of the
Fund, and (ii) have been prepared and/or maintained by the Fund or any other
person of firm on behalf of the Fund.
(d) The reliance on, or the carrying out by DWTC or its agents
or subcontractors of, any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or regulations or the securities
or Blue Sky laws of any State or other jurisdiction that such Shares be
registered in such State or other jurisdiction or in violation of any stop
order or other determination or ruling by any federal agency or any State or
other jurisdiction with respect to the offer or sale of such Shares in such
State or other jurisdiction.
5.2 DWTC shall indemnify and hold the Fund harmless
from or against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to any action
or failure or omission to act by DWTC as a result of the lack of good faith,
negligence or willful misconduct of DWTC, its officers, employees or agents.
5.3 At any time DWTC may apply to any officer of the
Fund for instructions, and may consult with legal counsel to the Fund, with
respect to any matter arising in connection with the services to be performed
by DWTC under this Agreement, and DWTC and its agents or subcontractors shall
not be liable and shall be indemnified by the Fund for any action taken or
omitted by it in reliance upon such instructions or upon the opinion of such
counsel. DWTC, its agents and subcontractors shall be protected and
indemnified in acting upon any paper or document furnished by or on behalf of
the Fund, reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data, records
or documents provided to DWTC or its agents or subcontractors by machine
readable input, telex, CRT data entry or other similar means authorized by the
Fund, and shall not be held to have notice of any change of authority of any
person, until receipt of written notice thereof from the Fund. DWTC, its
agents and subcontractors shall also be protected and indemnified in
recognizing stock certificates which are reasonably believed to bear the proper
manual or facsimile signature of the officers of the Fund, and the proper
countersignature of any former transfer agent or registrar, or of a co-transfer
agent or co-registrar.
5.4 In the event either party is unable to perform
its obligations under the terms of this Agreement because of acts of God,
strikes, equipment or transmission failure or damage reasonably beyond its
control, or other causes reasonably beyond its control, such party shall not be
liable for damages to the other for any damages resulting from such failure to
perform or otherwise from such causes.
5.5 Neither party to this Agreement shall be liable
to the other party for consequential damages under any provision of this
Agreement or for any act or failure to act hereunder.
5.6 In order that the indemnification provisions
contained in this Article 5 shall apply, upon the assertion of a claim for
which either party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party of such assertion, and
shall keep the other party advised with respect to all developments concerning
such claim. The party who may be required to indemnify shall have the option
to participate with the party seeking indemnification in the defense o$ such
claim. The party seeking indemnification shall in no case confess any claim or
make any compromise in any case in which the other party may be required to
indemnify it except with the other party's prior written consent.
Article 6 Documents and Covenants of the Fund and DWTC
6.1 The Fund shall promptly furnish to DWTC the
following:
(a) If a corporation:
(i) A certified copy of the resolution of the Board
of Directors of the Fund authorizing the appointment of DWTC and the execution
and delivery of this Agreement;
(ii) A certified copy of the Articles of
Incorporation and By-Laws of the Fund and all amendments thereto;
(iii) Certified copies of each vote of the Board of
Directors designating persons authorized to give instructions on behalf of the
Fund and signature cards bearing the signature of any officer of the Fund or
any other person authorized to sign written instructions on behalf of the Fund.
(iv) A specimen of the certificate for Shares of the
Fund in the form approved by the Board of Directors, with a certificate of the
<PAGE>
Secretary of the Fund as to such approval;
(b) If a business trust:
(i) a certified copy of the resolution of the Board
of Trustees of the Fund authorizing the appointment of DWTC and the execution
and delivery of this agreement;
(ii) A certified copy of the Declaration of Trust
and By-laws of the Fund and all amendments thereto;
(iii) Certified copies of each vote of the Board of
Trustees designating persons authorized to give instructions on behalf of the
Fund and signature cards bearing the signature of any officer of the Fund or
any other person authorized to sign written instructions on behalf of the Fund;
(iv) A specimen of the certificate for Shares of the
Fund in the form approved by the Board of Trustees, with a certificate of the
Secretary of the Fund as to such approval;
(c) The registration statements and any amendments and
supplements thereto filed with the SEC pursuant to the requirements of the 1933
Act and the 1940 Act;
(d) All account application forms, if any, or other
documents relating to Shareholder accounts and/or relating to any dividend
reinvestment plan or other service offered or to be offered by the Fund; and
(e) Such other certificates, documents or opinions as DWTC
deems to be appropriate or necessary for the proper performance of its duties.
6.2 DWTC hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Fund for safekeeping of
Share certificates, check forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices.
6.3 DWTC shall prepare and keep records relating to
the services to be performed hereunder, in the form and manner as it may deem
advisable and as required by applicable laws and regulations. To the extent
required by Section 31 of the 1940 Act, and the Rules and Regulations
thereunder, DWTC agrees that all such records prepared or maintained by DWTC
relating to the services to be performed by DWTC hereunder are the property of
the Fund and will be preserved, maintained and made available in accordance
with such Section 31 of the 1940 Act, and the rules and regulations thereunder,
and will be surrendered promptly to the Fund on and in accordance with its
request.
6.4 DWTC and the Fund agree that all books,
records, information and data pertaining to the business of the other party
which are exchanged or received pursuant to the negotiation or the carrying out
of this Agreement shall remain confidential and shall not be voluntarily
disclosed to any other person except as may be required by law or with the
prior consent of DWTC and the Fund.
6.5 In case of any request or demands for the
inspection of the Shareholder records of the Fund, DWTC will endeavor to notify
the Fund and to secure instructions from an authorized officer of the Fund as
to such inspection. DWTC reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.
Article 7 Duration and Termination of Agreement
7.1 This Agreement shall remain in full force and
effect until July 31, 1996 and from year-to-year thereafter unless terminated
by either party as provided in Section 7.2 hereof.
7.2 This Agreement may be terminated by the Fund on
60 days written notice and by DWTC on 90 days written notice to the other party
without payment of any penalty.
7.3 Should the Fund exercise its right to
terminate, all out-of-pocket expenses associated with the movement of records
and other materials will be borne by the Fund. Additionally, DWTC reserves the
right to charge for any other reasonable fees and expenses associated with such
termination.
Article 8 Assignment
8.1 Except as provided in Section 8.3 below,
neither this Agreement nor any rights or obligations hereunder may be assigned
by either party without the written consent of the other party.
8.2 This Agreement shall inure to the benefit of
and be binding upon the parties and their respective permitted successors and
assigns.
8.3 DWTC may, in its sole discretion and without
further consent by the Fund, subcontract, in whole or in part, for the
performance of its obligations and duties hereunder with any person or entity
including but not limited to companies which are affiliated with DWTC;
provided, however, that such person or entity has and maintains the
qualifications, if any, required to perform such obligations and duties and
that DWTC shall be as fully responsible to the Fund for the acts and omissions
of any agent or subcontractor as it is for its own acts or omissions under this
Agreement.
<PAGE>
Article 9 Affiliations
9.1 DWTC may now or hereafter, without the consent
of or notice to the Fund, function as transfer agent, registrar and/or
shareholder servicing agent for any other investment company registered with
the SEC under the 1940 Act and for any other issuer, including without
limitation any investment company whose adviser, administrator, sponsor or
principal underwriter is or may become affiliated with Dean Witter, Discover &
Co. or any of its or their direct or indirect subsidiaries or affiliates.
9.2 It is understood and agreed that the Directors
or Trustees (as the case may be), officers, employees, agents and shareholders
of the Fund, and the directors, officers, employees, agents and shareholders of
the Fund's investment adviser and/or distributor, are or may be interested in
DWTC as directors, officers, employees, agents and shareholders or otherwise,
and that the directors, officers, employees, agents and shareholders of DWTC
may be interested in the Fund as Directors or Trustees (as the case may be),
officers, employees, agents and shareholders or otherwise, or in the investment
adviser and/or distributor as directors, officers, employees, agents,
shareholders or otherwise.
Article 10 Amendment
10.1 This Agreement may be amended or modified by a
written agreement executed by both parties and authorized or approved by a
resolution of the Board of Directors or the Board of Trustees (as the case may
be) of the Fund.
Article 11 Applicable Law
11.1 This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of the
State of New York.
Article 12 Miscellaneous
12.1 In the event that one or more additional
investment companies managed or administered by Dean Witter InterCapital Inc.
("Additional Dean Witter Funds") desires to retain DWTC to act as transfer
agent, dividend disbursing agent and/or shareholder servicing agent, and DWTC
desires to render such services, such services shall be provided pursuant to a
letter agreement, substantially in the form of Exhibit A hereto, between DWTC
and each Additional Dean Witter Fund.
12.2 In the event of an alleged loss or destruction of
any Share certificate, no new certificate shall be issued in lieu thereof,
unless there shall first be furnished to DWTC an affidavit of loss or non-
receipt by the holder of Shares with respect to which a certificate has been
lost or destroyed, supported by an appropriate bond satisfactory to DWTC and
the Fund issued by a surety company satisfactory to DWTC, except that DWTC may
accept an affidavit of loss and indemnity agreement executed by the registered
holder (or legal representative) without surety in such form as DWTC deems
appropriate indemnifying DWTC and the Fund for the issuance of a replacement
certificate, in cases where the alleged loss is in the amount of $1000 or less.
12.3 Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Fund or to DWTC shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Fund:
[Name of Fund]
Two World Trade Center
New York, New York 10048
Attention: General Counsel
To DWTC:
Dean Witter Trust Company
Harborside Financial Center, Plaza Two
Jersey City, New Jersey 07311
Attention: President
Article 13 Merger of Agreement
13.1 This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect to
the subject matter hereof whether oral or written.
Article 14 Personal Liability
14.1 In the case of a Fund organized as a
Massachusetts business trust, a copy of the Declaration of Trust of the Fund is
on file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Board of
Trustees of the Fund as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund;
provided, however, that the Declaration of Trust of the Fund provides that the
assets of a particular Series of the Fund shall under no circumstances be
charged with liabilities attributable to any other Series of the Fund and that
all persons extending credit to, or contracting with or having any claim
against, a particular Series of the Fund shall look only to the assets of that
particular Series for payment of such credit, contract or claim.
<PAGE>
f:\custody.ce
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf by and through
their duly authorized officers, as of the day and year first above written.
INTERCAPITAL INCOME SECURITIES INC.
HIGH INCOME ADVANTAGE TRUST
HIGH INCOME ADVANTAGE TRUST II
HIGH INCOME ADVANTAGE TRUST III
DEAN WITTER GOVERNMENT INCOME TRUST
MUNICIPAL INCOME TRUST
MUNICIPAL INCOME TRUST II
MUNICIPAL INCOME TRUST III
MUNICIPAL INCOME OPPORTUNITIES TRUST
MUNICIPAL INCOME OPPORTUNITIES TRUST II
MUNICIPAL INCOME OPPORTUNITIE TRUST III
MUNICIPAL PREMIUM INCOME TRUST
INTERCAPITAL INSURED MUNICIPAL BOND TRUST
INTERCAPITAL QUALITY MUNICIPAL INVESTMENT TRUST
INTERCAPITAL INSURED MUNICIPAL TRUST
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
INTERCAPITAL INSURED MUNICIPAL INCOME TRUST
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL INCOME TRUST
INTERCAPITAL CALIFORNIA QUALITY MUNICIPAL SECURITIES
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
TCW/DW TERM TRUST 2000
TCW/DW TERM TRUST 2002
TCW/DW TERM TRUST 2003
By: /s/ Sheldon Curtis
Sheldon Curtis
Vice President and General Counsel
ATTEST:
/s/ Barry Fink
Barry Fink
Assistant Secretary
DEAN WITTER TRUST COMPANY
BY:/s/ Charles A. Fiumefreddo
Charles A. Fiumefreddo
Chairman
ATTEST:
/s/ David A. Hughey
David A. Hughey
Executive Vice President
<PAGE>
Exhibit A
Dean Witter Trust Company
Harborside Financial Center, Plaza Two
Jersey City, NJ 07311
Gentlemen:
The undersigned, InterCapital Managed Municipal Trust, a
Massachusetts business trust (the "Fund"), desires to employ and appoint Dean
Witter Trust Company ("DWTC") to act as transfer agent for each series and
class of shares of the Fund, dividend disbursing agent shareholder servicing
agent, registrar and agent in connection with the Fund's Dividend Reinvestment
Plan.
The Fund hereby agrees that, in consideration for the payment
by the Fund to DWTC of fees as set out in the fee schedule attached hereto as
Schedule A, DWTC shall provide such services to the Fund pursuant to the terms
and conditions set forth in the Transfer Agency and Service Agreement annexed
hereto, as if the Fund was a signatory thereto.
Please indicate DWTC's acceptance of employment and appointment
by the Fund in the capacities set forth above by so indicating in the space
provided below.
Very truly yours,
INTERCAPITAL MANAGED MUNICIPAL TRUST
By:__________________________
ACCEPTED AND AGREED TO:
DEAN WITTER TRUST COMPANY
By:_______________________
Its:______________________
Date:_____________________
f:\custody.ce
<PAGE>
<PAGE>
SCHEDULE A
Fund: InterCapital Managed Municipal Trust
Fees: (1) Annual maintenance fee of $8.50 per
shareholder account, payable monthly.
(2) A fee equal to 1/12 of the fee set forth in (1) above, for
providing Forms 1099 for accounts closed during the year, payable following the
end of the calendar year.
(3) Out-of-pocket expenses in accordance withSection 2.2 of
the Agreement.
(4) Fees for additional services not set forth in this
Agreement shall be as negotiated between the parties.
f:\schedA\25
<PAGE>
EXHIBIT 10(c)
DEAN WITTER INTERCAPITAL INC.
September , 1994
Dean Witter Services Company Inc.
Two World Trade Center
New York, New York 10048
Re: InterCapital Managed Municipal Trust (the "Fund")
Dear Sirs:
Please be advised that, having entered into an Investment Management
Agreement with the Fund, we wish to retain you to perform administrative
services in respect of the Fund under our Services Agreement with you, dated
December 31, 1993 (attached hereto), for monthly compensation calculated daily
by applying the following annual rate to the Fund's net assets: 0.035%.
Your execution of this letter, where indicated, shall constitute
notification to us of your willingness to render administrative services in
respect of the Fund under the attached Services Agreement, in consideration of
the above-stated compensation.
Very truly yours,
DEAN WITTER INTERCAPITAL INC.
By: _________________________
ACCEPTED: DEAN WITTER SERVICES COMPANY INC.
BY: ________________________________________
<PAGE>
SERVICES AGREEMENT
AGREEMENT made as of the 31st day of December, 1993 by and between Dean
Witter InterCapital Inc., a Delaware corporation (herein referred to as
"InterCapital"), and Dean Witter Services Company Inc., a New Jersey
corporation (herein referred to as "DWS").
WHEREAS, InterCapital has entered into separate agreements (each such
agreement being herein referred to as an "Investment Management Agreement")
with certain investment companies as set forth on Schedule A (each such
investment company being herein referred to as a "Fund" and, collectively, as
the "Funds") pursuant to which InterCapital is to perform, or supervise the
performance of, among other services, administrative services for the Funds
(and, in the case of Funds with multiple portfolios, the Series or Portfolios
of the Funds (such Series and Portfolio being herein individually referred to
as "a Series" and, collectively, as "the Series"));
WHEREAS, InterCapital desires to retain DWS to perform the administrative
services as described below; and
WHEREAS, DWS desires to be retained by InterCapital to perform such
administrative services:
Now, therefore, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. DWS agrees to provide administrative services to each Fund as hereinafter
set forth. Without limiting the generality of the foregoing, DWS shall (i)
administer the Fund's business affairs and supervise the overall day-to-day
operations of the Fund (other than rendering investment advice); (ii) provide
the Fund with full administrative services, including the maintenance of
certain books and records, such as journals, ledger accounts and other records
required under the Investment Company Act of 1940, as amended (the"Act"), the
notification to the Fund and InterCapital of available funds for investment,
the reconciliation of account information and balances among the Fund's
custodian, transfer agent and dividend disbursing agent and InterCapital, and
the calculation of the net asset value of the Fund's shares; (iii) provide the
Fund with the services of persons competent to perform such supervisory,
administrative and clerical functions as are necessary to provide effective
operation of the Fund; (iv) oversee the performance of administrative and
professional services rendered to the Fund by others, including its custodian,
transfer agent and dividend disbursing agent, as well as accounting, auditing
and other services; (v) provide the Fund with adequate general office space and
facilities; (vi) assist in the preparation and the printing of the periodic
updating of the Fund's registration statement and prospectus (and, in the case
of an open-end Fund, the statement of additional information), tax returns,
proxy statements, and reports to its shareholders and the Securities and
Exchange Commission; and (vii) monitor the compliance of the Fund's investment
policies and restrictions.
In the event that InterCapital enters into an Investment Management Agreement
with another investment company, and wishes to retain DWS to perform
administrative services hereunder, it shall notify DWS in writing. If DWS is
willing to render such services, it shall notify InterCapital in writing,
whereupon such other Fund shall become a Fund as defined herein.
2. DWS shall, at its own expense, maintain such staff and employ or retain
such personnel and consult with such other persons as it shall from time to
time determine to be necessary or useful to the performance of its obligations
under this Agreement. Without limiting the generality of the foregoing, the
staff and personnel of DWS shall be deemed to include officers of DWS and
persons employed or otherwise retained by DWS (including officers and employees
of InterCapital, with the consent of InterCapital) to furnish services,
statistical and other factual data, information with respect to technical and
scientific developments, and such other information, advice and assistance as
DWS may desire. DWS shall maintain each Fund's records and books of account
(other than those maintained by the Fund's transfer agent, registrar, custodian
and other agencies). All such books and records so maintained shall be the
property of the Fund and, upon request therefor, DWS shall surrender to
InterCapital or to the Fund such of the books and records so requested.
3. InterCapital will, from time to time, furnish or otherwise make available
to DWS such financial reports, proxy statements and other information relating
to the business and affairs of the Fund as DWS may
1
<PAGE>
reasonably require in order to discharge its duties and obligations to the Fund
under this Agreement or to comply with any applicable law and regulation or
request of the Board of Directors/Trustees of the Fund.
4. For the services to be rendered, the facilities furnished, and the
expenses assumed by DWS, InterCapital shall pay to DWS monthly compensation
calculated daily (in the case of an open-end Fund) or weekly (in the case of a
closed-end Fund) by applying the annual rate or rates set forth on Schedule B
to the net assets of each Fund. Except as hereinafter set forth, (i) in the
case of an open-end Fund, compensation under this Agreement shall be calculated
by applying 1/365th of the annual rate or rates to the Fund's or the Series'
daily net assets determined as of the close of business on that day or the last
previous business day and (ii) in the case of a closed-end Fund, compensation
under this Agreement shall be calculated by applying the annual rate or rates
to the Fund's average weekly net assets determined as of the close of the last
business day of each week. If this Agreement becomes effective subsequent to
the first day of a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
on Schedule B. Subject to the provisions of paragraph 5 hereof, payment of DWS'
compensation for the preceding month shall be made as promptly as possible
after completion of the computations contemplated by paragraph 5 hereof.
5. In the event the operating expenses of any open-end Fund and/or any Series
thereof, or of InterCapital Income Securities Inc., including amounts payable
to InterCapital pursuant to the Investment Management Agreement, for any fiscal
year ending on a date on which this Agreement is in effect, exceed the expense
limitations applicable to the Fund and/or any Series thereof imposed by state
securities laws or regulations thereunder, as such limitations may be raised or
lowered from time to time, or, in the case of InterCapital Income Securities
Inc. or Dean Witter Variable Investment Series or any Series thereof, the
expense limitation specified in the Fund's Investment Management Agreement, the
fee payable hereunder shall be reduced on a pro rata basis in the same
proportion as the fee payable by the Fund under the Investment Management
Agreement is reduced.
6. DWS shall bear the cost of rendering the administrative services to be
performed by it under this Agreement, and shall, at its own expense, pay the
compensation of the officers and employees, if any, of the Fund employed by
DWS, and such clerical help and bookkeeping services as DWS shall reasonably
require in performing its duties hereunder.
7. DWS will use its best efforts in the performance of administrative
activitives on behalf of each Fund, but in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations hereunder,
DWS shall not be liable to the Fund or any of its investors for any error of
judgment or mistake of law or for any act or omission by DWS or for any losses
sustained by the Fund or its investors. It is understood that, subject to the
terms and conditions of the Investment Management Agreement between each Fund
and InterCapital, InterCapital shall retain ultimate responsibility for all
services to be performed hereunder by DWS. DWS shall indemnify InterCapital and
hold it harmless from any liability that InterCapital may incur arising out of
any act or failure to act by DWS in carrying out its responsibilities
hereunder.
8. It is understood that any of the shareholders, Directors/Trustees,
officers and employees of the Fund may be a shareholder, director, officer or
employee of, or be otherwise interested in, DWS, and in any person controlling,
controlled by or under common control with DWS, and that DWS and any person
controlling, controlled by or under common control with DWS may have an
interest in the Fund. It is also understood that DWS and any affiliated persons
thereof or any persons controlling, controlled by or under common control with
DWS have and may have advisory, management, administration service or other
contracts with other organizations and persons, and may have other interests
and businesses, and further may purchase, sell or trade any securities or
commodities for their own accounts or for the account of others for whom they
may be acting.
9. This Agreement shall continue until April 30, 1994, and thereafter shall
continue automatically for successive periods of one year unless terminated by
either party by written notice delivered to the other party within 30 days of
the expiration of the then-existing period. Notwithstanding the foregoing, this
Agreement may be terminated at any time, by either party on 30 days' written
notice delivered to the other party. In the
2
<PAGE>
event that the Investment Management Agreement between any Fund and
InterCapital is terminated, this Agreement will automatically terminate with
respect to such Fund.
10. This Agreement may be amended or modified by the parties in any manner by
mutual written agreement executed by each of the parties hereto.
11. This Agreement shall be construed and interpreted in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written in New York, New York.
DEAN WITTER INTERCAPITAL INC.
By: .....................
Attest:
.....................
DEAN WITTER SERVICES COMPANY INC.
By: .....................
Attest:
.....................
3
<PAGE>
<PAGE>
SCHEDULE A
DEAN WITTER FUNDS
AT DECEMBER 31, 1993
OPEN-END FUNDS*
1. Active Assets California Tax-Free Trust
2. Active Assets Government Securities Trust
3. Active Assets Money Trust
4. Active Assets Tax-Free Trust
5. Dean Witter American Value Fund
6. Dean Witter California Tax-Free Daily Income Trust
7. Dean Witter California Tax-Free Income Fund
8. Dean Witter Capital Growth Securities
9. Dean Witter Convertible Securities Trust
10. Dean Witter Developing Growth Securities Trust
11. Dean Witter Diversified Income Trust
12. Dean Witter Dividend Growth Securities Inc.
13. Dean Witter Equity Income Trust
14. Dean Witter European Growth Fund Inc.
15. Dean Witter Federal Securities Trust
16. Dean Witter Global Dividend Growth Securities
17. Dean Witter Global Short-Term Income Fund Inc.
18. Dean Witter Health Sciences Trust
19. Dean Witter High Yield Securities Inc.
20. Dean Witter Intermediate Income Securities
21. Dean Witter Limited Term Municipal Trust
22. Dean Witter Liquid Asset Fund Inc.
23. Dean Witter Managed Assets Trust
24. Dean Witter Multi-State Municipal Series Trust
25. Dean Witter Natural Resource Development Securities Inc.
26. Dean Witter New York Municipal Money Market Trust
27. Dean Witter New York Tax-Free Income Fund
28. Dean Witter Pacific Growth Fund Inc.
29. Dean Witter Precious Metals and Minerals Trust
30. Dean Witter Premier Income Trust
31. Dean Witter Retirement Series
32. Dean Witter Select Municipal Reinvestment Fund
33. Dean Witter Short-Term U.S. Treasury Trust
34. Dean Witter Strategist Fund
35. Dean Witter Tax-Exempt Securities Trust
36. Dean Witter Tax-Free Daily Income Trust
37. Dean Witter U.S. Government Money Market Trust
38. Dean Witter U.S. Government Securities Trust
39. Dean Witter Utilities Fund
40. Dean Witter Value-Added Market Series
41. Dean Witter Variable Investment Series
42. Dean Witter World Wide Income Trust
43. Dean Witter World Wide Investment Trust
CLOSED-END FUNDS*
44. High Income Advantage Trust
45. High Income Advantage Trust II
46. High Income Advantage Trust III
47. InterCapital Income Securities Inc.
48. Dean Witter Government Income Trust
49. InterCapital Insured Municipal Bond Trust
50. InterCapital Insured Municipal Trust
51. InterCapital Insured Municipal Income Trust
52. InterCapital California Insured Municipal Income Trust
53. InterCapital Quality Municipal Investment Trust
54. InterCapital Quality Municipal Income Trust
55. InterCapital Quality Municipal Securities
56. InterCapital California Quality Municipal Securities
57. InterCapital New York Quality Municipal Securities
4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Charles A. Fiumefreddo,
whose signature appears below, constitutes and appoints Sheldon
Curtis, Marilyn K. Cranney and Barry Fink, his true and lawful
attorneys-in-fact and agents, or any of them, with full power of
substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
InterCapital Managed Municipal Trust, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
Charles A. Fiumefreddo
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that John R. Haire, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or any of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
John R. Haire
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Manuel H. Johnson, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or any of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
Manuel H. Johnson
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Paul Kolton, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or any of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
Paul Kolton
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Michael E. Nugent, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or any of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
Michael E. Nugent
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Jack F. Bennett, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or any of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
Jack F. Bennett
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that John E. Jeuck, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or any of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
John E. Jeuck
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Edward R. Telling, whose
signature appears below, constitutes and appoints Sheldon Curtis,
Marilyn K. Cranney and Barry Fink, or any of them, his true and
lawful attorneys-in-fact and agents, with full power of
substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
Edward R. Telling
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Edwin J. Garn, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or any of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
Edwin J. Garn
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Michael Bozic, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or any of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
Michael Bozic
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that John L. Schroeder, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or any of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
John L. Schroeder
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Philip Purcell, whose
signature appears below, constitutes and appoints Sheldon Curtis,
Marilyn K. Cranney and Barry Fink, or any of them, his true and
lawful attorneys-in-fact and agents, with full power of
substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
INTERCAPITAL MANAGED MUNICIPAL TRUST, and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: July 14, 1994
Philip Purcell
<PAGE>
