Exhibit (h)
Pioneer Diversified High Income Trust
[__] Common Shares of Beneficial Interest
FORM OF UNDERWRITING AGREEMENT
May [__], 2007
UNDERWRITING AGREEMENT
May [__], 2007
UBS Securities LLC
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
RBC Capital Markets Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
as Representatives
c/o UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Pioneer Diversified High Income Trust, a statutory trust organized and
existing under and by virtue of the laws of the State of Delaware (the "Fund"),
proposes to issue and sell to the underwriters named in Schedule A annexed
hereto (the "Underwriters") an aggregate of [__] common shares of beneficial
interest (the "Firm Shares"), without par value (the "Common Shares"), of the
Fund. In addition, solely for the purpose of covering over-allotments, the Fund
proposes to grant to the Underwriters the option to purchase from the Fund up to
an additional [__] Common Shares (the "Additional Shares"). The Firm Shares and
the Additional Shares are hereinafter collectively sometimes referred to as the
"Shares." The Shares are described in the Prospectus which is defined below. UBS
Securities LLC ("UBS Securities" or the "Managing Representative") will act as
managing representative for the Underwriters.
The Fund has filed, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (collectively
called the "Securities Act"), and with the provisions of the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder (collectively
called the "Investment Company Act"), with the Securities and Exchange
Commission (the "Commission") a registration statement on Form N-2 (File Nos.
333-140358 and 811-22014), including a prospectus and a statement of additional
information, relating to the Shares. In addition, the Fund has filed a
Notification of Registration on Form N-8A (the "Notification") pursuant to
Section 8 of the Investment Company Act.
Except where the context otherwise requires, "Preliminary Prospectus," as
used herein, means each prospectus (including the statement of additional
information incorporated therein by reference) included in such registration
statement, or amendment thereof, before it became effective under the Securities
Act and any prospectus (including the statement of additional information
incorporated therein by reference) filed with the Commission by the Fund with
the consent of the Managing Representative on behalf of the Underwriters,
pursuant to Rule 497(a) under the Securities Act.
Except where the context otherwise requires, "Registration Statement," as
used herein, means the registration statement, as amended at the time of such
registration statement's effectiveness for purposes of Section 11 of the
Securities Act, as such section applies to each of the Underwriters (the
"Effective Time"), including (i) all documents filed as a part thereof or
incorporated by reference therein, (ii) any
information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 497 under the Securities Act and deemed to be part of the
registration statement at the Effective Time pursuant to Rule 430A under the
Securities Act, and (iii) any registration statement filed to register the offer
and sale of Shares pursuant to Rule 462(b) under the Securities Act.
Except where the context otherwise requires, "Prospectus," as used herein,
means the final prospectus (including the statement of additional information
incorporated therein by reference) as filed by the Fund with the Commission (i)
pursuant to Rule 497(h) under the Securities Act on or before the second
business day after the date hereof (or such earlier time as may be required
under the Securities Act) or (ii) pursuant to Rule 497(b) under the Securities
Act on or before the fifth business day after the date hereof (or such earlier
time as may be required under the Securities Act), or, if no such filing is
required, the final prospectus (including the final statement of additional
information) included in the Registration Statement at the Effective Time, in
each case in the form furnished by the Fund to the Managing Representative for
use by the Underwriters and by dealers in connection with the confirmation of
sales in the offering of the Shares.
"Pricing Prospectus" means the Preliminary Prospectus that is included in
the Registration Statement, or otherwise furnished by the Fund to the Managing
Representative for use by the Underwriters and by dealers in connection with the
offering of the Shares, immediately prior to the Applicable Time (as defined
below) and any amendment or supplement to such Preliminary Prospectus from the
Applicable Time through the Closing Time (as defined herein below).
"Pricing Information" means the information relating to (i) the number of
Shares issued and (ii) the offering price of the Shares included on the cover
page of the Prospectus dependent upon such information.
"Disclosure Package" means the Pricing Prospectus taken together with the
Pricing Information.
"Sales Materials" means those advertising materials, sales literature or
other promotional materials or documents, if any, constituting an advertisement
pursuant to Rule 482 under the Securities Act, or any "road show" materials
authorized or prepared by the Fund or authorized or prepared on behalf of the
Fund by the Adviser (as defined below) for use in connection with the public
offering or sale of the Shares; provided, however, that Sales Materials do not
include any slides, tapes or other materials or documents that constitute a
"written communication" (as defined in Rule 405 under the Securities Act) used
in connection with a "road show" or a "bona fide electronic road show" (each as
defined in Rule 433 under the Securities Act) related to the offering of Shares
contemplated hereby (collectively, "Road Show Materials").
"Applicable Time" means the time as of which this Underwriting Agreement
was entered into, which shall be [__] p.m. (New York City time) on the date of
this Underwriting Agreement (or such other time as is agreed to by the Fund and
the Managing Representative on behalf of the Underwriters).
The Fund has prepared and filed, in accordance with Section 12 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "Exchange Act"), a registration statement (as
amended, the "Exchange Act Registration Statement") on Form 8-A (File No.
001-33406) under the Exchange Act to register, under Section 12(b) of the
Exchange Act, the class of securities consisting of the Common Shares.
Pioneer Investment Management, Inc., a Delaware corporation (the
"Adviser"), will act as the Fund's investment adviser pursuant to an Advisory
Agreement by and between the Fund and the Adviser, dated as of [__], 2007 (the
"Advisory Agreement"). Montpelier Capital Advisors, Ltd., a Bermuda
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company (the "Subadviser," and together with the Adviser, the "Advisers") will
act as the Fund's sub-adviser pursuant to a Subadvisory Agreement among the
Fund, the Adviser and the Subadviser dated as of [__], 2007 (the "Subadvisory
Agreement"). ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co. will act as the custodian (the
"Custodian") of the Fund's cash and portfolio assets pursuant to the Custodian
Agreement, dated as of [__], 2007 (the "Custodian Agreement"). Pioneer
Investment Management Shareholder Services, Inc. will act as the Fund's transfer
agent, registrar, and dividend disbursing agent (the "Transfer Agent") pursuant
to a Transfer Agency and Service Agreement, dated as of [__], 2007 (the
"Transfer Agency Agreement"). American Stock Transfer & Trust Company will act
as the Fund's sub-transfer agent, sub-registrar and sub-dividend disbursing
agent (the "Sub-Transfer Agent") pursuant to a Sub-Transfer Agency and Service
Agreement, dated as of [__], 2007 (the "Sub-Transfer Agency Agreement"). Pioneer
Investment Management, Inc. will act as the administrator of the Fund pursuant
to an Administration Agreement, dated as of [__], 2007 (the "Administration
Agreement"). Princeton Administrators, L.P. will act as the Fund's
sub-administrator pursuant to a Sub-Administration Agreement, dated as of [__],
2007 (the "Sub-Administration Agreement"). The Adviser and UBS Securities LLC
have entered into a Shareholder Servicing Agreement dated May [__], 2007 (the
"Shareholder Servicing Agreement"). The Adviser has also entered into an
Additional Compensation Agreement with ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated dated May [__], 2007 (the "Additional Compensation Agreement").
[The Adviser has also entered into a Marketing and Structuring Fee Agreement
with [__] dated May [__], 2007 (the "Marketing and Structuring Fee Agreement"
and, together with the Shareholder Servicing Agreement and the Additional
Compensation Agreement, the "Shareholder Servicing Agreements").] The Fund and
the Adviser have entered into an Initial Share Purchase Agreement dated as of
April 12, 2007 (the "Initial Share Purchase Agreement"). In addition, the Fund
has adopted a dividend reinvestment plan (the "Dividend Reinvestment Plan")
pursuant to which holders of Shares may have their dividends automatically
reinvested in additional Common Shares of the Fund unless they elect to receive
such dividends in cash.
As used in this Underwriting Agreement, "business day" shall mean a day on
which the American Stock Exchange is open for trading. The terms "herein,"
"hereof," "hereto," "hereinafter" and similar terms, as used in this
Underwriting Agreement, shall in each case refer to this Underwriting Agreement
as a whole and not to any particular section, paragraph, sentence or other
subdivision of this Underwriting Agreement. The term "or," as used herein, is
not exclusive.
The Fund, the Adviser, the Subadviser and the Underwriters agree as
follows:
1. Sale and Purchase. Upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Fund agrees to
sell to the respective Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase from the Fund the aggregate number of
Firm Shares set forth opposite the name of such Underwriter in Schedule A
attached hereto in each case at a purchase price of $23.875 per Share. The
Fund is advised that the Underwriters intend (i) to make a public offering
of their respective portions of the Firm Shares as soon after the Effective
Time as is advisable and (ii) initially to offer the Firm Shares upon the
terms set forth in the Prospectus. The Underwriters may from time to time
increase or decrease the public offering price after the initial public
offering to such extent as they may determine.
In addition, the Fund hereby grants to the several Underwriters the option
to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Fund, ratably in
accordance with the number of Firm Shares to be purchased by each of them, all
or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per Share to be paid by the Underwriters to the Fund for the
3
Firm Shares. This option may be exercised by the Managing Representative on
behalf of the several Underwriters at any time and from time to time on or
before the forty-fifth (45th) day following the date hereof, by written notice
to the Fund. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised, and the date and time when the
Additional Shares are to be delivered (such date and time being herein referred
to as the "Additional Shares Closing Time"); provided, however, that the
Additional Shares Closing Time shall not be earlier than the Firm Shares Closing
Time (as defined below) nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the tenth business
day after the date on which the option shall have been exercised. The number of
Additional Shares to be sold to each Underwriter shall be the number which bears
the same proportion to the aggregate number of Additional Shares being purchased
as the number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as the Representatives may determine to eliminate
fractional shares).
2. Payment and Delivery. Payment of the purchase price for the Firm Shares
shall be made by the Underwriters to the Fund by Federal Funds wire
transfer, against delivery of the certificates for the Firm Shares to the
Representatives through the facilities of the Depository Trust Company for
the respective accounts of the Underwriters. Such payment and delivery
shall be made at a time mutually agreed upon by the parties on the third
business day following the date of this Underwriting Agreement (unless
another date shall be agreed to by the Fund and the Managing Representative
on behalf of the Underwriters). The time at which such payment and delivery
are actually made is hereinafter sometimes called the "Firm Shares Closing
Time." Certificates for the Firm Shares shall be delivered to the
Representatives in definitive form in such names and in such denominations
as the Representatives shall specify on the second business day preceding
the Firm Shares Closing Time. For the purpose of expediting the checking of
the certificates for the Firm Shares by the Representatives, the Fund
agrees to make such certificates available to the Representatives for such
purpose at least one full business day preceding the Firm Shares Closing
Time.
Payment of the purchase price for the Additional Shares shall be made at
the Additional Shares Closing Time in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to the Representatives in definitive form in such names and in such
denominations as the Representatives shall specify no later than the second
business day preceding the Additional Shares Closing Time. For the purpose of
expediting the checking of the certificates for the Additional Shares by the
Representatives, the Fund agrees to make such certificates available to the
Representatives for such purpose at least one full business day preceding the
Additional Shares Closing Time. The Firm Shares Closing Time and the Additional
Shares Closing Time are sometimes referred to herein as the "Closing Times."
3. Representations and Warranties of the Fund, the Adviser and the Subadviser.
Each of the Fund, the Adviser and the Subadviser jointly and severally
represents and warrants to each Underwriter as of the date of this
Underwriting Agreement, as of the Firm Shares Closing Time and as of each
Additional Shares Closing Time, if any, as follows:
(a) (i) (A) the Registration Statement has heretofore become effective
under the Securities Act or, with respect to any registration
statement to be filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the Securities Act, will be filed with
the Commission and become effective under the Securities Act no later
than 10:00 P.M., New York City time, on the date of determination of
the public offering price for the Shares; (B) no stop order of the
Commission preventing or suspending the use of any Preliminary
Prospectus or Sales Materials or of the Prospectus or the
effectiveness of the
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Registration Statement has been issued, and no proceedings for such
purpose have been instituted or, to the Fund's knowledge, are
contemplated by the Commission; and (C) the Exchange Act Registration
Statement has become effective as provided in Section 12 of the
Exchange Act;
(ii) (A) the Registration Statement complied at the Effective Time,
complies as of the date hereof and, as amended or supplemented, at the
Firm Shares Closing Time, each Additional Shares Closing Time, if any,
and at all times during which a prospectus is required by the
Securities Act to be delivered in connection with any sale of Shares,
will comply, in all material respects, with the requirements of the
Securities Act and the Investment Company Act; (B) each Preliminary
Prospectus and the Prospectus complied, at the time it was filed with
the Commission, and the Prospectus complies as of the date hereof and,
as amended or supplemented, at the Firm Shares Closing Time, each
Additional Shares Closing Time, if any, and at all times during which
a prospectus is required by the Securities Act to be delivered in
connection with any sale of Shares, will comply, in all material
respects with the requirements of the Securities Act (including,
without limitation, Section 10(a) of the Securities Act) and the
Investment Company Act; and (C) each of the Sales Materials complied,
at the time it was first used in connection with the public offering
of the Shares, and complies as of the date hereof, in all material
respects with the requirements of the Securities Act (including,
without limitation, Rule 482 thereunder), the Investment Company Act
and the applicable rules and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD");
(iii) (A) (1) the Registration Statement as of the Effective Time did
not, (2) the Registration Statement (including any post-effective
amendment thereto declared or deemed to be effective by the
Commission) as of the date hereof does not, and (3) the Registration
Statement (including any post-effective amendment thereto declared or
deemed to be effective by the Commission), as of the Firm Shares
Closing Time and each Additional Shares Closing Time, if any, will
not, in each case, 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; (B) at no
time during the period that begins as of the Applicable Time and ends
at the Firm Shares Closing Time did or will the Disclosure Package
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; (C) at no time during the period that begins at the time
each of the Sales Materials was first used in connection with the
public offering of the Shares and ends at the Applicable Time did any
of the Sales Materials 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; and (D) at no time during the period that
begins on the earlier of the date of the Prospectus and the date the
Prospectus is filed with the Commission and ends at the latest of the
Firm Shares Closing Time, the latest Additional Shares Closing Time,
if any, and the end of the period during which a prospectus is
required by the Securities Act to be delivered in connection with any
sale of Shares did or will the Prospectus, as then amended or
supplemented, 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 each of the Fund, the Adviser
and the Subadviser makes no representation or warranty with respect to
any statement contained in the Registration Statement, the Disclosure
Package or the Prospectus in reliance upon and in conformity with
information concerning an Underwriter and furnished in writing by or
on
5
behalf of such Underwriter through the Managing Representative to the
Fund expressly for use in the Registration Statement, the Disclosure
Package or the Prospectus as described in Section 9(f) hereof.
(b) (i) The Fund has been duly formed, is validly existing as a statutory
trust under the laws of State of Delaware, with full power and
authority to conduct all the activities conducted by it, to own or
lease all assets owned or leased by it and to conduct its business as
described in the Registration Statement, the Pricing Prospectus and
the Prospectus; (ii) the Fund is duly licensed and qualified to do
business and in good standing in each jurisdiction in which its
ownership or leasing of property or its conducting of business
requires such qualification; (iii) the Fund owns, possesses or has
obtained and currently maintains all governmental licenses, permits,
consents, orders, approvals and other authorizations, whether foreign
or domestic, necessary to carry on its business as contemplated in the
Pricing Prospectus and the Prospectus; and (iv) the Fund has no
subsidiaries.
(c) The outstanding and authorized capitalization of the Fund is as set
forth in the Registration Statement, the Pricing Prospectus and the
Prospectus. The Common Shares conform in all material respects to the
description of them in the Pricing Prospectus and the Prospectus. All
the outstanding Common Shares have been duly authorized and are
validly issued, fully paid and nonassessable (except as described in
the Registration Statement, the Pricing Prospectus and the
Prospectus). The Shares to be issued and delivered to and paid for by
the Underwriters in accordance with this Underwriting Agreement
against payment therefor as provided by this Underwriting Agreement
have been duly authorized and when issued and delivered to the
Underwriters will have been validly issued and will be fully paid and
nonassessable (except as described in the Registration Statement, the
Pricing Prospectus and the Prospectus). No person is entitled to any
preemptive or other similar rights with respect to the Shares.
(d) The Fund is duly registered with the Commission under the Investment
Company Act as a diversified, closed-end management investment
company, and, subject to the filing of any final amendment to the
Registration Statement (a "Final Amendment"), if not already filed,
all action under the Securities Act and the Investment Company Act, as
the case may be, necessary to make the public offering and consummate
the sale of the Shares as provided in this Underwriting Agreement has
or will have been taken by the Fund.
(e) The Fund has full power and authority to enter into each of this
Underwriting Agreement, the Advisory Agreement, the Subadvisory
Agreement, the Custodian Agreement, the Transfer Agency Agreement, the
Sub-Transfer Agency Agreement, the Administration Agreement, the
Sub-Administration Agreement, the Initial Share Purchase Agreement,
and the Dividend Reinvestment Plan (collectively, the "Fund
Agreements") and to perform all of the terms and provisions hereof and
thereof to be carried out by it and (i) each Fund Agreement has been
duly and validly authorized, executed and delivered by or on behalf of
the Fund, (ii) each Fund Agreement does not violate any of the
applicable provisions of the Investment Company Act or the Investment
Advisers Act of 1940, as amended, and the rules and regulations
thereunder (collectively called the "Advisers Act"), as the case may
be, and (iii) assuming due authorization, execution and delivery by
the other parties thereto, each Fund Agreement constitutes the legal,
valid and binding obligation of the Fund enforceable in accordance
with its terms, (A) subject, as to enforcement, to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether
enforcement is
6
sought in a proceeding in equity or at law) and (B) except as rights
to indemnity thereunder may be limited by federal or state securities
laws.
(f) None of (i) the execution and delivery by the Fund of the Fund
Agreements, (ii) the issue and sale by the Fund of the Shares as
contemplated by this Underwriting Agreement and (iii) the performance
by the Fund of its obligations under any of the Fund Agreements or
consummation by the Fund of the other transactions contemplated by the
Fund Agreements conflicts with or will conflict with, or results or
will result in a breach of, the Declaration of Trust or the By-laws of
the Fund or any agreement or instrument to which the Fund is a party
or by which the Fund is bound, or any law, rule or regulation, or
order of any court, governmental instrumentality, securities exchange
or association or arbitrator, whether foreign or domestic, applicable
to the Fund, other than state securities or "blue sky" laws applicable
in connection with the purchase and distribution of the Shares by the
Underwriters pursuant to this Underwriting Agreement.
(g) The Fund is not currently in breach of, or in default under, any
written agreement or instrument to which it is a party or by which it
or its property is bound or affected, except for such breaches or
defaults that do not, either alone or in the aggregate, have a
material adverse effect on the Fund or on the Fund's ability to
perform its obligations under the Fund Agreements.
(h) No person has any right to the registration of any securities of the
Fund because of the filing of the registration statement.
(i) No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required by the Fund for the
consummation by the Fund of the transactions to be performed by the
Fund or the performance by the Fund of all the terms and provisions to
be performed by or on behalf of it in each case as contemplated in the
Fund Agreements, except such as (i) have been obtained under the
Securities Act, the Investment Company Act, or the Advisers Act, and
(ii) may be required by the American Stock Exchange, or under state
securities or "blue sky" laws, in connection with the purchase and
distribution of the Shares by the Underwriters pursuant to this
Underwriting Agreement.
(j) The Shares are duly authorized for listing, subject to official notice
of issuance, on the American Stock Exchange and the Notification has
become effective.
(k) Ernst & Young LLP, whose report appears in the Prospectus, is an
independent registered public accounting firm with respect to the Fund
as required by the Securities Act and the Investment Company Act.
(l) The statement of assets and liabilities included or incorporated by
reference in the Registration Statement, the Pricing Prospectus and
the Prospectus presents fairly in all material respects, in accordance
with generally accepted accounting principles in the United States
applied on a consistent basis, the financial position of the Fund as
of the date indicated.
(m) The Fund will maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting
7
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets through an asset
reconciliation procedure or otherwise at reasonable intervals and
appropriate action is taken with respect to any differences.
(n) Since the date as of which information is given in the Registration
Statement, the Pricing Prospectus and the Prospectus, except as
otherwise stated therein, (i) there has been no material adverse
change in the condition, financial or otherwise, business prospects,
properties, net assets or results of operations of the Fund, whether
or not arising in the ordinary course of business, (ii) there have
been no transactions entered into by the Fund other than those in the
ordinary course of its business and (iii) there has been no dividend
or distribution of any kind declared, paid or made on any class of the
Fund's capital shares.
(o) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending, or, to
the knowledge of the Fund, threatened against or affecting the Fund,
except such which (i) if determined adversely would not result in any
material adverse change in the condition, financial or otherwise,
business affairs or business prospects of the Fund and would not
materially adversely affect the properties or assets of the Fund and
(ii) is not of a character required to be described in the
Registration Statement, the Pricing Prospectus or the Prospectus; and
there are no contracts, franchises or other documents that are of a
character required to be described in, or that are required to be
filed as exhibits to, the Registration Statement that have not been
described or filed as required.
(p) Except for stabilization transactions conducted by the Underwriters,
and except for tender offers, Share repurchases and the issuance or
purchase of Shares pursuant to the Fund's Dividend Reinvestment Plan
effected following the date on which the distribution of the Shares is
completed in accordance with the policies of the Fund as set forth in
the Pricing Prospectus or the Prospectus, the Fund has not taken and
will not take, directly or indirectly, any action designed or which
might be reasonably expected to cause or result in, or which will
constitute, stabilization or manipulation of the price of the Common
Shares in violation of applicable federal securities laws.
(q) The Fund intends to direct the investment of the proceeds of the
offering of the Shares in such a manner as to comply with the
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code").
(r) The Fund has not distributed and, prior to the later to occur of the
(i) date of the last Closing Time and (b) completion of the
distribution of the Shares, will not distribute any offering material
in connection with the public offering or sale of the Shares other
than the Registration Statement, the Disclosure Package, the Sales
Materials, the Road Show Materials and the Prospectus.
(s) Other than the Road Show Materials, there are no Sales Materials other
than the definitive client brochure and the broker brochure which were
filed with the NASD on April 13, 2007; and neither any Road Show
Materials authorized or prepared by the Fund or authorized or prepared
on behalf of the Fund by the Adviser, the Subadviser or any
representative thereof for use in connection with the public offering
or sale of the Shares
8
nor any Sales Materials contained or contains any untrue statement of
a material fact or omitted or omits to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(t) Neither the Fund nor any director, officer, agent, employee or
affiliate of the Fund is aware of or has taken any action, directly or
indirectly, that would result in a violation by such persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the "Foreign Corrupt Practices Act"); and the
Fund and its affiliates have instituted and maintain policies and
procedures designed to ensure continued compliance therewith.
(u) Except as disclosed in the Registration Statement, the Pricing
Prospectus and the Prospectus (or any amendment or supplement to any
of them), no trustee of the Fund is an "interested person" (as defined
in the Investment Company Act) of the Fund or an "affiliated person"
(as defined in the Investment Company Act) of any Underwriter listed
in Schedule A hereto.
In addition, any certificate signed by any officer of the Fund and
delivered to the Underwriters or counsel for the Underwriters in connection with
the offering of the Share shall be deemed to be a representation and warranty by
the Fund as to matters covered thereby, to each Underwriter.
4. Representations and Warranties of the Adviser and the Subadviser. Each of
the Adviser and the Subadviser represents to each Underwriter as of the
date of this Underwriting Agreement, as of the Firm Shares Closing Time and
as of each Additional Shares Closing Time, if any, as follows:
(a) Such Adviser has been duly formed, is validly existing as a
corporation under the laws of the State of Delaware, in the case of
the Adviser, or is validly existing as a company under the laws of
Bermuda in the case of the Subadviser, with full power and authority
to conduct all of its investment advisory activities, to own or lease
all of the assets owned or leased by it and to conduct its business as
described in the Registration Statement, the Pricing Prospectus and
the Prospectus, and such Adviser is duly licensed and qualified to do
business and in good standing in each jurisdiction in which it is
required to be so qualified; and such Adviser owns, possesses or has
obtained and currently maintains all governmental licenses, permits,
consents, orders, approvals and other authorizations, whether foreign
or domestic, necessary to carry on its business as contemplated in the
Registration Statement, the Pricing Prospectus and the Prospectus.
(b) Such Adviser is (i) duly registered as an investment adviser under the
Advisers Act and (ii) not prohibited by the Advisers Act or the
Investment Company Act from acting as the investment adviser for the
Fund as contemplated by the Advisory Agreement, the Subadvisory
Agreement, the Registration Statement, the Pricing Prospectus and the
Prospectus.
(c) Such Adviser has full power and authority to enter into each of this
Underwriting Agreement, the Advisory Agreement and the Subadvisory
Agreement, and, in the case of the Adviser, the Administration
Agreement, the Sub-Administration Agreement, the Initial Share
Purchase Agreement, and the Shareholder Servicing Agreements, to which
such Adviser is a party (collectively, the "Adviser Agreements"), and
to carry out all the terms and provisions hereof and thereof to be
carried out by it; and each Adviser Agreement has been duly and
validly authorized, executed and delivered by such
9
Adviser; none of the Adviser Agreements violates any of the applicable
provisions of the Investment Company Act or the Advisers Act; and
assuming due authorization, execution and delivery by the other
parties thereto, each Adviser Agreement constitutes a legal, valid and
binding obligation of such Adviser, enforceable in accordance with its
terms, (i) subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and
to general equitable principles (regardless of whether enforcement is
sought in a proceeding in equity or at law) and (ii) except as rights
to indemnity thereunder may be limited by federal or state securities
laws.
(d) Neither (i) the execution and delivery by such Adviser of any Adviser
Agreement nor (ii) the consummation by such Adviser of the
transactions contemplated by, or the performance of its obligations
under any Adviser Agreement conflicts or will conflict with, or
results or will result in a breach of, (x) any agreement or instrument
to which such Adviser is a party or by which such Adviser is bound,
except in each case for such conflicts or breaches which do not,
either alone or in the aggregate, have a material adverse effect upon
such Adviser's ability to perform its obligations under the Adviser
Agreements, (y) the Articles of Incorporation, in the case of the
Adviser, the Memorandum of Association, in the case of the Subadviser,
or By-Laws of such Adviser or (z) any law, rule or regulation, or
order of any court, governmental instrumentality, securities exchange
or association or arbitrator, whether foreign or domestic, applicable
to such Adviser.
(e) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required for the consummation of the
transactions contemplated in, or the performance by such Adviser of
its obligations under, any Adviser Agreement, as the case may be,
except such as (i) have been obtained under the Securities Act, the
Investment Company Act, or the Advisers Act, and (ii) may be required
by the American Stock Exchange, or under state securities or "blue
sky" laws, in connection with the purchase and distribution of the
Shares by the Underwriters pursuant to this Underwriting Agreement.
(f) The description of such Adviser and its business and the statements
attributable to such Adviser in the Registration Statement, the
Pricing Prospectus and the Prospectus comply with the requirements of
the Securities Act and the Investment Company Act and do 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 (in the case of the Pricing Prospectus and the
Prospectus in light of the circumstances in which they were made) not
misleading.
(g) Except as set forth in the Registration Statement, the Pricing
Prospectus and the Prospectus, there is no action, suit or proceeding
before or by any court, commission, regulatory body, administrative
agency or other governmental agency or body, foreign or domestic, now
pending or, to the knowledge of such Adviser, threatened against or
affecting such Adviser except such which (i) is not of a nature
required to be disclosed in the Registration Statement, the Pricing
Prospectus or the Prospectus and (ii) if determined adversely would
not result in any material adverse change in the condition, financial
or otherwise, business affairs or business prospects of such Adviser
or the ability of such Adviser to fulfill its respective obligations
under any Adviser Agreement.
(h) Except for stabilization activities conducted by the Underwriters and
except for tender offers, Share repurchases and the issuance or
purchase of Shares pursuant to the Fund's
10
Dividend Reinvestment Plan effected following the date on which the
distribution of the Shares is completed in accordance with the
policies of the Fund as set forth in the Pricing Prospectus and the
Prospectus, such Adviser has not taken and will not take, directly or
indirectly, any action designed, or which might reasonably be expected
to cause or result in, or which will constitute, stabilization or
manipulation of the price of the Common Shares in violation of
applicable federal securities laws.
(i) In the event that the Fund or such Adviser has made available any Road
Show Materials or promotional materials (other than the Sales
Materials) by means of an Internet web site or similar electronic
means such as to constitute a bona fide electronic road show, such
Adviser has installed and maintained pre-qualification and
password-protection or similar procedures which are designed and
reasonably expected to effectively prohibit access to such Road Show
Materials or promotional materials by persons other than qualified
broker-dealers and registered representatives thereof.
In addition, any certificate signed by any officer of the Adviser or the
Subadviser and delivered to the Underwriters or counsel for the
Underwriters in connection with the offering of the Shares shall be deemed
to be a representation and warranty by the Adviser or the Subadviser, as
applicable, as to matters covered thereby, to each Underwriter.
5. Agreements of the Parties.
(a) If the registration statement relating to the Shares has not yet
become effective, the Fund will promptly file a Final Amendment, if
not previously filed, with the Commission, and will use its best
efforts to cause such registration statement to become effective and,
as soon as the Fund is advised, will advise the Managing
Representative when the Registration Statement or any amendment
thereto has become effective. If it is necessary for a post-effective
amendment to the Registration Statement, or a Registration Statement
under Rule 462(b) under the Securities Act, to be filed with the
Commission and become effective before the Shares may be sold, the
Fund will use its best efforts to cause such post-effective amendment
or such Registration Statement to be filed and become effective as
soon as possible, and the Fund will advise the Managing Representative
promptly and, if requested by the Managing Representative, will
confirm such advice in writing, (i) when such post-effective amendment
or such Registration Statement has become effective. If the
Registration Statement has become effective and the Prospectus
contained therein omits certain information at the time of
effectiveness pursuant to Rule 430A under the Securities Act, the Fund
will file a 430A Prospectus pursuant to Rule 497(h) under the
Securities Act as promptly as practicable, but no later than the
second business day following the earlier of the date of the
determination of the offering price of the Shares or the date the
Prospectus is first used after the Effective Time. If the Registration
Statement has become effective and the Prospectus contained therein
does not so omit such information, the Fund will file a Prospectus
pursuant to Rule 497(b) or a certification pursuant to Rule 497(j)
under the Securities Act as promptly as practicable, but no later than
the fifth business day following the date of the later of the
Effective Time or the commencement of the public offering of the
Shares after the Effective Time. In either case, the Fund will provide
the Managing Representative satisfactory evidence of the filing. The
Fund will not file with the Commission any Prospectus or any other
amendment (except any post-effective amendment which is filed with the
Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which distribution of the
Shares is completed) or supplement to the Registration Statement or
the Prospectus unless a copy has first been submitted to the Managing
11
Representative a reasonable time before its filing and the Managing
Representative has not objected to it in writing within a reasonable
time after receiving the copy.
(b) For the period of three years from the date hereof, the Fund will
advise the Managing Representative promptly (i) of the issuance by the
Commission of any order in respect of the Fund, the Adviser or the
Subadviser, which relates to the offering of the Shares, (ii) of the
initiation or threatening of any proceedings for, or receipt by the
Fund of any notice with respect to, any suspension of the
qualification of the Shares for sale in any jurisdiction or the
issuance of any order by the Commission suspending the effectiveness
of the Registration Statement, (iii) of receipt by the Fund, or any
representative or attorney of the Fund, of any other communication
from the Commission relating in any material way to the Fund, the
Registration Statement, the Notification, any Preliminary Prospectus,
the Sales Materials, the Prospectus or to the transactions
contemplated by this Underwriting Agreement and (iv) the issuance by
any court, regulatory body, administrative agency or other
governmental agency or body, whether foreign or domestic, of any
order, ruling or decree, or the threat to initiate any proceedings
with respect thereto, regarding the offering of the Shares by the
Fund. The Fund will make every reasonable effort to prevent the
issuance of any order suspending the effectiveness of the Registration
Statement and, if any such order is issued, to obtain its lifting as
soon as possible.
(c) If not delivered prior to the date of this Underwriting Agreement, the
Fund will deliver to the Managing Representative, without charge, a
signed copy of the Registration Statement, the Exchange Act
Registration Statement and the Notification and of any amendments
(except any post-effective amendment which is filed with the
Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which the distribution of
the Shares is completed) to either the Registration Statement, the
Exchange Act Registration Statement or the Notification (including all
exhibits filed with any such document) and as many conformed copies of
the Registration Statement and any amendments thereto (except any
post-effective amendment which is filed with the Commission after the
later of (x) one year from the date of this Underwriting Agreement or
(y) the date on which the distribution of the Shares is completed)
(excluding exhibits) as the Managing Representative may reasonably
request.
(d) During such period as a prospectus is required by law to be delivered
by an underwriter or a dealer, the Fund will deliver, without charge,
to the Representatives, the Underwriters and any dealers, at such
office or offices as the Representatives may designate, as many copies
of the Prospectus as the Representatives may reasonably request, and,
if any event occurs during such period as a result of which it is
necessary to amend or supplement the Prospectus, in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading in any material respect, or if during such
period it is necessary to amend or supplement the Prospectus to comply
with the Securities Act or the Investment Company Act, the Fund
promptly will prepare, submit to the Managing Representative, file
with the Commission and deliver, without charge, to the Underwriters
and to dealers (whose names and addresses the Managing Representative
will furnish to the Fund) to whom Shares may have been sold by the
Underwriters, and to other dealers on request, amendments or
supplements to the Prospectus so that the statements in such
Prospectus, as so amended or supplemented, will not, in light of the
circumstances under which they were made, be misleading in any
material respect and will comply with the Securities Act and the
Investment Company
12
Act. Delivery by the Underwriters of any such amendments or
supplements to the Prospectus will not constitute a waiver of any of
the conditions in Section 6 hereof.
(e) The Fund will make generally available to holders of the Fund's
securities, as soon as practicable but in no event later than the last
day of the 18th full calendar month following the calendar quarter in
which the date of the Effective Time falls, an earnings statement, if
applicable, satisfying the provisions of the last paragraph of Section
11(a) of the Securities Act and, at the option of the Fund, Rule 158
under the Securities Act.
(f) If the transactions contemplated by this Underwriting Agreement are
consummated, the Fund shall pay all costs and expenses incident to the
performance of the obligations of the Fund under this Underwriting
Agreement (to the extent such expenses do not, in the aggregate,
exceed $0.05 per Share), including but not limited to costs and
expenses of or relating to (i) the preparation, printing and filing of
the Registration Statement and exhibits to it, each Preliminary
Prospectus, the Prospectus and all amendments and supplements thereto,
(ii) the issuance of the Shares and the preparation and delivery of
certificates for the Shares, (iii) the registration or qualification
of the Shares for offer and sale under the securities or "blue sky"
laws of the jurisdictions referred to in the foregoing paragraph,
including the fees and disbursements of counsel for the Underwriters
in that connection, and the preparation and printing of any
preliminary and supplemental "blue sky" memoranda, (iv) the furnishing
(including costs of design, production, shipping and mailing) to the
Underwriters and dealers of copies of each Preliminary Prospectus
relating to the Shares, the Sales Materials, the Prospectus, and all
amendments or supplements to the Prospectus, and of the other
documents required by this Section to be so furnished, (v) the filing
requirements of the NASD, in connection with its review of the
financing, including filing fees and the fees, disbursements and other
charges of counsel for the Underwriters in that connection, (vi) all
transfer taxes, if any, with respect to the sale and delivery of the
Shares to the Underwriters, (vii) the listing of the Shares on the
American Stock Exchange and (viii) the transfer agent for the Shares.
To the extent the foregoing costs and expenses incident to the
performance of the obligations of the Fund under this Underwriting
Agreement exceed, in the aggregate, $0.05 per Share, the Adviser or an
affiliate will pay all such excess costs and expenses. The Fund, the
Adviser and the Subadviser may otherwise agree among themselves as to
the payment of the foregoing expenses, whether or not the transactions
contemplated by this Underwriting Agreement are consummated, provided,
however, that in no event shall the Underwriters be obligated to pay
any of the foregoing expenses.
(g) If the transactions contemplated by this Underwriting Agreement are
not consummated, except as otherwise provided herein, no party will be
under any liability to any other party, except that (i) if this
Underwriting Agreement is terminated by (x) the Fund, the Adviser or
the Subadviser pursuant to any of the provisions hereof or (y) by the
Representatives or the Underwriters because of any inability, failure
or refusal on the part of the Fund, the Adviser or the Subadviser to
comply with any material terms of this Underwriting Agreement or
because any of the conditions in Section 6 are not satisfied, the
Adviser, the Subadviser or such Adviser's affiliates and the Fund,
jointly and severally, will reimburse the Underwriters for all
out-of-pocket expenses (including the reasonable fees, disbursements
and other charges of their counsel) reasonably incurred by them in
connection with the proposed purchase and sale of the Shares and (ii)
no Underwriter who has failed or refused to purchase the Shares agreed
to be purchased by it under this Underwriting Agreement, in breach of
its obligations pursuant to this
13
Underwriting Agreement, will be relieved of liability to the Fund, the
Adviser, the Subadviser and the other Underwriters for damages
occasioned by its default.
(h) Without the prior written consent of the Managing Representative, the
Fund will not offer, sell or register with the Commission, or announce
an offering of, any equity securities of the Fund, within 180 days
after the date of the Effective Time, except for the Shares as
described in the Prospectus and any issuances of Common Shares
pursuant to the Dividend Reinvestment Plan and except in connection
with any offering of preferred shares of beneficial interest as
contemplated by the Prospectus.
(i) The Fund will use its best efforts to list the Shares on the American
Stock Exchange prior to the date the Shares are issued and comply with
the rules and regulations of such exchange.
(j) The Fund will direct the investment of the net proceeds of the
offering of the Shares in such a manner as to comply with the
investment objective and policies of the Fund as described in the
Prospectus.
6. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters to purchase the Shares are subject to the accuracy on the date
of this Underwriting Agreement, and as of each of the Closing Times, of the
representations of the Fund, the Adviser and the Subadviser in this
Underwriting Agreement, to the accuracy and completeness of all material
statements made by the Fund, the Adviser or the Subadviser or any of their
respective officers in any certificate delivered to the Managing
Representative or its counsel pursuant to this Underwriting Agreement, to
performance by the Fund, the Adviser and the Subadviser of their respective
obligations under this Underwriting Agreement and to each of the following
additional conditions:
(a) The Registration Statement must have become effective by 5:30 p.m.,
New York City time, on the date of this Underwriting Agreement or such
later date and time as the Managing Representative consents to in
writing. The Prospectus must have been filed in accordance with Rule
497(b) or (h) or a certificate must have been filed in accordance with
Rule 497(j), as the case may be, under the Securities Act.
(b) No order suspending the effectiveness of the Registration Statement
may be in effect and no proceedings for such purpose may be pending
before or, to the knowledge of counsel to the Underwriters, threatened
by the Commission, and any requests for additional information on the
part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) must be complied with or waived to the
reasonable satisfaction of the Managing Representative.
(c) Since the dates as of which information is given in the Registration
Statement, the Pricing Prospectus and the Prospectus, as of the date
of this Underwriting Agreement, (i) there must not have been any
change in the Common Shares or the liabilities of the Fund except as
set forth in or contemplated by the Pricing Prospectus or the
Prospectus as of the date of this Underwriting Agreement; (ii) there
must not have been any change or a development involving a prospective
change in the general affairs, prospects, management, business,
financial condition or results of operations of the Fund, the Adviser
or the Subadviser whether or not arising from transactions in the
ordinary course of business as set forth in or contemplated by the
Pricing Prospectus or the Prospectus as of the date of this
Underwriting Agreement; (iii) the Fund must not have sustained any
14
loss or interference with its business from any court or from
legislative or other governmental action, order or decree, whether
foreign or domestic, or from any other occurrence not described in the
Registration Statement, the Pricing Prospectus and the Prospectus as
of the date of this Underwriting Agreement; and (iv) there must not
have occurred any event that makes untrue or incorrect any statement
or information contained in the Registration Statement, the Pricing
Prospectus or the Prospectus as of the date of this Underwriting
Agreement or that is not reflected in the Registration Statement, the
Pricing Prospectus or the Prospectus as of the date of this
Underwriting Agreement but should be reflected therein in order to
make the statements or information therein (in the case of the Pricing
Prospectus and the Prospectus, in light of the circumstances in which
they were made) not misleading; if, in the sole judgment of the
Managing Representative, any such development referred to in clause
(i), (ii), (iii), or (iv) of this paragraph (c) is material and
adverse so as to make it impracticable or inadvisable to consummate
the sale and delivery of the Shares to the public on the terms and in
the manner contemplated by the Pricing Prospectus.
(d) The Managing Representative must have received as of each Closing Time
a certificate, dated such date, of the President or a Vice-President
and the chief financial or accounting officer of each of the Fund, the
Adviser and the Subadviser certifying (in their capacity as such
officers and, with respect to clauses (ii), (iii) and (vi) below, on
behalf of the Fund, the Adviser and the Subadviser, as the case may
be) that (i) the signers have carefully examined the Registration
Statement, the Prospectus, the Pricing Prospectus and this
Underwriting Agreement, (ii) the representations of the Fund (with
respect to the certificates from such Fund officers), the
representations of the Adviser (with respect to the certificates from
such officers of the Adviser) and the representations of the
Subadviser (with respect to the certificates from such officers of the
Subadviser) in this Underwriting Agreement are accurate on and as of
the date of the certificate, (iii) there has not been any material
adverse change in the general affairs, prospects, management,
business, financial condition or results of operations of the Fund
(with respect to the certificates from such Fund officers), the
Adviser (with respect to the certificates from such officers of the
Adviser) or the Subadviser (with respect to the certificates from such
officers of the Subadviser), which change would materially and
adversely affect the ability of the Fund, the Adviser or the
Subadviser, as the case may be, to fulfill its obligations under this
Underwriting Agreement, the Advisory Agreement (with respect to the
certificates from such officers of the Adviser) or the Subadvisory
Agreement (with respect to the certificates from such officers of the
Subadviser), whether or not arising from transactions in the ordinary
course of business, (iv) with respect to the Fund only, no order
suspending the effectiveness of the Registration Statement,
prohibiting the sale of any of the Shares or otherwise having a
material adverse effect on the Fund has been issued and no proceedings
for any such purpose are pending before or, to the knowledge of such
officers after reasonable investigation, threatened by the Commission
or any other regulatory body, whether foreign or domestic, (v) no
order having a material adverse effect on the ability of the Adviser
to fulfill its obligations under this Underwriting Agreement, the
Shareholder Servicing Agreement, the Structuring Fee Agreement, the
Additional Compensation Agreement, the Initial Share Purchase
Agreement, the Subadvisory Agreement or the Advisory Agreement, as the
case may be, has been issued and no proceedings for any such purpose
are pending before or, to the knowledge of the officers of the Adviser
after reasonable investigation, threatened by the Commission or any
other regulatory body, whether foreign or domestic, (vi) no order
having a material adverse effect on the ability of the Subadviser to
fulfill its obligations under this Underwriting Agreement or the
Subadvisory Agreement, as the case may be,
15
has been issued and no proceedings for any such purpose are pending
before or, to the knowledge of the officers of the Subadviser after
reasonable investigation, threatened by the Commission or any other
regulatory body, whether foreign or domestic and (vii) each of the
Fund (with respect to the certificates from such Fund officers), the
Adviser (with respect to the certificates from such officers of the
Adviser) and the Subadviser (with respect to the certificates from
such officers of the Subadviser) has performed all of its respective
agreements that this Underwriting Agreement requires it to perform by
such Closing Time (to the extent not waived in writing by the Managing
Representative).
(e) The Managing Representative must have received as of each Closing Time
the opinions dated as of the date thereof substantially in the form of
Schedules B, C and D to this Underwriting Agreement from the counsel
identified in each such Schedule.
(f) The Managing Representative must have received as of each Closing Time
from ▇▇▇▇▇▇▇▇ Chance US LLP an opinion dated as of the date thereof
with respect to the Fund, the Shares, the Registration Statement and
the Prospectus, this Underwriting Agreement and the form and
sufficiency of all proceedings taken in connection with the sale and
delivery of the Shares. Such opinion and proceedings shall fulfill the
requirements of this Section 6(f) only if such opinion and proceedings
are satisfactory in all respects to the Managing Representative. The
Fund, the Adviser and the Subadviser must have furnished to such
counsel such documents as counsel may reasonably request for the
purpose of enabling them to render such opinion.
(g) The Managing Representative must have received on the date this
Underwriting Agreement is signed and delivered by the Managing
Representative a signed letter, dated such date, substantially in the
form of Schedule E to this Underwriting Agreement from the independent
registered public accounting firm designated in such Schedule. The
Managing Representative also must have received as of each Closing
Time a signed letter from such accountants, dated as of the date
thereof, confirming on the basis of a review in accordance with the
procedures set forth in their earlier letter that nothing has come to
their attention during the period from a date not more than five
business days before the date of this Underwriting Agreement,
specified in the letter, to a date not more than five business days
before the date of such Closing Time, that would require any change in
their letter referred to in the foregoing sentence.
(h) At Firm Shares Closing Time, the Managing Representative must have
received the Shareholder Servicing Agreements, as executed by the
Adviser.
(i) At Firm Shares Closing Time, the Shares must have been approved for
listing on the American Stock Exchange, subject only to official
notice of issuance.
(j) At Firm Shares Closing Time, the NASD must not have raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Underwriting Agreement will comply only if they are in
form and scope reasonably satisfactory to counsel for the Underwriters,
provided that any such documents, forms of which are annexed hereto, shall
be deemed satisfactory to such counsel if substantially in such form.
7. Termination. This Underwriting Agreement may be terminated by the Managing
Representative by notifying the Fund at any time:
16
(a) before the later of the Effective Time and the time when any of the
Shares are first generally offered pursuant to this Underwriting
Agreement by the Managing Representative to dealers by letter or
telegram;
(b) as of or before any Closing Time if (i) trading in the equity
securities of the Fund is suspended by the Commission or by the
principal exchange that lists the Shares, (ii) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq Stock Market shall have been suspended or limited or
minimum or maximum prices shall have been generally established on
such exchange or over-the-counter market, (iii) additional material
governmental restrictions, not in force on the date of this
Underwriting Agreement, have been imposed upon trading in securities
or trading has been suspended on any U.S. securities exchange, (iv) a
general banking moratorium has been established by U.S. federal or New
York authorities or (v) any change in the financial or securities
markets in the United States or in political, financial or economic
conditions in the United States or any outbreak or material escalation
of hostilities or declaration by the United States of a national
emergency or war or other calamity, terrorist activity or crisis shall
have occurred, the effect any of the foregoing (i) - (iv) which is, in
the sole judgment of the Managing Representative, material and adverse
so as to make it impracticable or inadvisable to consummate the sale
and delivery of the Shares to the public on the terms and in the
manner contemplated by the Pricing Prospectus; or
(c) as of or before any Closing Time, if any of the conditions specified
in Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
8. Substitution of Underwriters. If one or more of the Underwriters fails
(other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase as of any Closing Time the Shares
agreed to be purchased as of such Closing Time by such Underwriter or
Underwriters, the Managing Representative may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Managing Representative deems advisable, or one or more of the remaining
Underwriters may agree to purchase such Shares in such proportions as may
be approved by the Managing Representative, in each case upon the terms set
forth in this Underwriting Agreement. If no such arrangements have been
made within 36 hours after the date of such Closing Time, and
(a) the number of Shares to be purchased by the defaulting Underwriters as
of such Closing Time does not exceed 10% of the Shares that the
Underwriters are obligated to purchase as of such Closing Time, each
of the non-defaulting Underwriters will be obligated to purchase such
Shares on the terms set forth in this Underwriting Agreement in
proportion to their respective obligations under this Underwriting
Agreement, or
(b) the number of Shares to be purchased by the defaulting Underwriters as
of such Closing Time exceeds 10% of the Shares to be purchased by all
the Underwriters as of such Closing Time, the Fund will be entitled to
an additional period of 24 hours within which to find one or more
substitute underwriters reasonably satisfactory to the Managing
Representative to purchase such Shares on the terms set forth in this
Underwriting Agreement.
Upon the occurrence of the circumstances described in the foregoing
paragraph (b), either the Managing Representative or the Fund will have the
right to postpone the date of the applicable Closing Time for not more than five
business days in order that necessary changes and arrangements (including
17
any necessary amendments or supplements to the Registration Statement, the
Pricing Prospectus or the Prospectus) may be effected by the Managing
Representative and the Fund. If the number of Shares to be purchased as of such
Closing Time by such defaulting Underwriter or Underwriters exceeds 10% of the
Shares that the Underwriters are obligated to purchase as of such Closing Time,
and none of the non-defaulting Underwriters or the Fund makes arrangements
pursuant to this Section within the period stated for the purchase of the Shares
that the defaulting Underwriters agreed to purchase, this Underwriting Agreement
will terminate without liability on the part of any non-defaulting Underwriter,
the Fund, the Adviser or the Subadviser except as provided in Sections 5(g) and
9 hereof. Any action taken under this Section will not affect the liability of
any defaulting Underwriter to the Fund, the Adviser or the Subadviser or to any
non-defaulting Underwriters arising out of such default. A substitute
underwriter will become an Underwriter for all purposes of this Underwriting
Agreement.
9. Indemnity and Contribution.
(a) Each of the Fund, the Adviser and the Subadviser, jointly and
severally, agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and the successors
and assigns of all of the foregoing persons from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or
any such person may incur under the Securities Act, the Exchange Act,
the Investment Company Act, the Advisers Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim
(i) arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Fund) or arises out of or is
based upon any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or (ii) arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
included in any Preliminary Prospectus, any Road Show Material, the
Disclosure Package, any Sales Material or the Prospectus (as it may be
amended or supplemented) or arises out of or is based upon any
omission or alleged omission 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; except that
none of the aforementioned parties shall be required to indemnify,
defend or hold harmless anyone with respect to either of the foregoing
clause (i) and (ii) insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in
conformity with information concerning such Underwriters furnished in
writing by or on behalf of such Underwriter through the Managing
Representative to the Fund expressly for use with reference to any
Underwriter in such Registration Statement or in such Disclosure
Package or Prospectus (as amended or supplemented) as set forth in
Section 9(f) hereof or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or
such Disclosure Package or Prospectus or necessary to make such
information (with respect to such Disclosure Package or Prospectus, in
light of the circumstances under which they were made) not misleading.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may be
sought against the Fund, the Adviser or the Subadviser pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify the Fund, the
Adviser or the Subadviser, as the case may be, in writing of the institution of
such
18
Proceeding and the Fund, the Adviser or the Subadviser shall assume the defense
of such Proceeding, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify the Fund, the Adviser or the Subadviser
shall not relieve the Fund, the Adviser or the Subadviser from any liability
which the Fund, the Adviser or the Subadviser may have to any Underwriter or any
such person, other than pursuant to this Section 9 and only to the extent that
the omission to so notify the Fund, the Adviser or the Subadviser would have a
material adverse effect on the ability of the Fund, the Adviser or the
Subadviser to assume the defense of such Proceeding. Such Underwriter or such
person shall have the right to employ its or their own counsel in any such case,
but the reasonable fees and expenses of such counsel shall be at the expense of
such Underwriter or of such person unless the employment of such counsel shall
have been authorized in writing by the Fund, the Adviser or the Subadviser, as
the case may be, in connection with the defense of such Proceeding or the Fund,
the Adviser or the Subadviser shall not have, within a reasonable period of time
in light of the circumstances, employed counsel to have charge of the defense of
such Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them, which are
different from, additional to or in conflict with those available to the Fund,
the Adviser or the Subadviser (in which case the Fund, the Adviser or the
Subadviser shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties), in any of which events such
reasonable fees and expenses shall be borne by the Fund, the Adviser or the
Subadviser and paid as incurred (it being understood, however, that the Fund,
the Adviser or the Subadviser shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). Neither the Fund, the
Adviser nor the Subadviser shall be liable for any settlement of any Proceeding
effected without its written consent but if settled with the written consent of
the Fund, the Adviser or the Subadviser, the Fund, the Adviser or the
Subadviser, as the case may be, agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel as contemplated by
the second sentence of this paragraph, then the indemnifying party agrees that
it shall be liable for any settlement of any Proceeding effected without its
written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Fund, the Adviser and the Subadviser, and each of their
respective shareholders, partners, managers, members, trustees,
directors and officers, and any person who controls the Fund, the
Adviser or the Subadviser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and the successors
and assigns of all of the foregoing persons from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation), which, jointly or severally, the Fund, the Adviser,
the Subadviser or any such person may incur under the Securities Act,
the Exchange Act, the Investment Company Act, the Advisers Act, the
common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained
19
in and in conformity with information concerning such Underwriters
furnished in writing by or on behalf of such Underwriter to the Fund,
the Adviser or the Subadviser expressly for use with reference to such
Underwriter in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Fund) or in the Disclosure Package or Prospectus as set forth in
Section 9(f) hereof, or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or
the Disclosure Package or Prospectus or necessary to make such
information not misleading (with respect to the Disclosure Package and
Prospectus, in light of the circumstances under which they were made).
If any Proceeding is brought against the Fund, the Adviser, the Subadviser
or any such person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Fund, the Adviser, the
Subadviser or such person shall promptly notify such Underwriter in writing of
the institution of such Proceeding and such Underwriter shall assume the defense
of such Proceeding, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify such Underwriter shall not relieve such
Underwriter from any liability which such Underwriter may have to the Fund, the
Adviser, the Subadviser or any such person or otherwise. The Fund, the Adviser,
the Subadviser or such person shall have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of the Fund, the Adviser, the Subadviser or such person, as the case may be,
unless the employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or such
Underwriter shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them, which are different from or additional
to or in conflict with those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred
(it being understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). No
Underwriter shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Fund, the Adviser, the Subadviser and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
20
(c) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under subsections (a) and (b) of this Section
9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Fund, the
Adviser and the Subadviser on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Fund, the Adviser and the Subadviser on the one hand and of the
Underwriters on the other in connection with the statements or
omissions, which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Fund, the
Adviser and the Subadviser on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the
total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Fund and
the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate public offering price of the
Shares. The relative fault of the Fund, the Adviser and the Subadviser
on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission
or alleged omission relates to information supplied by the Fund, the
Adviser or the Subadviser or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed
to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating, preparing to defend or
defending any Proceeding.
(d) The Fund, the Adviser, the Subadviser and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the fees and commissions received
by such Underwriter. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in proportion to
their respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section 9
and the covenants, warranties and representations of the Fund
contained in this Underwriting Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person
(including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf
of the Fund, the Adviser or the Subadviser, its shareholders,
partners, advisers, members, trustees, directors or officers or any
person who controls the Fund, the Adviser or the Subadviser within the
meaning of Section 15 of the Securities
21
Act or Section 20 of the Exchange Act, and shall survive any
termination of this Underwriting Agreement or the issuance and
delivery of the Shares. The Fund, the Adviser, the Subadviser and each
Underwriter agree promptly to notify each other of the commencement of
any Proceeding against it and, in the case of the Fund, the Adviser or
the Subadviser, against any of the Fund's, the Adviser's or the
Subadviser's shareholders, partners, managers, members, trustees,
directors or officers in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement or
Prospectus.
(f) The Fund, the Adviser and the Subadviser each acknowledge that the
statements in the Prospectus with respect to (1) the public offering
price per share of the Shares as set forth on the cover page of the
Prospectus and (2) stabilization and selling concessions and
reallowances of selling concessions and payment of fees to
Underwriters that meet certain minimum sales thresholds under the
caption "Underwriting" in the Prospectus constitute the only
information furnished in writing by or on behalf of any Underwriter
through the Managing Representative to the Fund expressly for use with
reference to such Underwriter in the Registration Statement or in the
Disclosure Package or the Prospectus (as amended or supplemented). The
Underwriters severally confirm that these statements are correct in
all material respects and were so furnished by or on behalf of the
Underwriters severally for use in the Prospectus.
(g) Notwithstanding any other provisions in this Section 9, no party shall
be entitled to indemnification or contribution under this Underwriting
Agreement against any liability to the Fund or its security holders by
reason of such person's willful misfeasance, bad faith or gross
negligence in the performance of its duties or such person's reckless
disregard of its obligations and duties under this Agreement. This
Section 9(g) shall not be construed to imply that the Underwriters
have any obligations or duties under this Agreement (except the
several obligation to purchase the Shares on the terms and subject to
the conditions herein). For avoidance of doubt, it is understood that
the Underwriters have no duty hereunder to the Fund to perform any due
diligence investigation.
10. Notices. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Syndicate Department, if to the Fund or the Adviser, shall be
sufficient in all respects if delivered or sent to the Fund or the Adviser,
as the case may be, at the offices of the Fund or the Adviser at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and,
if to the Subadviser, shall be sufficient in all respects if delivered or
sent to the Subadviser at ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇: General Counsel.
11. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way
relating to this Underwriting Agreement ("Claim"), directly or indirectly,
shall be governed by, and construed in accordance with, the laws of the
State of New York. The Section headings in this Underwriting Agreement have
been inserted as a matter of convenience of reference and are not a part of
this Underwriting Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and
the Fund and UBS
22
Securities each consent to the jurisdiction of such courts and personal
service with respect thereto. The Fund hereby consents to personal
jurisdiction, service and venue in any court in which any Claim arising out
of or in any way relating to this Underwriting Agreement is brought by any
third party against UBS Securities or any indemnified party. Each of UBS
Securities, the Fund (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates), the Adviser
(on its behalf and, to the extent permitted by applicable law, on behalf of
its shareholders and affiliates) and the Subadviser (on its behalf and, to
the extent permitted by applicable law, on behalf of its shareholders and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way
arising out of or relating to this Underwriting Agreement. Each of the
Fund, the Adviser and the Subadviser agrees that a final judgment in any
such action, proceeding or counterclaim brought in any such court shall be
conclusive and binding upon the Fund, the Adviser and the Subadviser, as
the case may be, and may be enforced in any other courts in the
jurisdiction of which the Fund, the Adviser or the Subadviser, as the case
may be, is or may be subject, by suit upon such judgment.
13. Parties at Interest. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Fund, the Adviser and the
Subadviser and to the extent provided in Section 9 hereof the controlling
persons, shareholders, partners, members, trustees, managers, directors and
officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators.
No other person, partnership, association or corporation (including a
purchaser, as such purchaser, from any of the Underwriters) shall acquire
or have any right under or by virtue of this Underwriting Agreement.
14. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement
among the parties.
15. Successors and Assigns. This Agreement shall be binding upon the
Underwriters, the Fund, the Adviser and the Subadviser any successor or
assign of any substantial portion of the Fund's, the Adviser's, the
Subadviser's or any of the Underwriters' respective businesses and/or
assets.
16. Disclaimer of Liability of Trustees and Beneficiaries. A copy of the
Agreement and Declaration of Trust of the Fund is on file with the
Secretary of The State of Delaware, and notice hereby is given that this
Underwriting Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually and that the obligations arising out of this
Underwriting Agreement are not binding upon any of the Trustees or
beneficiaries individually but are binding only upon the assets and
properties of the Fund.
23
If the foregoing correctly sets forth the understanding among the Fund, the
Adviser, the Subadviser and the Underwriters, please so indicate in the space
provided below, whereupon this letter and the Managing Representative's
acceptance shall constitute a binding agreement among the Fund, the Adviser, the
Subadviser and the Underwriters, severally.
Very truly yours,
PIONEER DIVERSIFIED HIGH INCOME TRUST
----------------------------------------
By: [__________]
Title: [__________]
PIONEER INVESTMENT MANAGEMENT, INC.
----------------------------------------
By: [__________]
Title: [__________]
MONTPELIER CAPITAL ADVISORS, LTD.
----------------------------------------
By: [__________]
Title: [__________]
24
Accepted and agreed to as of the date
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
UBS SECURITIES LLC
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
RBC CAPITAL MARKETS CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
-------------------------------------
By: ▇▇▇▇ ▇▇▇▇
Title: Managing Director
-------------------------------------
By: ▇▇▇▇ ▇▇▇
Title: Executive Director
25
SCHEDULE A
UNDERWRITERS NUMBER OF SHARES
------------------------------------- ----------------
UBS Securities LLC
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
RBC Capital Markets Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
----------------
Total
================
Sch. A-1
DRAFT 05-21-07
SUBJECT TO WILMERHALE OPINION COMMITTEE REVIEW
SCHEDULE B
FORM OF OPINION OF WILMERHALE
REGARDING THE FUND AND THE ADVISER
[__________], 2007
UBS Securities LLC
As Representative of the Several Underwriters
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Pioneer Diversified High Income Trust
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section [___] of the Underwriting
Agreement, dated as of [__________], 2007 (the "Underwriting Agreement"), among
you, as Managing Representative of the several Underwriters, Pioneer Investment
Management, Inc., a Delaware corporation (the "Adviser"), and Pioneer
Diversified High Income Trust, a Delaware business trust (the "Fund").
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings ascribed to them in the Underwriting Agreement.
We have acted as counsel for the Fund and the Adviser in connection with the
sale to the Underwriters by the Fund of [__________] Common Shares of beneficial
interest, no par value per share, of the Fund (collectively, the "Common
Shares") pursuant to the Section 1 of the Underwriting Agreement. As such
counsel, we have assisted in the preparation and filing with the Securities and
Exchange Commission (the "Commission") of the Fund's Registration Statement on
Form N-2 dated [__________], 2007 (File Nos. 333- [_______] and 811-[_______]),
and amendment Nos. [__, __ and __] thereto, which Registration Statement became
effective on [__________], 2007 (the "Effective Date"). Such Registration
Statement, in the form in which it became effective, is referred to herein as
the "Registration Statement."
We have examined and relied upon the Agreement and Declaration of Trust (the
"Declaration of Trust") and By-Laws of the Fund, each as amended to date, the
Certificate of Incorporation and By-Laws of the Adviser, each as amended to
date, records of meetings or written actions of shareholders and of the Board of
Trustees of the Fund, trust proceedings of the Fund in connection with the
authorization and issuance of the Common Shares, the Registration Statement, the
Prospectus, the Statement of Additional Information, the Underwriting Agreement,
records of meetings of the Board of Directors of the Adviser, certificates of
1
representatives of the Fund, certificates of public officials and such other
documents as we have deemed necessary as a basis for the opinions hereinafter
expressed. We have assumed that all corporate or trust records of the Fund and
the Adviser and stock books of the Fund and are complete and accurate.
Insofar as this opinion relates to factual matters, information with respect to
which is in the possession of the Fund or the Adviser, we have relied, with your
permission, upon certificates, statements and representations of officers and
other representatives of the Fund and the Adviser, representations made in the
Underwriting Agreement and statements contained in the Registration Statement.
We have not attempted to verify independently such facts, although nothing has
come to our attention which has caused us to question the accuracy of such
certificates, statements or representations.
In our examination of the documents referred to above, we have assumed the
genuineness of all signatures, the legal capacity of each individual signing
such documents, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as copies,
and the authenticity of the originals of such documents.
Any reference to "our knowledge" or "best of our knowledge" or to any matters
"known to us," "of which we are aware" or "coming to our attention" or any
variation of any of the foregoing, shall mean the conscious awareness, as to the
existence or absence of any facts which would contradict the opinions and
statements so expressed, of the attorneys of this firm who have rendered
substantive attention to the transaction to which this opinion relates. Other
than as expressly set forth below, we have not undertaken, for purposes of this
opinion, any independent investigation to determine the existence or absence of
such facts, and no inference as to our knowledge of the existence or absence of
such facts should be drawn from the fact of our representation of the Fund and
the Adviser. Moreover, we have not searched any electronic databases or the
dockets of any court, regulatory body or administrative or other governmental
agency or other filing office in any jurisdiction.
For purposes of this opinion, we have assumed that the agreements referred to
herein have been duly authorized, executed and delivered by all parties thereto
other than the Fund and the Adviser, and that all such other parties have all
requisite power and authority to effect the transactions contemplated by such
agreements. We have also assumed that each such agreement is the valid and
binding obligation of each party thereto other than the Fund and the Adviser and
is enforceable against all such other parties in accordance with its terms. We
do not render any opinion as to the application of any federal or state law or
regulation to the power, authority or competence of any party to the agreements
other than the Fund.
Our opinions set forth below are qualified to the extent that they may be
subject to or affected by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws relating to or affecting the
rights of creditors generally, (ii) statutory or decisional law concerning
recourse by creditors to security in the absence of notice or hearing, (iii)
duties and standards imposed on creditors and parties to contracts, including,
without limitation, requirements of good faith, reasonableness and fair dealing,
and (iv) general equitable principles. We express no opinion as to the
availability of any equitable or specific remedy upon any breach of any of the
agreements as to which we are opining herein, or any of the agreements,
2
documents or obligations referred to therein, or to the successful assertion of
any equitable defenses, inasmuch as the availability of such remedies or the
success of any equitable defense may be subject to the discretion of a court.
Without limiting the foregoing, (i) we are expressing no opinion as to the
enforceability of the indemnification or contribution provisions of the
Underwriting Agreement, the Shareholder Servicing Agreement and the Additional
Compensation Agreement, (ii) we note that a court may refuse to enforce, or may
limit the application of, the Underwriting Agreement, the Shareholder Servicing
Agreement or the Additional Compensation Agreement, or certain provisions
thereof, as unconscionable or contrary to public policy, and (iii) we have
assumed compliance by all parties with federal and state securities laws.
We also express no opinion herein as to any provision of any agreement (a) which
may be deemed to or construed to waive any right of the Fund or the Adviser, (b)
to the effect that rights and remedies are not exclusive, that every right or
remedy is cumulative and may be exercised in addition to or with any other right
or remedy and does not preclude recourse to one or more other rights or
remedies, (c) relating to the effect of invalidity or unenforceability of any
provision of any agreement on the validity or enforceability of any other
provision thereof, (d) requiring the payment of penalties, consequential damages
or liquidated damages, (e) which is in violation of public policy, including,
without limitation, any provision relating to non-competition and
non-solicitation or relating to indemnification and contribution with respect to
securities law matters, (f) purporting to indemnify any person against his, her
or its own negligence or intentional misconduct, (g) which provides that the
terms of any agreement may not be waived or modified except in writing or (h)
relating to choice of law or consent to jurisdiction.
Our opinion expressed in paragraph [1] below as to the legal existence and good
standing of the Fund is based solely on a certificate of legal existence issued
by the Secretary of State of the State of Delaware, a copy of which has been
made available to your counsel, and our opinion with respect to such matters is
rendered as of the date of such certificate and limited accordingly. Our opinion
expressed in paragraph [18] below as to the legal existence and good standing of
the Adviser is based solely on a certificate of legal existence issued by the
Secretary of State of the State of Delaware, a copy of which has been made
available to your counsel, and our opinion with respect to such matters is
rendered as of the date of such certificate and limited accordingly. We express
no opinion as to the tax good standing of the Fund or the Adviser in any
jurisdiction.
In connection with our opinion expressed in paragraph [4] below, insofar as it
relates to full payment for the outstanding Common Shares of the Fund, we have
relied solely on a certificate of an officer of the Fund. Our opinion expressed
in paragraph [4] below as to issued and outstanding shares of beneficial
interest of the Fund is based solely on a certificate of the Fund's transfer
agent, which we assume to be complete and accurate. Our opinion expressed in
paragraph [4] below as to the due and valid issuance of all outstanding Common
Shares of the Fund is based solely on a review of the corporate minute books of
the Fund, and a certificate of an officer of the Fund, each of which we assume
to be complete and accurate.
Our opinion expressed in paragraph [16] below as to the effectiveness of the
Registration Statement under the Securities Act, is based solely upon oral
advice from [Mr./Ms. __________] at the Division of Investment Management of the
Commission that such Registration Statements were declared effective as of 4:30
p.m. on [__________], 2007. Our opinion expressed in
3
paragraph [11] below as to the listing of the Common Shares on the American
Stock Exchange is solely based upon a letter from the American Stock Exchange to
the Fund, dated [__________], 2007. Our opinion in paragraph [20] is based
solely upon the Commission's Investment Adviser Public Disclosure Website as of
the date of this opinion.
We are opining herein solely with respect to the state laws of The Commonwealth
of Massachusetts, the Delaware Statutory Trust Act statute, the Delaware
Corporation Law statute, and the federal laws of the United States of America.
To the extent that the laws of any other jurisdiction govern any of the matters
as to which we express an opinion below, we have assumed for purposes of this
opinion, with your permission and without independent investigation, that the
laws of such jurisdiction are identical to the substantive state laws of The
Commonwealth of Massachusetts, and we express no opinion as to whether such
assumption is reasonable or correct. We note that the Underwriting Agreement,
the Shareholder Servicing Agreement and the Additional Compensation Agreement
are governed by New York law. We express no opinion with respect to the
securities or Blue Sky laws of any state of the United States, with respect to
state or federal antifraud laws (except to the extent expressly provided in the
third to last paragraph below) or with respect to the approval by the National
Association of Securities Dealers, Inc. of the offering.
On the basis of and subject to the foregoing, we are of the opinion that:
1. The Fund is validly existing and has been duly organized as a statutory
trust in good standing under the laws of the state of Delaware.
2. The Fund has the power and authority as a business trust to own, lease
and operate its properties and to conduct its business as described in
the Registration Statement, the Preliminary Prospectus, the Pricing
Prospectus and the Disclosure Package and the Prospectus and to enter
into and perform its obligations under the Underwriting Agreement.
3. The Fund is duly organized as a foreign statutory trust to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business.
4. To the best of our knowledge, the Fund does not have any subsidiaries.
5. The authorized, issued and outstanding shares of beneficial interest of
the Fund are as set forth in the Preliminary Prospectus, the Pricing
Prospectus and the Prospectus under the caption "Description of shares"
(except for subsequent issuances, if any, pursuant to the Underwriting
Agreement); all issued and outstanding Common Shares of the Fund as of
the date of this Opinion have been duly authorized and validly issued
and are fully paid and non-assessable and have been offered and sold or
exchanged by the Fund either to the Adviser pursuant to an exception
from registration under the Securities Act or to the Underwriters
pursuant to the Underwriting Agreement and are not subject to any
preemptive or similar statutory rights under the Delaware Business
Trust statute or similar contractual rights granted by the Fund
pursuant to any contract or agreement that has been filed as an exhibit
to the Underwriting Agreement. Except as set forth in the Disclosure
Package, no options, warrants or other rights to purchase, agreements
or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, common shares of beneficial
interest of the Fund are outstanding.
6. The Shares to be purchased by the Underwriters from the Fund have been
duly authorized for issuance and sale to the Underwriters pursuant to
the Underwriting Agreement and, when issued and delivered by the Fund
pursuant to the Underwriting Agreement against
4
payment of the consideration set forth in the Underwriting Agreement,
will be validly issued and fully paid and non-assessable and no holder
of the Shares is or will be subject to personal liability by reason of
being such a holder.
7. The form of certificate used to evidence the Common Shares complies in
all material respects with (i) applicable statutory requirements, (ii)
applicable requirements of the Declaration of Trust of the Fund and
By-Laws of the Fund and (iii) applicable requirements of the American
Stock Exchange.
8. We are not aware of any action, suit or proceeding before any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending, or, to
the knowledge of the Fund, threatened against the Fund that is required
by the Securities Act, the Investment Company or the rules and
regulations thereunder to be described in the Registration Statement or
the Prospectus that is not so described.
9. Each section in the Registration Statement entitled "U.S. Federal
Income Tax Matters" is a fair summary of the principal United States
federal income tax rules currently in effect applicable to the Fund and
to the purchase, ownership and disposition of the Common Shares. The
statements in the in the Prospectus under the caption "Description of
Shares" and in Item 29 of Part C of the Registration Statement, insofar
as such statements constitute matters of law or legal conclusions, are
correct in all material respects.
10. Each of the Advisory Agreement, Custodian Agreement, Transfer Agency
Agreement, Administration Agreement, Underwriting Agreement,
Sub-Administration Agreement, Initial Share Purchase Agreement,
Subadvisory Agreement, Marketing and Structuring Fee Agreement,
Accounting and Legal Services Agreement and Additional Compensation
Agreement complies in all material respects with all applicable
provisions of the Securities Act, the Investment Company Act and the
Advisers Act. Each of the Initial Shares Purchase Agreement and the
Underwriting Agreement complies in all material respects with all
applicable provisions of the Securities Act.
11. The Fund is duly registered with the Commission under the Investment
Company Act as a closed-end, diversified management investment company,
and, to the best of our knowledge, no order of suspension or revocation
of such registration has been issued or proceedings therefor initiated
or threatened by the Commission.
12. The Common Shares have been approved for listing on the American Stock
Exchange.
13. To the best of our knowledge, no person is serving as an officer,
director or investment manager of the Fund, except in accordance with
the Investment Company Act and the Advisers Act. Except as disclosed in
the Preliminary Prospectus, the Pricing Prospectus and the Prospectus
or in the Registration Statement, no director of the Fund is an
"interested person" (as defined in the Investment Company Act) of the
Fund or an "affiliated person" (as defined in the Investment Company
Act) of an Underwriter.
14. The execution, delivery and performance by the Fund of the Underwriting
Agreement, Advisory Agreement, Custodian Agreement, Transfer Agency
Agreement, Accounting and Legal Services Agreement, Initial Share
Purchase Agreement and the Administration Agreement and the
consummation of the transactions contemplated thereby in the
Registration Statement (including the issuance and sale of
5
the Shares and the use of the proceeds from the sale of the Common
Shares as described in the Preliminary Prospectus, the Pricing
Prospectus and the Prospectus under the caption "Use of Proceeds") and
compliance by the Fund with its obligations under thereof do not and
will not (A) require any consent, approval, authorization or other
order of, or qualification with, any Massachusetts state or U.S.
federal court or governmental body or agency (except such as may be
required under the securities or Blue Sky laws of the various states or
the National Association of Securities Dealers, Inc. or as have been
obtained under the federal securities laws) (B) 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 assets of the
Fund pursuant to, any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument
to which the Fund is a party filed as an exhibit to the Registration
Statement, (C) violate or conflict with the Declaration of Trust or
By-Laws of the Fund, (D) violate or conflict with any applicable
federal or Massachusetts law, statute, rule or regulation or the
Delaware Business Trust statute or (E) violate or conflict with any
judgment, order or decree specifically naming the Trust, or
specifically applicable to the Trust's property, of which we are aware.
15. The Advisory Agreement, Custodian Agreement, Transfer Agency Agreement,
Administration Agreement, Underwriting Agreement, Accounting and Legal
Services Agreement and Initial Share Purchase Agreement have been duly
authorized by all requisite action on the part of the Fund, executed
and delivered by the Fund, as of the dates noted therein.
16. Assuming due authorization, execution and delivery by the other parties
thereto, each of the Advisory Agreement, Custodian Agreement, Transfer
Agency Agreement, Accounting and Legal Services Agreement and Initial
Share Purchase Agreement and Administration Agreement constitutes a
valid and binding agreement of the Fund, enforceable in accordance with
its terms.
17. The Registration Statement has been declared effective under the
Securities Act; any required filing of the Prospectus pursuant to Rule
497(c) or Rule 497(h) has been made in the manner and within the time
period required by Rule 497; and no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Securities Act, and no order of suspension or revocation of
registration pursuant to Section 8(e) of the Investment Company Act has
been issued, and no proceedings for any such purpose have been
instituted or are pending or threatened by the Commission.
18. The Registration Statement, the Preliminary Prospectus, the Pricing
Prospectus, the Prospectus and the Disclosure Package as of their
respective effective or issue dates (except for financial statements,
supporting schedules and other financial data included therein or
omitted therefrom, as to which we do not express any opinion), and the
notification on Form N-8A complied as to form in all material respects
with the requirements of the Securities Act and the Investment Company
Act.
19. The Adviser is validly existing and has been duly organized as a
corporation in good standing under the laws of the State of Delaware.
20. The Adviser has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement, the Preliminary
6
Prospectus, the Pricing Prospectus, the Prospectus and the Disclosure
Package, and to enter into and perform its obligations under the
Purchase Agreement.
21. The Adviser is registered with the Commission as an investment adviser
under the Advisers Act and is not prohibited by the Advisers Act, rules
and regulations thereunder, the Investment Company Act or the rules and
regulations thereunder, from acting under the Advisory Agreement for
the Fund as contemplated by the Preliminary Prospectus, the Pricing
Prospectus and the Prospectus.
22. The Underwriting Agreement, the Advisory Agreement, Subadvisory
Agreement, Administration Agreement, Sub-Administration Agreement,
Shareholder Servicing Agreement, Initial Share Purchase Agreement and
the Additional Compensation Agreement have been duly authorized,
executed and delivered by the Adviser.
23. Assuming due authorization, execution and delivery by the other parties
thereto, the Advisory Agreement, Subadvisory Agreement, Administration
Agreement, Sub-Administration Agreement, Shareholder Servicing
Agreement, Initial Share Purchase Agreement and the Additional
Compensation Agreement each constitutes a valid and binding obligation
of the Adviser, enforceable in accordance with their respective terms.
24. We are not aware of any legal or governmental proceeding pending or
threatened against the Adviser that is required by the Securities Act
or the Investment Company Act and the Rule and Regulation thereunder to
be described in the Registration Statement that is not so described or
which reasonably might be expected to cause the Adviser to be
ineligible to serve as investment adviser of the Fund pursuant to
Section 9 of the Investment Company Act.
25. The execution, delivery and performance by the Adviser of the Advisory
Agreement, Subadvisory Agreement, the Administration Agreement, the
Sub-Administration Agreement, Initial Share Purchase Agreement,
Shareholder Servicing Agreement and the Additional Compensation
Agreement, the compliance by the Adviser with all the provisions
thereof and the consummation by the Adviser of the transactions
contemplated thereby do not and will not (A) require any consent,
approval, authorization or other order of, or qualification with, any
Massachusetts state or U.S. federal court or governmental body or
agency (except such as may be required under the securities or Blue Sky
laws of the various states or the National Association of Securities
Dealers, Inc. or as have been obtained under the federal securities
laws), (B) 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 assets of the Adviser pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Adviser is a party
filed as an exhibit to the Registration Statement, (C) violate or
conflict with the Articles of Incorporation or By-laws of the Adviser,
or (D) violate or conflict with any applicable federal and
Massachusetts law, rule or regulation or the Delaware Business
Corporation Law statute, or (E) violate or conflict with any judgment,
order or decree specifically naming the Advise, or specifically
applicable to the Adviser's property, of which we are aware.
7
In connection with the preparation of the Registration Statement, the
Preliminary Prospectus, the Pricing Prospectus, the Prospectus and the
Disclosure Package we have participated in discussions with certain officers and
representatives of the Fund, the Adviser, the Subadviser, counsel for the
Underwriters and the independent registered public accounts of the Fund at which
conference we made inquiries of such persons and others and discussed the
contents of the Registration Statement the Preliminary Prospectus, the Pricing
Prospectus, the Prospectus and the Disclosure Package. While we have not
independently verified and are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the information
contained in the Registration Statement, the Preliminary Prospectus, the Pricing
Prospectus, the Prospectus or the Disclosure Package, on the basis of such
participation and review, nothing has come to our attention that would lead us
to believe that the Registration Statement (except for financial statements,
supporting schedules and other financial data included therein or omitted
therefrom, as to which we do not express any belief), at the time such
Registration Statement became effective (but after giving effect to changes
incorporated pursuant to Rule 430A under the Securities Act), 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 as of the date it was filed with the Commission pursuant
to Rule 497 under the Securities Act or as of the date hereof or the Disclosure
Package as of the Applicable Time (in each case, except for financial
statements, supporting schedules and other financial data included therein or
omitted therefrom, as to which we do not express any belief), included or
includes an untrue statement of a material fact or omitted or omits 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 (except for
financial statements, supporting schedules and other financial data included
therein or omitted therefrom, as to which we do not express any belief).
This opinion is based upon currently existing statutes, rules, regulations and
judicial decisions and is rendered as of the date hereof, and we disclaim any
obligation to advise you of any change in any of the foregoing sources of law or
subsequent developments in law or changes in facts or circumstances which might
affect any matters or opinions set forth herein. Please note that we are opining
only as to the matters expressly set forth herein, and no opinion should be
inferred as to any other matters.
This opinion is being furnished to you, as Representative of the Underwriters,
at the request of the Fund pursuant to the Purchase Agreement, is solely for the
benefit of the Underwriters, and may not be relied upon by you for any other
purpose, or furnished to, quoted to or relied upon by any other party for any
purpose, without our prior written consent.
8
SCHEDULE C
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇ REGARDING THE ADVISER
(i) The Adviser is a corporation duly incorporated and validly existing in
good standing under the laws of the state of Delaware.
(ii) The Adviser has full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement, the Preliminary Prospectus, the Pricing Prospectus, the
Prospectus and the Disclosure Package and to enter into and perform its
obligations under this Agreement and the description of the Adviser and its
business in the Registration Statement, the Preliminary Prospectus, the Pricing
Prospectus, the Prospectus and the Disclosure Package complies in all material
respects with all requirements of the Securities Act and the Investment Company
Act.
(iii) The Adviser is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business.
(iv) The Adviser is duly registered with the Commission as an investment
adviser under the Advisers Act and is not prohibited by the Advisers Act or the
Investment Company Act from acting under the Advisory Agreement for the Fund as
contemplated by the Preliminary Prospectus, the Pricing Prospectus and the
Prospectus.
(v) This Agreement and the Adviser Agreements, to which the Adviser is a
party, have been duly authorized, executed and delivered by the Adviser, and
neither their execution, delivery or performance, nor the consummation by the
Adviser of the transactions therein contemplated or the adoption of the Fund's
Dividend Reinvestment Plan (i) conflicts or will conflict with or constitutes or
will constitute a breach of or default under the articles of incorporation, or
the certificate of formation, of the Adviser, (ii) conflicts or will conflict
with, or constitutes or will constitute a breach of or default under any
agreement, indenture, lease or other instrument that is filed as an exhibit to
the Registration Statement or (iii) violates or will violates any applicable
federal or New York law rule or regulation or the laws of the State of Delaware
("Adviser Applicable Law") or any order known to us issued pursuant to any such
law by any court or governmental agency or body having jurisdiction over the
Fund. The Advisory Agreement constitutes a valid and binding obligation of the
Adviser, enforceable in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or at
law).
(vi) This Agreement and the Adviser Agreements, to which the Adviser is a
party, comply in all material respects with all applicable provisions of the
Securities Act, the Investment Company Act and the Advisers Act.
(vi) Except as set forth in the Registration Statement, the Pricing
Prospectus and the Prospectus, there is no action, suit or proceeding before or
by any court, commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to the
knowledge of the Adviser, threatened against or affecting the Adviser except
such which is not of a nature required to be disclosed in the Registration
Statement, the Pricing Prospectus or the Prospectus and if determined adversely
would not result in any material adverse change in the condition, financial or
otherwise, business affairs or business prospects of the Adviser or the ability
of the Adviser to function as an investment adviser or fulfill its obligations
under the Advisory Agreement.
(vii) There are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described or
referred to in the Registration Statement, the Preliminary
Sch. C-1
Prospectus, the Pricing Prospectus or the Prospectus or to be filed as exhibits
to the Registration Statement other than those described or referred to therein
or filed or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct.
(viii) The Adviser is not in violation of its Articles of Incorporation,
by-laws or other organizational documents and no default by the Adviser exists
in the due performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Registration Statement, the Preliminary Prospectus, the Pricing Prospectus, the
Prospectus or the Disclosure Package or filed or incorporated by reference as an
exhibit to the Registration Statement.
(ix) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than under the Securities Act and the
Investment Company Act, which have been obtained, or as may be required under
the securities or blue sky laws of the various states, as to which we need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of this Agreement.
(x) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and in the
Registration Statement and compliance by the Adviser with its obligations under
this Agreement do not and will not, whether with or without the giving of notice
or lapse of time or both, conflict with or constitute a breach of, or default or
repayment event under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Adviser pursuant to any
contract, indenture, mortgage, deed of Fund, loan or credit agreement, note,
lease or any other agreement or instrument, known to us, to which the Adviser is
a party or by which it or any of them may be bound, or to which any of the
property or assets of the Adviser is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation or by-laws of the
Adviser, or any applicable law, statute, rule, regulation, judgment, order, writ
or decree, known to us, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Adviser or any of its
properties, assets or operations.
In addition, we have participated in the preparation of the portions of the
Registration Statement, the Preliminary Prospectus, the Pricing Prospectus, the
Prospectus and the Disclosure Package describing the Adviser and participated in
discussions with certain officers, Directors and employees of the Fund, the
Adviser, the Subadviser, representatives of Ernst & Young LLP, the independent
registered public accounting firm who examined the financial statements of the
Fund included or incorporated by reference in the Registration Statement, the
Preliminary Prospectus, the Pricing Prospectus and the Prospectus, and you and
your representatives and we have reviewed certain Fund records and documents.
While we have not independently verified and are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
information contained in such portions of the Registration Statement, the
Preliminary Prospectus, the Pricing Prospectus and the Prospectus, on the basis
of such participation and review, nothing has come to our attention that would
lead us to believe that such portions in the Registration Statement and the
Prospectus (except for financial statements, supporting schedules and other
financial data included therein or omitted therefrom, as to which we do not
express any belief), at the time such Registration Statement became effective,
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 (except for financial statements,
supporting schedules and other financial data included therein or omitted
therefrom, as to which we do not express any belief), at the time the Prospectus
was issued or at the Closing Time or any Additional Shares Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
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. In
addition, nothing has come to our attention that would lead us to believe that
the portions of the documents included in the Disclosure Package describing the
Adviser, other than
Sch. C-2
the financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which we need make
no statement, as of the Applicable Time, 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. With respect to statements contained in the Disclosure
Package, any statement contained in any of the constituent documents shall be
deemed to be modified or superseded to the extent that any information contained
in subsequent constituent documents modifies or replaces such statement.
Sch. C-3
SCHEDULE D
FORM OF OPINION OF [_____] REGARDING THE SUBADVISER
(i) The Subadviser is a company duly formed and validly existing in good
standing under the laws of Bermuda.
(ii) The Subadviser has full corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Registration Statement, the Preliminary Prospectus, the Pricing Prospectus, the
Prospectus and the Disclosure Package and to enter into and perform its
obligations under this Agreement and the description of the Subadviser and its
business in the Registration Statement, the Preliminary Prospectus, the Pricing
Prospectus, the Prospectus and the Disclosure Package complies in all material
respects with all requirements of the Securities Act and the Investment Company
Act.
(iii) The Subadviser is duly qualified as a foreign company to transact
business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business.
(iv) The Subadviser is duly registered with the Commission as an investment
adviser under the Advisers Act and is not prohibited by the Advisers Act or the
Investment Company Act from acting under the Advisory Agreement for the Fund as
contemplated by the Preliminary Prospectus, the Pricing Prospectus and the
Prospectus.
(v) This Agreement and the Adviser Agreements, to which the Subadviser is a
party, have been duly authorized, executed and delivered by the Subadviser, and
neither their execution, delivery or performance, nor the consummation by the
Subadviser of the transactions therein contemplated or the adoption of the
Fund's Dividend Reinvestment Plan (i) conflicts or will conflict with or
constitutes or will constitute a breach of or default under the limited
partnership agreement, or the certificate of formation, of the Subadviser, (ii)
conflicts or will conflict with, or constitutes or will constitute a breach of
or default under any agreement, indenture, lease or other instrument that is
filed as an exhibit to the Registration Statement or (iii) violates or will
violates any applicable federal or New York law rule or regulation or the laws
of Bermuda ("Subadviser Applicable Law") or any order known to us issued
pursuant to any such law by any court or governmental agency or body having
jurisdiction over the Fund. The Advisory Agreement constitutes a valid and
binding obligation of the Subadviser, enforceable in accordance with its terms,
except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).
(vi) This Agreement and the Adviser Agreements, to which the Subadviser is
a party, comply in all material respects with all applicable provisions of the
Securities Act, the Investment Company Act and the Advisers Act.
(vi) Except as set forth in the Registration Statement, the Pricing
Prospectus and the Prospectus, there is no action, suit or proceeding before or
by any court, commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to the
knowledge of the Subadviser, threatened against or affecting the Subadviser
except such which is not of a nature required to be disclosed in the
Registration Statement, the Pricing Prospectus or the Prospectus and if
determined adversely would not result in any material adverse change in the
condition, financial or otherwise, business affairs or business prospects of the
Subadviser or the ability of the Subadviser to function as an investment adviser
or fulfill its obligations under the Subadvisory Agreement.
Sch. D-1
(vii) There are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described or
referred to in the Registration Statement, the Preliminary Prospectus, the
Pricing Prospectus or the Prospectus or to be filed as exhibits to the
Registration Statement other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct.
(viii) The Subadviser is not in violation of its Memorandum of Association,
by-laws or other organizational documents and no default by the Subadviser
exists in the due performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is described or
referred to in the Registration Statement, the Preliminary Prospectus, the
Pricing Prospectus, the Prospectus or the Disclosure Package or filed or
incorporated by reference as an exhibit to the Registration Statement.
(ix) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than under the Securities Act and the
Investment Company Act, which have been obtained, or as may be required under
the securities or blue sky laws of the various states, as to which we need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of this Agreement.
(x) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and in the
Registration Statement and compliance by the Subadviser with its obligations
under this Agreement do not and will not, whether with or without the giving of
notice or lapse of time or both, conflict with or constitute a breach of, or
default or repayment event under or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Subadviser
pursuant to any contract, indenture, mortgage, deed of Fund, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Subadviser is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Subadviser is subject, nor will
such action result in any violation of the provisions of the limited partnership
agreement or by-laws of the Subadviser, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Subadviser or any of its properties, assets or operations.
In addition, we have participated in the preparation of the portions of the
Registration Statement, the Preliminary Prospectus, the Pricing Prospectus, the
Prospectus and the Disclosure Package describing the Subadviser and participated
in discussions with certain officers, Directors and employees of the Fund, the
Adviser, the Subadviser, representatives of Ernst & Young LLP, the independent
registered public accounting firm who examined the financial statements of the
Fund included or incorporated by reference in the Registration Statement, the
Preliminary Prospectus, the Pricing Prospectus and the Prospectus, and you and
your representatives and we have reviewed certain Fund records and documents.
While we have not independently verified and are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
information contained in such portions of the Registration Statement, the
Preliminary Prospectus, the Pricing Prospectus and the Prospectus, on the basis
of such participation and review, nothing has come to our attention that would
lead us to believe that such portions in the Registration Statement and the
Prospectus (except for financial statements, supporting schedules and other
financial data included therein or omitted therefrom, as to which we do not
express any belief), at the time such Registration Statement became effective,
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 (except for financial statements,
supporting schedules and other financial data included therein or omitted
therefrom, as to which we do not express any belief), at the time the Prospectus
was issued or at the Closing Time or any Additional Shares Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they
Sch. D-2
were made, not misleading. In addition, nothing has come to our attention that
would lead us to believe that the portions of the documents included in the
Disclosure Package describing the Subadviser, other than the financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no statement,
as of the Applicable Time, 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. With respect to statements contained in the Disclosure Package, any
statement contained in any of the constituent documents shall be deemed to be
modified or superseded to the extent that any information contained in
subsequent constituent documents modifies or replaces such statement.
Sch. D-3
SCHEDULE E
FORM OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM LETTER
[TO COME]
Sch. E-1