Pioneer High Income Trust
(a Delaware business trust)
[ ] Auction Market Preferred Shares ("AMPS") of Beneficial Interest
[ ] Shares _____ AMPS, Series M
[ ] Shares _____ AMPS, Series W
Liquidation Preference $25,000 per share
PURCHASE AGREEMENT
July 10, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
UBS Warburg LLC
c/▇ ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
North Tower
World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Pioneer High Income Trust, a Delaware business trust (the "Trust"),
proposes, upon the terms and conditions set forth herein, to issue and sell [ ]
shares of its Auction Market Preferred Shares, Series M and [ ] shares of its
Auction Market Preferred Shares, Series W, each with a liquidation preference of
$25,000 per share (the "AMPS"). The AMPS will be authorized by, and subject to
the terms and conditions of, the Statement of Preferences of Auction Market
Preferred Shares of the Trust, dated as of July 3, 2002 (the "Statement") and
the Agreement and Declaration of Trust of the Trust, as amended and restated,
dated as of [____________], 2002 (the "Declaration"), in the forms filed as
exhibits to the Registration Statement referred to in the second following
paragraph of this Agreement, as the same may be amended from time to time. The
Trust and the Trust's investment adviser, Pioneer Investment Management, Inc., a
Delaware corporation and a member of the UniCredito Italiano Banking Group,
Register of Banking Groups (the "Adviser"), confirms its agreement with ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇
▇▇▇▇▇"), UBS Warburg LLC ("UBS"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ("Salomon") and each
of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ and UBS are
acting as representatives (in such capacity, the "Representatives"), with
respect to the issue and sale by the Trust and the purchase by the Underwriters,
acting severally and not jointly, of the respective number of AMPS set forth in
said SCHEDULE A.
The Trust understands that the Underwriters propose to make a public
offering of the AMPS as soon as the Representatives deem advisable after this
Agreement has been executed and delivered.
The Trust has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-87656 and No.
811-10603) covering the registration of the AMPS under the Securities Act of
1933, as amended (the "1933 Act"), including the related preliminary prospectus
or prospectuses, and a notification on Form N-8A of registration (the
"1940 Act Notification") of the Trust as an investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations of the Commission under the 1933 Act and the 1940 Act (the "Rules
and Regulations"). Promptly after execution and delivery of this Agreement, the
Trust will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the Rules and Regulations and paragraph
(c) or (h) of Rule 497 ("Rule 497") of the Rules and Regulations or (ii) if the
Trust has elected to rely upon Rule 434 ("Rule 434") of the Rules and
Regulations, prepare and file a term sheet (a "Term Sheet") in accordance with
the provisions of Rule 434 and Rule 497. The information included in any such
prospectus or in any such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective, if
applicable, (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, including in each
case any statement of additional information incorporated therein by reference,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto and schedules thereto at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the Rules and Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first furnished to the Underwriters
for use in connection with the offering of the AMPS, including the statement of
additional information incorporated therein by reference, is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated July 3, 2002 together with the Term Sheet and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act") which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE TRUST AND THE ADVISER. The Trust and
the Adviser jointly and severally represent and warrant to each Underwriter as
of the date hereof and as of the Closing Time referred to in Section 2(c)
hereof, and agree with each Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the Registration
Statement and any Rule 462(b) Registration Statement has become
effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act, or order of
suspension or revocation of registration pursuant to Section 8(e) of
the 1940 Act, and no proceedings for any such purpose have been
instituted or are pending or, to the knowledge of the Trust or the
Adviser, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with.
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At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time, the Registration Statement,
the Rule 462(b) Registration Statement, the notification of Form N-8A
and any amendments and supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act, the 1940
Act and the Rules and Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time, included or will
include an untrue statement of a material fact or omitted or will 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. If Rule 434 is used, the Trust will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially
different", as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 497 under the 1933 Act,
complied when so filed in all material respects with the Rules and
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
If a Rule 462(b) Registration Statement is required in
connection with the offering and sale of the AMPS, the Trust has
complied or will comply with the requirements of Rule 111 under the
1933 Act Regulations relating to the payment of filing fees thereof.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified the statement
of assets and liabilities included in the Registration Statement are
independent public accountants as required by the 1933 Act and the
Rules and Regulations.
(iii) FINANCIAL STATEMENTS. The statement of assets and liabilities included
in the Registration Statement and the Prospectus, together with the
related notes, presents fairly the financial position of the Trust at
the date indicated; said statement has been prepared in conformity with
generally accepted accounting principles ("GAAP").
(iv) INCORPORATED DOCUMENTS. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1933 Act and the Rules and Regulations and, when
read together with the other information in the Prospectus, at the date
the Registration Statement became effective, at the date the Prospectus
was issued and at the Closing Time, did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(v) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of which
information with respect to the Trust is given in the Registration
Statement and the Prospectus, except as otherwise stated therein and
except for changes in the net asset value of the Trust arising out of
normal investment operations, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Trust, whether or not
arising in the ordinary course of business (provided that a change in
the Trust's net asset value or portfolio securities arising in the
course of its normal investment operations shall not be deemed to be a
Material Adverse Effect) (a "Material Adverse Effect"), (B) there have
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been no transactions entered into by the Trust, other than those in
the ordinary course of business, which are material with respect to the
Trust, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Trust on any class of its capital stock
except for dividends declared on Common Stock.
(vi) GOOD STANDING OF THE TRUST. The Trust has been organized and is
validly existing as a business trust in good standing under the laws of
the State of Delaware and has business trust power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement; and the Trust is duly qualified as a
foreign business 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, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vii) NO SUBSIDIARIES. The Trust has no subsidiaries.
(viii) INVESTMENT COMPANY STATUS. The Trust is registered with the Commission
under the 1940 Act as a closed-end diversified management investment
company, and no order of suspension or revocation of such registration
has been issued or proceedings therefor initiated or threatened by the
Commission.
(ix) OFFICERS AND TRUSTEES. No person is serving or acting as an officer,
trustee or investment adviser of the Trust except in accordance with
the provisions of the 1940 Act and the Rules and Regulations and the
Investment Adviser Act of 1940, as amended (the "Adviser Act"), and the
rules and regulations of the Commission promulgated under the Adviser
Act (the "Adviser Act Rules and Regulations"). Except as disclosed in
the Registration Statement and the Prospectus (or any amendment or
supplement to either of them), no trustee of the Trust is an
"interested person" (as defined in the 1940 Act) of the Trust or an
"affiliated person" (as defined in the 1940 Act) of any Underwriter.
(x) CAPITALIZATION. The authorized, issued and outstanding shares of
beneficial interest of the Trust is as set forth in the Prospectus as
of the date thereof under the caption "Capitalization." All issued and
outstanding shares of beneficial interest of the Trust have been duly
authorized and validly issued and are fully paid and non-assessable and
have been offered and sold or exchanged by the Trust in compliance with
all applicable laws (including, without limitation, federal and state
securities laws); none of the outstanding shares of beneficial interest
of the Trust was issued in violation of the preemptive or other similar
rights of any securityholder of the Trust.
(xi) AUTHORIZATION AND DESCRIPTION OF AMPS. The AMPS to be purchased by the
Underwriters from the Trust have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when issued
and delivered by the Trust pursuant to this Agreement against payment
of the consideration set forth herein, will be validly issued and fully
paid and non-assessable. The AMPS conform in all material respects to
all statements relating thereto contained in the Prospectus and such
description conforms in all material respects to the rights set forth
in the instruments defining the same; except as described in the
Registration Statement, no holder of the AMPS will be subject to
personal liability solely by reason of being such a holder; and the
issuance of the AMPS is not subject to the preemptive or other similar
rights of any securityholder of the Trust.
(xii) ABSENCE OF DEFAULTS AND CONFLICTS. The Trust is not in violation of
its declaration of trust or by-laws, or in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit
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agreement, note, lease or other agreement or instrument to which it is
a party or by which it may be bound, or to which any of the property or
assets of the Trust is subject (collectively, "Agreements and
Instruments") except for such violations or defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Management Agreement, the
Administration Agreement, the Custodian Agreement, the Transfer Agent
and Service Agreement and the Auction Agency Agreement referred to in
the Registration Statement (as used herein, the "Management Agreement,"
the "Administration Agreement", the "Custodian Agreement", the
"Transfer Agency Agreement" and the "Auction Agency Agreement",
respectively) and the consummation of the transactions contemplated
herein and in the Registration Statement (including the issuance and
sale of the AMPS and the use of the proceeds from the sale of the AMPS
as described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Trust with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Trust pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the declaration of trust
or by-laws of the Trust or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Trust or any of its assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Trust.
(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the
Trust or the Adviser, threatened, against or affecting the Trust, which
is required to be disclosed in the Registration Statement (other than
as disclosed therein), or which might reasonably be expected to result
in a Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of the Trust
or the consummation of the transactions contemplated in this Agreement
or the performance by the Trust of its obligations hereunder. The
aggregate of all pending legal or governmental proceedings to which the
Trust is a party or of which any of its property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect.
(xiv) ACCURACY OF EXHIBITS. There are no contracts or documents which are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto by the 1933 Act, the 1940
Act or by the Rules and Regulations which have not been so described
and filed as required.
(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Adviser owns or possesses, or
can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade
names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by the
Trust, and the Adviser has not received any notice or is not otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
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inadequate to protect the interest of the Adviser therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xvi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or authorization,
approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary
or required for the performance by the Trust of its obligations
hereunder, in connection with the offering, issuance or sale of the
AMPS hereunder or the consummation of the transactions contemplated by
this Agreement, except such as have been already obtained or as may be
required under the 1933 Act, the 1940 Act, the 1934 Act, or state
securities laws.
(xvii) POSSESSION OF LICENSES AND PERMITS. The Trust possesses such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to operate its
properties and to conduct the business as contemplated in the
Prospectus; the Trust is in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and the Trust has not
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xviii) ADVERTISEMENTS. Any advertising, sales literature or other promotional
material (including "prospectus wrappers", "broker kits," "road show
slides" and "road show scripts") authorized in writing by or prepared
by the Trust or the Adviser used in connection with the public offering
of the AMPS (collectively, "sales material") does not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Moreover, all sales material complied and will comply in all material
respects with the applicable requirements of the 1933 Act, the 1940
Act, the Rules and Regulations and the rules and interpretations of the
National Association of Securities Dealers, Inc. ("NASD").
(xix) SUBCHAPTER M. The Trust intends to direct the investment of the
proceeds of the offering described in the Registration Statement in
such a manner as to comply with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended ("Subchapter M of the Code"
and the "Code," respectively), and as of the date of this Agreement
qualifies as a regulated investment company under Subchapter M of the
Code.
(xx) DISTRIBUTION OF OFFERING MATERIALS. The Trust has not distributed and,
without prior consent of the Representatives, prior to the later to
occur of (A) the Closing Time and (B) completion of the distribution of
the AMPS, will not distribute any offering material in connection with
the offering and sale of the AMPS other than the Registration
Statement, a preliminary prospectus, the Prospectus or other materials,
if any, permitted by the 1933 Act or the 1940 Act or the Rules and
Regulations.
(xxi) ACCOUNTING CONTROLS. The Administrator maintains on behalf of the Trust
a system of internal accounting controls which the Trust has been
advised is sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general
or specific authorization and with the applicable requirements of the
1940 Act, the Rules and Regulations and the Code; (B) transactions are
recorded as necessary to permit preparation of
6
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets and to maintain
compliance with the books and records requirements under the 1940 Act
and the Rules and Regulations; (C) access to assets is permitted only
in accordance with the management's general or specific authorization;
and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxii) ABSENCE OF UNDISCLOSED PAYMENTS. To the Trust's knowledge, neither the
Trust nor any employee or agent of the Trust has made any payment of
funds of the Trust or received or retained any funds, which payment,
receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(xxiii) MATERIAL AGREEMENTS. This Agreement, the Management Agreement, the
Administration Agreement, the Custodian Agreement, the Transfer Agency
Agreement and the Auction Agency Agreement have each been duly
authorized by all requisite action on the part of the Trust, executed
and delivered by the Trust, as of the dates noted therein and each
complies with all applicable provisions of the 1940 Act. Assuming due
authorization, execution and delivery by the other parties thereto with
respect to the Administration Agreement, Custodian Agreement, the
Transfer Agency Agreement and the Auction Agency Agreement, each of the
Management Agreement, the Administration Agreement, the Custodian
Agreement, the Transfer Agency Agreement and the Auction Agency
Agreement constitutes a valid and binding agreement of the Trust,
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, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
(xxiv) REGISTRATION RIGHTS. There are no persons with registration rights or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Trust under the
1933 Act.
(xxv) NYSE LISTING. The Trust's common shares are listed on the New York
Stock Exchange ("NYSE").
(xxvi) RATINGS. The AMPS have been, or prior to the Closing Date will be,
assigned a rating of `Aaa' by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") and "AAA" by Fitch, Inc. ("Fitch").
(b) REPRESENTATIONS AND WARRANTIES BY THE ADVISER. The Adviser represents and
warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof as follows:
(i) GOOD STANDING OF THE ADVISER. The Adviser has been duly organized and
is validly existing and in good standing as a corporation under the
laws of the State of Delaware with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus and it 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.
(ii) INVESTMENT ADVISER STATUS. The Adviser is duly registered with the
Commission as an investment adviser under the Adviser Act, and is not
prohibited by the Adviser Act or the 1940 Act, or the rules and
regulations under such acts, from acting under the Management Agreement
for the Trust as contemplated by the Prospectus.
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(iii) DESCRIPTION OF ADVISER. The description of the Adviser in the
Registration Statement and the Prospectus (and any amendment or
supplement to either of them) complied and comply in all material
respects with the provisions of the 1933 Act, the 1940 Act, the Adviser
Act, the Rules and Regulations and the Adviser Act Rules and
Regulations and is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(iv) CAPITALIZATION. The Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Prospectus, this Agreement and under the Management
Agreement.
(v) AUTHORIZATION OF AGREEMENTS; ABSENCE OF DEFAULTS AND CONFLICTS. This
Agreement and the Management Agreement have each been duly authorized,
executed and delivered by the Adviser, and the Management Agreement
constitutes a valid and binding obligation of the Adviser, enforceable
in accordance with its terms, 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); and neither the execution and delivery of this
Agreement or the Management Agreement nor the performance by the
Adviser of its obligations hereunder or thereunder will conflict with,
or result in a breach of any of the terms and provisions of, or
constitute, with or without the giving of notice or lapse of time or
both, a default under, any agreement or instrument to which the Adviser
is a party or by which it is bound and which are material to the
conduct of the Adviser's services under the Management Agreement, the
certificate of incorporation, the by-laws or other organizational
documents of the Adviser, or to the Adviser's knowledge, by any law,
statute, order, writ, decree, rule or regulation applicable to it of
any jurisdiction, court, federal or state regulatory body,
administrative agency or other governmental body, stock exchange or
securities association having jurisdiction over the Adviser or its
respective properties or operations; and no consent, approval,
authorization or order of any court or governmental authority or agency
is required for the consummation by the Adviser of the transactions
contemplated by this Agreement or the Management Agreement, except as
have been obtained or may be required under the 1933 Act, the 1940 Act,
the 1934 Act or state securities laws.
(vi) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of which
information with respect to the Adviser is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, there
has not occurred any event which should reasonably be expected to have
a material adverse effect on the ability of the Adviser to perform its
obligations under this Agreement and the Management Agreement.
(vii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the
Adviser, threatened against or affecting the Adviser or any "affiliated
person" of the Adviser (as such term is defined in the 1940 Act) or any
partners, directors, officers or employees of the foregoing, whether or
not arising in the ordinary course of business, which should reasonably
be expected to result in any material adverse change in the condition,
financial or otherwise, or earnings, business affairs or business
prospects of the Adviser, materially and adversely affect the
properties or assets of the Adviser or materially impair or adversely
affect the ability of the Adviser to function as an investment adviser
or perform its obligations under the Management Agreement or which is
required to be disclosed in the Registration Statement and the
Prospectus.
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(viii) ABSENCE OF VIOLATION OR DEFAULT. The Adviser is not in violation of its
certificate of incorporation, by-laws or other organizational documents
or in default under any agreement, indenture or instrument, which
violation or default should reasonably be expected to have a material
adverse effect on the ability of the Adviser to perform its obligations
under this Agreement and the Management Agreement.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the Trust
or the Adviser delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Trust or the
Adviser, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) SHARES. On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Trust agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Trust, at the price per
share set forth in SCHEDULE B, the number of AMPS set forth in SCHEDULE A
opposite the name of such Underwriter, plus any additional number of AMPS which
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) COMMISSION. The Trust agrees to pay to the Underwriters a commission as set
forth in Schedule B as compensation to the Underwriters for their performance
under this Agreement.
(c) PAYMENT. Payment of the purchase price for, and delivery of certificates
for, the AMPS shall be made at the offices of ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or through the facilities of The
Depository Trust Company ("DTC") or at such other place as shall be agreed upon
by the Representatives and the Trust, at 10:00 A.M. (Eastern time) on the
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Trust
(such time and date of payment and delivery being herein called "Closing Time").
Payment shall be made to the Trust by wire transfer of immediately
available funds to a bank account designated by the Trust, against delivery to
the Representatives through DTC for the respective accounts of the Underwriters
of the AMPS to be purchased by them. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the AMPS which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the AMPS to be purchased by any Underwriter whose funds have not been
received by the Closing Time but such payment shall not relieve such Underwriter
from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the AMPS shall be in such
denominations and registered in such names as the Representatives may request in
writing at least one full business day before the Closing Time. The certificates
for the AMPS will be made available for examination and packaging by the
Representatives in the City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time.
SECTION 3. Covenants.
(a) The Trust and the Adviser, jointly and severally, covenant with each
Underwriter as follows:
(i) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Trust, subject to Section 3(a)(ii), will comply with the requirements
of Rule 430A or Rule 434, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing,
9
(i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the AMPS for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Trust will promptly effect the filings
necessary pursuant to Rule 497 and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 497 was received for filing by the
Commission and, in the event that it was not, it will promptly file
such prospectus. The Trust will make reasonable efforts to prevent the
issuance of any stop order, or order of suspension or revocation of
registration pursuant to Section 8(e) of the 1940 Act, and, if any
such stop order or order of suspension or revocation of registration is
issued, to obtain the lifting thereof at the earliest possible moment.
If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, prohibiting or suspending
the use of the Prospectus or any sales material (or any amendment or
supplement to any of the foregoing) or suspending the qualification of
the AMPS for offering or sale in any jurisdiction, the Trust will use
its best efforts to obtain the withdrawal of such order at the earliest
possible time. If at any time the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court
or any other governmental, regulatory, self-regulatory or
administrative agency or any official shall issue any order prohibiting
or suspending the use of the Prospectus or any sales material (or any
amendment or supplement to any of the foregoing) or suspending the
qualification of the AMPS for offering or sale in any jurisdiction, the
Trust will use its reasonable best efforts to obtain the withdrawal of
such order at the earliest possible time.
(ii) FILING OF AMENDMENTS. The Trust will give the Representatives notice of
its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or
any amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Representatives or counsel for the Underwriters shall object.
(iii) DELIVERY OF REGISTRATION STATEMENTS. The Trust has furnished or will
deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein) and signed copies
of all consents and certificates of experts, and will also deliver to
the Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(iv) DELIVERY OF PROSPECTUSES. The Trust has delivered to each Underwriter,
without charge, as many copies of each preliminary prospectus as such
Underwriter reasonably requested, and the Trust hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Trust
will furnish to each Underwriter, without charge, during the period
when in the opinion of counsel for the Underwriters the Prospectus is
required to be delivered under the 1933 Act in connection with sales by
any Underwriter or dealer or the 1934 Act, such number of copies of the
10
Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(v) CONTINUED COMPLIANCE WITH SECURITIES LAWS. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection
with sales of the AMPS, any event shall occur or condition shall exist
as a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Trust, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will
not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, at any such time to amend the Registration Statement
or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the Rules and Regulations, the Trust
will promptly prepare and file with the Commission, subject to
Section 3(a)(ii), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the
Trust will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(vi) BLUE SKY QUALIFICATIONS. The Trust will use its best efforts, in
cooperation with the Underwriters, to qualify the AMPS for offering and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representatives may designate
and to maintain such qualifications in effect for a period of not less
than one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided,
however, that the Trust shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the AMPS have been so qualified, the Trust will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement.
(vii) RULE 158. The Trust will timely file such reports pursuant to the 1934
Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(viii) USE OF PROCEEDS. The Trust will use the net proceeds received by it
from the sale of the AMPS in the manner specified in the Prospectus
under "Use of Proceeds".
(ix) REPORTING REQUIREMENTS. The Trust, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1940 Act and the 1934 Act within the time periods
required by the 1940 Act and the Rules and Regulations and the 1934 Act
and the rules and regulations of the Commission thereunder,
respectively.
(x) SUBCHAPTER M. The Trust will comply with the requirements of Subchapter
M of the Code to qualify as a regulated investment company under the
Code.
(xi) NO MANIPULATION OF MARKET FOR AMPS. The Trust will not (a) take,
directly or indirectly, any action designed to cause or to result in,
or that might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Trust to facilitate
11
the sale or resale of the AMPS, and (b) until the Closing Date (i)
sell, bid for or purchase the AMPS or pay any person any compensation
for soliciting purchases of the AMPS or (ii) pay or agree to pay to any
person any compensation for soliciting another to purchase any other
securities of the Trust.
(xii) RULE 462(B) REGISTRATION STATEMENT. If the Trust elects to rely upon
Rule 462(b), the Trust shall file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the day following the date of this Agreement,
and the Trust shall at the time of filing either pay to the Commission
the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the 1933 Act.
(xiii) ACCOUNTANT'S CERTIFICATE. The Trust will furnish to the Underwriters,
on the date on which delivery is made to the Rating Agencies, the
report and the confirmation of the Independent Accountant (as defined
in the Statement) required to be delivered pursuant to paragraph 6(f)
of Part I of the Statement.
(b) Except as provided in this Agreement, the Trust will not sell,
contract to sell or otherwise dispose of any of its preferred shares of
beneficial interest of the same series as the AMPS or any securities convertible
into or exercisable or exchangeable for its preferred shares of beneficial
interest of the same series as the AMPS, or grant any options or warrants to
purchase its preferred shares of beneficial interest of the same series as the
AMPS, for a period of 180 days after the date of this Prospectus, without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 4. Payment of Expenses.
(a) EXPENSES. The Trust will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the AMPS,
(iii) the preparation, issuance and delivery of the certificates for the AMPS to
the Underwriters, including any stock or other transfer taxes and any stamp or
other duties payable upon the sale, issuance or delivery of the AMPS to the
Underwriters, (iv) the fees and disbursements of the Trust's counsel,
accountants and other advisors, (v) the qualification of the AMPS under
securities laws in accordance with the provisions of Section 3(a)(vi) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus,
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the AMPS, (ix) the filing fees incident to, and the reasonable
fees and disbursements of counsel to the Underwriters in connection with, the
review by the NASD of the terms of the sale of the AMPS, (x) the fees and
expenses incurred in connection with the rating of the AMPS and (xi) the
printing of any sales material.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Trust and the Adviser, jointly and severally, agree that
they shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
12
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to
the accuracy of the representations and warranties of the Trust and the Adviser
contained in Section 1 hereof or in certificates of any officer of the Trust or
the Adviser delivered pursuant to the provisions hereof, to the performance by
the Trust and the Adviser of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, shall have become effective
and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act, no notice or
order pursuant to Section 8(e) of the 1940 Act shall have been issued, and no
proceedings with respect to either shall have been initiated or threatened by
the Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 497 (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if the
Trust has elected to rely upon Rule 434, a Term Sheet shall have been filed with
the Commission in accordance with Rule 497.
(b) OPINION OF COUNSEL FOR TRUST AND THE ADVISER. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Trust and the Adviser, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in EXHIBIT A hereto and to such further effect as counsel to
the Underwriters may reasonably request.
(c) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇▇
Chance ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters with respect
to the matters set forth in paragraphs 1, 4 through 8, inclusive, 10 (solely as
to the information in the Prospectus under "Description of AMPS"), 15 and the
third to last paragraph of EXHIBIT A hereto. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York and the federal law of the United States, upon the
opinions of counsel satisfactory to the Representatives. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Trust and
certificates of public officials.
(d) OFFICERS' CERTIFICATES. At Closing Time, there shall not have been, since
the date hereof or since the respective dates as of which information is given
in the Prospectus (exclusive of any supplement thereto), any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Trust, whether or not arising in the
ordinary course of business (provided that a change in the Trust's net asset
value or portfolio securities arising in the course of its normal investment
operations shall not be deemed to be a material adverse change), and the
Representatives shall have received a certificate of a duly authorized officer
of the Trust and of the chief financial or chief accounting officer of the Trust
and of the President or a Vice President of the Adviser, dated as of Closing
Time, to the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties in Sections 1(a) and (b) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) each of the Trust and the Adviser, respectively, has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement, or order of
suspension or revocation of registration pursuant to Section 8(e) of the 1940
Act, has been issued and no proceedings for any such purpose have been
instituted or are pending or are contemplated by the Commission.
13
(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this Agreement,
the Representatives shall have received from Ernst & Young LLP a letter dated
such date, in form and substance satisfactory to the Representatives, together
with signed or reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives shall have
received from Ernst & Young LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (e) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
(g) NO OBJECTION. The NASD has confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(h) RATING. The Trust shall have delivered and you shall have received evidence
satisfactory to you that the AMPS are rated `Aaa' by ▇▇▇▇▇'▇ and `AAA' by Fitch
as of the Closing Date, and there shall not have been given any notice of any
intended or potential downgrading, or of any review for a potential downgrading,
in the rating accorded to the AMPS or any other securities issued by the Trust,
by ▇▇▇▇▇'▇ or by Fitch.
(i) ASSET COVERAGE. As of the Closing Date and assuming the receipt of the net
proceeds from the sale of the AMPS, the Investment Company Act Preferred Shares
Asset Coverage and the Preferred Shares Basic Maintenance Amount (each as
defined in the Statement) each will be met.
(j) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the AMPS as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Trust and the Adviser in
connection with the organization and registration of the Trust under the 1940
Act and the issuance and sale of the AMPS as herein contemplated shall be
satisfactory in form and substance to the Representatives and counsel for the
Underwriters.
(k) TERMINATION OF AGREEMENT. If any condition specified in this Section shall
not have been fulfilled when and as required to be fulfilled, this Agreement may
be terminated by the Representatives by notice to the Trust at any time at or
prior to Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7, 8 and 13 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) INDEMNIFICATION OF UNDERWRITERS. The Trust and the Adviser, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or
any amendment thereto), including the Rule 430A Information and the Rule
434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
14
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement of
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(e) below) any
such settlement is effected with the written consent of the Trust; and
(iii)against any and all expense whatsoever, as incurred (including the
reasonable fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇),
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Trust or the
Adviser by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) and
provided further that the Trust will not be liable to any Underwriter with
respect to any indemnification contained in this paragraph (a) to the extent
that the Trust shall sustain the burden of proving that any such loss,
liability, claim, damage or expense resulted from the fact that such
Underwriter, in contravention of a requirement of this Agreement or applicable
law, sold Securities to a person to whom such Underwriter failed to send or
give, at or prior to the Closing Time, a copy of the Prospectus, as then amended
or supplemented if: (i) the Trust has previously furnished copies thereof
(sufficiently in advance of the Closing Time, to allow for distribution by the
Closing Time) to the Underwriter and the loss, liability, claim, damage or
expense of such Underwriter resulted from an untrue statement or omission of a
material fact contained in or omitted from the preliminary prospectus which was
corrected in the Prospectus as, if applicable, amended or supplemented prior to
the Closing Time and such Prospectus was required by law to be delivered at or
prior to the written confirmation of sale to such person and (ii) the failure to
give or send such Prospectus by the Closing Time, to such person would have
constituted the sole basis for the claim asserted by such person against the
party or parties asserting such loss, liability, claim, damage or expense as to
which indemnification is sought pursuant to this paragraph (a).
(b) INDEMNIFICATION OF TRUST, ADVISER, TRUSTEES, DIRECTORS AND OFFICERS. Each
Underwriter severally agrees to indemnify and hold harmless the Trust and the
Adviser, their respective trustees and directors, each of the Trust's officers
who signed the Registration Statement, and each person, if any, who controls the
Trust or the Adviser within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Trust or the Adviser by such Underwriter
through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) INDEMNIFICATION FOR MARKETING MATERIALS. In addition to the foregoing
indemnification, the Trust and the Adviser also, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
15
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 6(a), as limited by
the proviso set forth therein, with respect to any sales material.
(d) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement of such
action, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, to assume the defense thereof with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense thereof,
the indemnifying party shall not be liable to the indemnified party for any
legal expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation. In any such action where the
indemnifying party does not assume the defense thereof, counsel to the
indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇ in the case of parties
indemnified pursuant to Section 6(a) above, and, in the case of parties
indemnified pursuant to Section 6(b) above, counsel to the indemnified parties
shall be selected by the Trust and the Adviser, and in both cases, an
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred,
16
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Trust and the Adviser on the one hand and the Underwriters on
the other hand from the offering of the AMPS pursuant to this Agreement or (ii)
if the allocation provided by clause (i) 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 Trust and the
Adviser on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Trust and the Adviser on the one
hand and the Underwriters on the other hand in connection with the offering of
the AMPS pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the AMPS pursuant to
this Agreement (before deducting expenses) received by the Trust and the total
underwriting discount received by the Underwriters (whether from the Trust or
otherwise), in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the AMPS as set forth on such cover.
The relative fault of the Trust and the Adviser on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Trust or the Adviser or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Trust, the Adviser and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the AMPS underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Trust and each director of the Adviser, respectively, each
officer of the Trust who signed the Registration Statement, and each person, if
any, who controls the Trust or the Adviser, within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Trust and the Adviser, respectively. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of AMPS set forth opposite their respective names in
SCHEDULE A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Trust or the Adviser submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
17
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Trust or the Adviser, and shall survive
delivery of the AMPS to the Underwriters.
SECTION 9. Termination of Agreement.
(a) TERMINATION; GENERAL. The Representatives may terminate this Agreement, by
notice to the Trust, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Trust or the Adviser, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to market the AMPS
or to enforce contracts for the sale of the AMPS, or (iii) if trading in the
common shares of the Trust has been suspended or materially limited by the
Commission or the NYSE, or if trading generally on the American Stock Exchange
or the NYSE or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, or (iv) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8 and
13 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time to
purchase the AMPS which it or they are obligated to purchase under this
Agreement (the "Defaulted Shares"), the Representatives shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Shares in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Shares does not exceed 10% of the number of AMPS
to be purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Shares exceeds 10% of the number of AMPS to be
purchased on such date, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Trust shall have the right
to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
18
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., North Tower, World Financial Center, New
York, New York 10080, attention of Equity Capital Markets; and notices to the
Trust or the Adviser shall be directed, as appropriate, to the office of Pioneer
Investment Management, Inc. at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel.
SECTION 12. Parties.
This Agreement shall each inure to the benefit of and be binding upon
the Underwriters, the Trust, the Adviser and their respective partners and
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Trust, the Adviser and their respective successors and the
controlling persons and officers, trustees and directors referred to in Sections
6 and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Trust, the
Adviser and their respective partners and successors, and said controlling
persons and officers, trustees and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of AMPS from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
19
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Trust and the Adviser in accordance with its terms.
Very truly yours,
Pioneer High Income Trust
By:
Name:
Title:
Pioneer Investment Management, Inc.
By:
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
UBS WARBURG LLC
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By: ____________________________________
Authorized Signatory
For themselves and as
Representatives of the other
Underwriters named in
SCHEDULE A hereto.
20
SCHEDULE A
Number of
NAME OF UNDERWRITER AMPS
-------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated............................... [ ]
UBS Warburg LLC.................................................................. [ ]
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ....................................................... [ ]
Total................................................................... [ ]
Sch A-1
SCHEDULE B
PIONEER HIGH INCOME TRUST
[ ] Auction Market Preferred Shares of Beneficial Interest
[ ] Shares ___ AMPS, Series M
[ ] Shares ___ AMPS, Series W
Liquidation Preference $25,000 per share
1. The initial public offering price per share for the AMPS, determined
as provided in said Section 2, shall be $25,000.
2. The purchase price per share for the AMPS to be paid by the several
Underwriters shall be $25,000.
3. The commission to be paid to the Underwriters for their performance
hereunder shall be $250 per share.
4. The initial dividend rate on the AMPS shall be [__]% per annum for
the Series M and [ ]% per annum for the Series W.
Sch B-1
Exhibit A
FORM OF OPINION OF TRUST'S AND ADVISER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇,
Incorporated
UBS Warburg LLC
As Representatives of the
Several Underwriters
North Tower
World Financial Center
New York, New York 10080
Re: Pioneer High Income Trust
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5(b) of the
Purchase Agreement, dated as of July 10, 2002 (the "Purchase Agreement"), among
you, as Representatives of the several Underwriters, Pioneer Investment
Management, Inc., a Delaware corporation (the "Adviser") and Pioneer High Income
Trust, a Delaware business trust (the "Trust"). Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings ascribed to
them in the Purchase Agreement.
We have acted as counsel for the Trust and the Adviser in connection
with the sale to the Underwriters by the Trust of 2,202 shares of its Auction
Market Preferred Shares, Series M, liquidation preference of $25,000 per share,
and 2,020 shares of its Auction Market Preferred Shares, Series W, liquidation
preference of $25,000 per share, of the Trust, (collectively, the "Shares")
pursuant to the Section 2(a) of the Purchase Agreement. The rights, preferences
and limitations of the Shares are set forth in a Statement of Preferences of
Auction Market Preferred Shares (the "Statement"). As such counsel, we have
assisted in the preparation and filing with the Securities and Exchange
Commission (the "Commission") of the Trust's Registration Statement on Form N-2
dated April __, 2002 (File No. 333- 87656), and amendments No.1 and No. 2
thereto, which Registration Statement became effective on July 10, 2002 (the
"Effective Date"). Such Registration Statement, in the form in which it became
effective, is referred to herein as the "Registration Statement," and the
prospectus dated July 10, 2002 and statement of additional information dated
July 10, 2002 included therein, as filed pursuant to Rule 497 of the Securities
Act of 1933, as amended (the "Securities Act"), on July 10, 2002, are referred
to herein as the "Prospectus" and the "Statement of Additional Information."
We have examined and relied upon the Declaration of Trust and By-laws
of the Trust, each as amended to date, the Statement, records of meetings or
written actions of shareholders and of the Board of Trustees of the Trust, trust
proceedings of the Trust in connection with the authorization and issuance of
the Shares, the Certificate of Incorporation and By-laws of the Adviser, records
of the meetings of the Board of Directors of the Adviser, the Registration
Statement, the Prospectus, the Statement of Additional Information, the Purchase
Agreement, certificates of representatives of the Trust and the Adviser,
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 Trust and the Adviser and stock books
of the Trust and are complete and accurate.
A-1
Insofar as this opinion relates to factual matters, information with
respect to which is in the possession of the Trust or the Adviser, we have
relied, with your permission, upon certificates, statements and representations
of officers and other representatives of the Trust and the Adviser,
representations made in the Purchase Agreement and statements contained in the
Registration Statement.
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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ who are the attorneys of this firm
who have rendered substantive attention to the transaction to which this opinion
relates. Other than as 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
Trust and the Adviser. Moreover, we have not searched any electronic databases
or the dockets of any court, regulatory body or 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 Trust 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 Trust
and the Adviser and is enforceable against 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 compliance of any party to
the agreements other than the Trust and the Adviser.
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, 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.
Our opinions expressed in paragraphs 1 and 17 below as to the valid
existence and good standing of the Trust and the Adviser and the payment of
franchise taxes are based solely on certificates of legal existence and/or good
standing issued by the Secretary of State of the State of Delaware, copies of
which have been made available to your counsel, and our opinion with respect to
such matters is rendered as of the dates of such certificates and limited
accordingly. We express no opinion as to the tax good standing of the Trust or
the Adviser in any jurisdiction.
In connection with our opinion expressed in paragraph 3 below, insofar
as it relates to full payment for the outstanding common shares, no par value
(the "Common Shares"), of the Trust, we have relied solely on a certificate of
an officer of the Trust.
A-2
Our opinion expressed in paragraph 7 below as to the effectiveness of
the Registration Statement under the Securities Act is based solely upon oral
advice from ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ at the Division of Investment Management of the
Commission that the Registration Statement was declared effective as of _:__p.m.
on July 10, 2002.
Our opinions expressed in paragraphs 2 and 13 below are based solely
upon a certificate of an officer of the Trust.
We have not made any investigation of the laws of any jurisdiction
other than the state laws of the Commonwealth of Massachusetts, the Delaware
Business Trust statute, the Delaware General Corporation Law statute and the
federal laws of the United States of America. To the extent that any other laws
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 state laws of the Commonwealth of Massachusetts, and we express no opinion
as to whether such assumption is reasonable or correct. 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.
We have assumed the due execution and delivery, pursuant to due
authorization, of the Purchase Agreement by you as Representatives.
On the basis of and subject to the foregoing, we are of the opinion
that:
1. The Trust is validly existing as a business trust in good standing under the
laws of the State of Delaware and has business trust power and authority to
carry on its business and own, lease and operate its properties as described in
the Prospectus and to enter into and perform its obligations under the Purchase
Agreement. No franchise taxes that are currently due with respect to the Trust
have not been paid.
2. To the best of our knowledge, the Trust does not have any subsidiaries.
3. The authorized, issued and outstanding shares of beneficial interest of the
Trust are as set forth in the Prospectus under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to the Purchase Agreement);
all issued and outstanding common shares of beneficial interest of the Trust as
of the date of this opinion have been duly authorized, validly issued, are fully
paid and non-assessable, have been sold either to the Adviser pursuant to an
exception from registration under the Securities Act or pursuant to an offering
of the Trust's common shares registered under the Securities Act and are not
subject to any preemptive or similar statutory rights under the Delaware
Business Trust statute or, to our knowledge, similar contractual rights granted
by the Trust.
4. The Shares have been duly authorized and, when issued and delivered to the
Underwriters against payment therefore as provided by the Purchase 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 under the Declaration of
Trust or the Delaware Business Trust statute by reason of being such a holder.
5. The issuance of the Shares will not be subject to any preemptive or similar
statutory rights under the Delaware Business Trust statute, or to the best of
our knowledge, similar contractual rights granted by the Trust.
6. The Purchase Agreement has been duly authorized, executed and delivered by
the Trust.
7. The Registration Statement has been declared or become 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, to the best of our knowledge, no stop order suspending the
A-3
effectiveness of the Registration Statement has been issued under the Securities
Act, and, to the best of our knowledge, no order of suspension or revocation of
registration pursuant to Section 8(e) of the Investment Company Act of 1940, as
amended (the "1940 Act") has been issued, and no proceedings for any such
purpose have been instituted or are pending or threatened by the Commission.
8. The Registration Statement, including any Rule 430A Information, the
Prospectus and each amendment or supplement to the Registration Statement and
Prospectus as of their respective effective or issue dates (other than the
financial statements and supporting schedules included therein or omitted
therefrom, as to which we express no opinion), and the notification on Form N-8A
complied as to form in all material respects with the requirements of the
Securities Act, the 1940 Act and the rules and regulations of the Commission
thereunder (the "Rules and Regulations").
9. We do not know of any legal or governmental proceedings pending or threatened
against the Trust.
10. The statements in the Prospectus under the captions "Description of the
Common Shares," "Description of AMPS," "The Auction" and "U.S. Federal Income
Tax Matters," in the Statement of Additional Information under the caption "U.S.
Federal Income Tax Matters" and in Item 29 of Part C of the Registration
Statement, insofar as such statements constitute matters of law or legal
conclusions or are descriptions of the rights set forth in the Declaration of
Trust or By-laws, are correct in all material respects.
11. Each of the Management Agreement, the Administration Agreement, the
Custodian Agreement, the Transfer Agency Agreement, the Auction Agency Agreement
and the Purchase Agreement comply in all material respects with all applicable
provisions of the 1940 Act, the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), the Rules and Regulations and the rules and regulations of the
Commission under the Advisers Act (the "Advisers Act Rules and Regulations").
12. The Trust is duly registered with the Commission under the 1940 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.
13. To the best of our knowledge, no person affiliated with the Adviser is
serving as an officer, trustee or investment adviser of the Trust except in
accordance with the 1940 Act and the Rules and Regulations and the Investment
Advisers Act and the Advisers Act Rules and Regulations. Except as disclosed in
the Registration Statement, Prospectus or the Statement of Additional
Information (or any amendment or supplement to any of them), to the best of our
knowledge, no trustee of the Trust is an "interested person" (as defined in the
1940 Act) of the Trust or an "affiliated person" (as defined in the 1940 Act) of
an Underwriter.
14. The execution, delivery and performance of the Purchase Agreement by the
Trust, the compliance by the Trust with all the provisions thereof and the
consummation by the Trust of the transactions contemplated thereby (including
the issuance and sale of the Shares and the use of the proceeds from the sale of
the Shares as described in the Prospectus under the caption "Use of Proceeds")
do not and will not (A) require any consent, approval, authorization or other
order of, or qualification with, any 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 any of the terms or provisions of, or a default under, or
result in the imposition of a lien, charge or encumbrance upon the assets of the
Trust pursuant to, any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which the Trust is a party filed as an exhibit to the
Registration Statement, (C) violate or conflict with the Declaration of Trust or
By-laws, (D) violate or conflict with any applicable federal or
A-4
Massachusetts law, 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 its property of which we are aware.
15. The Management Agreement, the Administration Agreement, the Custodian
Agreement, the Auction Agency Agreement and the Transfer Agency Agreement have
each been duly authorized by all requisite action on the part of the Trust,
executed and delivered by the Trust, as of the dates noted therein. Assuming due
authorization, execution and delivery by the other parties thereto with respect
to the Custodian Agreement, the Auction Agency Agreement and the Transfer Agency
Agreement, each of the Management Agreement, the Administration Agreement, the
Custodian Agreement, the Auction Agency Agreement and the Transfer Agency
Agreement constitutes a valid and binding agreement of the Trust, enforceable in
accordance with their respective terms.
16. The form of certificate used to evidence the Shares complies in all material
respects with all applicable requirements of the Delaware Business Trust statute
and with any applicable requirements of the Declaration of Trust and By-laws of
the Trust.
17. The Adviser is validly existing as a corporation in good standing under the
laws of the State of Delaware. No franchise taxes that are currently due with
respect to the Adviser have not been paid.
18. The Adviser has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Purchase Agreement.
19. The Adviser is registered with the Commission as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act, the Advisers Act
Rules and Regulations, the 1940 Act or the Rules and Regulations from acting
under the Management Agreement for the Trust as contemplated by the Prospectus.
20. The Purchase Agreement, the Management Agreement and the Administration
Agreement have been duly authorized, executed and delivered by the Adviser, and
the Management Agreement and the Administration Agreement each constitutes a
valid and binding obligation of the Adviser, enforceable in accordance with
their respective terms.
21. We do not know of any legal or governmental proceeding pending or threatened
against the Adviser that are required by the Securities Act or the 1940 Act and
the Rule and Regulation thereunder to be described in the Registration Statement
on the Prospectus that are not so described or which reasonably might be
expected to cause the Adviser to be ineligible to serve as investment adviser of
the Trust pursuant to Section 9 of the 1940 Act.
22. The execution, delivery and performance of the Purchase Agreement by the
Adviser, 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 order of, or
qualification with, any court or governmental body or agency (except such as may
be required under the securities or Blue Sky laws of the various states of 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 any of
the terms or provisions of, or a default under or result in the imposition of a
lien, charge or encumbrance upon the assets of the Adviser pursuant to, any
indenture, loan agreement, mortgage, 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
statute, or (E) violate or conflict with any judgment, order or decree
specifically naming the Adviser or its property of which we are aware.
A-5
In connection with the preparation of the Registration Statement and
the Prospectus, we have participated in conferences with officers and
representatives of the Trust and the Adviser, counsel for the Underwriters and
the independent accountants of the Trust, at which conferences we made inquiries
of such persons and others and discussed the contents of the Registration
Statement and the Prospectus. While the limitations inherent in the independent
verification of factual matters and the character of determinations involved in
the registration process are such that we are not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, subject to the
foregoing and based on such participation, inquiries and discussions, no facts
have come to our attention which have caused us to believe that the Registration
Statement, as of the Effective Date (but after giving effect to changes
incorporated pursuant to Rule 430A under the Securities Act), contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading (except that we express no such view with respect to the
financial statements, including the notes and schedules thereto, or any other
financial or accounting data included therein), 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, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading (except that we express no such view with respect to the
financial statements, including the notes and schedules thereto, or any other
financial or accounting data included therein).
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 Representatives of the
Underwriters, at the request of the Trust 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.
Very truly yours,
▇▇▇▇ AND ▇▇▇▇ LLP
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