Exhibit 99.(h)
Pioneer Tax Advantaged Balanced Trust
(a Delaware statutory trust)
Auction Market Preferred Shares ("AMPS") of Beneficial Interest
[______] Shares [___]% AMPS, Series T7
[______] Shares [___]% AMPS, Series F7
[______] Shares [___]% AMPS, Series TH28
Liquidation Preference $25,000 per share
PURCHASE AGREEMENT
April 7, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
[other co-managers]
c/▇ ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Pioneer Tax Advantaged Balanced Trust, a Delaware statutory trust (the
"Trust"), proposes, upon the terms and conditions set forth herein, to issue and
sell [______] shares of its Auction Market Preferred Shares, Series T7, [______]
shares of its Auction Market Preferred Shares, Series F7, and [______] share of
its Auction Market Preferred Shares, Series TH28, 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, restated and amended as of April [
], 2004 (the "Statement") and the Agreement and Declaration of Trust of the
Trust, dated as of October 16, 2003 (the "Declaration"), in the forms filed as
exhibits to the Registration Statement referred to in the third 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, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), [other
co-managers] 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 [______] 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. 333-113064 and No.
811-21448) 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 April 7, 2004 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 financial statements
included in the Registration Statement and the Prospectus, together
with the related notes, present 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 statutory trust in good standing
under the laws of the State of Delaware and has statutory 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
4
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 Advisory 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 "Advisory 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
5
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 NASD, 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 Advisory
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, the Custodian Agreement,
the Transfer Agency Agreement and the Auction Agency Agreement, each of
the Advisory 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) 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 and 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
Advisory Agreement for the Trust as contemplated by the Prospectus.
(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
7
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 Advisory Agreement.
(v) Authorization of Agreements; Absence of Defaults and
Conflicts. This Agreement and the Advisory Agreement have each been
duly authorized, executed and delivered by the Adviser, and the
Advisory Agreement constitutes a valid and binding obligation of the
Adviser, enforceable in accordance with its terms, except as affected
by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and general equitable principles (whether considered
in a proceeding in equity or at law); and neither the execution and
delivery of this Agreement or the Advisory 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 Advisory
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 Advisory 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
Advisory 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
Advisory Agreement or which is required to be disclosed in the
Registration Statement and the Prospectus.
(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 Advisory
Agreement.
8
(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 Clifford Chance US
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, each
representing one series of the preferred shares, shall be registered in the name
of Cede & Co., as nominee for the Depository Trust Company. 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, (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
9
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 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.
10
(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 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.
11
(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 fees and expenses incurred in connection with
the rating of the AMPS and (x) 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) 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.
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
12
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 Clifford Chance US 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.
(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
13
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) 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.
(h) 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.
(i) 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.
(j) 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 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
14
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 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
15
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, (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
16
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
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
17
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 New York Stock Exchange
("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.
SECTION 11. Tax Disclosure.
Notwithstanding any other provision of this Agreement, from the
commencement of discussions with respect to the transactions contemplated
hereby, the Trust and the Adviser (and each employee, representative or other
agent of the Trust or the Adviser) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure (as such terms are
used in Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury
Regulations promulgated thereunder) of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided relating to such tax treatment and tax structure.
18
SECTION 12. 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, c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., 4 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 13. 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 14. 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 15. 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.
[signatures on following page]
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 TAX ADVANTAGED BALANCED TRUST
By:
------------------------------------
Name:
Title:
PIONEER INVESTMENT MANAGEMENT, INC.
By:
------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
[other co-managers]
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 Number of Number of
Shares -- Shares -- Shares --
Series T7 Series F7 Series TH28
Name of Underwriter AMPS AMPS AMPS
------------------- --------- --------- -----------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.................. [____] [____] [____]
[______]..................................... [____] [____] [____]
Total........................................ [____] [____] [____]
====== ====== ======
Sch A-1
SCHEDULE B
PIONEER TAX ADVANTAGED BALANCED TRUST
Auction Market Preferred Shares of Beneficial Interest
[______] Shares [___]% AMPS, Series T7
[______] Shares [___]% AMPS, Series F7
[______] Shares [___]% AMPS, Series TH28
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 T7, [___]% per annum for the Series F7 and [___]% per annum for the
Series TH28.
Sch B-1
Exhibit A
FORM OF OPINION OF TRUST'S AND ADVISER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
To the Underwriters named
in Schedule A of the
Purchase Agreement (defined below)
Re: Pioneer Tax Advantaged Balanced Trust
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5(b) of the
Purchase Agreement, dated as of April 7, 2004 (the "Purchase Agreement"), among
you, as Representatives of the several Underwriters, Pioneer Investment
Management, Inc., a Delaware corporation (the "Adviser") and Pioneer Tax
Advantaged Balanced Trust, a Delaware statutory 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 [______] shares of its Auction
Market Preferred Shares, Series T7, [______] shares of it Auction Market
Preferred Shares, Series F7, and [______] shares of its Auction Market Preferred
Shares, Series TH28, each with a 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 February 24, 2004 (File No.
333-113064), and amendment No.1 thereto, which Registration Statement became
effective on [______], 2004 (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 April [__], 2004 and
statement of additional information dated April [__], 2004 included therein, as
filed pursuant to Rule 497 of the Securities Act of 1933, as amended (the
"Securities Act"), on April [__], 2004, are referred to herein as the
"Prospectus" and the "Statement of Additional Information."
We have examined and relied upon the Agreement and Declaration of Trust
(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. We have not attempted to verify independently such
facts, although nothing has come to our attention which has caused us to
question the accuracy of such certificates, statements or representations.
In our examination of the documents referred to above, we have assumed
the genuineness of all signatures, the legal capacity of each individual signing
such documents, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as copies,
and the authenticity of the originals of such documents.
Any reference to "our knowledge" or "best of our knowledge" or to any
matters "known to us," "of which we are aware" or "coming to our attention" or
any variation of any of the foregoing, shall mean the conscious awareness, as to
the existence or absence of any facts which would contradict the opinions and
statements so expressed of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ who are the attorneys of this firm who have rendered substantive
attention to the transaction to which this opinion relates. Other than as
expressly set forth below, we have not undertaken, for purposes of this opinion,
any independent investigation to determine the existence or absence of such
facts, and no inference as to our knowledge of the existence or absence of such
facts should be drawn from the fact of our representation of the Trust and the
Adviser. Moreover, we have not searched any electronic databases or the dockets
of any court, regulatory body or administrative or other governmental agency or
other filing office in any jurisdiction.
For purposes of this opinion, we have assumed that the agreements
referred to herein have been duly authorized, executed and delivered by all
parties thereto other than the 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 all such other parties in accordance
with its terms. We do not render any opinion as to the application of any
federal or state law or regulation to the power, authority or competence of any
party to the agreements other than the 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. Without limiting the foregoing, with respect to our
opinion in paragraphs 11, 14 and 22 below, (i) we are expressing no opinion as
to the enforceability of the indemnification or contribution provisions of the
Purchase Agreement, (ii) we note that a court may refuse to enforce, or may
limit the application of, the Purchase Agreement or certain provisions thereof,
as unconscionable or contrary to public policy, and (iii) we have assumed
compliance by all parties with federal and state securities laws.
We also express no opinion herein as to any provision of any agreement
(a) which may be deemed to or construed to waive any right of the Trust or the
Adviser, (b) to the effect that rights and remedies are not exclusive, that
every right or remedy is cumulative and may be exercised in addition to or with
any other right or remedy and does not preclude recourse to one or more other
rights or remedies,
A-2
(c) relating to the effect of invalidity or unenforceability of any provision of
any agreement on the validity or enforceability of any other provision thereof,
(d) requiring the payment of penalties, consequential damages or liquidated
damages, (e) which is in violation of public policy, including, without
limitation, any provision relating to non-competition and non-solicitation or
relating to indemnification and contribution with respect to securities law
matters, (f) purporting to indemnify any person against his, her or its own
negligence or intentional misconduct, (g) which provides that the terms of any
agreement may not be waived or modified except in writing or (h) relating to
choice of law or consent to jurisdiction.
Our 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. Our opinion in paragraph 3 as to the Common Shares
outstanding on the date of the Prospectus is based solely upon a certificate of
the Trust's transfer agent or sub-transfer agent. Our opinion in paragraph 3 as
to the due and valid issuance of Common Shares is based solely upon a review of
the minute books of the Trust and a certificate of an officer of the Trust, each
of which we assume to be complete and accurate.
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 [10:00]
a.m. on April 7, 2004. Our opinion expressed in Paragraph 19 as to the
registrant of the Adviser under the Investment Advisers Act of 1940, as amended
(the "Adviser's Act") is based solely upon the Commission's Investment Adviser
Public Disclosure Website as of the date of this opinion.
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
Statutory Trust Act 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 note that the
Purchase Agreement and the Auction Agent Agreement are governed by New York law.
We express no opinion with respect to the securities or Blue Sky laws of any
state of the United States, with respect to state or federal antifraud laws
(except to the extent expressly provided in the third to last paragraph below)
or with respect to the approval by the National Association of Securities
Dealers, Inc. of the offering.
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 statutory trust in good
standing under the state laws of the State of Delaware and has statutory 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
A-3
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 as of the date of the Prospectus 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 as of the date of this opinion have been duly authorized, validly issued,
are fully paid and non-assessable and have been sold either to the Adviser
pursuant to an exception from registration under the Securities Act, pursuant to
an offering of the Trust's common shares registered under the Securities Act or
issued in accordance with the Trust's Dividend Reinvestment Plan; and the
Trust's common shares are not subject to any preemptive or similar statutory
rights under the Delaware Statutory Trust Act 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 Statutory Trust Act 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 Statutory Trust Act
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 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 AMPS," and "The Auction" 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. Each section in the
Prospectus entitled "Federal Income Tax Matters" and the section in the
Statement of Additional Information entitled "Federal Income Tax Matters" is a
fair summary of the principal U.S. federal income tax rules currently in effect
and applicable to the Trust and to the purchase, ownership and disposition of
the Shares.
11. Each of the Advisory 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 Advisers
A-4
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 therefore 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
Massachusetts state or U.S. federal court or governmental body or agency (except
such as may be required under the securities or Blue Sky laws of the various
states or the National Association of Securities Dealers, Inc. or as have been
obtained under the federal securities laws), (B) conflict with or constitute a
breach of 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 U.S. federal or
Massachusetts state law, rule or regulation which in our experience is normally
applicable in transaction of the type contemplated by the Purchase Agreement or
the Delaware Statutory Trust Act statute or (E) violate or conflict with any
judgment, order or decree specifically naming the Trust or specifically
applicable to the Trust's property of which we are aware.
15. The Advisory Agreement, 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 Advisory 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
Statutory Trust Act 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.
A-5
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 Advisory Agreement for the Trust as contemplated by the
Prospectus.
20. The Purchase Agreement, the Advisory Agreement and the
Administration Agreement have been duly authorized, executed and delivered by
the Adviser, and the Advisory 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
other order of, or qualification with, any Massachusetts state or U.S. federal
court or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states or the National Association of
Securities Dealers, Inc. or as have been obtained under the federal securities
laws), (B) conflict with or constitute a breach of 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 state law,
rule or regulation which in our experience is normally applicable in transaction
of the type contemplated by the Purchase Agreement or the Delaware Business
Corporation Law statute, or (E) violate or conflict with any judgment, order or
decree specifically naming the Adviser or specifically applicable to the
Adviser's property of which we are aware.
In connection with the preparation of the Registration Statement, the
Prospectus and the Statement of Additional Information, 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, the Prospectus and the Statement of
Additional Information. 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, the Prospectus or the Statement of
Additional Information, 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 information relating to the Underwriter or the method of distribution
of the Share by the Underwriter included therein), or that the Prospectus and
the Statement of Additional Information, as of the date 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
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notes and schedules thereto, or any other financial or accounting data included
therein or information relating to the Underwriter or the method of distribution
of the Share by the Underwriter 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. We understand that
Clifford Chance US LLP, in delivering their opinion to you pursuant to Section
5(c) of the Purchase Agreement, is relying upon this opinion as to matters of
the Delaware Statutory Trust Act statute. We consent to such reliance.
Very truly yours,
▇▇▇▇ AND ▇▇▇▇ LLP
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