▇▇▇▇ ▇▇▇▇▇▇▇ Tax-Advantaged Dividend Income Fund
[ ] Common Shares of Beneficial Interest
No Par Value
UNDERWRITING AGREEMENT
February [ ], 2004
UNDERWRITING AGREEMENT
February [ ], 2004
UBS Securities LLC
as Managing Representative
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇ ▇▇▇▇▇▇▇ Tax-Advantaged Dividend Income Fund, a voluntary
association with transferable shares organized and existing under and by virtue
of the laws of The Commonwealth of Massachusetts (commonly referred to as a
Massachusetts business trust) (the "Fund"), proposes to issue and sell to the
underwriters named in Schedule A annexed hereto (the "Underwriters") an
aggregate of [ ] common shares of beneficial interest (the "Firm Shares"), no
par value (the "Common Shares"), of the Fund. In addition, solely for the
purpose of covering over-allotments, the Fund proposes to grant to the
Underwriters the option to purchase from the Fund up to an additional [ ] Common
Shares (the "Additional Shares"). The Firm Shares and the Additional Shares are
hereinafter collectively sometimes referred to as the "Shares." The Shares are
described in the Prospectus which is referred to below.
The Fund has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), and with the provisions of the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder
(collectively called the "Investment Company Act"), with the Securities and
Exchange Commission (the "Commission") a registration statement on Form N-2
(File Nos. 333-108102 and 811-21416), including a prospectus and a statement of
additional information, relating to the Shares. The Fund has furnished to you,
for use by the Underwriters and by dealers, copies of one or more preliminary
prospectuses (including a preliminary statement of additional information) (each
thereof, including such preliminary statement of additional information, being
herein called a "Preliminary Prospectus") relating to the Shares. Except where
the context otherwise requires, the registration statement, as amended when it
becomes effective (the "Effective Date"), including all documents filed as a
part thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 497 under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A under the Act, is herein called
the "Registration Statement," and the prospectus (including the statement of
additional information), in the form filed by the Fund with the Commission
pursuant to Rule 497 under the Act or, if no such filing is required, the form
of final prospectus (including the form of final statement of additional
information) included in the Registration Statement at the time it became
effective, is herein called the "Prospectus." In addition, the Fund has filed a
Notification of Registration on Form N-8A (the "Notification") pursuant to
Section 8 of the Investment Company Act.
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▇▇▇▇ ▇▇▇▇▇▇▇ Advisers, LLC ("▇▇▇▇ ▇▇▇▇▇▇▇ Advisers" or the
"Investment Adviser") will act as the Fund's investment adviser pursuant to an
Investment Advisory Agreement by and between the Fund and the Investment
Adviser, dated as of [ ], 2004 (the "Investment Advisory Agreement"). The Bank
of New York will act as the custodian (the "Custodian") of the Fund's cash and
portfolio assets pursuant to a Custody Agreement, dated as of [ ], 2004 (the
"Custody Agreement"). Mellon Investor Services LLC will act as the Fund's
transfer agent, registrar and dividend disbursing agent (the "Transfer Agent")
pursuant to a Transfer Agency Agreement, dated as of [ ], 2004 (the "Transfer
Agency Agreement"). The Investment Adviser and UBS Securities LLC (the "Managing
Representative") have entered into a Shareholder Servicing Agreement, dated as
of [ ], 2004 (the "Shareholder Servicing Agreement"). The Investment Adviser has
entered into a Lead Managing Underwriter Additional Compensation Agreement with
UBS Securities LLC, dated as of [ ], 2004; a Lead Managing Underwriter
Additional Compensation Agreement with ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, dated as of [ ], 2004; and a Qualifying Underwriter Additional
Compensation Agreement with [ ] dated as of [ ], 2004 (collectively, the
"Additional Compensation Agreements"). In addition, the Fund has adopted a
dividend reinvestment plan (the "Dividend Reinvestment Plan") pursuant to which
holders of Shares may elect to reinvest their dividends in additional Shares of
the Fund.
The Fund, the Investment Adviser and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and representations
and subject to the terms and conditions herein set forth, the Fund
agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the
Fund the aggregate number of Firm Shares set forth opposite the name of
such Underwriter in Schedule A attached hereto in each case at a
purchase price of $19.10 per Firm Share. The Fund is advised that the
Underwriters intend (i) to make a public offering of their respective
portions of the Firm Shares as soon after the effective date of the
Registration Statement as is advisable and (ii) initially to offer the
Firm Shares upon the terms set forth in the Prospectus. The
Underwriters may from time to time increase or decrease the public
offering price after the initial public offering to such extent as they
may determine.
In addition, the Fund hereby grants to the several
Underwriters the option to purchase, and upon the basis of the
warranties and representations and subject to the terms and conditions
herein set forth, the Underwriters shall have the right to purchase,
severally and not jointly, from the Fund, ratably in accordance with
the number of Firm Shares to be purchased by each of them, all or a
portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm
Shares, at the same purchase price per share to be paid by the
Underwriters to the Fund for the Firm Shares. This option may be
exercised by you on behalf of the several Underwriters at any time and
from time to time on or before the forty-fifth day following the date
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hereof, by written notice to the Fund. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being
exercised and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the
"Additional Time of Purchase"); provided, however, that the Additional
Time of Purchase shall not be earlier than the Time of Purchase (as
defined below) nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the tenth
business day after the date on which the option shall have been
exercised. The number of Additional Shares to be sold to each
Underwriter shall be the number which bears the same proportion to the
aggregate number of Additional Shares being purchased as the number of
Firm Shares set forth opposite the name of such Underwriter on Schedule
A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional
shares).
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Fund by Federal Funds wire transfer,
against delivery of the certificates for the Firm Shares to you
through the facilities of the Depository Trust Company ("DTC") for the
respective accounts of the Underwriters. Such payment and delivery
shall be made at 10:00 A.M., New York City time on the third business
day following the date of this Underwriting Agreement (unless another
date or time shall be agreed to by you and the Fund). The time at
which such payment and delivery are actually made is hereinafter
sometimes called the "Time of Purchase." Certificates for the Firm
Shares shall be delivered to you in definitive form in such names and
in such denominations as you shall specify on the second business day
preceding the Time of Purchase. For the purpose of expediting the
checking of the certificates for the Firm Shares by you, the Fund
agrees to make such certificates available to you for such purpose at
least one full business day preceding the Time of Purchase.
Payment of the purchase price for the Additional Shares shall
be made at the Additional Time of Purchase in the same manner and at
the same office as the payment for the Firm Shares. Certificates for
the Additional Shares shall be delivered to you in definitive form in
such names and in such denominations as you shall specify no later than
the second business day preceding the Additional Time of Purchase. For
the purpose of expediting the checking of the certificates for the
Additional Shares by you, the Fund agrees to make such certificates
available to you for such purpose at least one full business day
preceding the Additional Time of Purchase. The Time of Purchase and the
Additional Time of Purchase are sometimes referred to herein as the
"Closing Dates."
3. Representations and Warranties of the Fund and the Investment
Adviser. Each of the Fund and the Investment Adviser jointly and
severally represents and warrants to each Underwriter as follows:
4
(a) On (A) the Effective Date and the date on which the Prospectus is
first filed with the Commission pursuant to Rule 497(b), (h) or (j)
under the Act, as the case may be, (B) the date on which any
post-effective amendment to the Registration Statement (except any
post-effective amendment which is filed with the Commission after the
later of (x) one year from the date of this Underwriting Agreement or
(y) the date on which the distribution of the Shares is completed)
became or becomes effective or any amendment or supplement to the
Prospectus was or is filed with the Commission and (C) the Closing
Dates, the Registration Statement, the Prospectus and any such
amendment or supplement thereto and the Notification complied or will
comply in all material respects with the requirements of the Act and
the Investment Company Act, as the case may be. On the Effective Date
and on the date that any post-effective amendment to the Registration
Statement (except any post-effective amendment which is filed with the
Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which the distribution of
the Shares is completed) became or becomes effective, neither the
Registration Statement nor any such amendment did or will contain any
untrue statement of a material fact or omit to state a material fact
required to be stated in it or necessary to make the statements in it
not misleading. On the Effective Date and, if applicable, the date the
Prospectus or any amendment or supplement to the Prospectus was or is
filed with the Commission and on the Closing Dates, the Prospectus did
not or will not, as the case may be, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
in it or necessary to make the statements in it, in light of the
circumstances under which they were made, not misleading. The
foregoing representations in this Section 3(a) do not apply to
statements or omissions relating to the Underwriters made in reliance
on and in conformity with information furnished in writing to the Fund
by you expressly for use in the Registration Statement, the
Prospectus, or any amendments or supplements thereto, as described in
Section 9(f) hereof.
(b) The Fund has been duly formed, is validly existing as a
Massachusetts business trust, with full power and authority to conduct
its business as described in the Registration Statement and
Prospectus; the Fund is duly licensed and qualified to do business and
in good standing in each jurisdiction in which its ownership or
leasing of property or its conducting of business requires such
qualification, except where the failure to be so licensed and
qualified, either alone or in the aggregate, would not result in a
Material Adverse Effect (as defined below in Section 3(n)); and the
Fund owns, possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary to carry on its
business as contemplated in the Prospectus, except such licenses,
permits, consents, orders, approvals and other authorizations of the
Fund which the failure to obtain, either alone or in the aggregate,
would not result in a Material Adverse Effect. The Fund has no
subsidiaries.
5
(c) The capitalization of the Fund is as set forth in the Registration
Statement and the Prospectus. The Shares conform to the description of
them in the Prospectus. All the outstanding Shares have been duly
authorized and are validly issued, fully paid and, except to the
extent set forth in the Prospectus, nonassessable. The Shares to be
issued and delivered to and paid for by the Underwriters in accordance
with this Underwriting Agreement against payment therefor as provided
by this Underwriting Agreement have been duly authorized and, when
issued and delivered to the Underwriters, will have been validly
issued and will be fully paid and, except to the extent set forth in
the Prospectus, nonassessable. No person is entitled to any preemptive
or other similar rights with respect to the Shares.
(d) The Fund is duly registered with the Commission under the
Investment Company Act as a diversified, closed-end management
investment company, and, subject to the filing of a final amendment to
the Registration Statement, or any required filing under Rule 430A or
Rule 497 under the Securities Act (the "Final Amendment"), if not
already filed, all action under the Act and the Investment Company
Act, as the case may be, necessary under the federal securities laws
on the part of the Fund to make the public offering and consummate the
sale of the Shares as provided in this Underwriting Agreement has or
will have been taken by the Fund.
(e) The Fund has full power and authority to enter into each of this
Underwriting Agreement, the Investment Advisory Agreement, the Custody
Agreement, the Transfer Agency Agreement and the Dividend Reinvestment
Plan (collectively, the "Fund Agreements") and to perform all of the
terms and provisions hereof and thereof to be carried out by it, and
(i) each Fund Agreement has been duly and validly authorized, executed
and delivered by or on behalf of the Fund, (ii) each Fund Agreement
does not violate in any material respect any of the applicable
provisions of the Investment Company Act or the Investment Advisers
Act of 1940, as amended, and the rules and regulations thereunder
(collectively called the "Advisers Act"), as the case may be, and
(iii) assuming due authorization, execution and delivery by the other
parties thereto, each Fund Agreement constitutes the legal, valid and
binding obligation of the Fund enforceable in accordance with its
terms, (A) subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and
to general equitable principles (regardless of whether enforcement is
sought in a proceeding in equity or at law) and (B) except as rights
to indemnity thereunder may be limited by federal or state securities
laws.
6
(f) None of (i) the execution and delivery by the Fund of the Fund
Agreements, (ii) the issue and sale by the Fund of the Shares as
contemplated by this Underwriting Agreement and (iii) the performance
by the Fund of its obligations under any of the Fund Agreements or
consummation by the Fund of the other transactions contemplated by the
Fund Agreements conflict with or will conflict with, or result or will
result in a breach of, the Agreement and Declaration of Trust or the
By-laws of the Fund or any agreement or instrument to which the Fund
is a party or by which the Fund is bound, or any law, rule or
regulation, or order of any court, governmental instrumentality,
securities exchange or association or arbitrator, whether foreign or
domestic, applicable to the Fund, other than state securities or "blue
sky" laws applicable in connection with the purchase and distribution
of the Shares by the Underwriters pursuant to this Underwriting
Agreement.
(g) The Fund is not currently in breach of, or in default under, any
written agreement or instrument to which it is a party or by which it
or its property is bound or affected, except for such breaches or
defaults that do not, either alone or in the aggregate, have a
Material Adverse Effect (as defined below in Section 3(n)).
(h) No person has any right to the registration of any securities of
the Fund because of the filing of the Registration Statement.
(i) No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required to be obtained by the Fund
prior to the Closing Dates for the consummation by the Fund of the
transactions to be performed by the Fund or the performance by the
Fund of all the terms and provisions to be performed by or on behalf
of it in each case as contemplated in the Fund Agreements, except such
as (i) have been obtained under the Act, the Investment Company Act or
the Advisers Act and (ii) may be required by the New York Stock
Exchange or under state securities or "blue sky" laws in connection
with the purchase and distribution of the Shares by the Underwriters
pursuant to this Underwriting Agreement.
(j) The Shares are duly authorized for listing, subject to official
notice of issuance, on the New York Stock Exchange, and the Fund's
Registration Statement on Form 8-A, under the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder (the
"Exchange Act"), has become effective.
(k) Deloitte & Touche LLP, whose report appears in the Prospectus, are
independent public auditors with respect to the Fund as required by
the Act and the Investment Company Act.
7
(l) The statement of assets and liabilities included in the
Registration Statement and the Prospectus presents fairly in
all material respects, in accordance with generally accepted
accounting principles in the United States applied on a
consistent basis, the financial position of the Fund as of the
date indicated.
(m) The Fund will maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's
general or specific authorization, (ii) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the
recorded accountability for assets is compared with existing
assets through an asset reconciliation procedure or otherwise
at reasonable intervals and appropriate action is taken with
respect to any differences.
(n) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise
stated therein, (i) there has been no material adverse change
in the condition, financial or otherwise, business affairs or
business of the Fund, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (ii) there
have been no transactions entered into by the Fund other than
those in the ordinary course of its business and (iii) there
has been no dividend or distribution of any kind declared,
paid or made on any class of its capital shares.
(o) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending,
or, to the knowledge of the Fund, threatened against or
affecting the Fund, which (i) might result in any material
adverse change in the condition, financial or otherwise,
business affairs or business prospects of the Fund or might
have a Material Adverse Effect on the properties or assets of
the Fund or (ii) is of a character required to be described in
the Registration Statement or the Prospectus; and there are no
contracts, franchises or other documents that are of a
character required to be described in, or that are required to
be filed as exhibits to, the Registration Statement that have
not been described or filed as required.
(p) Except for stabilization transactions conducted by the
Managing Representative, and except for tender offers, Share
repurchases and the issuance or purchase of Shares pursuant to
the Dividend Reinvestment Plan effected following the date on
which the distribution of the Shares is completed in
accordance with the policies of the Fund as set forth in the
Prospectus, the Fund has not taken and will not take, directly
or indirectly, any action designed or which might be
reasonably expected to cause or result in, or which will
constitute, stabilization or manipulation of the price of the
Shares in violation of applicable federal securities laws.
8
(q) The Fund intends to direct the investment of the proceeds of
the offering of the Shares in such a manner as to comply with
the requirements of Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code").
(r) No advertising, sales literature or other promotional
materials (excluding road show slides or road show tapes)
were authorized or prepared by or on behalf of the Fund or
the Investment Adviser or any representative thereof for use
in connection with the public offering or sale of the Shares
other than the definitive client brochure and the broker
selling memo filed with the NASD on January 20, 2004
(collectively referred to as the "sales materials") and the
prospecting letter filed with the NASD on January 28, 2004;
the sales materials and any road show slides or road show
tapes complied and comply in all material respects with the
applicable requirements of the Act and the rules and
interpretations of the NASD; and no broker kits, road show
slides, road show tapes or sales materials authorized or
prepared by the Fund or authorized or prepared on behalf of
the Fund by the Investment Adviser or any representative
thereof for use in connection with the public offering or
sale of the Shares contained or contains any untrue
statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary
in order to make the statements therein not misleading.
4. Representations and Warranties of the Investment Adviser. The Investment
Adviser represents to each Underwriter as follows:
(a) The Investment Adviser has been duly formed, is validly
existing as a limited liability company under the laws of
Delaware with full power and authority to perform its
obligations under this Underwriting Agreement, the
Shareholder Servicing Agreement, the Investment Advisory
Agreement and the Additional Compensation Agreements
(collectively, this Underwriting Agreement, the Shareholder
Servicing Agreement, the Investment Advisory Agreement and
the Additional Compensation Agreements being referred to
herein as the "Investment Adviser Agreements"), and the
Investment Adviser is duly licensed and qualified to do
business and in good standing in each jurisdiction in which
it is required to be so qualified in order to perform its
obligations under the Investment Adviser Agreements; and the
Investment Adviser owns, possesses or has obtained and
currently maintains all governmental licenses, permits,
consents, orders, approvals and other authorizations,
whether foreign or domestic, necessary to perform its
obligations under the Investment Adviser Agreements.
9
(b) The Investment Adviser is (i) registered as an investment
adviser under the Advisers Act and (ii) not prohibited by the
Advisers Act or the Investment Company Act from acting as the
investment adviser for the Fund as contemplated by the Investment
Advisory Agreement, the Registration Statement and the
Prospectus.
(c) The Investment Adviser has full power and authority to enter
into each of the Investment Adviser Agreements and to carry out
all the terms and provisions hereof and thereof to be carried out
by it; and each Investment Adviser Agreement has been duly and
validly authorized, executed and delivered by the Investment
Adviser; none of the Investment Adviser Agreements violate any of
the applicable provisions of the Investment Company Act or the
Advisers Act; and, assuming due authorization, execution and
delivery by the other parties thereto, each Investment Adviser
Agreement constitutes a legal, valid and binding obligation of
the Investment Adviser, enforceable in accordance with its terms,
(i) subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally
and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and
(ii) except as rights to indemnity thereunder may be limited by
federal or state securities laws.
(d) Neither (i) the execution and delivery by the Investment
Adviser of any Investment Adviser Agreement nor (ii) the
consummation by the Investment Adviser of the transactions
contemplated by, or the performance of its obligations under, any
Investment Adviser Agreement conflicts or will conflict with, or
results or will result in a breach of, the limited liability
company agreement or other organizational documents of the
Investment Adviser or any agreement or instrument to which the
Investment Adviser is a party or by which the Investment Adviser
is bound, or any law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association
or arbitrator, whether foreign or domestic, applicable to the
Investment Adviser, except in each case for such conflicts or
breaches which do not, either alone or in the aggregate, have a
Material Adverse Effect upon the Investment Adviser's ability to
perform its obligations under the Investment Adviser Agreements.
(e) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or
association, whether foreign or domestic, is required to be
obtained by the Investment Adviser on or prior to the Closing
Dates for the consummation of the transactions contemplated in,
or the performance by the Investment Adviser of its obligations
under, any Investment Adviser Agreement, as the case may be,
except such as (i) have been obtained under the Act, the
Investment Company Act or the Advisers Act and (ii) may be
required by the New York Stock Exchange or under state securities
or "blue sky" laws in connection with the purchase and
distribution of the Shares by the Underwriters pursuant to this
Underwriting Agreement.
10
(f) The description of the Investment Adviser and its business and
the statements attributable to the Investment Adviser in the
Registration Statement and the Prospectus comply in all
material respects with the requirements of the Act and the
Investment Company Act and do not contain any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the
statements therein not misleading (and, solely with respect to
the Prospectus, in the light of the circumstances under which
they were made).
(g) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending
or, to the knowledge of the Investment Adviser, threatened
against or affecting the Investment Adviser of a nature
required to be disclosed in the Registration Statement or
Prospectus.
(h) Except for stabilization activities conducted by the Managing
Representative and except for tender offers, Share repurchases
and the issuance or purchase of Shares pursuant to the
Dividend Reinvestment Plan effected following the date on
which the distribution of the Shares is completed in
accordance with the policies of the Fund as set forth in the
Prospectus, the Investment Adviser has not taken and will not
take, directly or indirectly, any action designed, or which
might reasonably be expected to cause or result in, or which
will constitute, stabilization or manipulation of the price of
the Shares in violation of applicable federal securities laws.
(i) The Investment Adviser has not made available any promotional
materials intended for use only by qualified broker-dealers
and registered representatives thereof by means of an Internet
web site or similar electronic means.
5. Agreements of the Parties.
(a) If the Registration Statement relating to the Shares has
not yet become effective, the Fund will promptly file the
Final Amendment, if not previously filed, with the
Commission, and will use its best efforts to cause such
Registration Statement to become effective and, as soon as
the Fund is advised, will advise the Managing Representative
when the Registration Statement or any amendment thereto has
become effective. If the Registration Statement has become
effective and the Prospectus contained therein omits certain
information at the time of effectiveness pursuant to Rule
430A under the Act, the Fund will file a Prospectus pursuant
to Rule 497(h) under the Act as promptly as practicable, but
no later than the second business day following the earlier
of the date of the determination of the offering price of
the Shares or the date the Prospectus is first used after
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the Effective Date. If the Registration Statement has become
effective and the Prospectus contained therein does not so
omit such information, the Fund will file a Prospectus
pursuant to Rule 497(b) or (j) under the Act as promptly as
practicable, but no later than the fifth business day
following the date of the later of the Effective Date or the
commencement of the public offering of the Shares after the
Effective Date. In either case, the Fund will provide you
satisfactory evidence of the filing. The Fund will not file
with the Commission any Prospectus or any other amendment
(except any post-effective amendment which is filed with the
Commission after the later of (x) one year from the date of
this Underwriting Agreement or (y) the date on which
distribution of the Shares is completed) or supplement to
the Registration Statement or the Prospectus unless a copy
has first been submitted to the Managing Representative a
reasonable time before its filing and the Managing
Representative has not objected to it in writing within a
reasonable time after receiving the copy.
(b) For the period of three years from the date hereof, the
Fund will advise the Managing Representative promptly (1) of
the issuance by the Commission of any order in respect of
the Fund or the Investment Adviser or which relates to the
offering of the Shares, (2) of the initiation or threatening
of any proceedings for, or receipt by the Fund of any notice
with respect to, the suspension of the qualification of the
Shares for sale in any jurisdiction or the issuance of any
order by the Commission suspending the effectiveness of the
Registration Statement, (3) of receipt by the Fund, or any
representative or attorney of the Fund, of any other
communication from the Commission relating to the offering
of the Shares, the Registration Statement, the Notification,
any Preliminary Prospectus, the Prospectus or to the
transactions contemplated by this Underwriting Agreement and
(4) the issuance by any court, regulatory body,
administrative agency or other governmental agency or body,
whether foreign or domestic, of any order, ruling or decree,
or the threat to initiate any proceedings with respect
thereto, regarding the offering of the Shares by the Fund.
The Fund will make every reasonable effort to prevent the
issuance of any order suspending the effectiveness of the
Registration Statement and, if any such order is issued, to
obtain its lifting as soon as possible.
(c) If not delivered prior to the date of this Underwriting
Agreement, the Fund will deliver to the Managing
Representative, without charge, a signed copy of the
Registration Statement and the Notification and of any
amendments (except any post-effective amendment which is filed
with the Commission after the later of (x) one year from the
date of this Underwriting Agreement or (y) the date on which
the distribution of the Shares is completed) to either the
Registration Statement or the Notification (including all
exhibits filed with any such document) and as many conformed
copies of the Registration Statement and any amendments
thereto (except any post-effective amendment which is filed
with the Commission after the later of (x) one year from the
date of this Underwriting Agreement or (y) the date on which
the distribution of the Shares is completed) (excluding
exhibits) as the Managing Representative may reasonably
request.
12
(d) During such period as a prospectus is required by law to
be delivered by an underwriter or a dealer, the Fund will
deliver, without charge, to you, the Underwriters and any
dealers, at such office or offices as you may designate, as
many copies of the Prospectus as you may reasonably request,
and, if any event occurs during such period as a result of
which it is necessary to amend or supplement the Prospectus,
in order to make the statements therein, in light of the
circumstances existing when such Prospectus is delivered to
a purchaser of Shares, not misleading in any material
respect, or if during such period it is necessary to amend
or supplement the Prospectus to comply with the Act or the
Investment Company Act, the Fund promptly will prepare,
submit to the Managing Representative, file with the
Commission and deliver, without charge, to the Underwriters
and to dealers (whose names and addresses the Managing
Representative will furnish to the Fund) to whom Shares may
have been sold by the Underwriters, and to other dealers on
request, amendments or supplements to the Prospectus so that
the statements in such Prospectus, as so amended or
supplemented, will not, in light of the circumstances
existing when such Prospectus is delivered to a purchaser,
be misleading in any material respect and will comply with
the Act and the Investment Company Act. Delivery by the
Underwriters of any such amendments or supplements to the
Prospectus will not constitute a waiver of any of the
conditions in Section 6 hereof.
(e) The Fund will make generally available to holders of the
Fund's securities, as soon as practicable but in no event
later than the last day of the 18th full calendar month
following the calendar quarter in which the Effective Date
falls, an earnings statement, if applicable, satisfying the
provisions of Section 11(a) of the Act and, at the option of
the Fund, Rule 158 under the Act.
(f) The Fund will take such actions as the Managing Representative
reasonably requests in order to qualify the Shares for offer
and sale under the securities or "blue sky" laws of such
jurisdictions as the Managing Representative reasonably
designates; provided that the Fund shall not be required in
connection therewith or as a condition thereof to qualify as a
foreign corporation or to execute a general consent to service
of process in any jurisdiction.
13
(g) If the transactions contemplated by this Underwriting
Agreement are consummated, the Fund shall pay all costs and
expenses incident to the performance of the obligations of
the Fund under this Underwriting Agreement (to the extent
such expenses do not, in the aggregate, exceed $0.04 per
Share), including but not limited to costs and expenses of
or relating to (1) the preparation, printing and filing of
the Registration Statement and exhibits to it, each
Preliminary Prospectus, the Prospectus and all amendments
and supplements thereto, (2) the issuance of the Shares and
the preparation and delivery of certificates for the Shares,
(3) the registration or qualification of the Shares for
offer and sale under the securities or "blue sky" laws of
the jurisdictions referred to in the foregoing paragraph,
including the fees and disbursements of counsel for the
Underwriters in that connection, and the preparation and
printing of any preliminary and supplemental "blue sky"
memoranda, (4) the furnishing (including costs of design,
production, shipping and mailing) to the Underwriters and
dealers of copies of each Preliminary Prospectus relating to
the Shares, the sales materials, the Prospectus, and all
amendments or supplements to the Prospectus, and of the
other documents required by this Section to be so furnished,
(5) the filing requirements of the NASD, in connection with
its review of the financing, including filing fees and the
fees, disbursements and other charges of counsel for the
Underwriters in that connection, (6) all transfer taxes, if
any, with respect to the sale and delivery of the Shares to
the Underwriters, (7) the listing of the Shares on the New
York Stock Exchange and (8) the transfer agent for the
Shares. To the extent the foregoing costs and expenses
incident to the performance of the obligations of the Fund
under this Underwriting Agreement exceed, in the aggregate,
$0.04 per Share, ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers or an affiliate will
pay all such excess costs and expenses.
(h) If the transactions contemplated by this Underwriting
Agreement are not consummated, except as otherwise provided
herein, no party will be under any liability to any other
party, except that (i) if this Underwriting Agreement is
terminated by (A) the Fund or the Investment Adviser
pursuant to any of the provisions hereof (otherwise than
pursuant to Section 8 hereof) or (B) by you or the
Underwriters because of any inability, failure or refusal on
the part of the Fund or the Investment Adviser to comply
with any material terms or because any of the conditions in
Section 6 are not satisfied, ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers or an
affiliate and the Fund, jointly and severally, will
reimburse the Underwriters for all out-of-pocket expenses
(including the reasonable fees, disbursements and other
charges of their counsel) reasonably incurred by them in
connection with the proposed purchase and sale of the Shares
and (ii) no Underwriter who has failed or refused to
purchase the Shares agreed to be purchased by it under this
Underwriting Agreement, in breach of its obligations
pursuant to this Underwriting Agreement, will be relieved of
liability to the Fund and the Investment Adviser and the
other Underwriters for damages occasioned by its default.
14
(i) Without the prior written consent of the Managing
Representative, the Fund will not offer, sell or register
with the Commission, or announce an offering of, any equity
securities of the Fund, within 180 days after the Effective
Date, except for the Shares as described in the Prospectus
and any issuances of Shares pursuant to the Dividend
Reinvestment Plan and except in connection with any offering
of preferred shares of beneficial interest as contemplated
by the Prospectus.
(j) The Fund will use its best efforts to list the Shares on
the New York Stock Exchange and comply with the rules and
regulations of such exchange.
(k) The Fund will direct the investment of the net proceeds
of the offering of the Shares in such a manner as to comply
with the investment objective and policies of the Fund as
described in the Prospectus.
6. Conditions of the Underwriters' Obligations. The obligations
of the Underwriters to purchase the Shares are subject to the
accuracy on the date of this Underwriting Agreement, and on
each of the Closing Dates, of the representations of the Fund
and the Investment Adviser in this Underwriting Agreement, to
the accuracy and completeness of all statements made by the
Fund, the Investment Adviser or any of their respective
officers in any certificate delivered to the Managing
Representative or its counsel pursuant to this Underwriting
Agreement, to performance by the Fund and the Investment
Adviser of their respective obligations under this
Underwriting Agreement and to each of the following additional
conditions:
(a) The Registration Statement must have become effective by
5:30 p.m., New York City time, on the date of this
Underwriting Agreement or such later date and time as the
Managing Representative consents to in writing. The
Prospectus must have been filed in accordance with Rule
497(b), (h) or (j), as the case may be, under the Act.
(b) No order suspending the effectiveness of the
Registration Statement may be in effect and no proceedings
for such purpose may be pending before or, to the knowledge
of counsel to the Underwriters, threatened by the
Commission, and any requests for additional information on
the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) must
be complied with or waived to the reasonable satisfaction of
the Managing Representative.
(c) Since the dates as of which information is given in the
Registration Statement and the Prospectus, (i) there must
not have been any material adverse change in the number of
outstanding Shares or liabilities of the Fund except as set
forth in or contemplated by the Prospectus (provided that a
change in the Fund's net asset value, liabilities or
portfolio securities arising in the course of its normal
investment operations shall not be deemed to be a material
adverse change); (ii) there must not have been any material
adverse change in the general affairs, prospects,
management, business, financial condition or results of
operations of the Fund or the Investment Adviser whether or
not arising from transactions in the ordinary course of
business as set forth in or contemplated by the Prospectus
15
(provided that a change in the Fund's net asset value,
liabilities or portfolio securities arising in the course of
its normal investment operations shall not be deemed to be a
material adverse change); (iii) the Fund must not have
sustained any material interference with its business from
any court or from any legislative or other governmental
action, order or decree, whether foreign or domestic, not
described in the Registration Statement and Prospectus; and
(iv) there must not have occurred any event that makes
untrue or incorrect in any material respect any statement or
information contained in the Registration Statement or
Prospectus or that is not reflected in the Registration
Statement or Prospectus but should be reflected therein in
order to make the statements or information therein (in the
case of the Prospectus, in light of the circumstances in
which they were made) not misleading in any material
respect; if, in the judgment of the Managing Representative,
any such development referred to in clause (i), (ii), (iii)
or (iv) of this paragraph (c) makes it impracticable or
inadvisable to consummate the sale and delivery of the
Shares pursuant to this Underwriting Agreement by the
Underwriters, at the initial public offering price of the
Shares.
(d) The Managing Representative must have received on each
Closing Date a certificate, dated such date, of the
President or a Vice-President and the chief financial or
accounting officer of each of the Fund and the Investment
Adviser certifying in their capacity as such officers that
(i) the signers have examined the Registration Statement,
the Prospectus and this Underwriting Agreement, (ii) the
representations of the Fund (with respect to the
certificates from such Fund officers) and the
representations of the Investment Adviser (with respect to
the certificates from such officers of the Investment
Adviser) in this Underwriting Agreement are accurate on and
as of the date of the certificate, (iii) there has not been
any material adverse change in the general affairs,
prospects, management, business, financial condition or
results of operations of the Fund (with respect to the
certificates from such Fund officers) or the Investment
Adviser (with respect to the certificates from such officers
of the Investment Adviser), which change would have a
Material Adverse Effect on the ability of the Fund or the
Investment Adviser, as the case may be, to fulfill its
obligations under this Underwriting Agreement or the
Investment Advisory Agreement, whether or not arising from
transactions in the ordinary course of business, (iv) with
respect to the Fund only, no order suspending the
16
effectiveness of the Registration Statement or prohibiting
the sale of any of the Shares has been issued and no
proceedings for any such purpose are pending before or
threatened by the Commission or any other regulatory body,
whether foreign or domestic, (v) no order having a Material
Adverse Effect on the ability of the Investment Adviser to
fulfill its obligations under any of the Investment Adviser
Agreements has been issued and no proceedings for any such
purpose are pending before or threatened by the Commission
or any other regulatory body, whether foreign or domestic,
and (vi) each of the Fund (with respect to the certificates
from such Fund officers) and the Investment Adviser (with
respect to the certificates from such officers of the
Investment Adviser) has performed all of its respective
agreements that this Underwriting Agreement requires it to
perform by such Closing Date (to the extent not waived in
writing by the Managing Representative).
(e) You must receive on each Closing Date the opinions dated
such Closing Date substantially in the form of Schedules B
and C to this Underwriting Agreement from the counsel
identified in each such Schedules.
(f) You must receive on each Closing Date from Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP an opinion dated such
Closing Date with respect to the Fund, the Shares, the
Registration Statement and the Prospectus, this Underwriting
Agreement and the form and sufficiency of all proceedings
taken in connection with the sale and delivery of the
Shares. Such opinion and proceedings shall fulfill the
requirements of this Section 6(f) only if such opinion and
proceedings are satisfactory in all respects to the Managing
Representative. The Fund and the Investment Adviser must
have furnished to such counsel such documents as counsel may
reasonably request for the purpose of enabling them to
render such opinion.
(g) The Managing Representative must receive on the date
this Underwriting Agreement is signed and delivered by you a
signed letter, dated such date, substantially in the form of
Schedule D to this Underwriting Agreement from the firm of
accountants designated in such Schedule. The Managing
Representative also must receive on each Closing Date a
signed letter from such accountants, dated as of such
Closing Date, confirming on the basis of a review in
accordance with the procedures set forth in their earlier
letter that nothing has come to their attention during the
period from a date not more than five business days before
the date of this Underwriting Agreement, specified in the
letter, to a date not more than five business days before
such Closing Date, that would require any change in their
letter referred to in the foregoing sentence.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Underwriting Agreement will comply only if
they are in form and scope reasonably satisfactory to counsel for the
Underwriters, provided that any such documents, forms of which are
annexed hereto, shall be deemed satisfactory to such counsel if
substantially in such form.
7. Termination. This Underwriting Agreement may be terminated by the Managing
Representative by notifying the Fund at any time:
17
(a) before the later of the effectiveness of the
Registration Statement and the time when any of the Shares
are first generally offered pursuant to this Underwriting
Agreement by the Managing Representative to dealers by
letter or telegram;
(b) at or before any Closing Date if, in the sole judgment
of the Managing Representative, payment for and delivery of
any Shares is rendered impracticable or inadvisable because
(i) trading in the equity securities of the Fund is
suspended by the Commission or by the principal exchange
that lists the Shares, (ii) trading in securities generally
on the New York Stock Exchange or the Nasdaq Stock Market
shall have been suspended or limited or minimum or maximum
prices shall have been generally established on such
exchange or over-the-counter market, (iii) additional
material governmental restrictions, not in force on the date
of this Underwriting Agreement, have been imposed upon
trading in securities or trading has been suspended on any
U.S. securities exchange, (iv) a general banking moratorium
has been established by U.S. federal or New York authorities
or (v) any material adverse change in the financial or
securities markets in the United States or in political,
financial or economic conditions in the United States or any
outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or
war or other calamity or crisis shall have occurred the
effect of any of which is such as to make it, in the sole
judgment of the Managing Representative, impracticable or
inadvisable to market the Shares on the terms and in the
manner contemplated by the Prospectus; or
(c) at or before any Closing Date, if any of the conditions
specified in Section 6 have not been fulfilled when and as
required by this Underwriting Agreement.
8. Substitution of Underwriters. If one or more of the Underwriters fails
(other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase on any Closing Date the Shares agreed
to be purchased on such Closing Date by such Underwriter or Underwriters,
the Managing Representative may find one or more substitute underwriters to
purchase such Shares or make such other arrangements as the Managing
Representative deems advisable, or one or more of the remaining
Underwriters may agree to purchase such Shares in such proportions as may
be approved by the Managing Representative, in each case upon the terms set
forth in this Underwriting Agreement. If no such arrangements have been
made within 36 hours after such Closing Date, and
(a) the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date does not exceed 10% of the
Shares that the Underwriters are obligated to purchase on
such Closing Date, each of the nondefaulting Underwriters
will be obligated to purchase such Shares on the terms set
forth in this Underwriting Agreement in proportion to their
respective obligations under this Underwriting Agreement, or
18
(b) the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date exceeds 10% of the Shares
to be purchased by all the Underwriters on such Closing
Date, the Fund will be entitled to an additional period of
24 hours within which to find one or more substitute
underwriters reasonably satisfactory to the Managing
Representative to purchase such Shares on the terms set
forth in this Underwriting Agreement.
In any such case, either the Managing Representative or the
Fund will have the right to postpone the applicable Closing Date for
not more than five business days in order that necessary changes and
arrangements (including any necessary amendments or supplements to the
Registration Statement or the Prospectus) may be effected by the
Managing Representative and the Fund. If the number of Shares to be
purchased on such Closing Date by such defaulting Underwriter or
Underwriters exceeds 10% of the Shares that the Underwriters are
obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Fund make arrangements pursuant to
this Section within the period stated for the purchase of the Shares
that the defaulting Underwriters agreed to purchase, this Underwriting
Agreement will terminate without liability on the part of any
nondefaulting Underwriter, the Fund or the Investment Adviser, except
as provided in Sections 5(h) and 9 hereof. This Section 8 will not
affect the liability of any defaulting Underwriter to the Fund or the
nondefaulting Underwriters arising out of such default. A substitute
underwriter will become a Underwriter for all purposes of this
Underwriting Agreement.
9. Indemnity and Contribution.
(a) Each of the Fund and the Investment Adviser, jointly and
severally, agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and
any person who controls any Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act,
and the successors and assigns of all of the foregoing
persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the
Exchange Act, the Investment Company Act, the Advisers Act,
the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or in
the Registration Statement as amended by any post-effective
amendment thereof by the Fund) or in a Prospectus (the term
"Prospectus" for the purpose of this Section 9 being deemed
to include any Preliminary Prospectus, the sales materials
prepared or authorized by the Fund, the Prospectus and the
Prospectus as amended or supplemented by the Fund), or
arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in
either such Registration Statement or Prospectus or
19
necessary to make the statements made therein not
misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with
information furnished in writing by or on behalf of any
Underwriter through you to the Fund or the Investment
Adviser expressly for use with reference to such Underwriter
in such Registration Statement or such Prospectus or arises
out of or is based upon any omission or alleged omission to
state a material fact in connection with such information
required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not
misleading, provided, however, that the indemnity agreement
contained in this subsection (a) with respect to any
Preliminary Prospectus or amended Preliminary Prospectus
shall not inure to the benefit of any Underwriter (or to the
benefit of any person controlling such Underwriter) from
whom the person asserting any such loss, damage, expense,
liability or claim purchased the Shares which is the subject
thereof if the Prospectus corrected any such alleged untrue
statement or omission and if such Underwriter failed to send
or give a copy of the Prospectus to such person at or prior
to the written confirmation of the sale of such Shares to
such person, unless the failure is the result of
noncompliance by the Fund with Section 5(d) hereof.
If any action, suit or proceeding (together, a
"Proceeding") is brought against an Underwriter or any such
person in respect of which indemnity may be sought against
the Fund or the Investment Adviser pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly
notify the Fund or the Investment Adviser, as the case may
be, in writing of the institution of such Proceeding and the
Fund or the Investment Adviser shall assume the defense of
such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that
the omission to so notify the Fund or the Investment Adviser
shall not relieve the Fund or the Investment Adviser from
any liability which the Fund or the Investment Adviser may
have to any Underwriter or any such person or otherwise,
unless and only to the extent that such omission results in
the forfeiture of substantive rights or defenses by the
indemnifying party. Such Underwriter or such person shall
have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall
be at the expense of such Underwriter or of such person
unless the employment of such counsel shall have been
authorized in writing by the Fund or the Investment Adviser,
as the case may be, in connection with the defense of such
Proceeding or the Fund or the Investment Adviser shall not
have, within a reasonable period of time in light of the
20
circumstances, employed counsel to have charge of the
defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be
defenses available to it or them which are different from,
additional to or in conflict with those available to the
Fund or the Investment Adviser (in which case the Fund or
the Investment Adviser shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified
party or parties), in any of which events such fees and
expenses shall be borne by the Fund or the Investment
Adviser and paid as incurred (it being understood, however,
that the Fund or the Investment Adviser shall not be liable
for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such
Proceeding). None of the Fund or the Investment Adviser
shall be liable for any settlement of any Proceeding
effected without its written consent, but if settled with
the written consent of the Fund or the Investment Adviser,
the Fund or the Investment Adviser, as the case may be,
agrees to indemnify and hold harmless any Underwriter and
any such person from and against any loss or liability by
reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by
the second sentence of this paragraph, then the indemnifying
party agrees that it shall be liable for any settlement of
any Proceeding effected without its written consent if (i)
such settlement is entered into more than 60 business days
after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at
least 30 days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and
indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such
indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend
and hold harmless the Fund and the Investment Adviser, its
trustees, directors, members and officers, and any person
who controls the Fund or the Investment Adviser within the
meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage,
expense, liability or claim (including the reasonable cost
of investigation) which, jointly or severally, the Fund or
the Investment Adviser or any such person may incur under
the Act, the Exchange Act, the Investment Company Act, the
Advisers Act, the common law or otherwise, insofar as such
21
loss, damage, expense, liability or claim arises out of or
is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity
with information furnished in writing by or on behalf of
such Underwriter through you to the Fund or the Investment
Adviser expressly for use with reference to such Underwriter
in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof
by the Fund) or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a
material fact in connection with such information required
to be stated in such Registration Statement or such
Prospectus or necessary to make such information not
misleading.
If any Proceeding is brought against the Fund, the
Investment Adviser or any such person in respect of which
indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Fund or the Investment Adviser
or such person shall promptly notify such Underwriter in
writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify
such Underwriter shall not relieve such Underwriter from any
liability which such Underwriter may have to the Fund, the
Investment Adviser or any such person or otherwise. The
Fund, the Investment Adviser or such person shall have the
right to employ its own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of
the Fund, the Investment Adviser or such person, as the case
may be, unless the employment of such counsel shall have
been authorized in writing by such Underwriter in connection
with the defense of such Proceeding or such Underwriter
shall not have, within a reasonable period of time in light
of the circumstances, employed counsel to have charge of the
defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or
additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have
the right to direct the defense of such Proceeding on behalf
of the indemnified party or parties, but such Underwriter
may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the
expense of such Underwriter), in any of which events such
fees and expenses shall be borne by such Underwriter and
paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more
than one separate counsel (in addition to any local counsel)
in any one Proceeding or series of related Proceedings in
the same jurisdiction representing the indemnified parties
22
who are parties to such Proceeding). No Underwriter shall be
liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter, but if
settled with the written consent of such Underwriter, such
Underwriter agrees to indemnify and hold harmless the Fund
or the Investment Adviser and any such person from and
against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall
be liable for any settlement of any Proceeding effected
without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by
such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of
such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice
of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of
such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a)
and (b) of this Section 9 in respect of any losses, damages,
expenses, liabilities or claims referred to therein, then
each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such
proportion as is appropriate to reflect the relative
benefits received by the Fund and the Investment Adviser on
the one hand and the Underwriters on the other from the
offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also
the relative fault of the Fund and the Investment Adviser on
the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted
in such losses, damages, expenses, liabilities or claims, as
well as any other relevant equitable considerations. The
relative benefits received by the Fund or the Investment
Adviser on the one hand and the Underwriters on the other
shall be deemed to be in the same respective proportions as
the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses)
received by the Fund and the total underwriting discounts
23
and commissions received by the Underwriters bear to the
aggregate public offering price of the Shares. The relative
fault of the Fund and the Investment Adviser on the one hand
and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or
omission or alleged omission relates to information supplied
by the Fund or the Investment 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 amount paid or payable by a party
as a result of the losses, damages, expenses, liabilities
and claims referred to in this subsection shall be deemed to
include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating,
preparing to defend or defending any Proceeding.
(d) The Fund and the Investment Adviser and the Underwriters
agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable
considerations referred to in subsection (c) above.
Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in
excess of the fees and commissions received by such
Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and
representations of the Fund contained in this Underwriting
Agreement shall remain in full force and effect regardless
of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any
person (including each partner, officer or director of such
person) who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or
by or on behalf of the Fund, the Investment Adviser, its
trustees, directors, members or officers or any person who
controls the Fund or the Investment Adviser within the
meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this
Underwriting Agreement or the issuance and delivery of the
Shares. The Fund or the Investment Adviser and each
Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case
of the Fund and the Investment Adviser, against any of the
Fund's or the Investment Adviser's trustees, directors,
members or officers in connection with the issuance and sale
of the Shares, or in connection with the Registration
Statement or Prospectus.
(f) The Fund and the Investment Adviser each acknowledge
that (1) the statements with respect to the public offering
of the Shares as set forth on the cover page of the
Prospectus and (2) the statements relating to stabilization,
to selling concessions and reallowances of selling
concessions and with respect to discretionary accounts under
the caption "Underwriting" in the Prospectus constitute the
only information furnished in writing to the Fund by the
Managing Representative on behalf of the Underwriters
expressly for use in such document. The Underwriters
severally confirm that these statements are correct in all
material respects and were so furnished by or on behalf of
the Underwriters severally for use in the Prospectus.
24
(g) Notwithstanding any other provisions in this Section 9,
no party shall be entitled to indemnification or
contribution under this Underwriting Agreement against any
loss, claim, liability, expense or damage arising by reason
of such person's willful misfeasance, bad faith, gross
negligence or reckless disregard in the performance of its
duties hereunder.
10. Notices. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or
sent to UBS Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Syndicate Department and, if to the Fund or the Investment
Adviser, shall be sufficient in all respects if delivered or sent to
the Fund or the Investment Adviser, as the case may be, at the offices
of the Fund or the Investment Adviser at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President and
General Counsel.
11. Governing Law; Construction. This Agreement and any claim, counterclaim
or dispute of any kind or nature whatsoever arising out of or in any
way relating to this Agreement ("Claim"), directly or indirectly, shall
be governed by, and construed in accordance with, the laws of the State
of New York. The Section headings in this Agreement have been inserted
as a matter of convenience of reference and are not a part of this
Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim
may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New
York or in the United States District Court for the Southern District
of New York, which courts shall have jurisdiction over the
adjudication of such matters, and the Fund consents to the
jurisdiction of such courts and personal service with respect thereto.
The Fund hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating
to this Underwriting Agreement is brought by any third party against
UBS Securities LLC or any indemnified party. Each of UBS Securities
LLC, the Fund (on its behalf and, to the extent permitted by
applicable law, on behalf of its shareholders and affiliates) and the
Investment Adviser (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) waives
all right to trial by jury in any action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Underwriting Agreement. Each of the Fund
and the Investment Adviser agrees that a final judgment in any such
action, proceeding or counterclaim brought in any such court may be
enforced in any other courts in the jurisdiction of which the Fund or
the Investment Adviser, as the case may be, is or may be subject, by
suit upon such judgment.
25
13. Parties at Interest. The Underwriting Agreement herein set forth has
been and is made solely for the benefit of the Underwriters and the
Fund and, to the extent provided in Section 9 hereof, the controlling
persons, trustees, directors, members and officers referred to in such
section and their respective successors, assigns, heirs, personal
representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any
right under or by virtue of this Underwriting Agreement.
14. Counterparts. This Underwriting Agreement may be signed by the parties
in one or more counterparts which together shall constitute one and the
same agreement among the parties.
15. Successors and Assigns. This Underwriting Agreement shall be binding
upon the Underwriters, the Fund or the Investment Adviser, and any
successor or assign of any substantial portion of the Fund's, the
Investment Adviser's, or any of the Underwriters' respective businesses
and/or assets.
16. Disclaimer of Liability of Trustees and Beneficiaries. A copy of the
Underwriting Agreement and the Agreement and Declaration of Trust of
the Fund is on file with the Secretary of The Commonwealth of
Massachusetts, and notice hereby is given that this Underwriting
Agreement is executed on behalf of the Trustees of the Fund as Trustees
and not individually and that the obligations arising out of this
Underwriting Agreement are not binding upon any of the Trustees or
beneficiaries individually but are binding only upon the assets and
properties of the Fund.
26
If the foregoing correctly sets forth the understanding among the Fund
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement among the Fund, the Investment Adviser and the Underwriters,
severally.
Very truly yours,
▇▇▇▇ ▇▇▇▇▇▇▇ TAX-ADVANTAGED
DIVIDEND INCOME FUND
--------------------------
By:
Title:
▇▇▇▇ ▇▇▇▇▇▇▇ ADVISERS, LLC
--------------------------
By:
Title:
27
Accepted and agreed to as of the
date first above written, on
behalf of themselves and
the other several Underwriters
named in Schedule A
By: UBS SECURITIES LLC
--------------------------
By:
Title:
--------------------------
By:
Title:
28
SCHEDULE A
Number of Shares
Name to be Purchased
---- ---------------
UBS Securities LLC [ ]
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated [ ]
Total..................................................[ ]
SCHEDULE B
FORM OF OPINION OF
▇▇▇▇ & ▇▇▇▇ REGARDING THE FUND
[ ], 2004
UBS Securities LLC
As Managing Representative of the
Several Underwriters
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: ▇▇▇▇ ▇▇▇▇▇▇▇ Tax-Advantaged Dividend Income Fund
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 6(e) of the
Underwriting Agreement, dated as of [ ], 2004 (the "Underwriting Agreement"),
among you, as Managing Representative of the several Underwriters, ▇▇▇▇ ▇▇▇▇▇▇▇
Advisers, LLC, a Delaware limited liability company (the "Adviser"), and ▇▇▇▇
▇▇▇▇▇▇▇ Tax-Advantaged Dividend Income Fund, a Massachusetts business trust (the
"Trust"). Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings ascribed to them in the Underwriting Agreement.
We have acted as counsel for the Trust and the Adviser in connection
with the sale to the Underwriters by the Trust of [ ] common shares of
beneficial interest, no par value per share, of the Trust (collectively, the
"Shares") pursuant to the Section 1 of the Underwriting Agreement. As such
counsel, we have assisted in the preparation and filing with the Securities and
Exchange Commission (the "Commission") of the Trust's Registration Statement on
Form N-2 dated August 20, 2003 (File Nos. 333-108102 and 811-21416), and
amendments [No. 1, No. 2 and No. 3] 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 [ ], 2004 and statement of
additional information dated [ ], 2004 included therein, as filed pursuant to
Rule 497 of the Securities Act of 1933, as amended (the "Securities Act"), on [
], 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,
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 Registration Statement, the
Prospectus, the Statement of Additional Information, the Underwriting Agreement,
certificates of representatives of the Trust, 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.
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 Underwriting Agreement and statements contained in
the Registration Statement. We have not attempted to verify independently such
facts, although nothing has come to our attention which has caused us to
question the accuracy of such certificates, statements or representations.
In our examination of the documents referred to above, we have assumed
the genuineness of all signatures, the legal capacity of each individual signing
such documents, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as copies,
and the authenticity of the originals of such documents.
Any reference to "our knowledge" or "best of our knowledge" or to any
matters "known to us," "of which we are aware" or "coming to our attention" or
any variation of any of the foregoing, shall mean the conscious awareness, as to
the existence or absence of any facts which would contradict the opinions and
statements so expressed, of the attorneys of this firm who have rendered
substantive attention to the transaction to which this opinion relates. Other
than as expressly set forth below, we have not undertaken, for purposes of this
opinion, any independent investigation to determine the existence or absence of
such facts, and no inference as to our knowledge of the existence or absence of
such facts should be drawn from the fact of our representation of the 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 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 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.
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
C-2
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 paragraph 9 below, (i) we are expressing no opinion as to the
enforceability of the indemnification or contribution provisions of the
Underwriting Agreement, (ii) we note that a court may refuse to enforce, or may
limit the application of, the Underwriting 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, (b) to
the effect that rights and remedies are not exclusive, that every right or
remedy is cumulative and may be exercised in addition to or with any other right
or remedy and does not preclude recourse to one or more other rights or
remedies, (c) relating to the effect of invalidity or unenforceability of any
provision of any agreement on the validity or enforceability of any other
provision thereof, (d) requiring the payment of penalties, consequential damages
or liquidated damages, (e) which is in violation of public policy, including,
without limitation, any provision relating to non-competition and
non-solicitation or relating to indemnification and contribution with respect to
securities law matters, (f) purporting to indemnify any person against his, her
or its own negligence or intentional misconduct, (g) which provides that the
terms of any agreement may not be waived or modified except in writing or (h)
relating to choice of law or consent to jurisdiction.
Our opinion expressed in paragraph 1 below as to the legal existence
and good standing of the Trust is based solely on a certificate of legal
existence issued by the Secretary of State of The Commonwealth of The
Commonwealth of Massachusetts, a copy of which has been made available to your
counsel, and our opinion with respect to such matters is rendered as of the date
of such certificate and limited accordingly. We express no opinion as to the tax
good standing of the Trust in any jurisdiction.
In connection with our opinion expressed in paragraph 2 below, insofar
as it relates to full payment for the outstanding Common Shares of the Trust, we
have relied solely on a certificate of an officer of the Trust. Our opinion
expressed in paragraph 2 below as to issued and outstanding shares of beneficial
interest of the Trust is based solely on a certificate of the Trust's transfer
agent, which we assume to be complete and accurate. Our opinion expressed in
paragraph 2 below as to the due and valid issuance of all outstanding Common
Shares of the Trust is based solely on a review of the corporate 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 opinions expressed in paragraphs 4 and 10 below as to the
effectiveness of the Registration Statement under the Securities Act and the
Trust's Registration Statement on Form 8-A under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), are based solely upon oral advice from
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ at the Division of Investment Management of the Commission
that such Registration Statements were declared effective as of [ ] [a.m/p.m.]
on [ ], 2004. Our opinion expressed in paragraph 10 below as to the listing of
the Common Shares on the New York Stock Exchange (the "Exchange") is solely
based upon a letter from the Exchange to the Trust, dated [ ], 2004.
C-3
Our opinions in paragraphs 2 and 3 below are qualified to the extent
that, under Massachusetts law, shareholders of a Massachusetts business trust
may be held personally liable for the obligations of the Trust. However, the
Declaration of Trust disclaims shareholders liability for acts or obligations of
the Trust. Also, the Declaration of Trust provides for indemnification out of
Trust property for all loss and expense of any shareholder held personally
liable for the obligations of the Trust.
We are opining herein solely with respect to the state laws of The
Commonwealth of Massachusetts and the federal laws of the United States of
America. To the extent that the laws of any other jurisdiction govern any of the
matters as to which we express an opinion below, we have assumed for purposes of
this opinion, with your permission and without independent investigation, that
the laws of such jurisdiction are identical to the state laws of The
Commonwealth of Massachusetts, and we express no opinion as to whether such
assumption is reasonable or correct. We note that the Underwriting Agreement,
the Shareholder Servicing Agreement between the Adviser and UBS Securities LLC,
dated [ ], 2004 (the "Shareholder Servicing Agreement") and each of the
Additional Compensation Agreements between the Adviser and UBS Securities LLC,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and the Qualifying
Underwriters, each dated [ ], 2004 (collectively, the "Additional Compensation
Agreements"), are governed by New York law. We express no opinion with respect
to the securities or Blue Sky laws of any state of the United States, with
respect to state or federal antifraud laws (except to the extent expressly
provided in the third to last paragraph below) or with respect to the approval
by the National Association of Securities Dealers, Inc. of the offering.
On the basis of and subject to the foregoing, we are of the opinion
that:
1. The Trust is validly existing as a business trust in good standing
under the state laws of The Commonwealth of Massachusetts and has
business trust power and authority to carry on its business and own,
lease and operate its properties as described in the Prospectus, and
to enter into and perform its obligations under the Underwriting
Agreement.
2. 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 Statement of Additional Information under the caption
"Financial Highlights." All issued and outstanding shares of
beneficial interest of the Trust as of the date hereof have been duly
authorized, validly issued, and fully paid and are not subject to any
preemptive or similar statutory rights under the Massachusetts
Business Trust statute or, to our knowledge, similar contractual
rights granted by the Trust.
C-4
3. The Shares have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor pursuant to the
Underwriting Agreement, will be validly issued and fully paid.
4. The Registration Statement has been declared effective under the
Securities Act. Any required filing of the Prospectus pursuant to Rule
497(c) or Rule 497(h) has been made in the manner and within the time
period required by Rule 497. To the best of our knowledge, no stop
order suspending the effectiveness of the Registration Statement has
been issued under the Securities Act. 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.
5. The Trust is registered with the Commission under the 1940 Act as a
closed-end, diversified management investment company; and to our
knowledge, no order of suspension or revocation of such registration
has been issued nor have any proceedings therefor been initiated or,
to the best of our knowledge, threatened by the Commission.
6. The Underwriting Agreement has been duly authorized, executed and
delivered by the Trust.
7. Each of the Investment Management Contract between the Trust and
the Adviser, dated [ ] __, 2004 (the "Investment Advisory Agreement"),
the Custodian Agreement between the Trust and The Bank of New York,
dated [ ] __, 2004 (the "Custodian Agreement"), the Transfer Agency
Agreement between the Trust and Mellon Investor Services, LLC, dated [
] __, 2004 (the "Transfer Agency Agreement"), the Underwriting
Agreement, the Shareholder Servicing Agreement and the Additional
Compensation Agreements comply in all material respects with all
applicable provisions of the 1940 Act, the Investment Advisers Act of
1940, as amended (the "Advisers Act"), and the rules and regulations
of the Commission under the 1940 Act and the Advisers Act.
8. Each of the Investment Advisory Agreement, the Custodian Agreement,
and the Transfer Agency Agreement, has been duly authorized by all
requisite action on the part of the Trust, and duly executed and
delivered by the Trust, as of the dates noted therein. Assuming due
authorization, execution and delivery by the other parties thereto,
each of the Investment Advisory Agreement, the Custodian Agreement,
and the Transfer Agency Agreement constitutes a valid and binding
agreement of the Trust, enforceable against the Trust in accordance
with its terms.
9. The execution, delivery and performance of the Investment Advisory
Agreement, Transfer Agency Agreement, Custodian Agreement and the
Underwriting 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 filed as
C-5
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 transactions of the
type contemplated by the Underwriting Agreement, 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.
10. The Shares have been approved for listing on the New York Stock
Exchange and the Trust's Registration Statement on Form 8-A under the
Exchange Act has been declared effective.
11. To our knowledge, there are no legal or governmental proceedings
pending or threatened against the Trust.
12. The statements in the Prospectus under the captions "Description
of shares" and in Item 29 of Part C of the Registration Statement,
insofar as such statements constitute matters of law or legal
conclusions, are correct in all material respects.
13. The Trust does not require any tax or other rulings to enable it
to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended.
14. Each of the section in the Prospectus entitled "U.S. Federal
Income Tax Matters" and the section in the Statement of Additional
Information entitled "U.S. Federal Income Tax Matters" is a fair
summary of the principal United States federal income tax rules
currently in effect applicable to the Trust and to the purchase,
ownership and disposition of the Shares.
15. 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
including the notes and schedules thereto, or any other financial or
accounting data 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.
C-6
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, representatives of the Underwriters, counsel for the Underwriters
and the independent accountants of the Trust, at which conferences we made
inquiries of such persons and others and discussed the contents of the
Registration Statement and the Prospectus 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 Underwriters or the method of
distribution of the Shares by the Underwriters included therein), or that the
Prospectus and 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
notes and schedules thereto, or any other financial or accounting data included
therein or information relating to the Underwriters or the method of
distribution of the Shares by the Underwriters 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 Managing Representative of
the Underwriters, at the request of the Trust pursuant to the Underwriting
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 Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP in delivering their
opinion pursuant to Section 6(f) of the Underwriting Agreement is relying upon
this opinion as to matters of the state laws of The Commonwealth of
Massachusetts. We consent to such reliance.
C-7
Very truly yours,
▇▇▇▇ AND ▇▇▇▇ LLP
C-8
SCHEDULE C
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING ▇▇▇▇ ▇▇▇▇▇▇▇ ADVISERS, LLC
[ ], 2004
UBS Securities LLC
As Managing Representative of the
Several Underwriters
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: ▇▇▇▇ ▇▇▇▇▇▇▇ Tax-Advantaged Dividend Income Fund
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 6(e) of the
Underwriting Agreement dated as of [ ], 2004 (the "Underwriting Agreement"),
among you, as Managing Representative of the several Underwriters, ▇▇▇▇ ▇▇▇▇▇▇▇
Advisers, LLC, a Delaware limited liability company ("▇▇▇▇ ▇▇▇▇▇▇▇ Advisers"),
and ▇▇▇▇ ▇▇▇▇▇▇▇ Tax-Advantaged Dividend Income Fund, a Massachusetts business
trust (the "Fund"). Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings ascribed to them in the Underwriting
Agreement.
I am Senior Attorney and Assistant Secretary of ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers
and in such capacity have assisted in the preparation and filing with the
Securities and Exchange Commission (the "Commission") of the Fund's Registration
Statement on Form N-2 dated August 20, 2003 (File Nos. 333-108102 and
811-21416), and amendments [No. 1, No. 2 and No. 3] 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 [ ], 2004 and
statement of additional information dated [ ], 2004 included therein, as filed
pursuant to Rule 497 of the Securities Act of 1933, as amended (the "Securities
Act") on [ ], 2004, are referred to herein as the "Prospectus" and "Statement of
Additional Information."
I have examined and relied upon the Certificate of Formation and the
Limited Liability Company Agreement of ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers, the Underwriting
Agreement, certificates of public officials and such other documents, as I have
deemed necessary as a basis for the opinions hereinafter expressed.
For the purposes of this opinion, I have assumed that the agreements
referred to herein have been duly authorized, executed and delivered by all
parties thereto other than ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers, and that all such other
parties have all requisite power and authority to effect the transactions
contemplated by such agreements. I have also assumed that each such agreement is
the valid and binding obligation of each party thereto other than ▇▇▇▇ ▇▇▇▇▇▇▇
Advisers and is enforceable against all such other parties in accordance with
its terms. I 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 ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers.
My 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. I
express no opinion as to the availability of any equitable or specific remedy
upon any breach of any of the agreements as to which I am 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 my
opinion in paragraph 4 below, (i) I am expressing no opinion as to the
enforceability of the indemnification or contribution provisions of the
Underwriting Agreement or the Shareholder Servicing Agreement, (ii) I note that
a court may refuse to enforce, or may limit the application of, the Underwriting
Agreement, the Additional Compensation Agreements or the Shareholder Servicing
Agreement or certain provisions thereof, as unconscionable or contrary to public
policy, and (iii) I have assumed compliance by all parties with federal and
state securities laws.
I 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 ▇▇▇▇ ▇▇▇▇▇▇▇
Advisers, (b) to the effect that rights and remedies are not exclusive, that
every right or remedy is cumulative and may be exercised in addition to or with
any other right or remedy and does not preclude recourse to one or more other
rights or remedies, (c) relating to the effect of invalidity or unenforceability
of any provision of any agreement on the validity or enforceability of any
provision thereof, (d) requiring the payment of penalties, consequential damages
or liquidated damages, (e) which is in violation or 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.
My opinion expressed in paragraph 1 below as to the valid existence of
▇▇▇▇ ▇▇▇▇▇▇▇ Advisers is based solely on a certificate of legal existence issued
by the Secretary of State of the State of Delaware, a copy of which has been
made available to your counsel, and my opinion with respect to this matter is
rendered as of the date of such certificate and limited accordingly. I express
no opinion as to the tax good standing of ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers in any
jurisdiction.
C-2
I have not made any investigation of the laws of any jurisdiction other
than the state laws of The Commonwealth of Massachusetts, the Delaware Limited
Liability Company Act statute and the federal laws of the United States of
America. To the extent that the laws of any other jurisdiction govern any of the
matters as to which I express an opinion below, I 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 I express no opinion as to whether such
assumption is reasonable or correct. I 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 or with respect to the approval by the National
Association of Securities Dealers, Inc. of the offering.
On the basis of and subject to the foregoing, I am of the opinion that:
1. ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers has been duly formed and is validly existing as a
limited liability company under the laws of the State of Delaware. ▇▇▇▇ ▇▇▇▇▇▇▇
Advisers has limited liability company 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 Underwriting
Agreement, the Shareholder Servicing Agreement, the Additional Compensation
Agreements and the Investment Advisory Agreement.
2. ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and is not
prohibited by the Advisers Act or the Investment Company Act of 1940, as amended
(the "Investment Company Act") from acting as investment adviser and
administrator for the Fund as contemplated by the Investment Advisory Agreement,
the Registration Statement and the Prospectus.
3. The Underwriting Agreement, the Shareholder Servicing Agreement, the
Investment Advisory Agreement and the Additional Compensation Agreement have
been duly authorized, executed and delivered by ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers, and the
Investment Advisory Agreement, the Shareholder Servicing Agreement and each
Additional Compensation Agreement each constitutes a valid and binding
obligation of ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers, enforceable against ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers
in accordance with their respective terms
4. The execution, delivery and performance of the Underwriting Agreement by ▇▇▇▇
▇▇▇▇▇▇▇ Advisers, the compliance by ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers with all the
provisions thereof and the consummation by ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers of the
transactions contemplated thereby do not and will not (A) require any consent,
approval, authorization or order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states 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
C-3
the assets of ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers pursuant to, any indenture, loan agreement,
mortgage, lease or other agreement or instrument to which ▇▇▇▇ ▇▇▇▇▇▇▇ Adviser
is a party filed as an exhibit to the Registration Statement, (C) violate or
conflict with the Certificate of Formation or the Limited Liability Company
Agreement of ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers, (D) violate or conflict with any applicable
federal and Massachusetts law, rule or regulation or the Delaware Limited
Liability Company statute, or (E) violate or conflict with any judgment, order
or decree specifically naming ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers or its property of which I
am aware.
vi. To my knowledge, there is no legal or governmental proceeding pending or
threatened against ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers that is either: (1) required by the
Securities Act or the Investment Company Act and their Rules and Regulations to
be described in the Registration Statement or Prospectus that is not already
described, or: (2) which would, under Section 9 of the Investment Company Act,
make ▇▇▇▇ ▇▇▇▇▇▇▇ Advisers ineligible to act as the Fund's investment adviser.
In connection with the registration of the Shares, I have advised ▇▇▇▇
▇▇▇▇▇▇▇ Advisers as to the requirements of the Securities Act, the Investment
Company Act and the applicable rules and regulations of the Commission
thereunder and have rendered other legal advice and assistance to ▇▇▇▇ ▇▇▇▇▇▇▇
Advisers in the course of the preparation of the registration Statement and the
Prospectus. Rendering such assistance involved, among other things, discussions
and inquiries concerning various legal and related subjects and reviews of
certain corporate records, documents and proceedings. I have also participated
in conferences with representatives of the Fund and its accountants and ▇▇▇▇
▇▇▇▇▇▇▇ Advisers at which the contents of the Registration Statement and
Prospectus and related matters were discussed. With your permission, I have not
undertaken, except as otherwise indicated herein, to determine independently,
and do not assume any responsibility for, the accuracy, completeness or fairness
of the statements in the Registration Statement or Prospectus. On the basis of
the information which was developed in the course of the performance of the
services referred to above, no information has come to my attention that would
lead me to believe that the Registration Statement, at the time it became
effective, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as of its date and as
of the date hereof, contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or that any amendment or supplement to the Prospectus, as
of its respective date, and as of the date hereof, contained any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements in the Prospectus, in the light of the
circumstances under which they were made, not misleading (except the financial
statements, schedules and other financial data included therein or any other
financial or accounting data included therein, as to which I express no view).
This opinion is based upon currently existing statutes, rules,
regulations and judicial decisions and is rendered as of the date hereof, and I
disclaim any obligation to advise you of any changes 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 I am opining only as to the matters expressly set forth herein,
and no opinion should be inferred as to any other matters.
C-4
This opinion is being furnished to you, as Managing Representative of
the Underwriters, pursuant to the Underwriting Agreement, is solely for the
benefit of the Underwriters, and may not be relied upon you for any other
purpose, or furnished to, quoted to or relied upon by any other party for any
purpose, without our prior written consent.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
C-5
SCHEDULE D
FORM OF ACCOUNTANT'S LETTER
[ ] , 2004
The Board of Trustees of
▇▇▇▇ ▇▇▇▇▇▇▇ Tax-Advantaged Dividend Income Fund
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of
▇▇▇▇ ▇▇▇▇▇▇▇ Tax-Advantaged Dividend Income Fund (the "Fund") as of ______, 2004
included in the Registration Statement on Form N-2 filed by the Fund under the
Securities Act of 1933 (the "Act") (File No. 333-108102) and under the
Investment Company Act of 1940 (the "1940 Act") (File No. 811-21416); such
statement and our report with respect to such statement are included in the
Registration Statement.
In connection with the Registration Statement:
1. We are independent public accountants with respect to the
Fund within the meaning of the Act and the applicable rules and
regulations thereunder.
2. In our opinion, the statement of assets and liabilities
included in the Registration Statement and audited by us complies as to
form in all respects with the applicable accounting requirements of the
Act, the 1940 Act and the respective rules and regulations thereunder.
3. For purposes of this letter we have read the minutes of all
meetings of the Shareholders, the Board of Trustees and all Committees
of the Board of Trustees of the Fund as set forth in the minute books
at the offices of the Fund, officials of the Fund having advised us
that the minutes of all such meetings through , 2004, were set forth
therein.
4. Fund officials have advised us that no financial statements
as of any date subsequent to , 2004, are available. We have made
inquiries of certain officials of the Fund who have responsibility for
financial and accounting matters regarding whether there was any change
at , 2004, in the capital shares or net assets of the Fund as compared
with amounts shown in the , 2004, statement of assets and liabilities
included in the Registration Statement, except for changes that the
Registration Statement discloses have occurred or may occur. On the
basis of our inquiries and our reading of the minutes as described in
Paragraph 3, nothing came to our attention that caused us to believe
that there were any such changes.
The foregoing procedures do not constitute an audit made in accordance
with generally accepted auditing standards. Accordingly, we make no
representations as to the sufficiency of the foregoing procedures for your
purposes.
This letter is solely for the information of the addressees and to
assist the underwriters in conducting and documenting their investigation of the
affairs of the Fund in connection with the offering of the securities covered by
the Registration Statement, and is not to be used, circulated, quoted or
otherwise referred to within or without the underwriting group for any other
purpose, including but not limited to the registration, purchase or sale of
securities, nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.
Very Truly Yours,
D-2