EXHIBIT(h)(1)
[____________] SHARES
XXXXXX BROTHERS/FIRST TRUST
INCOME OPPORTUNITY FUND
COMMON SHARES
UNDERWRITING AGREEMENT
[_____], 2003
XXXXXX BROTHERS INC.
As Representative of the
several underwriters named in Schedule 1 hereto
c/x XXXXXX BROTHERS INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Xxxxxx Brothers/First Trust Income Opportunity Fund, a Delaware
statutory trust (the "FUND"), proposes to sell [ ] shares (the "FIRM SHARES") of
the Fund's common shares of beneficial interest, no par value per share (the
"COMMON SHARES"). In addition, the Fund proposes to grant to the Underwriters
named in Schedule 1 hereto (the "UNDERWRITERS") an option to purchase up to an
additional [ ] Common Shares on the terms and for the purposes set forth in
Section 3 (the "OPTION SHARES"). The Firm Shares and the Option Shares, if
purchased, are hereinafter collectively called the "SHARES." The Fund, the
Fund's investment adviser, Xxxxxx Brothers Asset Management Inc., a Delaware
corporation (the "INVESTMENT ADVISER"), and the Fund's Subadviser, Lincoln
Capital Fixed Income Management Company, LLC, a Delaware limited liability
company (the "SUBADVISER," and together with the Investment Adviser, the
"ADVISERS"), each wishes to confirm its agreement concerning the purchase of the
Shares from the Fund by the Underwriters.
The Fund has entered into an Investment Advisory Agreement with the
Investment Adviser dated __________, 2003 (the "ADVISORY AGREEMENT"), a
Servicing Agreement with First Trust Portfolios L.P. ("FIRST TRUST") dated
__________, 2003 (the "SERVICING Agreement"), a Custodian Agreement with
Investors Bank & Trust ("IBT") dated _________, 2003 (the "CUSTODIAN
AGREEMENT"), an Administration Agreement with IBT dated ___________, 2003 (the
"ADMINISTRATION AGREEMENT") and a Transfer Agency and Service Agreement with IBT
dated __________, 2003 (the "TRANSFER AGENCY AGREEMENT"). Collectively, the
Advisory Agreement, the Servicing Agreement, the Custodian Agreement, the
Administration Agreement and the Transfer Agency Agreement are referred to
herein as the "FUND AGREEMENTS." The Investment Adviser has entered into an
Investment Sub-Advisory Agreement with the Subadviser dated __________, 2003
(the "SUB-ADVISORY AGREEMENT"), a Letter Agreement with First Trust dated
__________, 2003 regarding compensation payable by the Adviser to First Trust
(the "LETTER AGREEMENT") and an Underwriter Participation Agreement with First
Trust and the Fund dated __________, 2003 (the "UNDERWRITER PARTICIPATION
AGREEMENT"). Collectively, the Sub-Advisory Agreement, the Letter Agreement and
the Underwriter Participation Agreement are referred to herein as the "ADVISERS
AGREEMENTS." This Underwriting Agreement is herein referred to as the
"AGREEMENT."
SECTION 1. Representations, Warranties and Agreements of the Fund and the
Advisers. The Fund and the Advisers jointly and severally represent, warrant and
agree that:
(a) A registration statement on Form N-2 (Files No. 333-105069 and
811-21342) with respect to the Shares has (i) been prepared by the Fund in
conformity with the requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT"), the Investment Company Act of 1940, as amended (the "1940
ACT"), and the rules and regulations of the United States Securities and
Exchange Commission (the "COMMISSION") under the Securities Act (the "1933 ACT
RULES AND REGULATIONS") and the 1940 Act (the "1940 ACT RULES AND REGULATIONS,"
and, together with the 1933 Act Rules and Regulation, the "RULES AND
REGULATIONS"), (ii) been filed with the Commission under the Securities Act and
the 1940 Act and (iii) become effective under the Securities Act. If any
post-effective amendment to such registration statement has been filed with the
Commission prior to execution and delivery of this Agreement, the most recent
such amendment has been declared effective by the Commission. Copies of such
registration statement and each of the amendments thereto have been delivered by
the Fund to you as the representative (the "REPRESENTATIVE") of the
Underwriters. As used in this Agreement, "EFFECTIVE TIME" means the date and the
time as of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission; "EFFECTIVE
DATE" means the date of the Effective Time; "PRELIMINARY PROSPECTUS" means each
prospectus and related statement of additional information included in such
registration statement, or amendments thereof, before it became effective under
the Securities Act and any prospectus filed with the Commission by the Fund with
the consent of the Representative pursuant to Rule 497(a) of the 1933 Act Rules
and Regulations; "REGISTRATION STATEMENT" means such registration statement, as
amended at the Effective Time, including all information contained in the final
prospectus (including the statement of additional information) filed with the
Commission pursuant to Rule 497 of the 1933 Act Rules and Regulations and deemed
to be a part of the registration statement as of the Effective Time pursuant to
Rule 430A of the Rules and Regulations; and "PROSPECTUS" means the prospectus in
the form first used to confirm sales of Shares. If the Fund has filed an
abbreviated registration statement to register additional Common Shares pursuant
to Rule 462(b) under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"),
then any reference herein to the term "REGISTRATION STATEMENT" shall be deemed
to include such Rule 462 Registration Statement. The Commission has not issued
any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus.
(b) A notification of registration of the Fund as an investment
company under the 1940 Act on Form N-8A (the "1940 ACT NOTIFICATION") has been
prepared by the Fund in conformity with the 1940 Act and has been filed with the
Commission. A registration statement on Form 8-A (the "FORM 8-A") with respect
to the Shares has been prepared by the Fund in conformity with Section 12(g) of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") and the
rules and regulations under the Exchange Act and has been filed with the
Commission under the Exchange Act.
(c) The Registration Statement and the 1940 Act Notification
conform, and the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they become effective or are
filed with the Commission, as the case may be, conform in all respects to the
requirements of the Securities Act, the 1940 Act and the Rules and Regulations
and do not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and the 1940 Act Notification and any
amendment or supplement thereto) contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the Registration
Statement, the 1940 Act Notification or the Prospectus in reliance upon and in
conformity with written information furnished to the Fund through the
Representative by or on behalf of any Underwriter specifically for inclusion
therein.
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(d) The Fund has been duly formed and is validly existing as a
statutory trust in good standing under the laws of Delaware, is duly registered
and qualified to do business and is in good standing in each jurisdiction in
which its ownership or lease of property or the conduct of its business as
described in the Registration Statement and the Prospectus (and any amendment or
supplement to either) requires such qualification, and has all statutory trust
power and authority necessary to own or hold property and to conduct the
business as described in the Registration Statement and the Prospectus (and any
amendment or supplement to either), except where the failure to so qualify or to
be in good standing would not reasonably be expected to have a material adverse
effect on business, management, financial condition, stockholders' equity or
results of operations of the Fund (a "MATERIAL ADVERSE EFFECT"). The Fund has no
subsidiaries.
(e) The Fund has an authorized capitalization as set forth in the
Registration Statement and the Prospectus. All of the issued shares of capital
stock of the Fund have been duly and validly authorized and issued, were issued
in compliance with federal and state securities laws, are fully paid and
non-assessable and conform to the description thereof contained in the
Registration Statement and the Prospectus (and any amendment or supplement to
either).
(f) The Shares to be issued and sold by the Fund to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor in accordance with this Agreement, will
be duly and validly issued, fully paid and non-assessable; and the Shares will
conform to the description thereof contained in the Registration Statement and
the Prospectus (and any amendment or supplement to either). Upon payment for and
delivery of the Shares to be sold by the Fund pursuant to this Agreement, the
Underwriters will acquire good and valid title to such Shares, in each case free
and clear of all liens, encumbrances, equities, preemptive rights, subscription
rights, other rights to purchase, voting or transfer restrictions and other
claims.
(g) This Agreement and each of the Fund Agreements have been duly
authorized, executed and delivered by the Fund and constitute valid and legally
binding agreements of the Fund, enforceable against the Fund in accordance with
their terms, except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws and subject to the qualification
that the enforceability of the Fund's obligations hereunder and thereunder may
be limited by bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and by general equitable
principles.
(h) The execution, delivery and performance of this Agreement and
the Fund Agreements by the Fund and the consummation of the transactions
contemplated hereby and thereby will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Fund is a party or by which the Fund is bound or to
which any of the property or assets of the Fund is subject, (ii) result in any
violation of the provisions of the Declaration of Trust (the "DECLARATION OF
TRUST") or by-laws of the Fund or (iii) result in the violation of any statute
or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Fund or any of its properties or assets, except in
the case of clauses (i) and (iii), such conflicts, breaches or violations that
in the aggregate would not reasonably be expected to have a Material Adverse
Effect; and except for the registration of the Shares under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Shares by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement and the Fund Agreements by the Fund
and the consummation of the transactions contemplated hereby and thereby.
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(i) There are no contracts, agreements or understandings between
the Fund and any person granting such person the right to require the Fund to
file a registration statement under the Securities Act with respect to any
securities of the Fund owned or to be owned by such person or to require the
Fund to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Fund under the Securities Act. The
holders of outstanding shares of the Fund's capital stock are not entitled to
preemptive or other rights to subscribe for the Shares. There are no outstanding
options, warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the Fund.
(j) Except for 6,667 Common Shares sold to the Investment Adviser,
the Fund has not sold or issued any shares of capital stock at any time
preceding the date of the Prospectus.
(k) The Fund has not sustained, since the date of the latest
audited financial statements included in the Prospectus, any material loss or
interference with its business that has had, or could reasonably be expected to
have, a Material Adverse Effect, whether from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree; and, since such date, there has
not been any change in the capital stock or long-term debt of the Fund or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Fund that has had or
could reasonably be expected to have a Material Adverse Effect, other than as
set forth or contemplated in the Prospectus.
(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the Fund, at the dates and for the periods indicated, and have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(m) Ernst & Young LLP, who have certified certain financial
statements of the Fund, whose report appears in the Prospectus and who have
delivered the letters referred to in Section 8(f) hereof, have represented to
the Fund that they are independent public accountants as required by the
Securities Act, the 1940 Act and the Rules and Regulations.
(n) The Fund carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its businesses and the
value of its property and as is customary for companies engaged in similar
businesses in similar industries.
(o) There are no legal or governmental proceedings pending to
which the Fund is a party or of which any property or assets of the Fund is the
subject which is reasonably likely to be determined adversely to the Fund and,
if determined adversely to the Fund, would be reasonably likely to have a
Material Adverse Effect; and to the best of the Fund's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(p) There are no contracts or other documents which are required
to be described in the Registration Statement or the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act, the 1940 Act or by
the Rules and Regulations which have not been described in the Registration
Statement or the Prospectus or filed as exhibits to the Registration Statement.
(q) No relationship, direct or indirect, exists between or among
the Fund on the one hand, and the trustees, officers, stockholders, suppliers or
service providers of the Fund on the other hand,
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which is required to be described in the Registration Statement or the
Prospectus which is not so described.
(r) The Fund has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has paid
all taxes due thereon, and no tax deficiency has been determined adversely to
the Fund (nor does the Fund have any knowledge of any tax deficiency which, if
determined adversely to the Fund, might have a Material Adverse Effect).
(s) Since the date as of which information is given in the
Registration Statement and the Prospectus through the date hereof, and except as
may otherwise be disclosed in the Prospectus, the Fund has not (i) issued or
granted any securities, (ii) incurred any liability or obligation, direct or
contingent, other than non-material liabilities and obligations which were
incurred in the ordinary course of business, (iii) entered into any transaction
not in the ordinary course of business or (iv) declared or paid any dividend on
its capital stock.
(t) The Fund (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable assurance
that (A) transactions are executed in accordance with management's authorization
and with the investment policies and restrictions of the Fund and the applicable
requirements of the 1940 Act, the 1940 Act Rules and Regulations and the
Internal Revenue Code of 1986, as amended (the "CODE"), (B) transactions are
recorded as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is permitted
only in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at reasonable
intervals.
(u) The Fund is not (i) in violation of its Declaration of Trust
or by-laws, (ii) in default, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its properties or
assets is subject or (iii) in violation of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets may be
subject or has failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business, except, in the case
of clauses (ii) and (iii), such defaults, events, violations or failures that in
the aggregate would not reasonably be expected to have a Material Adverse
Effect.
(v) Neither the Fund nor the Advisers, nor any trustee, director,
officer, agent, employee or other person associated with or acting on behalf of
the Fund or any of the Advisers, has used any funds of the Fund or the Advisers
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from any funds of the
Fund or the Advisers; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(w) Neither the Fund nor any employee or agent of the Fund nor any
Adviser has made any payment of funds of the Fund or the Advisers or received or
retained any funds, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus or the Registration
Statement.
(x) Except for the Underwriter Participation Agreement and the
Letter Agreement, there are no contracts, agreements or understandings between
the Fund or any of the Advisers and any person that
5
would give rise to a valid claim against the Fund or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with this
offering.
(y) The statistical, market-related and industry data included in
the Prospectus and the Registration Statement are based on or derived from
sources which the Fund believes to be reliable and accurate.
(z) The Fund, subject to the filing of the Prospectus under Rule
497 under the 1933 Act Rules and Regulations, has taken all required action
under the Securities Act, the 1940 Act and the Rules and Regulations to make the
public offering and consummate the sale of the Shares as contemplated by this
Agreement.
(aa) Except as stated in this Agreement and in the Prospectus (and
any amendment or supplement thereto), the Fund has not taken and shall not take,
directly or indirectly, any action designed to cause or result in, or which
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Shares to facilitate the sale
or resale of the Shares.
(bb) The Fund is duly registered under the 1940 Act as a
closed-end, diversified management investment company and the 1940 Act
Notification has been duly filed with the Commission, and, at the time of filing
thereof and at the time of filing any amendment or supplement thereto, conformed
in all material respects with all applicable provisions of the 1940 Act and the
1940 Act Rules and Regulations. The Fund has not received any notice from the
Commission pursuant to Section 8(e) of the 1940 Act with respect to the 1940 Act
Notification or the Registration Statement (or any amendment or supplement to
either of them).
(cc) The Fund and each of the Advisers owns or possesses adequate
rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights and licenses (collectively, the "INTELLECTUAL PROPERTY") necessary
for the conduct of its business (as described in the Prospectus).
(dd) All advertising, sales literature, promotional materials or
any other materials or information (including "prospectus wrappers", "broker
kits" and any roadshow or investor presentations), whether in oral, printed or
electronic form, authorized, provided or prepared by the Fund or the Advisers in
connection with the offering and sale of the Shares (collectively, the
"MARKETING MATERIALS") complied and comply in all material respects with the
applicable requirements of the Securities Act, the 1933 Act Rules and
Regulations and the rules and interpretations of the National Association of
Securities Dealers, Inc. ("NASD") and if required to be filed with the NASD
under the NASD's conduct rules were so filed. No Marketing Materials contained
or contains an untrue statement of a material fact or omitted or omits to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(ee) This Agreement and each of the Fund Agreements complies in all
material respects with all applicable provisions of the 1940 Act, the 1940 Act
Rules and Regulations, the Investment Advisers Act of 1940 (the "ADVISERS ACT"),
and the rules and regulations adopted by the Commission under the Advisers Act
(the "ADVISERS ACT RULES AND REGULATIONS").
(ff) The Shares have been duly approved for listing upon official
notice of issuance on the New York Stock Exchange (the "NYSE") and the Fund's
registration statement on Form 8-A under the Exchange Act has become effective.
6
(gg) The Fund will 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 Code and intends to qualify as a regulated investment
company under Subchapter M of the Code.
(hh) The Fund will comply with all applicable securities and other
applicable laws, rules and regulations, including, without limitation, the
Xxxxxxxx-Xxxxx Act of 2002, and will use its best efforts to cause the Fund's
trustees and officers, in their capacities as such, to comply with such laws,
rules and regulations, including, without limitation, the provisions of the
Xxxxxxxx-Xxxxx Act of 2002.
(ii) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), no trustee of the
Fund is an "interested person" (as defined in the 0000 Xxx) of the Fund or an
"affiliated person" (as defined in the 0000 Xxx) of any Underwriter listed in
Schedule 1 hereto.
SECTION 2. Representations, Warranties and Agreements of the Advisers. Each of
the Advisers severally as to itself only and not jointly or as to any other
party, represents, warrants and agrees that:
(a) Such Adviser has been duly incorporated, organized or formed
and is validly existing as a corporation or limited liability company, as the
case may be, in good standing under the laws of its jurisdiction of
incorporation, is duly registered and qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of property or the
conduct of its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either) requires such
qualification, and has all corporate or limited liability company power and
authority necessary to own or hold their respective properties and to conduct
the business as described in the Registration Statement and the Prospectus (and
any amendment or supplement to either), except where the failure to so qualify
or to be in good standing would not reasonably be expected to have a Material
Adverse Effect.
(b) Such Adviser is duly registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act, the 1940 Act, the
Advisers Act Rules and Regulations or the 1940 Act Rules and Regulations from
acting under the Fund Agreements (to which such Adviser is a party) or the
Advisers Agreements (to which such Adviser is a party) as contemplated by the
Registration Statement and the Prospectus (or any amendment or supplement
thereto).
(c) This Agreement, the Fund Agreements (to which such Adviser is
a party) and the Advisers Agreements (to which such Adviser is a party) have
each been duly authorized, executed and delivered by such Adviser, and
constitute valid and legally binding agreements of such Adviser, enforceable
against such Adviser in accordance with their terms, except as rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws and subject to the qualification that the enforceability of such
Adviser's obligations hereunder and thereunder may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
(d) The execution, delivery and performance of this Agreement, the
Fund Agreements (to which such Adviser is a party) and the Advisers Agreements
(to which such Adviser is a party) and the consummation of the transactions
contemplated hereby and thereby will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which such Adviser is a party or by which such Adviser is bound
or to which any of the property or assets of such Adviser is subject, (ii)
result in any violation of the provisions of the charter documents or by-laws of
such Adviser or (iii) result in the violation of any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over such Adviser or any of its properties or assets, except in the case of
7
clauses (i) and (iii), such conflicts, breaches or violations that in the
aggregate would not reasonably be expected to have a Material Adverse Effect;
and except for the registration of the Shares under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Shares by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Fund Agreements (to which such
Adviser is a party) and the Advisers Agreements (to which such Adviser is a
party) and the consummation of the transactions contemplated hereby and thereby.
(e) Such Adviser has the financial resources available to it
necessary for the performance of its services and obligations as contemplated in
the Registration Statement and the Prospectus (or any amendment or supplement
thereto) and under this Agreement and the Fund Agreements (to which such Adviser
is a party) and the Advisers Agreements (to which such Adviser is a party).
(f) Such Adviser carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of its businesses
and the value of its property and as is customary for companies engaged in
similar businesses in similar industries.
(g) The description of such Adviser and its business, and the
statements attributable to such Adviser, in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) complied and comply in all
material respects with the provisions of the Securities Act, the 1940 Act, the
Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations and did not and will not contain an untrue statement of a material
fact necessary to make the statements therein (in the case of a prospectus, in
light of the circumstances under which they were made) not misleading.
(h) There are no legal or governmental proceedings pending to
which such Adviser is a party or of which any property or assets of such Adviser
is the subject which is reasonably likely to be determined adversely to such
Adviser and, if determined adversely to such Adviser, would be reasonably likely
to have a Material Adverse Effect; and to the best of such Adviser's knowledge,
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(i) Since the date as of which information is given in the
Registration Statement and the Prospectus through the date hereof, and except as
may otherwise be disclosed in the Prospectus, there have been no transactions
entered into by such Adviser which are material to such Adviser other than in
the ordinary course of its business.
(j) This Agreement, each of the Fund Agreements (to which such
Adviser is a party) and the Advisers Agreements (to which such Adviser is a
party) comply in all material respects with all applicable provisions of the
1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and the Advisers
Act Rules and Regulations.
(k) Except as stated in this Agreement and in the Prospectus (and
any amendment or supplement thereto), such Adviser has not taken and shall not
take, directly or indirectly, any action designed to cause or result in, or
which constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Shares to facilitate the sale
or resale of the Shares.
(l) Such Adviser is not (i) in violation of its charter documents
or by-laws, (ii) in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to
8
which it is a party or by which it is bound or to which any of its properties or
assets is subject or (iii) in violation of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets may be
subject or has failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business, except, in the case
of clauses (ii) and (iii), such defaults, events, violations or failures that in
the aggregate would not reasonably be expected to have a Material Adverse
Effect.
SECTION 3. Purchase of the Shares by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Fund agrees to sell [ ] Firm Shares to the
several Underwriters and each of the Underwriters, severally and not jointly,
agrees to purchase the number of shares of the Firm Shares set forth opposite
that Underwriter's name in Schedule 1 hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Shares shall be rounded
among the Underwriters to avoid fractional shares, as the Representative may
determine.
In addition, the Fund grants to the Underwriters an option to purchase
up to [ ] Option Shares. Such option is granted for the purpose of covering
over-allotments in the sale of Firm Shares and is exercisable as provided in
Section 5 hereof. The Option Shares shall be purchased severally for the account
of the Underwriters in proportion to the number of shares of the Firm Shares set
forth opposite the name of such Underwriters in Schedule 1 hereto. The
respective purchase obligations of each Underwriter with respect to the Option
Shares shall be adjusted by the Representative so that no Underwriter shall be
obligated to purchase Option Shares other than in 100 share amounts.
The price of both the Firm Shares and any Option Shares shall be
$[15.00] per share.
The Fund shall not be obligated to deliver any of the Shares to be
delivered on any Delivery Date (as hereinafter defined), except upon payment for
all the Shares to be purchased on such Delivery Date as provided herein.
SECTION 4. Offering of Shares by the Underwriters. Upon authorization by the
Representative of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
SECTION 5. Delivery of and Payment for the Shares. Delivery of and payment for
the Firm Shares shall be made at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or through the facilities of the
Depository Trust Company or another mutually agreeable facility, at 10:00 A.M.,
New York City time, on [_________], 2003 or at such other date or place as shall
be determined by agreement between the Representative and the Fund (the "FIRST
DELIVERY DATE"). On the First Delivery Date, the Fund shall deliver or cause to
be delivered the Firm Shares to the Representative for the account of each
Underwriter against payment to or upon the order of the Fund of the purchase
price by wire transfer in immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Firm Shares shall be registered in such names and in such
denominations as the Representative shall request in writing not less than two
full business days prior to the First Delivery Date. If certificates
representing the Firm Shares are issued, then for the purpose of expediting the
checking and packaging of the certificates for the Firm Shares, the Fund shall
make the certificates representing the Firm Shares available for inspection by
the Representative in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the First Delivery Date.
9
The option granted in Section 3 will expire 45 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Fund by the Representative. Such
notice shall set forth the aggregate number of Option Shares as to which the
option is being exercised, the names in which the Option Shares are to be
registered, the denominations in which the Option Shares are to be issued and
the date and time, as determined by the Representative, when the Option Shares
are to be delivered; provided, however, that this date and time shall not be
earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the Option Shares are delivered are sometimes referred to as a
"SECOND DELIVERY DATE" and the First Delivery Date and any Second Delivery Date
are sometimes each referred to as a "DELIVERY DATE".
Delivery of and payment for the Option Shares shall be made at
the place specified in the first sentence of the first paragraph of this Section
5 (or at such other place as shall be determined by agreement between the
Representative and the Fund) at 10:00 A.M., New York City time, on such Second
Delivery Date. On such Second Delivery Date, the Fund shall deliver or cause to
be delivered the Option Shares to the Representative for the account of each
Underwriter against payment to or upon the order of the Fund of the purchase
price by wire transfer in immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Option Shares shall be registered in such names and in such
denominations as the Representative shall request in the aforesaid written
notice. If certificates representing the Option Shares are issued, then for the
purpose of expediting the checking and packaging of the certificates for the
Option Shares, the Fund shall make the certificates representing the Option
Shares available for inspection by the Representative in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to such
Second Delivery Date.
SECTION 6. Further Agreements of the Fund and the Advisers. The Fund and the
Advisers jointly and severally covenant and agree that:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective under the Securities Act before the offering of
the Firm Shares may commence, to use its reasonable best efforts to cause the
Registration Statement or such post-effective amendment to become effective
under the Securities Act as soon as possible; if the Registration Statement has
become effective and the Prospectus contained therein omits certain information
at the time of effectiveness pursuant to Rule 430A of the 1933 Act Rules and
Regulations, to file a Prospectus with the Commission pursuant to Rule 497(h) of
the 1933 Act Rules and Regulations as promptly as possible, not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement; if the Registration Statement does not
so omit such information, the Fund will file a Prospectus pursuant to 497(c) or
(j) of the Securities Act as promptly as possible, not later than the fifth
business day following the execution and delivery of this Agreement; to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus except as permitted herein; to advise the Representative, promptly
after it receives notice thereof, of the time when the Registration Statement or
any amendment thereto has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Representative with copies thereof; to advise the Representative, promptly after
it receives notice thereof, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any
10
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representative and to
counsel for the Underwriters a signed copy of the Registration Statement and the
1940 Act Notification each as originally filed with the Commission and each
amendment thereto, including all financial statements, consents and exhibits
thereto (except any post-effective amendment which is filed with the Commission
after the later of (x) one year from the date of this Agreement and (y) the date
on which the distribution of the Shares is completed);
(c) To deliver promptly to the Representative such number of the
following documents as the Representative shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Shares or any
other securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
the Representative and, upon their request, to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in securities
as many copies as the Representative may from time to time reasonably request of
an amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Fund or the Representative, be required by the
Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 497 of the 1933 Act Rules and Regulations, to furnish a copy
thereof to the Representative and counsel for the Underwriters and obtain the
consent of the Representative to the filing, which consent shall not be
unreasonably withheld;
(f) As soon as practicable after the Effective Date, to make
generally available to the Fund's security holders and to deliver to the
Representative an earnings statement of the Fund (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Fund, Rule 158);
(g) For a period of five years following the Effective Date, to
furnish to the Representative, to the extent such information is not freely
available on the Internet, copies of all materials furnished by the Fund to its
shareholders and all public reports and all reports and financial statements
furnished by the Fund to the principal national securities exchange upon which
the Common Shares may be listed pursuant to requirements of or agreements with
such exchange or to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Shares for offering and
sale under the securities laws of such jurisdictions as the Representative may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the
11
Shares; provided that in connection therewith the Fund shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus, not
to, without the prior written consent of the Representative on behalf of the
Underwriters (which consent may be given or withheld in the Representative's
sole discretion), directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person at any time
in the future of) any Common Shares or securities convertible into or
exchangeable for Common Shares, or sell or grant options, rights or warrants
with respect to any Common Shares or securities convertible into or exchangeable
for Common Shares, or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such Common Shares, whether any such transaction described
in clause (1) or (2) above is to be settled by delivery of Common Shares or
other securities, in cash or otherwise;
(j) To comply with the rules and regulations of the NYSE;
(k) To apply the net proceeds from the sale of the Shares in a
manner consistent with the investment objectives, policies and restrictions of
the Fund as set forth in the Prospectus; and
(l) To comply with the undertaking set forth in paragraph 6 of
Item 33 of Part C of the Registration Statement.
SECTION 7. Expenses. The Fund agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Shares and any taxes payable
in that connection; (b) the costs incident to the preparation, printing and
filing under the Securities Act and the 1940 Act of the Registration Statement
and any amendments and exhibits thereto, the 1940 Act Notification and the Form
8-A; (c) the costs of distributing the Registration Statement as originally
filed and each amendment thereto and any post-effective amendments thereof
(including, in each case, exhibits), any Preliminary Prospectus, the Prospectus
and any amendment or supplement to the Prospectus, all as provided in this
Agreement; (d) the costs of producing and distributing this Agreement, any
supplemental agreement among the Underwriters and any other related documents in
connection with the offering, purchase, sale and delivery of the Shares; (e) the
preparation, issuance and delivery of the certificates for the Shares, if any,
to the Underwriters, including any stock or other transfer taxes and any stamp
or other duties payable upon the sale, issuance or delivery of the Shares to the
Underwriters, (f) the filing fees incident to securing the review by the NASD of
the terms of sale of the Shares (including related fees and expenses of counsel
to the Underwriters); (g) any applicable listing or other fees; (h) the fees and
expenses of qualifying the Shares under the securities laws of the several
jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (i) all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, up to
$0.005 per Share; (j) the fees and expenses of the Fund's accountants and the
fees and expenses of counsel for the Fund and of the transfer agent; (k) the
costs and expenses of the Fund relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the Fund,
travel and lodging expenses of the representatives and officers of the Fund, the
Advisers and any such consultants, and the cost of any aircraft chartered in
connection with the road show and (l) all other costs and expenses incident to
the performance of the obligations of the Fund under this Agreement. The
Investment Adviser will pay (x) all of the Fund's organizational expenses and
(y) to the extent that the aggregate of the foregoing costs and expenses
incidental to the performance of the obligations (other than organizational
expenses) of the Fund under this Agreement exceed $0.03 per Share, all such
costs and expenses.
12
SECTION 8. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Fund and each of the
Advisers contained herein, to the performance by the Fund and each of the
Advisers of their respective obligations hereunder, and to each of the following
additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Fund Agreements, the
Advisers Agreements, the Shares, the Registration Statement and the Prospectus,
and all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Fund shall have furnished to such counsel
all documents and information that they may reasonably request to enable them to
pass upon such matters.
(c) Xxxxxxx Xxxx & Xxxxx LLP, as counsel to the Fund, shall have
furnished to the Representative their written opinion, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representative, to the effect that:
(i) The Fund has been duly formed and is validly existing
as a statutory trust in good standing under the laws of Delaware, is duly
registered and qualified to do business and is in good standing in each
jurisdiction in which its ownership or lease of property or the conduct of its
business as described in the Registration Statement and the Prospectus (and any
amendment or supplement to either) requires such qualification, and has all
statutory trust power and authority necessary to own or hold property and to
conduct the business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either), except where the failure
to so qualify or to be in good standing would not reasonably be expected to have
a Material Adverse Effect;
(ii) The Fund has an authorized capitalization as set
forth in the Registration Statement and the Prospectus (or any amendment or
supplement thereto through the date of the opinion). All of the issued shares of
capital stock of the Fund have been duly and validly authorized and issued, were
issued in compliance with federal and state securities laws, are fully paid and
non-assessable and conform to the description thereof contained in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto through the date of the opinion). The Shares being delivered on such
Delivery Date to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor will be duly
and validly issued, fully paid and non-assessable;
(iii) The form of certificate for the Shares complies with
all applicable laws and the requirements of the NYSE;
(iv) Except as described in the Prospectus under the
heading "Certain Provisions of the Declaration of Trust and By-Laws," there are
no preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any of the Shares pursuant to the
Fund's Declaration of Trust or by-laws or any agreement or other instrument
known to such counsel;
(v) The Fund is not (i) in violation of its Declaration
of Trust or by-laws, (ii) in default, and no event has occurred which, with
notice or lapse of time or both, would constitute such a
13
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) in violation of any
law, ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any material license,
permit, certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its business,
except in the case of clauses (ii) and (iii), such defaults, events, violations
or failures that in the aggregate would not reasonably be expected to have a
Material Adverse Effect;
(vi) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Fund is a party or of which any property or
assets of the Fund is the subject which is reasonably likely to be determined
adversely to the Fund and, if determined adversely to the Fund, would be
reasonably likely to have a Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vii) The Registration Statement was declared effective
under the Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the Rule 497 of the 1933
Act Rules and Regulations specified in such opinion on the date specified
therein and no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and, to the knowledge of such
counsel, no proceeding for that purpose is pending or threatened by the
Commission;
(viii) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Fund prior to such
Delivery Date (except for the financial statements and related schedules
therein, as to which such counsel need express no belief) comply as to form in
all material respects with the requirements of the Securities Act, the 1940 Act
and the Rules and Regulations;
(ix) The statements contained in the Registration
Statement and the Prospectus (and any amendment or supplement thereto through
the date of the opinion), insofar as they describe matters of law, legal
proceedings, legal conclusions, the Fund's Declaration of Trust and bylaws,
contracts, agreements or other legal documents or refer to federal statutes,
rules and regulations, have been reviewed by such counsel, are correct in all
material respects and constitute a fair summary thereof and the opinion of such
counsel filed as Exhibit [ ] to the Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to them;
(x) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Registration Statement and the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act, the 1940 Act or by the Rules and
Regulations which have not been described in the Registration Statement and the
Prospectus or filed as exhibits to the Registration Statement;
(xi) This Agreement and each of the Fund Agreements has
been duly authorized, executed and delivered by the Fund and constitute the
valid and legally binding agreements of the Fund, enforceable against the Fund
in accordance with their terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws and subject to the
qualification that the enforceability of the Fund's obligations hereunder and
thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights generally and by
general equitable principles;
14
(xii) The issue and sale of the Shares being delivered on
such Delivery Date by the Fund pursuant to this Agreement and the execution,
delivery and performance by the Fund of this Agreement and each of the Fund
Agreements and the consummation of the transactions contemplated hereby and
thereby will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Fund is a party or by which the Fund is bound or to
which any of the property or assets of the Fund is subject, (ii) result in any
violation of the provisions of the Declaration of Trust or by-laws of the Fund
or (iii) result in the violation of any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body having
jurisdiction over the Fund or any of their properties or assets, except in the
case of clauses (i) and (iii), such conflicts, breaches or violations that in
the aggregate would not reasonably be expected to have a Material Adverse
Effect; and, except for the registration of the Shares under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Shares by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement and the Fund Agreements by the Fund
and the consummation of the transactions contemplated hereby, except for such
consents, approvals, authorizations, orders, filings or registrations as have
been obtained or made;
(xiii) This Agreement, the Fund Agreements and the Advisers
Agreements comply in all material respects with all applicable provisions of the
1940 Act, the Advisers Act, the 1940 Act Rules and Regulations and the Advisers
Act Rules and Regulations;
(xiv) The description of each Adviser and its business, and
the statements attributable to each Adviser, in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) complied and comply in
all material respects with the provisions of the Securities Act, the 1940 Act,
the Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations;
(xv) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Fund and any person granting
such person the right to require the Fund to file a registration statement under
the Securities Act with respect to any securities of the Fund owned or to be
owned by such person or to require the Fund to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Fund under the Securities Act;
(xvi) The Fund owns, licenses or otherwise possesses
adequate rights to use all Intellectual Property necessary for the conduct of
the Fund's business as now conducted or as proposed in the Prospectus to be
conducted;
(xvii) The Fund is duly registered under the 1940 Act as a
closed-end, diversified management investment company and the 1940 Act
Notification has been duly filed with the Commission, and, at the time of filing
thereof and at the time of filing any amendment or supplement thereto, conformed
in all material respects with all applicable provisions of the 1940 Act and the
1940 Act Rules and Regulations and, to the best of such counsel's knowledge
after reasonable inquiry, the Fund has not received any notice from the
Commission pursuant to Section 8(e) of the 1940 Act with respect to the 1940 Act
Notification or the Registration Statement (or any amendment or supplement to
either of them);
(xviii) The statements made in the Registration Statement and
the Prospectus (and any amendment or supplement thereto through the date of the
opinion) under the caption "U.S. Federal Income Tax Matters" have been reviewed
by such counsel and to the extent they describe or summarize
15
tax laws, legal conclusions, doctrines or practices of the United States,
present a fair and accurate description or summary thereof as of the date of the
opinion; and
(xix) The Shares have been duly approved for listing upon
official notice of issuance on the NYSE and the Fund's registration statement on
Form 8-A under the Exchange Act has become effective.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York, the General Corporation Law of the State of
Delaware and the Delaware Statutory Trust Act. To the extent such counsel deem
proper and to the extent specified in such opinion, such counsel may rely, as to
matters involving the application of laws of the State of Delaware upon the
opinion of Xxxxxxxx, Xxxxxx & Finger, P.A. or other counsel of good standing
whom such counsel believe to be reliable and who are satisfactory to the
Representative; provided that (x) such reliance is expressly authorized by the
opinion so relied upon and a copy of each such opinion is delivered to the
Representative and is, in form and substance, satisfactory to them and their
counsel and (y) such counsel state in their opinion that they believe that they
and the Underwriters are justified in relying thereon.
Such opinion shall also be to the effect that (x) such counsel has
acted as counsel to the Fund in connection with the preparation of the
Registration Statement and (y) based on the foregoing, no facts have come to the
attention of such counsel which would lead such counsel to believe that the
Registration Statement (except for the financial statements and related
schedules therein, as to which such counsel need express no belief) as of the
Effective Date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus (except as
stated above) contains any untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as set forth in clause (ix)
above).
(d) Counsel to each of the Advisers, shall have furnished to the
Representative their written opinion, addressed to the Underwriters and dated
such Delivery Date, in form and substance reasonably satisfactory to the
Representative, to the effect that:
(i) Each Adviser has been duly incorporated, organized or
formed and is validly existing as a corporation or limited liability company, as
the case may be, in good standing under the laws of its jurisdiction of
incorporation, is duly registered and qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of property or the
conduct of its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either) requires such
qualification, and has all corporate or limited liability company power and
authority necessary to own or hold their respective properties and to conduct
the business as described in the Registration Statement and the Prospectus (and
any amendment or supplement to either), except where the failure to so qualify
or to be in good standing would not reasonably be expected to have a Material
Adverse Effect;
(ii) Each Adviser is duly registered as an investment
adviser under the Advisers Act and is not prohibited by the Advisers Act, the
1940 Act, the Advisers Act Rules and Regulations or the 1940 Act Rules and
Regulations from acting under the Fund Agreements (to which each Adviser is a
party) or the Advisers Agreements (to which each Adviser is a party) as
contemplated by the Registration Statement and the Prospectus (or any amendment
or supplement thereto);
16
(iii) This Agreement, the Advisory Agreement and the
Advisers Agreements have each been duly authorized, executed and delivered by
each Adviser that is a party to such agreement, and constitute the valid and
legally binding agreements of each Adviser, enforceable against each Adviser in
accordance with their terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws and subject to the
qualification that the enforceability of each Adviser's obligations hereunder
and thereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and by general equitable principles;
(iv) The execution, delivery and performance of this
Agreement, the Advisory Agreement and the Advisers Agreements by each Adviser
that is a party to such agreement and the consummation of the transactions
contemplated hereby and thereby will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which such Adviser is a party or by which such Adviser is bound
or to which any of the property or assets of such Adviser is subject, (ii)
result in any violation of the provisions of the charter documents or by-laws of
such Adviser or (iii) result in any violation of any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over such Adviser or any of its properties or assets, except in the case of
clauses (i) and (iii), such conflicts, breaches and violations that in the
aggregate would not reasonably be expected to have a Material Adverse Effect;
and except for the registration of the Shares under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Shares by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Advisory Agreement and the
Advisers Agreements (to which each Adviser is a party) and the consummation of
the transactions contemplated hereby and thereby; and
(v) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or governmental
proceedings pending to which any Adviser is a party or of which any property or
assets of any Adviser is the subject which is reasonably likely to be determined
adversely to such Adviser and, if determined adversely to such Adviser, would be
reasonably likely to have a Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York, the General Corporation Law of the State of
Delaware and the Delaware Statutory Trust Act. To the extent such counsel deem
proper and to the extent specified in such opinion, such counsel may rely, as to
matters involving the application of laws of the State of Delaware upon the
opinion of Xxxxxxxx, Xxxxxx & Finger, P.A. or other counsel of good standing
whom such counsel believe to be reliable and who are satisfactory to the
Representative; provided that (x) such reliance is expressly authorized by the
opinion so relied upon and a copy of each such opinion is delivered to the
Representative and is, in form and substance, satisfactory to them and their
counsel and (y) such counsel state in their opinion that they believe that they
and the Underwriters are justified in relying thereon.
Such opinion shall also be to the effect that (x) such counsel has
acted as counsel to the Advisers in connection with the preparation of the
Registration Statement and (y) based on the foregoing, no facts have come to the
attention of such counsel which would lead such counsel to believe that the
Registration Statement (except for the financial statements and related
schedules therein, as to which such counsel need express no belief) as of the
Effective Date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements
17
therein not misleading, or that the Prospectus (except as stated above) contains
any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The foregoing opinion and statement may be qualified by a statement
to the effect that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus.
(e) The Representative shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Shares, the
Registration Statement, the Prospectus and other related matters as the
Representative may reasonably require, and the Fund shall have furnished to such
counsel such documents as they reasonably request for the purpose of enabling
them to pass upon such matters.
(f) At the time of execution of this Agreement, the Representative
shall have received from Ernst & Young LLP a letter or letters, in form and
substance satisfactory to the Representative, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(g) With respect to the letter or letters of Ernst & Young LLP
referred to in the preceding paragraph and delivered to the Representative
concurrently with the execution of this Agreement (the "INITIAL LETTERS"), the
Fund shall have furnished to the Representative a letter (the "BRING-DOWN
LETTER") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect to
the financial information and other matters covered by the initial letters and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letters.
(h) The Fund shall have furnished to the Representative a
certificate, dated such Delivery Date, of its Chairman of the Board of Trustees,
its President or a Vice President and its Treasurer or Assistant Treasurer
stating that:
(i) The representations, warranties and agreements of the
Fund in Section 1 are true and correct as of such Delivery Date; the Fund has
complied with all its agreements contained herein; and the conditions set forth
in Sections 8(a) and 8(j) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the Effective Date,
the Registration Statement and the Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (B) since the Effective Date no event has occurred which should have been
set forth in a supplement or amendment to the Registration Statement or the
Prospectus which has not been so set forth.
18
(i) First Trust shall have furnished to the Representative a
certificate of the Chairman of the Board of Directors, President or a Vice
President and the chief financial officer of The Charger Corporation, First
Trust's general partner, dated such Delivery Date, stating that:
(i) The representations, warranties and agreements of
First Trust in the Servicing Agreement, the Letter Agreement and the Underwriter
Participation Agreement are true and correct as of such Delivery Date, and First
Trust has complied with all its agreements contained therein; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the Effective Date,
the Registration Statement and the Prospectus did not include any untrue
statement of a material fact regarding First Trust and did not omit to state a
material fact regarding First Trust required to be stated therein or necessary
to make the statements therein not misleading, and (B) since the Effective Date
no event has occurred relating to business, general affairs, management,
financial condition, stockholders' equity, results of operations or prospects of
First Trust which should have been set forth in a supplement or amendment to the
Registration Statement or the Prospectus which has not been so set forth.
(j) The Fund shall not have sustained since the date of the latest
audited financial statements included in the Prospectus (A) any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, or (B) since such date, there shall not
have been any change in the capital stock or long-term debt of the Fund or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity, results
of operations, business or prospects of the Fund, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (A) or (B), is, in the judgment of the Representative, so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered on such Delivery Date on
the terms and in the manner contemplated in the Prospectus.
(k) Each of the Advisers shall have furnished to the
Representative a certificate, dated such Delivery Date, of its Chairman of the
Board of Directors, its President, its Chief Executive Officer or a Vice
President and its chief financial officer, Controller or Assistant Controller
stating that:
(i) The representations, warranties and agreements of
such Adviser in Sections 1 and 2 are true and correct as of such Delivery Date;
and such Adviser has complied with all its agreements contained herein;
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the Effective Date,
the Registration Statement and the Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (B) since the Effective Date no event has occurred which should have been
set forth in a supplement or amendment to the Registration Statement or the
Prospectus which has not been so set forth; and
(iii) Such Adviser is not (i) in violation of its charter
documents or by-laws, (ii) in default, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental
19
authorization or permit necessary to the ownership of its property or to the
conduct of its business, except in the case of clauses (ii) and (iii), such
defaults, events, violations or failures that in the aggregate would not
reasonably be expected to have a Material Adverse Effect.
(l) Neither the Fund nor the Advisers shall have failed at or
prior to the Delivery Date to have performed or complied with any of the
agreements contained herein and required to be performed or complied with by
them at or prior to the Delivery Date.
(m) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the NYSE or the American Stock Exchange or in the over-the-counter
market, or trading in any securities of the Fund on any exchange or in the
over-the-counter market, shall have been suspended or materially limited or the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such), including, without limitation, as a
result of terrorist activities after the date hereof, or any other calamity or
crisis as to make it, in the judgment of the Representative, impracticable or
inadvisable to proceed with the public offering or delivery of the Shares being
delivered on such Delivery Date on the terms and in the manner contemplated in
the Prospectus.
(n) The NYSE shall have approved the Shares for listing, subject
only to official notice of issuance.
(o) No Underwriter shall have discovered and disclosed to the Fund
on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the reasonable opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, is material or omits to state a fact which, in the
reasonable opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(p) The Fund and the Advisers shall have furnished to you such
further certificates, documents and opinions of counsel as you shall reasonably
request (including certificates of officers of the Fund and the Advisers).
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
SECTION 9. Indemnification and Contribution.
(a) The Fund and the Advisers shall jointly and severally
indemnify and hold harmless each Underwriter, its directors, officers and
employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Shares), to which that Underwriter, director, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue
20
statement of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto including information deemed to be a part of the Registration Statement
pursuant to Rule 430A of the Rules and Regulations, if applicable, or (B) in any
Marketing Materials, (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Marketing Materials, any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act or any alleged act or failure
to act by any Underwriter in connection with, or relating in any manner to, the
Shares or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that neither
the Fund nor the Advisers shall be liable under this clause (iii) to the extent
that it is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct), and shall
reimburse each Underwriter and each such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that neither the Fund nor the Advisers
shall be liable in any such case to the extent that any such loss, claim,
damage, liability or action (i) arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Fund or the
Advisers through the Representative by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of the
information specified in Section 9(e); or (ii) results solely from an untrue
statement of material fact contained in, or the omission of a material fact
from, a Preliminary Prospectus, which untrue statement or omission was corrected
in the Prospectus (as then amended or supplemented) if the Fund shall sustain
the burden of proving that (A) the Underwriters sold Shares to the person
alleging such loss, claim, damage, liability or action without sending or
giving, at or prior to the written confirmation of such sale, a copy of the
Prospectus (as then amended or supplemented), (B) within a reasonable amount of
time prior to such sale or such confirmation, the Fund had furnished to the
Underwriters copies of the corrected Prospectus which, if delivered, would have
cured the defect giving rise to such loss, claim, damage, liability or action,
and (C) the Underwriters failed to deliver such corrected Prospectus. The
foregoing indemnity agreement is in addition to any liability which the Fund or
the Advisers may otherwise have to any Underwriter or to any director, officer,
employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Fund, its officers and employees, each of its trustees,
and each person, if any, who controls the Fund within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Fund or any such
trustee, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Fund through the
Representative by or on behalf of that Underwriter specifically for inclusion
therein, which information is limited to the information set forth in Section
9(e), and shall reimburse the Fund and any such trustee, officer or controlling
person for any legal or other
21
expenses reasonably incurred by the Fund or any such trustee, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Fund or any such
trustee, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 9 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 9.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representative shall have the right to employ counsel to represent jointly
the Representative and those other Underwriters and their respective directors,
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Fund or the Advisers under this Section 9 if, in the
reasonable judgment of the Representative, it is advisable for the
Representative and those Underwriters, directors, officers, employees and
controlling persons to be jointly represented by separate counsel, and in that
event the fees and expenses of such separate counsel shall be paid by the Fund
or the Advisers. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 9 shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 9(a) or 9(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Fund and the Advisers (treated jointly as one person for this
purpose) 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 Advisers (treated jointly as one person for this
purpose) on the one hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as
22
any other relevant equitable considerations. The relative benefits received by
the Fund and the Advisers (treated jointly as one person for this purpose) on
the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Shares purchased under this Agreement (before deducting
expenses) received by the Fund, on the one hand, and the total underwriting
discounts and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the Shares under this Agreement, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Fund or the Advisers, on one hand,
or the Underwriters, on the other hand, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Fund, the Advisers and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section were to be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section shall be deemed to include, for purposes of
this Section 9(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 9(d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 9(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Fund and the
Advisers acknowledge that the statements set forth in the last sentence on the
front cover page, the legend concerning prospectus delivery requirements on the
inside front cover page, the names of the Underwriters and numbers of Shares
listed opposite such names in the first paragraph, and the fourth, fifth,
eleventh, twelfth, and fifteenth paragraphs appearing under the caption
"Underwriting", as well as the concessions and reallowance figures appearing
under the caption "Underwriting", in the Prospectus are correct and constitute
the only information concerning such Underwriters furnished in writing to the
Fund by or on behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
SECTION 10. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Shares which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of the Firm Shares
set opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of the Firm Shares set opposite the names of
all the remaining non-defaulting Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Shares on such Delivery Date if the total number of the
Shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such date exceeds 9.09% of the total number of the Shares to be
purchased on such Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the number of the Shares
which it agreed to purchase on such Delivery Date pursuant to the terms of
Section 3. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representative who
so agree, shall have the right, but shall not be obligated, to purchase, in such
proportion as may be agreed
23
upon among them, all the Shares to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representative
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Fund to sell, the Option Shares) shall
terminate without liability on the part of any non-defaulting Underwriter or the
Fund, except that the Fund will continue to be liable for the payment of
expenses to the extent set forth in Sections 7 and 12. As used in this
Agreement, the term "UNDERWRITER" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule 1 hereto
who, pursuant to this Section 10, purchases Firm Shares which a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Fund for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Shares of a defaulting or
withdrawing Underwriter, either the Representative or the Fund may postpone the
Delivery Date for up to seven full business days in order to effect any changes
that in the opinion of counsel for the Fund or counsel for the Underwriters may
be necessary in the Registration Statement, the Prospectus or in any other
document or arrangement.
SECTION 11. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representative by notice given to and received by the Fund
prior to delivery of and payment for the Firm Shares if, prior to that time, any
of the events described in Sections 8(j) or 8(m), shall have occurred or if the
Underwriters shall decline to purchase the Shares for any reason permitted under
this Agreement.
SECTION 12. Reimbursement of Underwriters' Expenses. If the Fund shall fail to
tender the Shares for delivery to the Underwriters by reason of any failure,
refusal or inability on the part of the Fund to perform any agreement on its
part to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Fund is not fulfilled, the
Fund will reimburse the Underwriters for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Shares, and upon
demand the Fund shall pay the full amount thereof to the Representative. If this
Agreement is terminated pursuant to Section 10 by reason of the default of one
or more Underwriters, the Fund shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
SECTION 13. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000, Attention: Syndicate Department (Fax: 000-000-0000), with a
copy, in the case of any notice pursuant to Section 9(c) the Director of
Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000; and with a copy to Xxxxxxx Xxxxxxx & Xxxxxxxx LLP,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxx, Esq.
(Fax: (000-000-0000; Telephone (000) 000-0000);
(b) if to the Fund, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Fund set forth in the Registration
Statement, Attention: Xxxxxxxx Xxxxxx (Fax: 000-000-0000); with a copy to
Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. Xxxxxxxx, Esq. (Fax: (000-000-0000; Telephone (000) 000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 9(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representative, which address will be supplied to any other party hereto by the
Representative upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt
24
thereof. The Fund shall be entitled to act and rely upon any request, consent,
notice or agreement given or made on behalf of the Underwriters by the
Representative.
SECTION 14. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Fund, the Advisers,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Fund and the
Advisers contained in this Agreement shall also be deemed to be for the benefit
of the directors, officers and the person or persons, if any, who control any
Underwriter within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Underwriters contained in Section 9(b) of this
Agreement shall be deemed to be for the benefit of trustees of the Fund,
officers of the Fund who have signed the Registration Statement and any person
controlling the Fund within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 14, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
SECTION 15. Survival. The respective indemnities, representations, warranties
and agreements of the Fund and the Underwriters contained in this Agreement or
made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Shares and shall remain in full
force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.
SECTION 16. Definition of the Terms "BUSINESS DAY" and "SUBSIDIARY". For
purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "SUBSIDIARY" has the meaning set forth in Rule 405 of the 1933 Act
Rules and Regulations.
SECTION 17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
SECTION 18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
25
If the foregoing correctly sets forth the agreement among the Fund, the
Advisers and the several Underwriters, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
XXXXXX BROTHERS/FIRST TRUST INCOME
OPPORTUNITY FUND
By __________________________________
Name: ___________________________
Title: ___________________________
XXXXXX BROTHERS ASSET MANAGEMENT INC.
By __________________________________
Name: ___________________________
Title: ___________________________
LINCOLN CAPITAL FIXED INCOME
MANAGEMENT COMPANY, LLC
By __________________________________
Name: ___________________________
Title: ___________________________
Accepted:
XXXXXX BROTHERS INC.
For itself and as Representative
of the several Underwriters named
in Schedule 1 hereto
By Xxxxxx Brothers Inc.
By ______________________
Authorized Representative
26
SCHEDULE 1
UNDERWRITER NUMBER OF FIRM SHARES TO BE PURCHASED
