First Trust/Four Corners Senior Floating Rate Income Fund II
(a Massachusetts business trust)
Common Shares of Beneficial Interest
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
May 25, 2004
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx & Associates, Inc.
Wachovia Capital Markets, LLC
Xxxxxx X. Xxxxx & Co. Incorporated
Fixed Income Securities L.P.
J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc.
Xxxxxxxxxxx & Co. Inc.
Quick & Xxxxxx, Inc.
RBC Capital Markets Corporation
Xxxx Xxxx & Co., Inc.
Xxxxxx, Xxxxxxxx & Company, Incorporated
SunTrust Capital Markets, Inc.
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Each of First Trust/Four Corners Senior Floating Rate Income Fund II, a
Massachusetts business trust (the "Fund"), its investment adviser, First Trust
Advisors L.P., an Illinois limited partnership (the "Investment Adviser" or
"First Trust") and its investment sub-adviser, Four Corners Capital Management,
LLC, a Delaware limited liability company (the "Sub-Adviser" or "Four Corners")
(each, an "Adviser" and together, the "Advisers"), confirms its agreement with
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), Xxxxxxx Xxxxx & Associates, Inc., Wachovia Capital Markets,
LLC, Xxxxxx X. Xxxxx & Co. Incorporated, Fixed Income Securities L.P., J.J.B.
Xxxxxxxx, X.X. Xxxxx, Inc., Xxxxxxxxxxx & Co. Inc., Quick & Xxxxxx, Inc., RBC
Capital Markets Corporation, Xxxx Xxxx & Co., Inc., Xxxxxx, Xxxxxxxx & Company,
Incorporated, SunTrust Capital Markets, Inc. and each of the other Underwriters
named in Schedule A hereto (collectively, the "Underwriters," which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx, Xxxxxxx Xxxxx & Associates, Inc., Wachovia
Capital Markets, LLC, Xxxxxx X. Xxxxx & Co. Incorporated, Fixed Income
Securities L.P., J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc., Xxxxxxxxxxx & Co. Inc.,
Quick & Xxxxxx, Inc., RBC Capital Markets Corporation, Xxxx Xxxx & Co., Inc.,
Xxxxxx, Xxxxxxxx & Company, Incorporated, SunTrust Capital Markets, Inc. are
acting as representatives (in such capacity, the "Representatives"), with
respect to the issue and sale by the Fund and the purchase by the Underwriters,
acting severally and not jointly, of the respective number of common shares of
beneficial interest, par value $.01 per share, of the Fund ("Common Shares") set
forth in said Schedule A, and with respect to the grant by the Fund to the
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Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of [_____________] additional
Common Shares for the sole purpose of covering overallotments, if any. The
aforesaid [___________] Common Shares (the "Initial Securities") to be purchased
by the Underwriters and all or any part of the [_____________] Common Shares
subject to the option described in Section 2(b) hereof (the "Option Securities")
are hereinafter called, collectively, the "Securities."
The Fund understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-113978 and No.
811-21539) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses, and a notification on Form N-8A of registration of
the Fund as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations of the Commission under
the 1933 Act and the 1940 Act (the "Rules and Regulations"). Promptly after
execution and delivery of this Agreement, the Fund will either (i) prepare and
file a prospectus in accordance with the provisions of Rule 430A ("Rule 430A")
of the Rules and Regulations and paragraph (c) or (h) of Rule 497 ("Rule 497")
of the Rules and Regulations or (ii) if the Fund has elected to rely upon Rule
434 ("Rule 434") of the Rules and Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 497. The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective, if applicable, (a) pursuant to paragraph (b) of
Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph
(d) of Rule 434 is referred to as "Rule 434 Information." Each prospectus used
before such registration statement became effective, and any prospectus that
omitted, as applicable, the Rule 430A Information or the Rule 434 Information,
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, including in each case any statement of additional
information incorporated therein by reference, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the Rules and Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus in
the form first furnished to the Underwriters for use in connection with the
offering of the Securities, including the statement of additional information
incorporated therein by reference, is herein called the "Prospectus." If Rule
434 is relied on, the term "Prospectus" shall refer to the preliminary
prospectus dated April 29, 2004 together with the Term Sheet and all references
in this Agreement to the date of the Prospectus shall mean the date of the Term
Sheet. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Advisers. The
Fund and the Advisers jointly and severally represent and warrant to each
Underwriter as of the date hereof and as of the Closing Time referred to in
Section 2(c) hereof, will jointly and severally represent and warrant to each
Underwriter as of each Date of Delivery (if any) referred to in Section 2(b)
hereof, and agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act, or order of
suspension or revocation of registration pursuant to Section 8(e) of the
1940 Act, and no proceedings for any such purpose have been instituted
or are pending or, to the knowledge of the Fund or the Advisers, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with in all
material respects.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time, the Registration Statement,
the Rule 462(b) Registration Statement, the notification of Form N-8A
and any amendments and supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act, the 1940
Act and the Rules and Regulations and did not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment or
supplement was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), included or will
include any untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Fund will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially
different", as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
Each preliminary prospectus and the prospectus filed as part of
the effective Registration Statement or as part of any amendment
thereto, or filed pursuant to Rule 497 under the 1933 Act, complied when
so filed in all material respects with the Rules and Regulations and
each preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection
with the offering and sale of the Securities, the Fund has complied or
will comply with the requirements of Rule 111 under the 1933 Act
Regulations relating to the payment of filing fees thereof.
The foregoing representations in this Section 1(a)(i) do not
apply to statements or omissions relating to the Underwriters made in
reliance on and in conformity with information furnished in writing to
the Fund by or on behalf of the Underwriters or their agents expressly
for use in the Registration Statement, the 462(b) Registration
Statement, the Prospectus or the preliminary prospectus (or any
amendment or supplement to any of the foregoing), or the descriptions of
each of the Advisers (referred to in Sections (1)(b)(iii) and 1(c)(iii)
of this Agreement) contained in the foregoing.
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(ii) Independent Accountants. As of the date of the report of the
independent accountants contained in the Registration Statement, the
accountants who certified the statement of assets and liabilities
included in the Registration Statement are independent public
accountants as required by the 1933 Act and the Rules and Regulations.
(iii) Financial Statements. The statement of assets and
liabilities included in the Registration Statement and the Prospectus,
together with the related notes, presents fairly in all material
respects the financial position of the Fund at the date indicated; said
statement has been prepared in conformity with U.S. generally accepted
accounting principles ("GAAP").
(iv) Expense Summary. The information set forth in the Prospectus
in the fee table contained in the section of the Prospectus entitled
"Summary of Fund Expenses" has been prepared in accordance with the
requirements of Form N-2 and to the extent estimated or projected, such
estimates or projections are reasonably believed to be attainable and
reasonably based.
(v) No Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the financial condition, earnings or business
affairs of the Fund, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Fund, other than those in the ordinary
course of business, which are material with respect to the Fund, and (C)
there has been no dividend or distribution of any kind declared, paid or
made by the Fund on any class of its capital shares.
(vi) Good Standing of the Fund. The Fund has been duly organized
and is validly existing as a business trust in good standing under the
laws of The Commonwealth of Massachusetts and has power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement; and the Fund is duly qualified to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not be expected to
result in a Material Adverse Effect.
(vii) No Subsidiaries. The Fund has no subsidiaries.
(viii) Investment Company Status. The Fund is duly registered
with the Commission under the 1940 Act as a closed-end non-diversified
management investment company, and no order of suspension or revocation
of such registration has been issued or proceedings therefor initiated
or, to the knowledge of the Fund or any Adviser, threatened by the
Commission.
(ix) Officers and Trustees. No person is serving or acting as an
officer, trustee or investment adviser of the Fund except in accordance
with the provisions of the 1940 Act and the Rules and Regulations and
the Investment Advisers Act of 1940, as amended (the "Advisers Act"),
and the rules and regulations of the Commission promulgated under the
Advisers Act (the "Advisers Act Rules and Regulations"). Except as
disclosed in the Registration Statement and the Prospectus (or any
amendment or supplement to either of them), no trustee of the Fund is
(A) an "interested person" (as defined in the 0000 Xxx) of the Fund or
(B) an "affiliated person" (as defined in the 0000 Xxx) of any
Underwriter.
(x) Capitalization. The authorized, issued and outstanding shares
of beneficial interest of the Fund are as set forth in the Prospectus.
All issued and outstanding common shares of beneficial interest of the
Fund have been duly authorized and validly issued and are fully paid and
non-assessable and have been offered and sold or exchanged by the Fund
in compliance with all applicable laws (including, without limitation,
Page 4
federal and state securities laws); none of the outstanding common
shares of beneficial interest of the Fund was issued in violation of the
preemptive or other similar rights of any securityholder of the Fund.
(xi) Authorization and Description of Securities. The Securities
to be purchased by the Underwriters from the Fund have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Fund pursuant to this
Agreement when paid for by the Underwriters, will be validly issued and
fully paid and non-assessable. In all material respects, the Common
Shares conform to all statements relating thereto contained in the
Prospectus and such statements conform to the rights set forth in the
instruments defining the same, to the extent such rights are set forth;
no holder of the Securities will be subject to personal liability by
reason of being such a holder; and the issuance of the Securities is not
subject to preemptive or other similar rights of any securityholder of
the Fund.
(xii) Absence of Defaults and Conflicts. The Fund is not in
violation of its declaration of trust or by-laws, each as amended from
time to time, or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which it is a party or by
which it may be bound, or to which any of the property or assets of the
Fund is subject (collectively, "Agreements and Instruments") except for
such violations or defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement,
the Investment Management Agreement, each Sub-Advisory Agreement, the
Administration and Accounting Services Agreement, the Custodian Services
Agreement and the Transfer Agency Services Agreement referred to in the
Registration Statement (as used herein, the "Management Agreement," the
"Sub-Advisory Agreements," the "Administration Agreement," the
"Custodian Agreement" and the "Transfer Agency Agreement," respectively)
and the consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities
as described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Fund with its obligations hereunder have been duly
authorized by all necessary Fund actions and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event
(as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Fund
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the declaration of trust or by-laws of
the Fund, each as amended from time to time, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Fund or any of its assets, properties or
operations, except for such violations that would not have a Material
Adverse Effect. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Fund.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Fund or any Adviser, threatened, against or
affecting the Fund, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which would
reasonably be expected to result in a Material Adverse Effect, or which
would prohibit or materially delay the consummation of the transactions
contemplated in this Agreement or the performance by the Fund of its
obligations hereunder.
Page 5
(xiv) Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits thereto by the 1933 Act, the 1940 Act or by
the Rules and Regulations which have not been so described and filed as
required.
(xv) Possession of Intellectual Property. The Fund owns or
possesses, or can acquire on reasonable terms, or otherwise has rights
to, adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by the Fund, and the Fund has not
received any notice or is not otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property that has, or could reasonably be expected to have, a material
adverse effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is or will be necessary or required for the performance by the
Fund of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained, or with respect to which the failure to so obtain
would not have a Material Adverse Effect, or as may be required under
the 1933 Act, the 1940 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or state securities laws.
(xvii) Possession of Licenses and Permits. The Fund possesses
such permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies necessary
to operate its properties and to conduct the business as contemplated in
the Prospectus, the Fund is in compliance with the terms and conditions
of all such Governmental Licenses, except where the failure to so
possess or comply would not have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and the Fund has not received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xviii) Advertisements. Any advertising, sales literature or
other promotional material (including "prospectus wrappers" and "broker
kits") authorized in writing by or prepared by the Fund or the Advisers
used in connection with the public offering of the Securities
(collectively, "Sales Material") does not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading. Moreover, all
sales material complied and will comply in all material respects with
the applicable requirements of the 1933 Act, the 1940 Act, the Rules and
Regulations and the rules and interpretations of the NASD, Inc. (the
"NASD").
(xix) Subchapter M. The Fund intends to direct the investment of
the proceeds of the offering described in the Registration Statement in
such a manner as to comply with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended ("Subchapter M of the Code"
and the "Code," respectively), and intends to qualify as a regulated
investment company under Subchapter M of the Code.
Page 6
(xx) Distribution of Offering Materials. The Fund has not
distributed and, prior to the later to occur of (A) the Closing Time and
(B) completion of the distribution of the Common Shares, will not
distribute any offering material in connection with the offering and
sale of the Common Shares other than the Registration Statement, a
preliminary prospectus, the Prospectus or the Sales Materials; provided,
however, that in no event shall this provision be applicable with
respect to any offering material distributed by any Underwriter without
the consent of the Fund or either Adviser.
(xxi) Accounting Controls. The Fund maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with management's
general or specific authorization and with the applicable requirements
of the 1940 Act, the Rules and Regulations and the Code; (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain
accountability for assets and to maintain compliance with the books and
records requirements under the 1940 Act and the Rules and Regulations;
(C) access to assets is permitted only in accordance with the
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(xxii) Absence of Undisclosed Payments. To the Fund's knowledge,
neither the Fund nor any employee or agent of the Fund has made any
payment of funds of the Fund or received or retained any funds, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus (except as disclosed therein).
(xxiii) Material Agreements. This Agreement, the Management
Agreement, the Sub-Advisory Agreements, the Administration Agreement,
the Custodian Agreement and the Transfer Agency Agreement have each been
duly authorized by all requisite action on the part of the Fund,
executed and delivered by the Fund, as of the dates noted therein and
each complies with all applicable provisions of the 1940 Act in all
material respects. Assuming due authorization, execution and delivery by
the other parties thereto, each such agreement constitutes a valid and
binding agreement of the Fund, enforceable against the Fund in
accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities
laws and public policy and except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights and
remedies generally (whether considered in a proceeding in equity or at
law).
(xxiv) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities of
the Fund registered pursuant to the Registration Statement or otherwise
registered by the Fund under the 1933 Act.
(xxv) New York Stock Exchange Listing. The Securities have been
duly authorized for listing, upon notice of issuance, on the New York
Stock Exchange ("NYSE") and the Fund's registration statement on Form
8-A under the 1934 Act has become effective.
(b) Representations and Warranties by the Investment Adviser. The
Investment Adviser represents and warrants to each Underwriter, and in the case
of paragraph (iii) also represents to the Fund, as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof as follows:
(i) Good Standing of the Investment Adviser. The Investment
Adviser has been duly organized and is validly existing and in good
standing as a limited partnership under the laws of the state of
Illinois, with full limited partnership power and authority to own,
lease and operate its properties and to conduct its business as
Page 7
described in the Prospectus and is duly qualified to transact business
and is in good standing in each other jurisdiction in which such
qualification is required, except where failure to so qualify or to be
in good standing would not result in a material adverse effect.
(ii) Investment Adviser's Status. The Investment Adviser is duly
registered and in good standing with the Commission as an investment
adviser under the Advisers Act, and is not prohibited by the Advisers
Act or the 1940 Act, or the rules and regulations under such acts, from
acting under the Management Agreement for the Fund as contemplated by
the Prospectus.
(iii) Descriptions of the Investment Adviser. The descriptions of
the Investment Adviser in the Registration Statement and the Prospectus
(and any amendment or supplement to either of them) complied and comply
in all material respects with the provisions of the 1933 Act, the 1940
Act, the Advisers Act, the Rules and Regulations and the Advisers Act
Rules and Regulations and are true and correct and do not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(iv) Capitalization. The Investment Adviser has the financial
resources available to it necessary for the performance of its services
and obligations as contemplated in the Prospectus, this Agreement and
under the Management Agreement and each of the Sub-Advisory Agreements.
(v) Authorization of Agreements; Absence of Defaults and
Conflicts. This Agreement, the Management Agreement and the Sub-Advisory
Agreements have each been duly authorized, executed and delivered by the
Investment Adviser, and, assuming due authorization, execution and
delivery by the other parties thereto, such agreements constitute valid
and binding obligations of the Investment Adviser, enforceable in
accordance with their respective terms, except as rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws and public policy and except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and general
equitable principles (whether considered in a proceeding in equity or at
law); and neither the execution and delivery of this Agreement, the
Management Agreement or the Sub-Advisory Agreements nor the performance
by the Investment Adviser of its obligations hereunder or thereunder
will conflict with, or result in a breach of any of the terms and
provisions of, or constitute, with or without the giving of notice or
lapse of time or both, a default under, any agreement or instrument to
which the Investment Adviser is a party or by which it is bound, the
organizational documents of the Investment Adviser, or to the Investment
Adviser's knowledge, by any law, order, decree, rule or regulation
applicable to it of any jurisdiction, court, federal or state regulatory
body, administrative agency or other governmental body, stock exchange
or securities association having jurisdiction over the Investment
Adviser or its properties or operations; and no consent, approval,
authorization or order of any court or governmental authority or agency
is required for the consummation by the Investment Adviser of the
transactions contemplated by this Agreement, the Management Agreement or
the Sub-Advisory Agreements, except as have been obtained or may be
required under the 1933 Act, the 1940 Act, the 1934 Act or state
securities laws.
(vi) No Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not occurred
any event which should reasonably be expected to have a material adverse
effect on the ability of the Investment Adviser to perform its
obligations under this Agreement, the Management Agreement and each of
the Sub-Advisory Agreements.
Page 8
(vii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Investment Adviser, threatened against or affecting
the Investment Adviser or any "affiliated person" (as such term is
defined in the 0000 Xxx) of the Investment Adviser or any partners,
directors, officers or employees of the foregoing, whether or not
arising in the ordinary course of business, which might reasonably be
expected to result in any material adverse change in the financial
condition or earnings, business affairs or business prospects of the
Investment Adviser, materially and adversely affect the properties or
assets of the Investment Adviser or materially impair or adversely
affect the ability of the Investment Adviser to function as an
investment adviser or perform its obligations under the Management
Agreement and each of the Sub-Advisory Agreements, or which is required
to be disclosed in the Registration Statement and the Prospectus.
(viii) Absence of Violation or Default. The Investment Adviser is
not in violation of its organizational documents or in default under any
agreement, indenture or instrument, where such violation or default
would reasonably be expected to have a material adverse effect on the
ability of the Investment Adviser to function as an investment adviser
or perform its obligations under the Management Agreement and each of
the Sub-Advisory Agreements.
(c) Representations and Warranties by the Sub-Adviser. The Sub-Adviser
represents and warrants to each Underwriter, and in the case of paragraph (iii)
also represent to the Fund, as of the date hereof and as of the Closing Time
referred to in Section 2(c) hereof, and will represent and warrant to each
Underwriter as of each Date of Delivery (if any) referred to in Section 2(b)
hereof, as follows:
(i) Good Standing of the Sub-Adviser. The Sub-Adviser has been
duly organized and is validly existing and in good standing as a limited
liability company under the laws of the State of Delaware, with full
limited liability company power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus and the Sub-Adviser is duly qualified to transact business
and is in good standing in each other jurisdiction in which such
qualification is required, except where the failure to so qualify or to
be in good standing would not have a material adverse effect on the
ability of the Sub-Adviser to function as an investment adviser or
perform its obligations under the Sub-Advisory Agreement to which it is
a party.
(ii) The Sub-Adviser's Status. The Sub-Adviser is duly registered
and in good standing with the Commission as an investment adviser under
the Advisers Act, and is not prohibited by the Advisers Act or the 1940
Act, or the rules and regulations under such acts, from acting under the
Sub-Advisory Agreement to which it is a party for the Fund as
contemplated by the Prospectus.
(iii) Descriptions of the Sub-Adviser. The descriptions of the
Sub-Adviser in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them) complied and comply in all
material respects with the provisions of the 1933 Act, the 1940 Act, the
Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations and do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(iv) Capitalization. The Sub-Adviser has the financial resources
available to it necessary for the performance of its services and
obligations as contemplated in the Prospectus, this Agreement and under
the Sub-Advisory Agreement to which it is a party.
Page 9
(v) Authorization of Agreements; Absence of Defaults and
Conflicts. This Agreement and the Sub-Advisory Agreement to which the
Sub-Adviser is a party have each been duly authorized, executed and
delivered by the Sub-Adviser, and, assuming due authorization, execution
and delivery by the other parties thereto, such agreements constitute
valid and binding obligations of the Sub-Adviser, enforceable against
the Sub-Adviser in accordance with their respective terms, except as
rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and public policy and except as enforcement may
be limited by equitable principles or by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors' rights
and remedies generally (whether considered in a proceeding in equity or
at law); and neither the execution and delivery of this Agreement or the
Sub-Advisory Agreement to which the Sub-Adviser is a party nor the
performance by the Sub-Adviser of its obligations hereunder or
thereunder will conflict with, or result in, a breach of any of the
terms and provisions of, or constitute, with or without the giving of
notice or lapse of time or both, a default under any agreement or
instrument to which the Sub-Adviser is a party or by which it is bound,
the organizational documents of the Sub-Adviser or, to the Sub-Adviser'
knowledge, by any law, order, decree, rule or regulation applicable to
it of any jurisdiction, court, federal or state regulatory body,
administrative agency or other governmental body, stock exchange or
securities association having jurisdiction over the Sub-Adviser or its
respective properties or operations; and no consent, approval,
authorization or order of any court or governmental authority or agency
is required for the consummation by the Sub-Adviser of the transactions
contemplated by this Agreement or the Sub-Advisory Agreement to which it
is a party, except as have been obtained or may be required under the
1933 Act, the 1940 Act, the 1934 Act or state securities laws.
(vi) No Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not occurred
any event which should reasonably be expected to have a material adverse
effect on the ability of the Sub-Adviser to perform its obligations
under this Agreement and the Sub-Advisory Agreement to which it is a
party.
(vii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Sub-Adviser, threatened against or affecting the
Sub-Adviser or any "affiliated person" (as such term is defined in the
0000 Xxx) of the Sub-Adviser or any partners, directors, officers or
employees of the foregoing, whether or not arising in the ordinary
course of business, which would reasonably be expected to have a
material adverse effect on the ability of the Sub-Adviser to function as
an investment adviser or perform its obligations under the Sub-Advisory
Agreement to which it is a party, or which is required to be disclosed
in the Registration Statement and the Prospectus.
(viii) Absence of Violation or Default. the Sub-Adviser is not in
violation of its organizational documents or in default under any
agreement, indenture or instrument, where such violation or default
would reasonably be expected to have a material adverse effect on the
ability of the Sub-Adviser to function as an investment adviser or
perform its obligations under the Sub-Advisory Agreement to which it is
a party.
(d) Officers' Certificates. Any certificate signed by any officer of
the Fund or any Adviser delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Fund or such
Adviser, as the case may be, to each Underwriter as to the matters covered
thereby.
Page 10
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Fund agrees to sell to each Underwriter, severally and not jointly,
and each Underwriter, severally and not jointly, agrees to purchase from the
Fund, at the price per share set forth in Schedule B, the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Fund hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional [_________] Common Shares in the
aggregate at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Fund and payable
on the Initial Securities but not payable on the Option Securities. The option
hereby granted will expire 45 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
overallotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the
Fund setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Initial Securities, subject in each case to such
adjustments as Xxxxxxx Xxxxx in its discretion shall make to eliminate any sales
or purchases of a fractional number of Option Securities plus any additional
number of Option Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(c) Payment. Payment of the purchase price for, and delivery of
certificates, if any, for, the Initial Securities shall be made at the offices
of Xxxxxxxx Chance US LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by the Representatives and the Fund, at
10:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be reasonably agreed
upon by the Representatives and the Fund (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Fund, on each Date of Delivery as specified in the notice from the
Representatives to the Fund.
Payment shall be made to the Fund by wire transfer of immediately
available funds to a bank account designated by the Fund, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Page 11
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in the City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants.
(a) The Fund and the Advisers, jointly and severally, covenant with each
Underwriter as follows:
(i) Compliance with Securities Regulations and Commission
Requests. The Fund, subject to Section 3(a)(ii), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Representatives promptly, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Fund will promptly effect the
filings necessary pursuant to Rule 497 and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 497 was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Fund will make reasonable commercial efforts to prevent
the issuance of any stop order, or order of suspension or revocation of
registration pursuant to Section 8(e) of the 1940 Act, and, if any such
stop order or order of suspension or revocation of registration is
issued, to obtain the lifting thereof at the earliest possible moment.
(ii) Filing of Amendments. The Fund will give the Representatives
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, will furnish the Representatives with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Representatives or counsel for the
Underwriters shall reasonably object in writing.
(iii) Delivery of Registration Statements. The Fund has furnished
or will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and a signed copy of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will
be identical to the electronically transmitted copies thereof filed with
Page 12
the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(iv) Delivery of Prospectuses. The Fund hereby consents to the
use by each Underwriter of any preliminary prospectus delivered by the
Fund to the Underwriter for purposes permitted by the 1933 Act. The Fund
will furnish to each Underwriter, without charge, during a period up to
180 days following the Closing Date, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(v) Continued Compliance with Securities Laws. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Underwriters or for the Fund, to
amend the Registration Statement or amend or supplement the Prospectus
in order that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if
it shall be necessary, in the opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the Rules and Regulations, the Fund will promptly prepare and file with
the Commission, subject to Section 3(a)(ii), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Fund will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may
reasonably request.
(vi) Blue Sky Qualifications. The Fund will use its reasonable
best efforts, subject to the reasonable cooperation of the Underwriters,
to qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United
States as the Representatives and the Fund may designate and to maintain
such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and
any Rule 462(b) Registration Statement; provided, however, that in no
event shall the Fund be obligated to file any general consent to service
of process or to qualify as a foreign business trust or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Fund
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification, if any, in effect for
a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(vii) Rule 158. The Fund will make generally available to its
securityholders as soon as practicable an earnings statement, if
applicable, for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Fund will use the net proceeds
received by it from the sale of the Securities substantially in the
manner specified in the Prospectus under "Use of Proceeds".
(ix) Listing. The Fund will use its reasonable best efforts to
effect the listing of the Securities on the NYSE, subject to notice of
issuance, concurrently with the effectiveness of the Registration
Statement.
Page 13
(x) Restriction on Sale of Securities. During a period of 180
days from the date of the Prospectus, the Fund will not, without the
prior written consent of Xxxxxxx Xxxxx, (A) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option, rights or
warrant to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of
Common Shares or any securities convertible into or exercisable or
exchangeable for Common Shares or file any registration statement under
the 1933 Act with respect to any of the foregoing or (B) enter into any
swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of
ownership of the Common Shares, whether any such swap or transaction
described in clause (A) or (B) above is to be settled by delivery of
Common Shares or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (1) the Securities to be sold
hereunder or (2) Common Shares issued or, for avoidance of doubt,
purchased in the open market pursuant to any dividend reinvestment plan.
(xi) Reporting Requirements. The Fund, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1940 Act and the 1934 Act within the time periods
required by the 1940 Act and the Rules and Regulations and the 1934 Act
and the rules and regulations of the Commission thereunder,
respectively.
(xii) Subchapter M. The Fund intends to comply with the
requirements of Subchapter M of the Code to qualify as a regulated
investment company under the Code.
(xiii) No Manipulation of Market for Securities. The Fund will
not (a) take, directly or indirectly, any action designed to cause or to
result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund
to facilitate the sale or resale of the Securities in violation of
federal or state securities laws, and (b) except for share repurchases
permitted in accordance with applicable laws and purchases of Securities
in the open market pursuant to the Fund's dividend reinvestment plan,
until the Closing Date, or the Date of Delivery, if any, (i) sell, bid
for or purchase the Securities or pay any person any compensation for
soliciting purchases of the Securities or (ii) pay or agree to pay to
any person any compensation for soliciting another to purchase any other
securities of the Fund .
(xiv) Rule 462(b) Registration Statement. If the Fund elects to
rely upon Rule 462(b), the Fund shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) by 10:00
P.M., Washington, D.C. time, on the date of this Agreement, and the Fund
shall at the time of filing either pay to the Commission the filing fee
for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under
the 1933 Act.
SECTION 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities 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
Securities to the Underwriters, (iv) the fees and disbursements of the Fund's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(a)(vi)
hereof, including filing fees and the reasonable fees and disbursements of
Page 14
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus,
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities in an
amount up to $7,500, (x) the fees and expenses incurred in connection with the
listing of the Securities on the NYSE and (xi) the printing of any sales
material. In addition, the Fund shall pay to the Underwriters $.00667 per Common
Share as partial reimbursement of expenses incurred in connection with the
offering. The amount paid by the Fund as this partial reimbursement to the
Underwriters will not exceed .03335% of the total price to the public of the
Common Shares sold in this offering. The Advisers have agreed to pay (i) all
organizational expenses of the Fund, and (ii) offering costs (other than sales
load, but including the partial reimbursement of expenses described above) of
the Fund that exceed $.04 per Common Share. The sum total of all compensation
received by the Underwriters in connection with this offering, including sales
load and all forms of compensation to and reimbursement of Underwriters, will
not exceed 9.0% of the total price to the public of the Common Shares sold in
this offering.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section 9(a)
hereof, the Fund and each of the Advisers, jointly and severally, agree that
they shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Fund and each of the
Advisers contained in Section 1 hereof or in certificates of any officer of the
Fund or each of the Advisers delivered pursuant to the provisions hereof, to the
performance by the Fund and each of the Advisers of their respective covenants
and other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective or will
have become effective by 5:30 p.m., New York City time on the date hereof, and
at Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act, no notice or order pursuant
to Section 8(e) of the 1940 Act shall have been issued, and no proceedings with
respect to either shall have been initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with or waived to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 497 (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A or a certificate must
have been filed in accordance with Rule 497(j)) or, if the Fund has elected to
rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 497.
(b) Opinion of Counsel for Fund and the Advisers. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing
Time, of Xxxxxxx and Xxxxxx LLP, counsel for the Fund and First Trust,
substantially in the forms set forth in Exhibit A with respect to the Fund and
Exhibit B with respect to First Trust, and of Xxxxxx Xxxxxxxxx Xxxxx & Xxxxxxxx
LLP, counsel for Four Corners, substantially in the form set forth in Exhibit C,
together with signed or reproduced copies of such letters for each of the other
Underwriters. In giving such opinion such counsel may rely, as to matters
governed by the laws of jurisdictions other than the law of the State of New
York and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
Page 15
deem proper, upon certificates of officers of the Fund and the Advisers and
certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxx Chance US LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (i), (ii), (vi), (vii) (solely
as to preemptive or other similar rights arising by operation of law or under
the charter or by-laws of the Fund), (viii) through (x), inclusive, (xii), (xiv)
(solely as to the information in the Prospectus under "Description of Shares")
and the last paragraph of Exhibit A hereto. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York and the federal law of the United States, upon the
opinions of counsel satisfactory to the Representatives. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Fund and
the Advisers and certificates of public officials.
(d) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the financial condition,
earnings or business affairs of the Fund, whether or not arising in the ordinary
course of business, and the Representatives shall have received a certificate of
a duly authorized officer of the Fund and of the chief financial or chief
accounting officer of the Fund and of the President or a Vice President or
Managing Director of each Adviser, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Sections 1(a), (b) and (c) hereof, as applicable, are true and
correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) each of the Fund and the Advisers, respectively, has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, (iv) with respect to the
certificate by an officer of each Adviser only, there has been no material
adverse change in the financial condition, earnings or business affairs of such
Adviser, whether or not arising in the ordinary course of business, and (v) with
respect to the Fund only, no stop order suspending the effectiveness of the
Registration Statement, or order of suspension or revocation of registration
pursuant to Section 8(e) of the 1940 Act, has been issued and no proceedings for
any such purpose have been instituted or are pending or are contemplated by the
Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Deloitte & Touche LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from Deloitte & Touche LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have been
approved for listing on the NYSE, subject only to official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Fund contained herein and the statements in any certificates furnished by
the Fund hereunder shall be true and correct as of each Date of Delivery and, at
the relevant Date of Delivery, the Representatives shall have received:
Page 16
(i) Officers' Certificates. Certificates, dated such Date of
Delivery, of a duly authorized officer of the Fund and of the chief
financial or chief accounting officer of the Fund and of the President
or a Vice President or Managing Director of each Adviser confirming that
the information contained in the certificate delivered by each of them
at the Closing Time pursuant to Section 5(d) hereof remains true and
correct as of such Date of Delivery.
(ii) Opinions of Counsel for the Fund and the Advisers. The
favorable opinions of counsel for the Fund and the Advisers,
substantially in the form set forth in Exhibit A hereto, dated such Date
of Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for the Underwriters. The favorable
opinion of Xxxxxxxx Chance US LLP, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from Deloitte & Touche
LLP, in form and substance satisfactory to the Representatives and dated
such Date of Delivery, substantially in the same form and substance as
the letter furnished to the Representatives pursuant to Section 5(f)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than three business
days prior to such Date of Delivery.
(j) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such other documents
as they may require and as are customarily provided for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Fund and the Advisers in connection with the
organization and registration of the Fund under the 1940 Act and the issuance
and sale of the Securities as herein contemplated shall be satisfactory in form
and substance to the Representatives and counsel for the Underwriters.
(k) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled by the Fund or the Advisers when and as required
to be fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities, on a Date of Delivery which is after the Closing
Time, the obligations of the several Underwriters to purchase the relevant
Option Securities, may be terminated by the Representatives by notice to the
Fund at any time at or prior to Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7, 8
and 12 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Fund and the Advisers, jointly
and severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission
Page 17
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission; provided that (subject to
Section 6(e) below) any such settlement is effected with the written
consent of the Fund; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund or an
Adviser by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
further, that the indemnity agreement contained in this Section 6(a) shall not
inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such loss,
liability, claim, damage and expense purchased the Securities which are the
subject thereof if the Prospectus corrected any such alleged untrue statement or
omission and if such Prospectus was delivered to such Underwriter in a timely
manner and if such Underwriter failed to send or give a copy of the Prospectus
to such person at or prior to the written confirmation of the sale of such
Securities to such person.
(b) Indemnification of the Fund, Advisers, Trustees, Directors and
Officers. Each Underwriter severally agrees to indemnify and hold harmless the
Fund and the Advisers, their respective trustees and directors, each of the
Fund's officers who signed the Registration Statement, and each person, if any,
who controls the Fund or an Adviser within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Fund or the Advisers by
such Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Indemnification for Marketing Materials. In addition to the
foregoing indemnification, the Fund and the Advisers also, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 6(a),
as limited by the proviso set forth therein, with respect to any sales material.
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
Page 18
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Fund or an Adviser, as applicable.
In each case such counsel shall be reasonably satisfactory to the indemnified
party, and the indemnifying party shall have the right to assume the defense of
such action. An indemnified party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying party be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from its own counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Fund or the Advisers on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Fund and the Advisers on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Fund and the Advisers on the one
hand and the Underwriters on the other hand in connection with the offering of
the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Fund and the total underwriting discount received by the Underwriters
(whether from the Fund or otherwise), in each case as set forth on the cover of
Page 19
the Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Securities as
set forth on such cover.
The relative fault of the Fund and the Advisers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Fund or the Advisers or by the Underwriters and the parties'
relative intent, 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 contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Fund and each director of an Adviser, respectively, each
officer of the Fund who signed the Registration Statement, and each person, if
any, who controls the Fund or any Adviser, within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, shall have the same rights to
contribution as the Fund and such Adviser, respectively. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and covenants contained in this
Agreement or in certificates of officers of the Fund or an Adviser submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Fund or an Adviser, and shall survive delivery
of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Fund, at any time at or prior to Closing Time (i) if
there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Fund or an Adviser,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
Page 20
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representatives, impracticable or inadvisable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in the Common Shares of the Fund has been suspended or materially
limited by the Commission or the NYSE, or if trading generally on the NYSE or
the American Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7, 8 and 12 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Representatives
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of
Securities to be purchased on such date, each of the non-defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Fund to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Fund to sell the relevant Option Securities, as
the case may be, either the Representatives or the Fund shall have the right to
postpone Closing Time or the relevant Date of Delivery, as the case may be, for
a period not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives, c/o Merrill Xxxxx & Co., 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, attention of Equity Capital Markets; notices to the Fund or the
First Trust shall be directed, as appropriate, to the office of First Trust
Page 21
Advisors L.P. at 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000,
Attention: W. Xxxxx Xxxxxxx; and notices to Four Corners shall be directed to it
at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX 00000, Attention:
Xxxxxxx X. XxXxxxx, President.
SECTION 12. Parties.
This Agreement shall each inure to the benefit of and be binding upon
the Underwriters, the Fund, the Advisers and each of their respective partners
and successors and controlling persons referred to herein. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters, the Fund, the Advisers
and their respective successors and the controlling persons and officers,
trustees and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Fund, the Advisers and each of their
respective partners and successors, and said controlling persons and officers,
trustees and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 15. Massachusetts Business Trust
A copy of the Declaration of Trust of the Fund is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby given that
this Agreement is executed on behalf of the Fund by an officer or trustee of the
Fund in his or her capacity as an officer or trustee of the Fund and not
individually and that the obligations of or arising out of this instrument are
not binding upon any of the trustees, officers or shareholders individually but
are binding only upon the assets and property of the Fund.
SECTION 16. Australian Regulatory Disclaimer
THE UNDERWRITERS ACKNOWLEDGE THAT INVESTMENTS IN THE FUND ARE NOT
DEPOSITS WITH OR OTHER LIABILITIES OF MACQUARIE BANK LIMITED ACN 000 000 000, OR
OF ANY ENTITY IN THE MACQUARIE BANK GROUP, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING POSSIBLE DELAYS IN REPAYMENT AND LOSS OF INCOME AND CAPITAL INVESTED.
NONE OF MACQUARIE BANK LIMITED, FOUR CORNERS, AND ANY MEMBER COMPANY OF THE
MACQUARIE BANK GROUP GUARANTEES ANY PARTICULAR RATE OF RETURN OR THE PERFORMANCE
OF THE FUND, NOR DO THEY GUARANTEE THE REPAYMENT OF CAPITAL FROM THE FUND.
[Signatures on Following Pages]
Page 22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Fund and each of the Advisers in accordance with its
terms.
Very truly yours,
First Trust/Four Corners Senior Floating
Rate Income Fund II
By:
---------------------------------
Name:
Title:
First Trust Advisors L.P.
By:
---------------------------------
Name:
Title:
Four Corners Capital Management, LLC
By:
---------------------------------
Name:
Title:
Page 23
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXX XXXXX & ASSOCIATES, INC.
WACHOVIA CAPITAL MARKETS, LLC
Xxxxxx X. Xxxxx & Co. Incorporated
FIXED INCOME SECURITIES L.P.
J.J.B. XXXXXXXX, X.X. XXXXX, INC.
XXXXXXXXXXX & CO. INC.
QUICK & XXXXXX, INC.
RBC CAPITAL MARKETS CORPORATION
XXXX XXXX & CO., INC.
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
SUNTRUST CAPITAL MARKETS, INC.
By: Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By:
----------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
Page 24
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated............................... [__________]
Xxxxxxx Xxxxx & Associates, Inc........................ [__________]
Wachovia Capital Markets, LLC.......................... [__________]
Xxxxxx X. Xxxxx & Co. Incorporated..................... [__________]
Fixed Income Securities L.P............................ [__________]
J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc....................... [__________]
Xxxxxxxxxxx & Co. Inc.................................. [__________]
Quick & Xxxxxx, Inc.................................... [__________]
RBC Capital Markets Corporation........................ [__________]
Xxxx Xxxx & Co, Inc.................................... [__________]
Xxxxxx, Xxxxxxxx & Company, Incorporated............... [__________]
SunTrust Capital Markets, Inc.......................... [__________]
[Other Underwriters]................................... [__________]
Total...................................... [__________]
Sch A-1
SCHEDULE B
First Trust/Four Corners Senior Floating Rate Income Fund II
Common Shares of Beneficial Interest
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $20.00.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $19.10, being an amount equal to the initial
public offering price set forth above less $.90 per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the overallotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Fund
and payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
Exhibit A
FORM OF OPINION OF FUND'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Fund has been duly organized and is validly existing as a
business trust in good standing under the laws of The Commonwealth of
Massachusetts.
(ii) The Fund has business trust power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus and to enter
into and perform its obligations under the Purchase Agreement.
(iii) The Fund is duly qualified as a foreign business trust to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(iv) To the best of our knowledge, the Fund does not have any
subsidiaries.
(v) The authorized, issued and outstanding shares of beneficial
interest of the Fund are as set forth in the Prospectus under the
caption "Description of Shares--Common Shares"; all issued and
outstanding shares of beneficial interest of the Fund have been duly
authorized and validly issued and are fully paid and non-assessable and
have been offered and sold or exchanged by the Fund in compliance with
all applicable laws (including, without limitation, federal and state
securities laws); the Common Shares conform as to legal matters to all
statements relating thereto contained in the Prospectus and such
description conforms to the rights set forth in the instruments defining
the same; and none of the outstanding shares of beneficial interest of
the Fund was issued in violation of the preemptive or other similar
rights of any securityholder of the Fund.
(vi) The Securities to be purchased by the Underwriters from the
Fund have been duly authorized for issuance and sale to the Underwriters
pursuant to the Purchase Agreement and, when issued and delivered by the
Fund pursuant to the Purchase Agreement against payment of the
consideration set forth in the Purchase Agreement, will be validly
issued and fully paid and non-assessable and no holder of the Securities
is or will be subject to personal liability by reason of being such a
holder.
(vii) The issuance of the Securities is not subject to preemptive
or other similar rights of any securityholder of the Fund.
(viii) The Purchase Agreement has been duly authorized, executed
and delivered by the Fund.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 497(c) or Rule
497(h) has been made in the manner and within the time period required
by Rule 497; and, to the best of our knowledge, no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act, and, to the
best of our knowledge, no order of suspension or revocation of
registration pursuant to Section 8(e) of the 1940 Act has been issued,
and no proceedings for any such purpose have been instituted or are
pending or threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Page A-1
Information, as applicable, the Prospectus and each amendment or supplement to
the Registration Statement and Prospectus as of their respective effective or
issue dates (except for financial statements, supporting schedules and other
financial data included therein or omitted therefrom, as to which we need
express no opinion), and the notification on Form N-8A, complied as to form in
all material respects with the requirements of the 1933 Act, the 1940 Act and
the Rules and Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective.
(xii) The form of certificate used to evidence the Common Shares
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the declaration of
trust and by-laws of the Fund and the requirements of the New York Stock
Exchange.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Fund is a party, or to which the property of the Fund is
subject, before or brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of the Fund or
the consummation of the transactions contemplated in the Purchase
Agreement or the performance by the Fund of its obligations thereunder.
(xiv) The information in the Prospectus under "Description of
Shares" and "Tax Matters" and in the Registration Statement under Item
29 (Indemnification), to the extent that it constitutes matters of law,
summaries of legal matters, the Fund's declaration of trust and by-laws
or legal proceedings, or legal conclusions is correct in all material
respects.
(xv) Each of the Management Agreement, the Sub-Advisory
Agreements, the Administration Agreement, the Custodian Agreement, the
Transfer Agency Agreement and the Purchase Agreement comply in all
material respects with all applicable provisions of the 1940 Act, the
Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations.
(xvi) The Fund is duly registered with the Commission under the
1940 Act as a closed-end diversified management investment company; and,
to the best of our knowledge, no order of suspension or revocation of
such registration has been issued or proceedings therefor initiated or
threatened by the Commission.
(xvii) To the best of our knowledge, no person is serving as an
officer, trustee or investment adviser of the Fund except in accordance
with the 1940 Act and the Rules and Regulations and the Investment
Advisers Act and the Advisers Act Rules and Regulations. Except as
disclosed in the Registration Statement and Prospectus (or any amendment
or supplement to either of them), to the best of our knowledge, 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 an Underwriter.
(xviii) There are no statutes or regulations that are required to
be described in the Prospectus that are not described as required.
(xix) All descriptions in the Registration Statement of contracts
and other documents to which the Fund is a party are accurate in all
material respects. To the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other than
Page A-2
those described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
(xx) To the best of our knowledge, the Fund is not in violation
of its declaration of trust or by-laws and no default by the Fund exists
in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xxi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency (other than under the 1933 Act, the
1934 Act, the 1940 Act and the Rules and Regulations, which have been
obtained, or as may be required under the securities or blue sky laws of
the various states, as to which we need express no opinion) is necessary
or required in connection with the due authorization, execution and
delivery of the Purchase Agreement or for the offering, issuance or sale
of the Securities or the consummation of the transactions contemplated
by this Agreement.
(xxii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectus under the caption
"Use of Proceeds") and compliance by the Fund with its obligations under
the Purchase Agreement do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined in Section
1(a)(xii) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Fund pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement
or instrument, known to us, to which the Fund is a party or by which it
or any of them may be bound, or to which any of the property or assets
of the Fund is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the Fund, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known
to us, of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Fund or any of its properties,
assets or operations.
(xxiii) The Purchase Agreement, the Management Agreement, the
Administration Agreement, the Sub-Advisory Agreements, the Custodian
Agreement and the Transfer Agency Agreement have each been duly
authorized by all requisite action on the part of the Fund, executed and
delivered by the Fund, as of the dates noted therein. Assuming due
authorization, execution and delivery by the other parties thereto, each
such agreement constitutes a valid and binding agreement of the Fund,
enforceable in accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws and public policy and except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing.
In addition, we have participated in the preparation of the Registration
Statement and the Prospectus and participated in discussions with certain
officers, trustees and employees of the Fund, representatives of Deloitte &
Touche LLP, the independent accountants who examined the statement of assets and
liabilities of the Fund included or incorporated by reference in the
Registration Statement and the Prospectus, and you and your representatives and
we have reviewed certain Fund records and documents. While we have not
independently verified and are not passing upon, and do not assume any
Page A-3
responsibility for, the accuracy, completeness or fairness of the information
contained in the Registration Statement and the Prospectus, except to the extent
necessary to enable us to give the opinions with respect to the Fund in
paragraphs (A)(v), (xiv) and (xix), on the basis of such participation and
review, nothing has come to our attention that would lead us to believe that the
Registration Statement (except for financial statements, supporting schedules
and other financial data included therein or omitted therefrom, as to which we
do not express any belief), at the time such Registration Statement became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except for financial
statements, supporting schedules and other financial data included therein or
omitted therefrom, as to which we do not express any belief), at the time the
Prospectus was issued, or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Page A-4
FORM OF OPINION OF INVESTMENT ADVISOR'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Investment Adviser has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the
State of Illinois.
(ii) The Investment Adviser has full limited partnership power
and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and to enter into and
perform its obligations under the Purchase Agreement.
(iii) The Investment Adviser is duly qualified to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
to so qualify would not result in a material adverse effect.
(iv) The Investment Adviser is duly registered with the
Commission as an investment adviser under the Advisers Act and is not
prohibited by the Advisers Act, the Advisers Act Rules and Regulations,
the 1940 Act or the Rules and Regulations from acting under the
Management Agreement and each of the Sub-Advisory Agreements.
(v) The Purchase Agreement, the Management Agreement and the
Sub-Advisory Agreement have been duly authorized, executed and delivered
by the Investment Adviser, and each of the Management Agreement and
Sub-Advisory Agreements constitutes a valid and binding obligation of
the Investment Adviser, enforceable in accordance with its terms, except
as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws and public policy and except as
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles
(whether considered in a proceeding in equity or at law).
(vi) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Investment Adviser is a party, or to which the property of the
Investment Adviser is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might reasonably
be expected to result in any material adverse change in the financial
condition, earnings or business affairs of the Investment Adviser,
materially and adversely affect the properties or assets of the
Investment Adviser or materially impair or adversely affect the ability
of the Investment Adviser to function as an investment adviser or
perform its obligations under the Management Agreement and Sub-Advisory
Agreements, or which is required to be disclosed in the Registration
Statement or the Prospectus.
(vii) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(viii) To the best of our knowledge, the Investment Adviser is
not in violation of its limited partnership agreement, by-laws or other
organizational documents and no default by the Investment Adviser exists
in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
Page B-1
that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(ix) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under
the 1933 Act, the 1940 Act and the Rules and Regulations, which have
been obtained, or as may be required under the securities or blue sky
laws of the various states, as to which we need express no opinion) is
necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement.
(x) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement and compliance by
the Investment Adviser with its obligations under the Purchase Agreement
do not and will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(xii) of the
Purchase Agreement) under or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Investment Adviser pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement
or instrument, known to us, to which the Investment Adviser is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Investment Adviser is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a material adverse effect), nor will such action result
in any violation of the provisions of the charter or by-laws of the
Investment Adviser, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Investment Adviser or any of its properties,
assets or operations (except for such violations that would not have a
material adverse effect).
In addition, we have participated in the preparation of the portions of
the Registration Statement and Prospectus describing the Investment Adviser and
participated in discussions with certain officers, trustees and employees of the
Fund and representatives of the Investment Adviser. While we have not
independently verified and are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the information
contained in such portions of the Registration Statement and the Prospectus, on
the basis of such participation and review, nothing has come to our attention
that would lead us to believe that such portions of the Registration Statement
(except for financial statements, supporting schedules and other financial data
included therein or omitted therefrom, as to which we do not express any
belief), at the time such Registration Statement became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that such portions of the Prospectus (except for financial statements,
supporting schedules and other financial data included therein or omitted
therefrom, as to which we do not express any belief), at the time the Prospectus
was issued, or at the Closing Time, included or include an untrue statement of a
material fact or omitted or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
FORM OF OPINION OF INVESTMENT SUB-ADVISER'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
First Trust/Four Corners Senior Floating Rate Income Fund II
______ Shares
Ladies and Gentlemen:
We have acted as counsel to Four Corners Capital Management, LLC, a
Delaware limited liability company ("Four Corners"), a sub-adviser to the First
Trust/Four Corners Senior Floating Rate Income Fund II, a Massachusetts business
trust (the "Fund"), in connection with the purchase by you, and the underwriters
identified in Schedule A to the Purchase Agreement (defined below) severally,
from the Fund of ____________ Shares of the Fund, subject to the terms and
conditions set forth in the Purchase Agreement, dated May __, 2004 (the
"Purchase Agreement"), among you as representatives of the underwriters
identified in Schedule A to the Purchase Agreement and the Fund, First Trust
Advisors L.P., an Illinois limited partnership and investment adviser to the
Fund ("First Trust"), and Four Corners. We are furnishing this letter to you at
the request of Four Corners pursuant to Section 5(b) of the Purchase Agreement.
All capitalized terms used but not defined herein have the respective meanings
given to such terms in the Purchase Agreement.
In such capacity, we have examined copies of the registration statement
on Form N-2 (File No. ________) filed by the Fund under the Securities Act of
1933, as amended (the "Securities Act"), with the Securities and Exchange
Commission (the "Commission") on _________, 2004 and ___________, 2004; and the
related prospectus (the registration statement, as amended at the time when it
became effective, including the information deemed to be part thereof at the
time of effectiveness pursuant to Rule 430A under the Securities Act, being
hereinafter referred to as the "Registration Statement"; and the final
prospectus dated ________, 2004, in the form in which it was filed pursuant to
Rule 497 under the Securities Act, being hereinafter referred to as the
"Prospectus").
In addition, we have examined originals or copies of the Purchase
Agreement, the Investment Sub-Advisory Agreement, dated ___________, 2004, among
Four Corners, the Fund and First Trust (the "Sub-Advisory Agreement") and the
agreement set out on Schedule I hereto, the Certificate of Formation of Four
Corners as filed with the Secretary of State of the State of Delaware on
September 5, 2001 (the "Certificate of Formation"), the Limited Liability
Company Agreement of Four Corners, dated September 21, 2001, as amended (the
"LLC Agreement"; together with the Certificate of Formation, the "Organizational
Documents"), the Form ADV of Four Corners as filed with the Commission through
the Investment Adviser Registration Depository System, Part II of the Form ADV
of Four Corners, and the originals, or copies identified to our satisfaction, of
such corporate records of the Fund and Four Corners, certificates and statements
of public officials, officers of the Fund, Four Corners and other persons, and
such other documents, agreements and instruments as we have deemed necessary as
a basis for the opinions hereinafter expressed. In our examination of the
foregoing, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals and the conformity with the
originals of all documents submitted to us as copies. We have further assumed
that there has been no oral or written modification of, or amendment or
supplement (including any express or implied waiver however arising) to, the
Purchase Agreement or the agreement set out on Schedule I hereunder or any other
instrument or document used by us to form the basis of the opinions expressed
herein. As to certain matters of fact material to the opinions expressed herein,
we have relied on the representations made in the Purchase Agreement and in
certificates of officers of Four Corners. We have not independently established
the facts so relied on.
The phrase "to our knowledge" as used in this opinion means the actual
knowledge of attorneys within our firm based upon (i) work performed on
Page C-1
substantive aspects of the transactions that are the subject of the Purchase
Agreement or other matters with respect to which such attorneys have performed
substantive work in the course of their representation of Four Corners, (ii)
certificates of certain representatives of Four Corners, and (iii) our
examination of the above-referenced documents, and does not include matters as
to which such attorneys could be deemed to have constructive knowledge. Except
as expressly set forth herein, we have not undertaken any independent
investigation, examination or inquiry to determine the existence or absence of
any facts (and have not caused the review of any court file, dockets or indices)
and no inference as to our knowledge concerning any facts should be drawn as a
result of the limited representation undertaken by us.
Our opinions set forth below, unless otherwise indicated, are limited to
the federal laws of the United States of America, the laws of the State of New
York and the laws of the State of Delaware, and we do not express any opinions
herein concerning any other laws. Our opinions set forth in paragraph (iii) as
to the good standing of Four Corners under the laws of the State of Delaware and
each other jurisdiction where qualification is required are based solely on a
certificate of good standing as of a recent date from the Secretary of State of
the State of Delaware as to the good standing of Four Corners and a certificate
of authority as of a recent date from the Secretaries of State of the States of
California and New York as to qualification to transact business.
Based upon and subject to the foregoing, we are of the opinion that:
(i) Four Corners has been duly formed and is validly existing as
a limited liability company in good standing under the laws of the State of
Delaware with full power and authority under such law to own, lease and operate
its properties and to conduct its business as described in the Prospectus.
(ii) Four Corners has (a) the limited liability company power to
execute, deliver and perform the Purchase Agreement and the Sub-Advisory
Agreement and (b) has taken all limited liability company action necessary to
authorize the execution, delivery and performance of the Purchase Agreement and
the Sub-Advisory Agreement.
(iii) Four Corners is duly qualified to transact business and is
in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not result in a material
adverse effect on Four Corners' ability to enter into and perform its
obligations under the Purchase Agreement and the Sub-Advisory Agreement.
(iv) The Sub-Adviser is duly registered with the Commission as an
investment adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and, to our knowledge, is not prohibited by the Advisers Act,
the rules and regulations of the Commission promulgated under the Advisers Act,
the Investment Company Act of 1940, as amended (the "1940 Act"), or the rules
and regulations of the Commission under the Securities Act and the 1940 Act (the
"Rules and Regulations") from acting under the Sub-Advisory Agreement.
(v) Each of the Purchase Agreement and the Sub-Advisory Agreement
has been duly authorized, executed and delivered by Four Corners, and, assuming
the due authority, execution and delivery of each other party thereto, the
Purchase Agreement and Sub-Advisory Agreement constitute valid and binding
obligations of Four Corners, enforceable against Four Corners in accordance with
their terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
(including, without limitation, all laws relating to fraudulent transfers) and
to the effect of general principles of equity (regardless of whether considered
in a proceeding in equity or at law).
(vi) To our knowledge, there are no legal or governmental
proceedings pending or threatened to which Four Corners is a party that are
required under the Securities Act to be disclosed in the Registration Statement
Page C-2
and the Prospectus or that would reasonably be expected to have a material
adverse effect on the ability of Four Corners to function as an investment
adviser or perform its obligations under the Sub-Advisory Agreement, or which is
required to be disclosed in the Registration Statement and the Prospectus.
(vii) To our knowledge, Four Corners is not in violation of the
Organizational Documents or in default under the Organizational Documents, the
agreement set out on Schedule I hereto, or any agreement to which it is a party
described in the Registration Statement or Prospectus or filed or incorporated
by reference as an exhibit to the Registration Statement, other than such
violation or default that would not reasonably be expected to have a material
adverse effect on the ability of Four Corners to enter into and perform its
obligations under the Sub-Advisory Agreement.
(viii) No approval, authorization, consent or license of any
State of California, New York State, Delaware State or U.S. federal governmental
or regulatory commission, board, body or authority or agency, is necessary or
required for the performance by Four Corners of its obligations under the
Purchase Agreement and the Sub-Advisory Agreement, except such as may be
required by the Securities Act, the 1940 Act and the Rules and Regulations or as
may be required under the securities or blue sky laws of the various states, as
to which we express no opinion.
(ix) Neither the execution and delivery of the Purchase Agreement
or the Sub-Advisory Agreement nor the performance by Four Corners of its
obligations thereunder or under the Registration Statement will conflict with,
or result in a breach or violation of, any of the terms and provisions of, or
constitute, with or without the giving of notice or lapse of time or both, a
default under (a) the Organizational Documents, (b) the agreement set out on
Schedule I hereto or any agreement to which it is a party described in the
Registration Statement or Prospectus or filed or incorporated by reference as an
exhibit to the Registration Statement, or (c) to our knowledge, any State of
California, New York State, Delaware State or U.S. federal law, order, decree,
rule or regulation applicable to Four Corners or its properties or operations,
in each case with respect to clause (b) and (c) only, other than such conflict,
breach or default that would not reasonably be expected to have a material
adverse effect on the ability of Four Corners to enter into and perform its
obligations under the Purchase Agreement, Sub-Advisory Agreement and the
Registration Statement.
We note that the Sub-Advisory Agreement is governed by Illinois law and
that the Fund is organized under Massachusetts law. For purposes of rendering
this opinion, we have assumed that such laws are identical to the laws of the
State of New York in all respects material to the conclusions expressed in this
opinion.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement or the
Prospectus and take no responsibility therefor. Subject to the statements set
forth above in this paragraph, we advise you that, based upon our investigations
made in connection with the Registration Statement and the Prospectus and such
knowledge as we have obtained in the course of our general representation of
Four Corners, no facts came to our attention which gave us reason to believe
that (i) the disclosure relating to Four Corners set out in "Prospectus Summary
- Investment Adviser and Sub-Adviser," "Management of the Fund - Sub-Adviser"
and "Sub-Adviser" in the Registration Statement (other than the financial
statements and other financial data contained therein or omitted therefrom, as
to which we have not been requested to comment), at the time it became
effective, 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 not misleading, or (ii) the disclosure
relating to Four Corners set out in "Prospectus Summary - Investment Adviser and
Sub-Adviser" and "Management of the Fund - Sub-Adviser" in the Prospectus (other
than the financial statements and other financial data contained therein or
omitted therefrom, as to which we have not been requested to comment), as of its
Page C-3
date or the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
This opinion letter is being furnished to you solely for your benefit
and is not to be used, circulated, quoted, relied upon or otherwise referred to
for any purpose without our express prior written consent. This opinion letter
speaks only as of the date hereof. We expressly disclaim any responsibility to
advise you of any development or circumstance of any kind including any change
of law or fact that may occur after the date of this letter even though such
development, circumstance or change may affect the legal analysis, a legal
conclusion or any other matter set forth in or relating to this opinion letter.
Sincerely
Page C-4
