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FIRST TRUST HIGH INCOME LONG/SHORT FUND
__________ Common Shares of Beneficial Interest
$20.00 per Share
UNDERWRITING AGREEMENT
Dated: [ ], 2010
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TABLE OF CONTENTS
Page
SECTION 1. Representations and Warranties.....................................2
SECTION 2. Sale and Delivery to Underwriters; Closing........................16
SECTION 3. Covenants of the Fund and the Advisers............................18
SECTION 4. Payment of Expenses...............................................20
SECTION 5. Conditions of Underwriters' Obligations...........................21
SECTION 6. Indemnification...................................................26
SECTION 7. Contribution......................................................28
SECTION 8. Representations, Warranties and Agreements to Survive Delivery....29
SECTION 9. Termination of Agreement..........................................30
SECTION 10. Default by One or More of the Underwriters.......................30
SECTION 11. Notices..........................................................31
SECTION 12. Parties..........................................................31
SECTION 13. GOVERNING LAW....................................................31
SECTION 14. Effect of Headings...............................................31
SECTION 15. Definitions......................................................32
SECTION 16. Absence of Fiduciary Relationship................................34
EXHIBITS
Exhibit A - Initial Securities to be Sold
Exhibit B - Form of Opinion of Fund Counsel
Exhibit C - Form of Opinion of Adviser Counsel
Exhibit D - Form of Opinion of Subadviser Counsel
Exhibit E - Price-Related Information
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FIRST TRUST HIGH INCOME LONG/SHORT FUND
[ ] Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
[ ],2010
Xxxxx Fargo Securities, LLC
[UNDERWRITERS]
As Representatives of the several Underwriters
listed on Exhibit A hereto
c/o Wells Fargo Securities, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
First Trust High Income Long/Short Fund, a Massachusetts business trust
(the "Fund"), First Trust Advisors L.P., an Illinois limited partnership (the
"Adviser"), and MacKay Xxxxxxx LLC, a Delaware limited liability company (the
"Subadviser," and together with the Adviser, the "Advisers"), confirm their
respective agreements with Xxxxx Fargo Securities, LLC ("Xxxxx Fargo") and each
of the other Underwriters named in Exhibit A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Xxxxx Fargo,
[REPRESENTATIVES] are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Fund of a total of
[ ] common shares of beneficial interest, par value $0.01 per share
(the "Initial Securities"), and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of Initial Securities set
forth in said Exhibit A hereto, and with respect to the grant by the Fund to the
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 of beneficial interest, par value $0.01 per share (the "Option
Securities"), to cover over-allotments, if any. The Initial Securities to be
purchased by the Underwriters and all or any part of the Option Securities are
hereinafter called, collectively, the "Securities." Certain terms used in this
Agreement are defined in Section 15 hereof.
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 entered into (i) an Investment Management Agreement with the
Adviser dated as of [ ], 2010, (ii) a Custodian Services Agreement
with PFPC Trust Company dated as of [ ], 2010, (iii) a Transfer
Agency Services Agreement with BNY Mellon Investment Servicing (US) Inc. dated
as of [ ], 2010 and (iv) an Administration and Accounting Services
Agreement with BNY Mellon Investment Servicing (US) Inc. dated as of [(black
circle)], 2010, and such agreements are herein referred to as the "Investment
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Management Agreement," the "Custodian Agreement," the "Transfer Agency
Agreement," and the "Administration Agreement", respectively. Collectively, the
Investment Management Agreement, the Subadvisory Agreement, the Custodian
Agreement, the Transfer Agency Agreement and the Administration Agreement are
herein referred to as the "Fund Agreements." The [Fund and the] Adviser
[has][have] entered into a Sub-Advisory Agreement with the Subadviser dated as
of [ ], 2010, and such agreement is herein referred to as the
"Sub-Advisory Agreement." The Adviser has entered into a Structuring Fee
Agreement with Xxxxx Fargo dated as of [ ], 2010[,] [and]
[Additional Compensation Agreement to be inserted] and such agreements are
herein referred to as and the "Fee Agreements." In addition, the Fund has
adopted a dividend reinvestment plan pursuant to which holders of common shares
of beneficial interest shall have their dividends automatically reinvested in
additional common shares of beneficial interest of the Fund unless they elect to
receive such dividends in cash, and such plan is herein referred to as the
"Dividend Reinvestment Plan."
The Fund has prepared and filed with the Commission a registration
statement (File Nos. 333-168186 and 811-22442) on Form N-2, including a related
preliminary prospectus (including the statement of additional information
incorporated by reference therein), for registration under the 1933 Act and the
1940 Act of the offering and sale of the Securities. The Fund may have filed one
or more amendments thereto, including a related preliminary prospectus
(including the statement of additional information incorporated by reference
therein), each of which has previously been furnished to you.
The Fund will next file with the Commission one of the following: either
(1) prior to the effective date of the registration statement, a further
amendment to the registration statement (including the form of final prospectus
(including the statement of additional information incorporated by reference
therein)) or (2) after the effective date of the registration statement, a final
prospectus (including the statement of additional information incorporated by
reference therein) in accordance with Rules 430A and 497. In the case of clause
(2), the Fund has included or incorporated by reference in the Registration
Statement, as amended at the effective date, all information (other than Rule
430A Information) required by the 1933 Act and the 1940 Act and the Rules and
Regulations to be included in the registration statement and the Prospectus. As
filed, such amendment and form of final prospectus (including the statement of
additional information incorporated by reference therein), or such final
prospectus (including the statement of additional information incorporated by
reference therein), shall contain all Rule 430A Information, together with all
other such required information, and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive respects
in the form furnished to you prior to the Applicable Time or, to the extent not
completed at the Applicable Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest preliminary
prospectus) as the Fund has advised you, prior to the Applicable Time, will be
included or made therein.
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, as of the Applicable Time, as of the Closing
Date referred to in Section 2(c) hereof, and as of each Option Closing Date (if
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any) referred to in Section 2(b) hereof, and agree with each Underwriter, as
follows:
(1) Compliance with Registration Requirements. The Securities have
been duly registered under the 1933 Act and the 1940 Act, pursuant to the
Registration Statement. Each of the Initial Registration Statement and any
Rule 462(b) Registration Statement has become effective under the 1933 Act
and has been filed under the 1940 Act, and no stop order suspending the
effectiveness of the Initial Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act or 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. The Preliminary Prospectus
and the Prospectus complied when filed with the Commission in all material
respects with the requirements of the 1933 Act, the 1940 Act and the Rules
and Regulations. The Preliminary Prospectus and the Prospectus and any
amendments or supplements thereto delivered to the Underwriters for use in
connection with the offering of the Securities each was identical to the
electronically transmitted copy thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
At the respective times the Initial Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became or become effective and at the Closing Date (and, if any Option
Securities are purchased, at the applicable Option Closing Date), the
Initial Registration Statement, any Rule 462(b) Registration Statement
will, and the 1940 Act Notification when originally filed with the
Commission and any amendments and supplements thereto did or will, comply
in all material respects with the requirements of the 1933 Act, the 1940
Act and the Rules and Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto, as of its date, at the Closing Date (and, if any Option
Securities are purchased, at the applicable Option Closing Date), and at
any time when a prospectus is required by applicable law to be delivered
in connection with sales of Securities, included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
Preliminary Prospectus and the information included on Exhibit E hereto,
all considered together (collectively, the "General Disclosure Package")
did not or will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Fund makes no representations or
warranties as to the information contained in or omitted from the
Preliminary Prospectus or the Prospectus in reliance upon and in
conformity with information furnished in writing to the Fund by or on
behalf of any Underwriter specifically for inclusion therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 6(b)
hereof.
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The Fund's registration statement on Form 8-A under the 1934 Act is
effective.
(2) Independent Accountants. Deloitte & Touche LLP who certified and
audited the financial statements and supporting schedules included in the
Registration Statement, the Preliminary Prospectus and the Prospectus is
an independent public accountant as required by the 1933 Act, the 1940 Act
and the Rules and Regulations.
(3) Financial Statements. The financial statements of the Fund
included in the Registration Statement, the Preliminary Prospectus and the
Prospectus, together with the related schedules (if any) and notes,
present fairly the financial position of the Fund at the dates indicated
and the results of operations and cash flows of the Fund for the periods
specified; and all such financial statements have been prepared in
conformity with GAAP applied on a consistent basis throughout the periods
involved and comply with all applicable accounting requirements under the
1933 Act, the 1940 Act and the Rules and Regulations. The supporting
schedules, if any, included in the Registration Statement present fairly,
in accordance with GAAP, the information required to be stated therein,
and the other financial and statistical information and data included in
the Registration Statement, the Preliminary Prospectus and the Prospectus
are accurately derived from such financial statements and the books and
records of the Fund.
(4) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Preliminary Prospectus and
the Prospectus, except as otherwise stated therein, (A) there has been no
Fund Material Adverse Effect, (B) there have been no transactions entered
into by the Fund which are material with respect to the Fund other than
those in the ordinary course of its business as described in the
Preliminary Prospectus and the Prospectus and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Fund on
any class of its Common Stock.
(5) Good Standing of the Fund. The Fund has been duly formed and is
validly existing in good standing as a business trust under the laws of
the Commonwealth of Massachusetts and has the full power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement, the Preliminary Prospectus and
the Prospectus and to enter into and perform its obligations under this
Agreement and the Fund Agreements; and the Fund is duly qualified to
transact business and is in good standing under the laws of each
jurisdiction which requires qualification.
(6) No Subsidiaries. The Fund has no subsidiaries.
(7) Investment Company Status. The Fund is duly registered under the
1940 Act as a closed-end, diversified management investment company under
the 1940 Act, the 1940 Act Rules and Regulations, and the 1940 Act
Notification has been duly filed with the Commission. The Fund has not
received any notice from the Commission pursuant to Section 8(e) of the
1940 Act with respect to the 1940 Act Notification or the Registration
Statement.
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(8) 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
Advisers Act. Except as disclosed in the Registration Statement, the
Preliminary Prospectus and the Prospectus, 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. For
purposes of this Section 1(a)(8), the Fund and the Advisers shall be
entitled to rely on representations from such officers and trustees.
(9) Capitalization. The authorized, issued and outstanding common
shares of beneficial interest of the Fund are as set forth in the
Preliminary Prospectus and 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, 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; the Securities have been
duly and validly authorized and, when issued and delivered to and paid for
by the Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the certificates for the Securities, if any, are in valid
and sufficient form.
(10) Power and Authority. The Fund has full power and authority to
enter into this Agreement and the Fund Agreements; the execution and
delivery of, and the performance by the Fund of its obligations under this
Agreement and the Fund Agreements have been duly and validly authorized by
the Fund; and this Agreement and the Fund Agreements have been duly
executed and delivered by the Fund and constitute the valid and legally
binding agreements of the Fund, enforceable against the Fund in accordance
with their terms, except as rights to indemnity and contribution may be
limited by federal or state securities laws and subject to the
qualification that the enforceability of the Fund's obligations hereunder
and thereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
(11) Approval of Investment Management Agreement and Sub-Advisory
Agreement. The Fund's Board of Trustees and the Fund's sole shareholder
have approved the Investment Management Agreement and the Sub-Advisory
Agreement in accordance with Section 15 of the 1940 Act.
(12) Agreements' Compliance with Law. This Agreement and each of the
Fund Agreements and the Sub-Advisory Agreement comply in all material
respects with all applicable provisions of the 1940 Act, the 1940 Act
Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
(13) Absence of Defaults and Conflicts. The Fund is not (i) in
violation of its Declaration of Trust or bylaws, (ii) in breach or default
in the performance of the terms of any indenture, contract, lease,
mortgage, declaration of trust, note agreement, loan agreement or other
5
agreement, obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject or (iii) in violation
of any law, ordinance, administrative or governmental rule or regulation
applicable to the Fund or of any decree of the Commission, FINRA, any
state securities commission, any foreign securities commission, any
national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or any
official having jurisdiction over the Fund.
(14) 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, threatened, against or affecting the Fund which is required to
be disclosed in the Preliminary Prospectus and Prospectus (other than as
disclosed therein), or that could reasonably be expected to result in a
Fund Material Adverse Effect, or that could reasonably be expected to
materially and adversely affect the properties or assets of the Fund or
the consummation of the transactions contemplated in this Agreement or the
performance by the Fund of its obligations under this Agreement or the
Fund Agreements; the aggregate of all pending legal or governmental
proceedings to which the Fund is a party or of which any of its property
or assets is the subject which are not described in the Preliminary
Prospectus or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the
1933 Act, the 1940 Act or the Rules and Regulations, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Fund Material Adverse Effect.
(15) Accuracy of Descriptions and Exhibits. The statements set forth
under the headings "Description of Shares," "Certain Provisions in the
Declaration of Trust and By-Laws" and "Federal Tax Matters" in the
Preliminary Prospectus and the Prospectus and "Federal Income Tax Matters"
in the Statement of Additional Information, insofar as such statements
purport to summarize certain provisions of the 1940 Act, Massachusetts
law, the Fund's Declaration of Trust, U.S. federal income tax law and
regulations or legal conclusions with respect thereto, fairly and
accurately summarize such provisions in all material respects; all
descriptions in the Registration Statement, the Preliminary Prospectus and
the Prospectus of any Fund documents are accurate in all material
respects; and there are no franchises, contracts, indentures, mortgages,
deeds of trust, loan or credit agreements, bonds, notes, debentures,
evidences of indebtedness, leases or other instruments or agreements
required to be described or referred to in the Registration Statement, the
Preliminary Prospectus or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required by the
1933 Act, the 1940 Act or the Rules and Regulations which have not been so
described and filed as required.
(16) Absence of Further Requirements. (A) No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, and (B) no authorization, approval, vote or other
consent of any other person or entity, is necessary or required for the
performance by the Fund of its obligations under this Agreement or the
Fund Agreements, for the offering, issuance, sale or delivery of the
6
Securities hereunder, or for the consummation of any of the other
transactions contemplated by this Agreement or the Fund Agreements, in
each case on the terms contemplated by the Registration Statement, the
Preliminary Prospectus and the Prospectus, except such as have been
already obtained and under the 1933 Act, the 1940 Act, the Rules and
Regulations, the rules and regulations of FINRA and the NYSE and such as
may be required under state securities laws.
(17) Non-Contravention. Neither the execution, delivery or
performance of this Agreement, the Fund Agreements nor the consummation by
the Fund of the transactions herein or therein contemplated (i) conflicts
or will conflict with or constitutes or will constitute a breach of the
Declaration of Trust or bylaws of the Fund, (ii) conflicts or will
conflict with or constitutes or will constitute a breach of or a default
under, any agreement, indenture, lease or other instrument to which the
Fund is a party or by which it or any of its properties may be bound or
(iii) violates or will violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to the Fund or any of its
properties or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Fund pursuant to
the terms of any agreement or instrument to which the Fund is a party or
by which the Fund may be bound or to which any of the property or assets
of the Fund is subject.
(18) Possession of Licenses and Permits. The Fund has such licenses,
permits and authorizations of governmental or regulatory authorities
("Permits") as are necessary to own its property and to conduct its
business in the manner described in the Preliminary Prospectus and the
Prospectus; the Fund has fulfilled and performed all its material
obligations with respect to such Permits and no event has occurred which
allows or, after notice or lapse of time, would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the Fund under any such Permit, subject in each case to such
qualification as may be set forth in the Preliminary Prospectus and the
Prospectus; and, except as described in the Preliminary Prospectus and the
Prospectus, none of such Permits contains any restriction that is
materially burdensome to the Fund.
(19) Distribution of Offering Material. The Fund has not distributed
and, prior to the later to occur of (i) the Closing Date and (ii)
completion of the distribution of the Securities, will not distribute any
offering material in connection with the offering and sale of the
Securities other than the Registration Statement, the Preliminary
Prospectus, the Prospectus, the Sales Material (as defined below) or other
materials permitted by the 1933 Act, the 1940 Act or the Rules and
Regulations.
(20) Absence of Registration Rights. There are no persons with
registration rights or other similar rights to have any securities (debt
or equity) (A) registered pursuant to the Registration Statement or
included in the offering contemplated by this Agreement or (B) otherwise
registered by the Fund under the 1933 Act or the 1940 Act. There are no
persons with tag-along rights or other similar rights to have any
securities (debt or equity) included in the offering contemplated by this
Agreement or sold in connection with the sale of Securities by the Fund
pursuant to this Agreement.
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(21) NYSE. The Securities are duly listed and admitted and
authorized for trading, subject to official notice of issuance and
evidence of satisfactory distribution, on the NYSE.
(22) FINRA Matters. All of the information provided to the
Underwriters or to counsel for the Underwriters by the Fund, its officers
and trustees in connection with letters, filings or other supplemental
information provided to FINRA pursuant to FINRA's conduct rules is true,
complete and correct.
(23) Tax Returns. The Fund has filed all tax returns that are
required to be filed and has paid all taxes required to be paid by it and
any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such tax,
assessment, fine or penalty that is currently being contested in good
faith by appropriate actions and except for such taxes, assessments, fines
or penalties the nonpayment of which would not, individually or in the
aggregate, have a Fund Material Adverse Effect.
(24) Subchapter M. The Fund is currently in compliance with the
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code") to qualify as a regulated investment company under
the Code and intends to direct the investment of the net proceeds of the
offering of the Securities in such a manner as to comply with the
requirements of Subchapter M of the Code.
(25) Insurance. The Fund is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts
as are prudent and customary in the businesses in which it is engaged and
which the Fund deems adequate; all policies of insurance insuring the Fund
or its business, assets, employees, officers and trustees, including its
fidelity bond required by Rule 17g-1 of the 1940 Act Rules and Regulations
and the Fund's trustees and officers/errors and omissions insurance
policy, are in full force and effect; the Fund is in compliance with the
terms of such fidelity bond and policy in all material respects; and there
are no claims by the Fund under any such fidelity bond or policy as to
which any insurance company is denying liability or defending under a
reservation of rights clause; the Fund has not been refused any insurance
coverage sought or applied for; and the Fund has no reason to believe that
it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have
a Fund Material Adverse Effect, except as set forth in or contemplated in
the Preliminary Prospectus and Prospectus (exclusive of any supplement
thereto).
(26) Accounting Controls and Disclosure 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 authorizations and with the investment
objectives, policies and restrictions of the Fund and the applicable
requirements of the 1940 Act, the 1940 Act Rules and Regulations and the
Code; (B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP, to calculate net asset
8
value, to maintain accountability for assets and to maintain material
compliance with the books and records requirements under the 1940 Act and
the 1940 Act Rules and Regulations; (C) access to assets is permitted only
in accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Fund employs "internal control over
financial reporting" (as such term is defined in Rule 30a-3 under the 0000
Xxx) and such internal control over financial reporting is and shall be
effective as required by the 1940 Act and the 1940 Act Rules and
Regulations. The Fund is not aware of any material weakness in its
internal control over financial reporting. The Fund employs "disclosure
controls and procedures" (as such term is defined in Rule 30a-3 under the
1940 Act); such disclosure controls and procedures are effective.
(27) Compliance with the Xxxxxxxx-Xxxxx Act. There is and has been
no failure on the part of the Fund or any of the Fund's trustees or
officers, in their capacities as such, to comply with any provision of the
Xxxxxxxx-Xxxxx Act and the rules and regulations promulgated in connection
therewith, including Sections 302 and 906 related to certifications.
(28) Fund Compliance with Policies and Procedures. The Fund has
adopted and implemented written policies and procedures reasonably
designed to prevent violation of the Federal Securities Laws (as that term
is defined in Rule 38a-1 under the 0000 Xxx) by the Fund, including
policies and procedures that provide oversight of compliance for each
investment adviser, administrator and transfer agent of the Fund.
(29) Absence of Manipulation. The Fund has not taken and will not
take, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security to facilitate
the sale or resale of the Securities, and the Fund is not aware of any
such action taken or to be taken by any affiliates of the Fund, other than
such actions as taken by the Underwriters that are affiliates of the Fund,
so long as such actions are in compliance with all applicable law.
(30) Statistical, Demographic or Market-Related Data. Any
statistical, demographic or market-related data included in the
Registration Statement, the Preliminary Prospectus or the Prospectus is
based on or derived from sources that the Fund believes to be reliable and
accurate and all such data included in the Registration Statement, the
Preliminary Prospectus or the Prospectus accurately reflects the materials
upon which it is based or from which it was derived.
(31) Advertisements. All advertising, sales literature or other
promotional material (including "prospectus wrappers", "broker kits",
"road show slides" and "road show scripts"), whether in printed or
electronic form, authorized in writing by or prepared by or at the
direction of the Fund or the Advisers for use in connection with the
offering and sale of the Securities (collectively, "Sales Material")
complied and 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 FINRA and if required to be filed with
9
FINRA under FINRA's conduct rules were so filed. No Sales Material
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.
(32) Foreign Corrupt Practices Act. Neither the Fund nor, to the
knowledge of the Fund, any trustee, officer, agent, employee, affiliate or
other person acting on behalf of the Fund is aware of or has taken any
action, directly or indirectly, that has resulted or would result in a
violation by such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (collectively, the
"FCPA"), including, without limitation, making use of the mails or any
means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of
any money, or other property, gift, promise to give, or authorization of
the giving of anything of value to any "foreign official" (as such term is
defined in the FCPA) or any foreign political party or official thereof or
any candidate for foreign political office, in contravention of the FCPA,
and the Fund and, to the knowledge of the Fund, its other affiliates have
conducted their businesses in compliance with the FCPA and have instituted
and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.
(33) Money Laundering Laws. The operations of the Fund are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all applicable jurisdictions, the rules and regulations
thereunder and any related or similar applicable rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, "Money Laundering Laws") and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Fund with respect to the Money Laundering Laws is
pending or, to the knowledge of the Fund, threatened.
(34) OFAC. Neither the Fund nor, to the knowledge of the Fund, any
trustee, officer, agent, employee, affiliate or person acting on behalf of
the Fund is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department ("OFAC");
and the Fund will not directly or indirectly use any of the proceeds
received by the Fund from the sale of Securities contemplated by this
Agreement, or lend, contribute or otherwise make available any such
proceeds to any subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
(b) Representations and Warranties by the Adviser. The Adviser represents
and warrants to each Underwriter as of the date hereof, as of the Applicable
Time, as of the Closing Date and as of each Option Closing Date (if any), and
agrees with each Underwriter, as follows:
(1) Adviser Status. The Adviser is duly registered as an investment
adviser under the Advisers Act and is not prohibited by the Advisers Act,
the 1940 Act, the Advisers Act Rules and Regulations or the 1940 Act Rules
10
and Regulations from acting under the Investment Management Agreement, the
Sub-Advisory Agreement, the Administration Agreement or the Fee Agreements
as contemplated by the Preliminary Prospectus and the Prospectus.
(2) Capitalization. The Adviser has the financial resources
available to it necessary for the performance of its services and
obligations as contemplated in the Preliminary Prospectus and the
Prospectus and under this Agreement, the Investment Management Agreement,
the Administration Agreement and the Fee Agreements.
(3) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Preliminary Prospectus and
the Prospectus, except as otherwise stated therein, (A) there has been no
Adviser Material Adverse Effect and (B) there have been no transactions
entered into by the Adviser which are material with respect to the Adviser
other than those in the ordinary course of its business as described in
the Preliminary Prospectus and the Prospectus.
(4) Good Standing. The Adviser has been duly formed and is validly
existing in good standing as a limited partnership under the laws of the
State of Illinois and has the full power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement, the Preliminary Prospectus and the Prospectus and
to enter into and perform its obligations under this Agreement, the Fund
Agreements and the Fee Agreements; and the Adviser is duly qualified to
transact business and is in good standing under the laws of each
jurisdiction which requires qualification.
(5) Power and Authority. The Adviser has full power and authority to
enter into this Agreement, the Investment Management Agreement, the
Sub-Advisory Agreement, the Administration Agreement and the Fee
Agreements; the execution and delivery of, and the performance by the
Adviser of its obligations under this Agreement, the Investment Management
Agreement, the Sub-Advisory Agreement and the Fee Agreements have been
duly and validly authorized by the Adviser; and this Agreement, the
Investment Management Agreement, the Sub-Advisory Agreement and the Fee
Agreements have been duly executed and delivered by the Adviser and
constitute the valid and legally binding agreements of the Adviser,
enforceable against the Adviser in accordance with their terms, except as
rights to indemnity and contribution may be limited by federal or state
securities laws and subject to the qualification that the enforceability
of the Adviser's obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and other laws relating to or affecting creditors' rights generally and by
general equitable principles.
(6) Description of the Adviser. The description of the Adviser and
its business and the statements attributable to the Adviser in the
Preliminary Prospectus and Prospectus complied and comply in all material
respects with the provisions of the 1933 Act, the 1940 Act, the Advisers
Act, the 1940 Act Rules and Regulations and the Advisers Act Rules and
Regulations and did not and will not contain an untrue statement of a
11
material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading.
(7) Non-Contravention. Neither the execution, delivery or
performance of this Agreement, the Investment Management Agreement, the
Sub-Advisory Agreement or the Fee Agreements nor the consummation by the
Fund or the Adviser of the transactions herein or therein contemplated (i)
conflicts or will conflict with or constitutes or will constitute a breach
of the Organizational Documents of the Adviser, (ii) conflicts or will
conflict with or constitutes or will constitute a breach of or a default
under, any agreement, indenture, lease or other instrument to which the
Adviser is a party or by which it or any of its properties may be bound or
(iii) violates or will violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to the Adviser or any of
its properties or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Adviser pursuant
to the terms of any agreement or instrument to which the Adviser is a
party or by which the Adviser may be bound or to which any of the property
or assets of the Adviser is subject.
(8) Agreements' Compliance with Laws. This Agreement, the Investment
Management Agreement, the Sub-Advisory Agreement and the Fee Agreements
comply in all material respects with all applicable provisions of the 1940
Act, the 1940 Act Rules and Regulations, the Advisers Act and the Advisers
Act Rules and Regulations.
(9) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Adviser, threatened, against or affecting the Adviser which is
required to be disclosed in the Preliminary Prospectus and Prospectus
(other than as disclosed therein), or that could reasonably be expected to
result in an Adviser Material Adverse Effect, or that could reasonably be
expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Adviser of its obligations under this
Agreement, the Investment Management Agreement, the Sub-Advisory Agreement
or the Fee Agreements; the aggregate of all pending legal or governmental
proceedings to which the Adviser is a party or of which any of its
property or assets is the subject which are not described in the
Preliminary Prospectus or the Prospectus, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in an Adviser Material Adverse Effect.
(10) Absence of Further Requirements. (A) No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, and (B) no authorization, approval, vote or other
consent of any other person or entity, is necessary or required for the
performance by the Adviser of its obligations under this Agreement, the
Investment Management Agreement, the Sub-Advisory Agreement or the Fee
Agreements, except such as have been already obtained under the 1933 Act,
the 1940 Act, the Rules and Regulations, the rules and regulations of
FINRA and the NYSE and such as may be required under state securities
laws.
12
(11) Possession of Permits. The Adviser has such Permits as are
necessary to own its property and to conduct its business in the manner
described in the Preliminary Prospectus and the Prospectus; the Adviser
has fulfilled and performed all its material obligations with respect to
such Permits and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or results in
any other material impairment of the rights of the Adviser under any such
Permit.
(12) Adviser Compliance with Policies and Procedures. The Adviser
has adopted and implemented written policies and procedures under Rule
206(4)-7 of the Advisers Act reasonably designed to prevent violation of
the Advisers Act and the Advisers Act Rules by the Adviser and its
supervised persons.
(13) Absence of Manipulation. The Adviser has not taken and will not
take, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security to facilitate
the sale or resale of the Securities, and the Adviser is not aware of any
such action taken or to be taken by any affiliates of the Adviser, other
than such actions as taken by the Underwriters that are affiliates of the
Adviser, so long as such actions are in compliance with all applicable
law.
(14) Promotional Materials. In the event that the Fund or the
Adviser makes available any promotional materials related to the
Securities or the transactions contemplated hereby intended for use only
by registered broker-dealers and registered representatives thereof by
means of an Internet web site or similar electronic means, the Adviser
will install and maintain, or will cause to be installed and maintained,
pre-qualification and password-protection or similar procedures which are
reasonably designed to effectively prohibit access to such promotional
materials by persons other than registered broker-dealers and registered
representatives thereof.
(15) Internal Controls. The Adviser maintains a system of internal
controls sufficient to provide reasonable assurance that (i) transactions
effectuated by it under the Investment Management Agreement and the
Sub-Advisory Agreement are executed in accordance with its management's
general or specific authorization; and (ii) access to the Fund's assets is
permitted only in accordance with management's general or specific
authorization.
(16) Money Laundering Laws. The operations of the Adviser and its
subsidiaries are and have been conducted at all times in compliance with
applicable Money Laundering Laws and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any
arbitrator involving the Adviser or any of its subsidiaries with respect
to the Money Laundering Laws is pending or, to the knowledge of the
Adviser, threatened.
(c) Representations and Warranties by the Subadviser. The Subadviser
represents and warrants to each Underwriter as of the date hereof, as of the
Applicable Time, as of the Closing Date and as of each Option Closing Date (if
any), and agrees with each Underwriter, as follows:
13
(1) Subadviser Status. The Subadviser is duly registered as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act, the 1940 Act, the Advisers Act Rules and Regulations or the
1940 Act Rules and Regulations from acting under the Sub-Advisory
Agreement as contemplated by the Preliminary Prospectus and the
Prospectus.
(2) Capitalization. The Subadviser has the financial resources
available to it necessary for the performance of its services and
obligations as contemplated in the Preliminary Prospectus and the
Prospectus and under this Agreement and the Sub-Advisory Agreement.
(3) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Preliminary Prospectus and
the Prospectus, except as otherwise stated therein, (A) there has been no
Subadviser Material Adverse Effect and (B) there have been no transactions
entered into by the Subadviser which are material with respect to the
Subadviser other than those in the ordinary course of its business as
described in the Preliminary Prospectus and the Prospectus.
(4) Good Standing. The Subadviser has been duly formed and is
validly existing in good standing as a limited liability company under the
laws of the State of Delaware and has the full power and authority to own,
lease and operate its properties and to conduct its business as described
in the Registration Statement, the Preliminary Prospectus and the
Prospectus and to enter into and perform its obligations under this
Agreement and the Sub-Advisory Agreement; and the Subadviser is duly
qualified to transact business and is in good standing under the laws of
each jurisdiction which requires qualification.
(5) Power and Authority. The Subadviser has full power and authority
to enter into this Agreement and the Sub-Advisory Agreement; the execution
and delivery of, and the performance by the Subadviser of its obligations
under this Agreement and the Sub-Advisory Agreement have been duly and
validly authorized by the Subadviser; and this Agreement and the
Sub-Advisory Agreement have been duly executed and delivered by the
Subadviser and constitute the valid and legally binding agreements of the
Subadviser, enforceable against the Subadviser in accordance with their
terms, except as rights to indemnity and contribution may be limited by
federal or state securities laws and subject to the qualification that the
enforceability of the Subadviser's obligations hereunder and thereunder
may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other laws relating to or affecting creditors'
rights generally and by general equitable principles.
(6) Description of the Subadviser. The description of the Subadviser
and its business and the statements attributable to the Subadviser in the
Preliminary Prospectus and Prospectus complied and comply in all material
respects with the provisions of the 1933 Act, the 1940 Act, the Advisers
Act, the 1940 Act Rules and Regulations and the Advisers Act Rules and
Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading.
14
(7) Non-Contravention. Neither the execution, delivery or
performance of this Agreement or the Sub-Advisory Agreement nor the
consummation by the Fund or the Subadviser of the transactions herein or
therein contemplated (i) conflicts or will conflict with or constitutes or
will constitute a breach of the Organizational Documents of the
Subadviser, (ii) conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, any agreement, indenture, lease
or other instrument to which the Subadviser is a party or by which it or
any of its properties may be bound or (iii) violates or will violate any
statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Subadviser or any of its properties or will
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Subadviser pursuant to the terms of any
agreement or instrument to which the Subadviser is a party or by which the
Subadviser may be bound or to which any of the property or assets of the
Subadviser is subject.
(8) Agreements' Compliance with Laws. This Agreement and the
Sub-Advisory Agreement comply in all material respects with all applicable
provisions of the 1940 Act, the 1940 Act Rules and Regulations, the
Advisers Act and the Advisers Act Rules and Regulations.
(9) 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 Subadviser, threatened, against or affecting the Subadviser which is
required to be disclosed in the Preliminary Prospectus and Prospectus
(other than as disclosed therein), or that could reasonably be expected to
result in an Subadviser Material Adverse Effect, or that could reasonably
be expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Subadviser of its obligations under
this Agreement or the Sub-Advisory Agreement; the aggregate of all pending
legal or governmental proceedings to which the Subadviser is a party or of
which any of its property or assets is the subject which are not described
in the Preliminary Prospectus or the Prospectus, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in an Subadviser Material Adverse Effect.
(10) Absence of Further Requirements. (A) No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, and (B) no authorization, approval, vote or other
consent of any other person or entity, is necessary or required for the
performance by the Subadviser of its obligations under this Agreement or
the Sub-Advisory Agreement, except such as have been already obtained
under the 1933 Act, the 1940 Act, the Rules and Regulations, the rules and
regulations of FINRA and the NYSE and such as may be required under state
securities laws.
(11) Possession of Permits. The Subadviser has such Permits as are
necessary to own its property and to conduct its business in the manner
described in the Preliminary Prospectus and the Prospectus; the Subadviser
has fulfilled and performed all its material obligations with respect to
such Permits and no event has occurred which allows, or after notice or
15
lapse of time would allow, revocation or termination thereof or results in
any other material impairment of the rights of the Subadviser under any
such Permit.
(12) Subadviser Compliance with Policies and Procedures. The
Subadviser has adopted and implemented written policies and procedures
under Rule 206(4)-7 of the Advisers Act reasonably designed to prevent
violation of the Advisers Act and the Advisers Act Rules by the Subadviser
and its supervised persons.
(13) Absence of Manipulation. The Subadviser has not taken and will
not take, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security to facilitate
the sale or resale of the Securities, and the Subadviser is not aware of
any such action taken or to be taken by any affiliates of the Subadviser,
other than such actions as taken by the Underwriters that are affiliates
of the Subadviser, so long as such actions are in compliance with all
applicable law.
(14) Promotional Materials. In the event that the Fund or the
Subadviser makes available any promotional materials related to the
Securities or the transactions contemplated hereby intended for use only
by registered broker-dealers and registered representatives thereof by
means of an Internet web site or similar electronic means, the Subadviser
will install and maintain, or will cause to be installed and maintained,
pre-qualification and password-protection or similar procedures which are
reasonably designed to effectively prohibit access to such promotional
materials by persons other than registered broker-dealers and registered
representatives thereof.
(15) Internal Controls. The Subadviser maintains a system of
internal controls sufficient to provide reasonable assurance that (i)
transactions effectuated by it under the Sub-Advisory Agreement are
executed in accordance with its management's general or specific
authorization; and (ii) access to the Fund's assets is permitted only in
accordance with management's general or specific authorization.
(16) Money Laundering Laws. The operations of the Subadviser and its
subsidiaries are and have been conducted at all times in compliance with
applicable Money Laundering Laws and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any
arbitrator involving the Subadviser or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the knowledge of
the Subadviser, threatened.
(d) Certificates. Any certificate signed by any officer of the Fund or the
Advisers and delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Fund or the Advisers, as
the case may be, to each Underwriter as to the matters covered thereby.
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 a
16
purchase price of $_____ per share, the amount of the Initial Securities set
forth opposite such Underwriter's name in Exhibit A hereto. The Fund is advised
that the Underwriters intend to (i) make a public offering of their respective
portions of the Securities as soon after the Applicable Time as is advisable and
(ii) initially to offer the Securities upon the terms set forth in the
Preliminary Prospectus and the Prospectus.
(b) Option Securities. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Fund hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to _____ Option Securities at the same purchase price per share as the
Underwriters shall pay for the Initial Securities. Said option may be exercised
only to cover over-allotments in the sale of the Initial Securities by the
Underwriters. Said option may be exercised in whole or in part at any time and
from time to time on or before the 45th day after the date of the Prospectus
upon written or telegraphic notice by the Representatives to the Fund setting
forth the number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The number of
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Initial Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares. Any such time and date
of delivery (an "Option Closing Date") 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 Date, as
hereinafter defined.
(c) Payment. Payment of the purchase price for the Initial Securities, and
delivery of the related closing certificates therefor, shall be made at the
offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or at such other place as shall be agreed upon by the
Representatives and the Fund, at 9:00 A.M. (Eastern time) on [ ],
2010 (unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Representatives and the Fund (such time and date of payment and
delivery being herein called "Closing Date").
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 Option Closing Date as specified in the notice from the
Representatives to the Fund.
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Fund by Federal Funds wire transfer payable in same-day
funds to an account specified by the Fund. Delivery of the Initial Securities
and the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct. Xxxxx Fargo,
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 Date or the relevant Option Closing Date,
17
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 Date or the relevant Option Closing Date, 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 noon (Eastern time) on
the business day prior to the Closing Date or the relevant Option Closing Date,
as the case may be.
SECTION 3. Covenants of the Fund and the Advisers. The Fund and
the Advisers, jointly and severally, covenant with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Fund, subject to Section 3(a)(ii), will comply with the requirements
of Rule 430A and will notify the Representatives immediately, and confirm
the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information,
(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, or of any examination pursuant to Section 8(e) of
the 1940 Act concerning the Registration Statement and (v) if the Fund
becomes the subject of a proceeding under Section 8A of the 1933 Act in
connection with the offering of the Securities. The Fund will use its best
efforts in connection with the offering of the Securities to prevent the
issuance of any stop order or the suspension of any such qualification
and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) 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)) 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, whether pursuant to the 1933 Act or otherwise, or will furnish
the Representatives with copies of any such documents within a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file or use any such document to which the Representatives or
counsel for the Underwriters shall object.
(c) 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)
and signed copies of all consents and certificates of experts. The copies
18
of the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Fund has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
prepared prior to the date of this Agreement as such Underwriter
reasonably requested, and the Fund hereby consents to the use of such
copies for purposes permitted by the 1933 Act. The Fund will furnish to
each Underwriter, without charge, such number of copies of the documents
constituting the General Disclosure Package prepared on or after the date
of this Agreement and the Prospectus (and any amendments or supplements
thereto) as such Underwriter may reasonably request. The Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto
furnished to the Underwriters is or will be, as the case may be, identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Fund will comply
with the 1933 Act, the 1940 Act and the Rules and Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time when
a prospectus is required by the 1933 Act to be delivered in connection
with sales of the Securities (including, without limitation, pursuant to
Rule 172), any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or
for the Fund, to amend the Registration Statement or amend or supplement
the Prospectus in order that the Prospectus will not include any untrue
statement 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, the 1940 Act or the
Rules and Regulations, the Fund will promptly prepare and file with the
Commission, subject to Section 3(b) hereof, 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.
(f) Blue Sky Qualifications. The Fund will use its best efforts, in
cooperation with the Underwriters, to qualify, if necessary, the
Securities for offering and sale under the applicable securities laws of
states of the United States, the District of Columbia, Guam, Puerto Rico
and the U.S. Virgin Islands as the Representatives may designate and to
maintain such qualifications in effect for a period of not less than one
year from the date of this Agreement; provided, however, that the Fund
shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject.
19
(g) Rule 158. The Fund will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable an earnings statement for the
purposes of, and to provide to the Underwriters the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Fund will use the net proceeds received by
it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(i) Reporting Requirements. The Fund, during the period when the
Prospectus is required to be delivered under the 1933 Act, the 1940 Act or
the Rules and Regulations, will file all documents required to be filed
with the Commission pursuant to the 1933 Act, the 1940 Act or the Rules
and Regulations within the time periods required by the 1934 Act, the 1940
Act or the Rules and Regulations.
(j) Subchapter M. The Fund will comply with the requirements of
Subchapter M of the Code to qualify as a regulated investment company
under the Code.
(k) Absence of Manipulation. The Fund and the Advisers have not
taken and will not take, directly or indirectly, any action designed to or
that would constitute or that might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security
to facilitate the sale or resale of the Securities, and the Fund and the
Advisers are not aware of any such action taken or to be taken by any
affiliates of the Fund or the Advisers, other than such actions as taken
by the Underwriters that are affiliates of the Fund or the Advisers, so
long as such actions are in compliance with all applicable law.
(l) Restriction on Sale of Securities. The Fund will not, without
the prior written consent of Xxxxx Fargo, offer, sell, contract to sell,
pledge, or otherwise dispose of, or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Fund or any affiliate of the Fund or
any person in privity with the Fund, directly or indirectly, including the
filing (or participation in the filing) of a registration statement with
the Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other Securities or any
securities convertible into, or exercisable, or exchangeable for,
Securities; or publicly announce an intention to effect any such
transaction for a period of 180 days following the Applicable Time,
provided, however, that the Fund may issue and sell Securities pursuant to
any dividend reinvestment plan of the Fund in effect at the Applicable
Time.
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 word
processing, printing and delivery to the Underwriters of this Agreement, any
20
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 or
evidence of book-entry notation 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 counsel, accountants and
other advisors to the Fund, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplements thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, the
documents constituting the General Disclosure Package, the Prospectus and the
1940 Act Notification, any Sales Material and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplements thereto, (viii) the fees and
expenses of the custodian and the transfer agent and 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
FINRA of the terms of the sale of the Securities, (x) the transportation and
other expenses incurred in connection with presentations to prospective
purchasers of the Securities, (xi) the fees and expenses incurred in connection
with the listing of the Securities on the NYSE and (xii) all other costs and
expenses incident to the performance by the Fund of its obligations hereunder.
To the extent that the foregoing costs and expenses incidental to the
performance of the obligations of the Fund under this Agreement exceed $0.04 per
share, the Adviser will pay all such costs and expenses.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Fund and 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 Underwriters to purchase the Initial Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Fund and the Advisers
contained herein as of the Applicable Time, the Closing Date and any Option
Closing Date pursuant to Section 4 hereof, to the accuracy of the statements of
the Fund and the Advisers made in any certificates pursuant to the provisions
hereof, to the performance by the Fund and the Advisers of their respective
covenants and other obligations hereunder and to the following additional
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at the Closing Date (or the applicable Option Closing Date,
as the case may be) no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or any
notice objecting to its use or order pursuant to Section 8(e) of the 1940
Act shall have been issued and proceedings therefor initiated or, to the
knowledge of the Fund or the Advisers, threatened by the Commission, and
any request on the part of the Commission for additional information shall
21
have been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 497 or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430A.
(b) Opinion of Counsel for Fund. At the Closing Date, the
Representatives shall have received the favorable opinion, dated as of the
Closing Date, of Xxxxxxx and Xxxxxx LLP, counsel for the Fund ("Fund
Counsel"), in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters, to the effect set forth in Exhibit B
hereto and to such further effect as counsel to the Underwriters may
reasonably request. Insofar as the opinion expressed above related to or
is dependent upon matters governed by Massachusetts law, Xxxxxxx and
Xxxxxx LLP will be permitted to rely on the opinion of Xxxxxxx XxXxxxxxx
LLP.
(c) Opinion of Counsel for Underwriters. At the Closing Date, the
Representatives shall have received the favorable opinion, dated as of the
Closing Date, of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters, in form and substance satisfactory to the
Representatives. Insofar as the opinion expressed above relates to or is
dependent upon matters governed by Massachusetts law, Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP will be permitted to rely on the opinion of Xxxxxxx XxXxxxxxx
LLP.
(d) Certificate of the Fund. At the Closing Date or the applicable
Option Closing Date, as the case may be, there shall not have been, since
the date hereof or since the respective dates as of which information is
given in the Prospectus or the General Disclosure Package (exclusive of
any amendments or supplements thereto subsequent to the date of this
Agreement), any Fund Material Adverse Effect, and, at the Closing Date,
the Representatives shall have received a certificate of the Chairman, the
President, the Chief Executive Officer or an Executive Vice President or
Senior Vice President of the Fund and of the Chief Financial Officer or
Chief Accounting Officer of the Fund, dated as of the Closing Date, to the
effect that (i) there has been no such Fund Material Adverse Effect, (ii)
the representations and warranties of the Fund in this Agreement are true
and correct with the same force and effect as though expressly made at and
as of the Closing Date, (iii) the Fund has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at
or prior to the Closing Date under or pursuant to this Agreement, and (iv)
no stop order suspending the effectiveness of the Registration Statement
or order of suspension or revocation of registration pursuant to Section
8(e) of the 1940 Act has been issued, and no proceedings for that purpose
have been instituted or are pending or, to their knowledge, are
contemplated by the Commission.
(e) Opinion of Counsel for the Adviser. At the Closing Date, the
Representatives shall have received the favorable opinion, dated as of the
Closing Date, of [ADVISER'S COUNSEL], counsel for the Adviser, in form and
substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in Exhibit C hereto and to such
further effect as counsel to the Underwriters may reasonably request.
22
(f) Certificate of the Adviser. At the Closing Date or the
applicable Option Closing Date, as the case may be, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus or the General Disclosure Package
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement), any Adviser Material Adverse Effect, and, at the
Closing Date, the Representatives shall have received a certificate of the
Chairman, the President, the Chief Executive Officer or an Executive Vice
President or Senior Vice President of the Adviser and of the Chief
Financial Officer or Chief Accounting Officer of the Adviser, dated as of
the Closing Date, to the effect that (i) there has been no such Adviser
Material Adverse Effect, (ii) the representations and warranties of the
Adviser in this Agreement are true and correct with the same force and
effect as though expressly made at and as of the Closing Date, (iii) the
Adviser has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Closing Date
under or pursuant to this Agreement, and (iv) no stop order suspending the
effectiveness of the Registration Statement or order of suspension or
revocation of registration pursuant to Section 8(e) of the 1940 Act has
been issued and no proceedings for that purpose have been instituted or
are pending or, to their knowledge, are contemplated by the Commission.
(g) Opinion of Counsel for the Subadviser. At the Closing Date, the
Representatives shall have received the favorable opinion, dated as of the
Closing Date, of [SUBADVISER'S COUNSEL], counsel for the Subadviser, in
form and substance satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in Exhibit D hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(h) Certificate of the Subadviser. At the Closing Date or the
applicable Option Closing Date, as the case may be, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus or the General Disclosure Package
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement), any Subadviser Material Adverse Effect, and, at the
Closing Date, the Representatives shall have received a certificate of the
Chairman, the President, the Chief Executive Officer or an Executive Vice
President or Senior Vice President of the Subadviser and of the Chief
Financial Officer or Chief Accounting Officer of the Subadviser, dated as
of the Closing Date, to the effect that (i) there has been no such
Subadviser Material Adverse Effect, (ii) the representations and
warranties of the Subadviser in this Agreement are true and correct with
the same force and effect as though expressly made at and as of the
Closing Date, (iii) the Subadviser has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Date under or pursuant to this Agreement, and (iv) no
stop order suspending the effectiveness of the Registration Statement or
order of suspension or revocation of registration pursuant to Section 8(e)
of the 1940 Act has been issued and no proceedings for that purpose have
been instituted or are pending or, to their knowledge, are contemplated by
the Commission.
(i) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from Deloitte &
23
Touche LLP a letter, dated the date of this Agreement and 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 of the Fund
contained in the Registration Statement, the Preliminary Prospectus or the
Prospectus.
(j) Bring-down Comfort Letter. At the Closing Date, the
Representatives shall have received from Deloitte & Touche LLP a letter,
dated as of the Closing Date and in form and substance satisfactory to the
Representatives, to the effect that they reaffirm the statements made in
the letter furnished pursuant to subsection (i) of this Section, except
that the specified date referred to shall be a date not more than three
business days prior to the Closing Date.
(k) Fee Agreements. At the Applicable Time, the Adviser shall
deliver to each of the other parties to the Fee Agreements copies of the
Fee Agreements, executed by the Adviser and dated the date of this
Agreement, together with reproduced copies of such agreements executed by
the Adviser for each of the other parties thereto.
(l) No Objection. Prior to the date of this Agreement, FINRA shall
have confirmed that it has no objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements. (m) 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 on any Option Closing Date that is after
the Closing Date, the obligations of the several Underwriters to purchase
the applicable Option Securities shall be subject to the conditions
specified in the introductory paragraph of this Section 5 and to the
further condition that, at the applicable Option Closing Date, the
Representatives shall have received:
(1) Officers' Certificate of the Fund. A certificate, dated
such Option Closing Date, to the effect set forth in, and signed by
two of the officers specified in, Section 5(d) hereof, except that
the references in such certificate to the Closing Date shall be
changed to refer to such Option Closing Date.
(2) Opinion of Counsel for Fund. The favorable opinion of
Fund Counsel in form and substance satisfactory to counsel for the
Underwriters, dated such Option Closing Date, relating to the Option
Securities to be purchased on such Option Closing Date and otherwise
to the same effect as the opinion required by Section 5(b) hereof.
(3) Opinion of Counsel for Underwriters. The favorable
opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, dated such Option Closing Date, relating to the Option
Securities to be purchased on such Option Closing Date and otherwise
to the same effect as the opinion required by Section 5(c) hereof.
24
(4) Opinion of Counsel for the Adviser. The favorable opinion
of [ADVISER COUNSEL], counsel for the Adviser, dated such Option
Closing Date, relating to the Option Securities to be purchased on
such Option Closing Date and otherwise to the same effect as the
opinion required by Section 5(e) hereof.
(5) Certificate of the Adviser. A certificate, dated such
Option Closing Date, to the effect set forth in, and signed by two
of the officers specified in, Section 5(f) hereof, except that the
references in such certificate to the Closing Date shall be changed
to refer to such Option Closing Date.
(6) Opinion of Counsel for the Subadviser. The favorable
opinion of [SUBADVISER COUNSEL], counsel for the Subadviser, dated
such Option Closing Date, relating to the Option Securities to be
purchased on such Option Closing Date and otherwise to the same
effect as the opinion required by Section 5(g) hereof.
(7) Certificate of the Subadviser. A certificate, dated such
Option Closing Date, to the effect set forth in, and signed by two
of the officers specified in, Section 5(h) hereof, except that the
references in such certificate to the Closing Date shall be changed
to refer to such Option Closing Date.
(8) Bring-down Comfort Letter. A letter from Deloitte &
Touche LLP, in form and substance satisfactory to the
Representatives and dated such Option Closing Date, substantially in
the same form and substance as the letter furnished to the
Representatives pursuant to Section 5(j) hereof, except that the
"specified date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Option Closing
Date.
(n) Additional Documents. At the Closing Date and at each Option
Closing Date, counsel for the Underwriters shall have been furnished with
such documents and opinions as they may require for the purpose of
enabling them to pass upon the issuance and sale of the 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, contained in this Agreement; and all proceedings taken by the
Fund and the Advisers in connection with the issuance and sale of the
Securities as herein contemplated and in connection with the other
transactions contemplated by this Agreement shall be satisfactory in form
and substance to the Representatives and counsel for the Underwriters.
(o) Delivery of Documents. The documents required to be delivered by
this Section 5 shall be delivered at the office of Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, at 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, on the Closing Date and at each Option Closing Date.
(p) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be
25
fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities on an Option Closing Date which is after the
Closing Date, the obligations of the several Underwriters to purchase the
relevant Option Securities, may be terminated by the Representatives by
notice to the Fund.
SECTION 6. Indemnification.
(a) Indemnification by the Fund and the Advisers. The Fund and the
Advisers, jointly and severally, agree to indemnify and hold harmless the
Underwriters, affiliates of 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), 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, any Sales Material, the Preliminary Prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that (subject to
Section 6(d) below) any such settlement is effected with the written
consent of the Fund and the Advisers; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxx Fargo),
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 the Advisers by any Underwriter
through Xxxxx Fargo expressly for use in the Registration Statement (or
any amendment thereto), or in any preliminary prospectus, any Sales
Material, the Preliminary Prospectus or the Prospectus (or any
amendment or supplement thereto).
26
(b) Indemnification by the Underwriters. Each Underwriter severally agrees
to indemnify and hold harmless each of the Fund and the Advisers, each of their
directors, trustees, members, each of their officers who signed the Registration
Statement and each person, if any, who controls the Fund or the Advisers 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 6, 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), or any
preliminary prospectus, any Sales Material, the 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 Xxxxx Fargo expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus, any Sales
Material, the Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto). The Fund and the Advisers acknowledge that the statements
set forth in the last paragraph of the cover page regarding the expected
delivery of the Securities and, under the heading "Underwriting", (i) the list
of Underwriters and their respective participation in the sale of the
Securities, (ii) the sentences related to concessions and reallowances and (iii)
the paragraphs related to stabilization, syndicate covering transactions and
penalty bids in any Preliminary Prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the Prospectus.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. Counsel to the indemnified parties shall be selected as follows:
counsel to the Underwriters 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 shall be selected by Xxxxx Fargo; counsel to the Fund, its
directors, trustees, members, each of its officers who signed the Registration
Statement and each person, if any, who controls the Fund within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall be selected by
the Fund; counsel to the Adviser and each person, if any, who controls such
Adviser within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall be selected by the Adviser; and counsel to the Subadviser and
each person, if any, who controls such Subadviser within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall be selected by the
Subadviser. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for the Underwriters 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, the fees and expenses of more than
one counsel (in addition to any local counsel) separate from their own counsel
for the Fund, each of their directors, trustees, members, each of its officers
who signed the Registration Statement and each person, if any, who controls the
Fund within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, the fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for the Adviser, the fees and expenses
of more than one counsel (in additional to any local counsel) separate from
27
their own counsel for the Subadviser and the fees and expenses of more than one
counsel, in each case 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.
(d) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Other Agreements with Respect to Indemnification and Contribution. The
provisions of this Section 6 and in Section 7 hereof shall not affect any
agreements among the Fund and the Advisers with respect to indemnification of
each other or contribution between themselves.
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 and 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
28
Securities pursuant to this Agreement (before deducting expenses) received by
the Fund and the Advisers and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth on the cover of the
Prospectus, 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, by 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 and each trustee, officer, employee and agent of an Underwriter
shall have the same rights to contributions as such Underwriters, and each
person who controls the Fund or the Advisers within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, each officer of the Fund and the
Advisers and each trustee, director or member of the Fund and the Advisers shall
have the same rights to contribution as the Fund and the Advisers. 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 Exhibit A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Fund or signed by or on behalf
of the Advisers submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
29
Underwriter or controlling person, or by or on behalf of the Fund, or by or on
behalf of the Advisers, 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 or the Advisers, at any time on or prior to the
Closing Date (and, if any Option Securities are to be purchased on an Option
Closing Date which occurs after the Closing Date, the Representatives may
terminate the obligations of the several Underwriters to purchase such Option
Securities, by notice to the Fund, at any time on or prior to such Option
Closing Date) (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 or the General Disclosure Package, any Fund Material Adverse Effect,
Adviser Material Adverse Effect or Subadviser Material Adverse Effect, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representatives, impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Fund has been suspended
or materially limited by the Commission or the NYSE, or if trading generally on
the NYSE or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, FINRA 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
9, 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 and 8 hereof 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 the Closing Date or an Option Closing
Date 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
30
(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 Option Closing Date which occurs after the Closing Date,
the obligation of the Underwriters to purchase and of the Fund to sell the
Option Securities that were to have been purchased and sold on such Option
Closing Date, shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 10 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 an Option Closing Date which is after the
Closing Date, 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, the Representatives shall have the right to postpone the
Closing Date or the relevant Option Closing Date, 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 at Xxxxx Fargo Securities,
LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Syndicate;
notices to the Fund, the Adviser shall be directed to them at [_____], [(black
circle)], Attention: President and the Subadviser shall be directed to them at
[_____], [ ], Attention: President.
SECTION 12. Parties. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Fund and the Advisers and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Fund and the Advisers and their respective successors
and the controlling persons and directors, officers, members and trustees
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 and the Advisers and their respective successors, and
said controlling persons and officers and directors and trustees 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. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. Effect of Headings. The Section and Exhibit headings
herein are for convenience only and shall not affect the construction hereof.
31
SECTION 15. Definitions. As used in this Agreement, the following
terms have the respective meanings set forth below:
"Advisers Act" means the Investment Advisers Act of 1940, as amended.
"Advisers Act Rules and Regulations" means the rules and regulations of
the Commission under the Advisers Act.
"Adviser Material Adverse Effect" means a material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Adviser, whether or not arising in the ordinary
course of business.
"Applicable Time" means the date and time that this Agreement is
executed and delivered by the parties hereto.
"Commission" means the Securities and Exchange Commission.
"Declaration of Trust" means the Agreement and Declaration of Trust of
First Trust High Income Long/Short Fund dated as of June 18, 2010, and any
amendments thereto.
"XXXXX" means the Commission's Electronic Data Gathering, Analysis and
Retrieval System.
"FINRA" means the Financial Industry Regulatory Authority.
"Fund Material Adverse Effect" means a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Fund, whether or not arising in the ordinary course
of business.
"GAAP" means generally accepted accounting principles.
"Initial Registration Statement" means the Fund's registration
statement (File Nos. 333-168186 and 811-22442) on Form N-2 (including
the statement of additional information incorporated by reference
therein), as amended (if applicable), at the time it became effective,
including the Rule 430A Information.
"NYSE" means the New York Stock Exchange.
"Organizational Documents" means (a) in the case of a corporation,
its charter and by-laws; (b) in the case of a limited or general
partnership, its partnership certificate, certificate of formation or
similar organizational document and its partnership agreement; (c) in
the case of a limited liability company, its articles of organization,
certificate of formation or similar organizational documents and its
operating agreement, limited liability company agreement, membership
agreement or other similar agreement; (d) in the case of a trust, its
declaration of trust, certificate of formation or similar
organizational document and its trust agreement or other similar
agreement; and (e) in the case of any other entity, the organizational
and governing documents of such entity.
32
"preliminary prospectus" means any prospectus (including the statement
of additional information incorporated by reference therein) used in connection
with the offering of the Securities that was so used before the Initial
Registration Statement became effective, or that was used after such
effectiveness and prior to the execution and delivery of this Agreement, or
that omitted the Rule 430A Information or that was captioned "Subject to
Completion".
"Preliminary Prospectus" shall mean the preliminary prospectus
(including the statement of additional information incorporated by reference
therein) dated [ ], 2010 and any preliminary prospectus (including
the statement of additional information incorporated by reference therein)
included in the Registration Statement at the Applicable Time that omits Rule
430A Information.
"Prospectus" shall mean the prospectus (including the statement of
additional information incorporated by reference therein) relating to the
Securities that is first filed pursuant to Rule 497 after the Applicable Time.
"Registration Statement" means the Initial Registration Statement;
provided that, if a Rule 462(b) Registration Statement is filed with the
Commission, then the term "Registration Statement" shall also include such Rule
462(b) Registration Statement.
"Rule 172," "Rule 497," "Rule 430A," "Rule 433" and "Rule 462(b)"
refer to such rules under the 1933 Act.
"Rule 430A Information" means the information included in the
Prospectus that was omitted from the Initial Registration Statement at the time
it became effective but that is deemed to be a part of the Initial Registration
Statement at the time it became effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" means a registration statement
filed by the Fund pursuant to Rule 462(b) for the purpose of registering any of
the Securities under the 1933 Act, including the Rule 430A Information.
"Rules and Regulations" means, collectively, the 1933 Act Rules and
Regulations and the 1940 Act Rules and Regulations.
"Xxxxxxxx-Xxxxx Act" means the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated thereunder or implementing the provisions
thereof.
"Subadviser Material Adverse Effect" means a material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Subadviser, whether or not arising in the ordinary
course of business.
"1933 Act" means the Securities Act of 1933, as amended.
"1933 Act Rules and Regulations" means the rules and regulations of
the Commission under the 1933 Act.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
33
"1934 Act Rules and Regulations" means the rules and regulations of
the Commission under the 1934 Act.
"1940 Act" means the Investment Company Act of 1940, as amended.
"1940 Act Notification" means a notification of registration of the
Fund as an investment company under the 1940 Act on Form N-8A, as the 1940 Act
Notification may be amended from time to time.
"1940 Act Rules and Regulations" means the rules and regulations of
the Commission under the 1940 Act.
All references in this Agreement to the Registration Statement, the
Initial Registration Statement, any Rule 462(b) Registration Statement, any
preliminary prospectus, the Preliminary Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to XXXXX.
SECTION 16. Absence of Fiduciary Relationship. Each of the Fund
and the Advisers acknowledges and agrees that:
(a) Each of the Underwriters is acting solely as an underwriter in
connection with the public offering of the Securities and no fiduciary, advisory
or agency relationship between the Fund or the Advisers, on the one hand, and
any of the Underwriters, on the other hand, has been or will be created in
respect of any of the transactions contemplated by this Agreement, irrespective
of whether or not any of the Underwriters have advised or is advising the Fund
or the Advisers on other matters and none of the Underwriters has any obligation
to the Fund or the Advisers with respect to the transactions contemplated by
this Agreement except the obligations expressly set forth in this Agreement;
(b) the public offering price of the Securities and the price to be paid
by the Underwriters for the Securities set forth in this Agreement were
established by the Fund following discussions and arms-length negotiations with
the Representatives;
(c) it is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions contemplated by
this Agreement;
(d) in connection with each transaction contemplated by this Agreement and
the process leading to such transactions, each Underwriter is and has been
acting solely as principal and not as fiduciary, advisor or agent of the Fund or
the Adviser or any of their respective affiliates; provided however, that in its
capacity as an independent contractor, an Underwriter may be providing advice to
the Adviser as to the structure, design and organization of the Fund pursuant to
the Fee Agreements;
(e) none of the Underwriters has provided any legal, accounting,
regulatory or tax advice to the Fund or the Advisers with respect to the
transactions contemplated by this Agreement and it has consulted its own legal,
accounting, regulatory and tax advisers to the extent it has deemed appropriate;
34
(f) it is aware that the Underwriters and their respective affiliates are
engaged in a broad range of transactions which may involve interests that differ
from those of the Fund and the Advisers, and that none of the Underwriters has
any obligation to disclose such interests and transactions to the Fund or the
Advisers by virtue of any fiduciary, advisory or agency relationship; and
(g) it waives, to the fullest extent permitted by law, any claims it may
have against any of the Underwriters for breach of fiduciary duty or alleged
breach of fiduciary duty and agrees that none of the Underwriters shall have any
liability (whether direct or indirect, in contract, tort or otherwise) to it in
respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on its behalf or on behalf of the Fund or the Advisers.
[SIGNATURE PAGE FOLLOWS]
35
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Fund, the Adviser and the Subadviser a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Underwriters, the Fund, the Adviser and the
Subadviser in accordance with its terms.
Very truly yours,
FIRST TRUST HIGH INCOME LONG/SHORT FUND
By ____________________________________
Name:
Title:
FIRST TRUST ADVISORS L.P.
By ____________________________________
Name:
Title:
MACKAY XXXXXXX LLC
By ____________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above
written:
XXXXX FARGO SECURITIES, LLC
[REPRESENTATIVES]
By: XXXXX FARGO SECURITIES, LLC
By: ___________________________
Authorized Signatory
For themselves and as Representatives of the Underwriters named in Exhibit A
hereto.
