Common use of Offering and Sale of Shares Clause in Contracts

Offering and Sale of Shares. (a) First Trust will not make any offer of Shares on the basis of any communications or documents relating to the Fund or Shares, except the Offering Materials, any other documents supplied or prepared by the Fund or the Investment Manager and delivered to First Trust by the Fund or the Investment Manager for use in making an offer of Shares, or any other materials expressly approved for such use by the Fund or the Investment Manager. The Fund and the Investment Manager shall not, and the Fund shall not permit the Sub-Adviser to, provide to any prospective investor or First Trust Client (as defined below) any Offering Materials that have not been approved by First Trust in writing for distribution to prospective investors or First Trust Clients; provided that such approval shall not reduce the Fund’s or the Investment Manager’s responsibility for the accuracy of such materials. First Trust shall not make any representations to any prospective investor or First Trust Client concerning the Fund or the Investment Manager other than those contained in the Offering Materials or in any promotional materials or sales literature furnished to First Trust by the Investment Manager. The Fund shall provide First Trust with reasonably advanced notice to review and comment on any amendment to the Fund’s Offering Materials. By way of example and not limitation, in the ordinary course of business the Fund shall provide First Trust any such amendment at least three (3) business days prior to filing such amendment. To the extent either the Fund or First Trust seeks to amend any provision in the Fund’s Registration Statement or Memorandum which pertains to First Trust; the distribution of the Shares; the applicable sales charge; the compensation or other payments, if any, paid by the Fund and/or First Trust to Intermediaries, other third-party broker-dealers or other parties in connection with the sale of a Fund’s Shares; or any distribution and/or service fee, First Trust and the Fund shall in good faith consult with each other regarding any of the foregoing to develop disclosure mutually acceptable to the parties. In the event the Fund and First Trust cannot agree on mutually acceptable disclosure, the Fund acknowledges that it may not be commercially reasonable for First Trust to solicit prospective investors for the Fund and that First Trust may have to stop soliciting prospective investors for the Fund until such time as the parties can agree on mutually acceptable disclosure. Notwithstanding the foregoing, nothing contained in this Agreement shall in any way limit a Fund’s right to file at any time such amendments to the Registration Statement or Memorandum, of whatever character, as the Fund may deem advisable, such right being in all respects absolute and unconditional. (b) All activities of First Trust and its registered representatives, employees, independent contractors and agents in connection with the introduction of Shares shall be in material compliance with all applicable laws, rules and regulations, First Trust’s policies and procedures and any written instructions of the Fund’s Board of Trustees. (c) First Trust shall comply with all applicable laws and regulations in connection with its activities as placement agent. First Trust is duly registered pursuant to the provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as a broker-dealer and it is a member in good standing of FINRA and is duly registered as a broker-dealer in those states in which it is required to be so registered in order to carry out the offering of Shares contemplated by this Agreement. First Trust has and will maintain all licenses and registrations for all associated person necessary under applicable law and regulations (including the rules of FINRA or the SEC) to serve as the placement agent of the Fund and provide the services required to be provided by it hereunder. (d) First Trust will reasonably believe immediately prior to making any offer or sale of Shares that any prospective investor solicited by First Trust is an “accredited investor,” as that term is defined in Regulation D, and meets such other eligibility criteria as are set forth in the Offering Documents. The Fund will be responsible for the timely filing of any notice with applicable United States or non-United States securities agencies or commissions with respect to the offer or sale of the Shares (including, without limitation, as applicable, with the SEC of any notices required by Regulation D). First Trust shall be responsible for any required filings under FINRA Rule 5123 but shall have no responsibility for filings of other placement agents retained by the Fund or the Investment Manager with First Trust’s consent. (e) Prior to the sale of any Shares to any First Trust Client that is a Direct Client, First Trust will take reasonable steps to verify that such First Trust Client is an “accredited investor,” as that term is defined in Regulation D, in accordance with SEC guidance and the “safe harbors” afforded under Rule 506(c) of Regulation D and shall perform “know your customer,” “suitability” and “best interests” reviews in compliance with applicable rules and regulations. First Trust will maintain records with respect to the verification of each such First Trust Client’s status as an “accredited investor,” which records shall be made available to the Fund or the relevant regulatory authorities in connection with any investigation of the Fund’s compliance with Rule 506(c) of Regulation D and other applicable rules and regulations. (f) With respect to eligible investors for Shares that are clients of Intermediaries that are SEC registered investment advisers (“Intermediary RIAs,” and with the Intermediary BDs, the “Intermediaries”), First Trust shall execute a Letter of Understanding in the form attached as Annex A hereto pursuant to which such Intermediary RIA shall agree to perform “accredited investor,” “know your customer,” “suitability” and “best interests” reviews in compliance with applicable rules and regulations which records shall be made available to the Fund or the relevant regulatory authority in connection with any investigation of the Fund’s compliance with Rule 506(c) of Regulation D and other applicable rules and regulations. (g) With respect to eligible investors for Shares that are customers of Intermediary BDs, First Trust shall act in a commercially reasonable manner to either (i) execute a selling agreement with the Intermediary BD containing customary representations, warranties and indemnifications with respect to the sale of Shares or (ii) introduce such Intermediaries to the Investment Manager for the execution of private placement or similar agreement directly with the Fund. Such Intermediary BDs shall be responsible for “accredited investor,” “know your customer,” “suitability” and “best interests” reviews in compliance with applicable rules and regulations. (h) The Fund and the Investment Manager will be responsible for the registration or qualification of the Shares under all applicable laws, rules or regulations. The Fund and the Investment Manager will use reasonable efforts to register or qualify the Shares in each jurisdiction, including each state of the United States and each jurisdiction outside of the United States (if applicable), in which the Shares are offered by First Trust or an Intermediary and which are acceptable to the Investment Manager, and will notify First Trust when such registration or qualification is completed so that offers and sales may be made in such jurisdiction. If the Shares may not be offered in any particular jurisdiction, the Investment Manager will promptly notify First Trust. First Trust assumes no responsibility or obligation with respect to the registration or qualification of the Shares under the laws of any jurisdiction. (i) First Trust will pay the costs incurred in printing and mailing copies of the Offering Materials and such other materials as First Trust is required to provide to prospective investors under this Agreement. The Fund will provide a copy of the Offering Materials to First Trust. If any Offering Materials are amended or supplemented, the Fund will promptly notify First Trust and provide copies of such amendments or supplements. First Trust also shall regularly keep the Investment Manager apprised of its ongoing solicitation efforts generally, providing such information with such frequency as the Fund and Investment Manager shall reasonably request. (j) All subscriptions to the Fund submitted by prospective investors and First Trust Clients will be subject to the Investment Manager’s approval. The Investment Manager agrees that it has the ultimate responsibility to determine whether a prospective investor meets all applicable private placement accreditation, minimum investment and other qualification requirements necessary to invest in the Fund. Subject to the foregoing, the Investment Manager agrees that it will not unreasonably reject or delay accepting a subscription submitted by First Trust if the prospective investor otherwise meets the eligibility criteria set forth in the Offering Materials. The Investment Manager shall promptly notify First Trust regarding the Fund’s acceptance or rejection of any investor introduced by First Trust or an Intermediary. The Fund reserves the right, in its sole discretion, to accept or reject any subscription to purchase Shares in the Fund at any time.