FIRST TRUST MORTGAGE INCOME FUND
UP TO ONE MILLION COMMON SHARES OF BENEFICIAL
INTEREST
CAPITAL ON DEMAND(TM)
SALES AGREEMENT
June 21, 2012
JONESTRADING INSTITUTIONAL SERVICES LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
First Trust Mortgage Income Fund, a Massachusetts business trust (the
"FUND"), First Trust Advisors L.P., an Illinois limited partnership (the
"ADVISER") and Brookfield Investment Management Inc., a Delaware corporation
(the "SUB-ADVISER"), confirm their agreement (this "AGREEMENT") with
JonesTrading Institutional Services LLC ("XXXXX"), as follows:
1. Issuance and Sale of Shares. The Fund agrees that, from time to time during
the term of this Agreement, on the terms and subject to the conditions set forth
herein, it may issue and sell through Xxxxx, acting as agent and/or principal,
up to one million (1,000,000) of the Fund's common shares of beneficial
interest, $0.01 par value per share (the "SHARES"). Notwithstanding anything to
the contrary contained herein, the parties hereto agree that compliance with the
limitations set forth in this Section 1 on the number of Shares issued and sold
under this Agreement shall be the sole responsibility of the Fund, and Xxxxx
shall have no obligation in connection with such compliance. The issuance and
sale of Shares through Xxxxx will be effected pursuant to the Registration
Statement (as defined below) filed by the Fund and declared effective by the
Securities and Exchange Commission (the "COMMISSION").
The Fund has entered into an investment management agreement with the Adviser
dated December 6, 2010 (the "Advisory Agreement"), a Custodian Services
Agreement with The Bank of New York Mellon (the "Custodian") dated May 16, 2005
(the "Custodian Contract"), a Transfer Agency Services Agreement with BNY Mellon
Investment Servicing (US) Inc. dated May 25, 2005 (the "Transfer Agency
Agreement") and an Administration and Accounting Services Agreement with BNY
Mellon Investment Servicing (US) Inc. dated May 25, 2005 (the "Administration
Agreement"). Collectively, the Advisory Agreement, the Custodian Contract, the
Transfer Agency Agreement and the Administration Agreement are herein referred
to as the "Fund Agreements." The Adviser has entered into the Advisory Agreement
and a Sub-Advisory Agreement with the Sub-Adviser dated July 25, 2011 (the
"Sub-Advisory Agreement," together with the Advisory Agreement, the "Adviser
Agreements"). The Sub-Adviser has entered into the Sub-Advisory Agreement and
this Agreement. In addition, the Fund has adopted a dividend reinvestment plan
(the "DIVIDEND REINVESTMENT PLAN") pursuant to which the holders of Shares shall
have their dividends automatically reinvested in additional Shares unless they
elect to receive such dividends in cash.
The Fund has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the "SECURITIES ACT") and the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder (collectively, the "INVESTMENT COMPANY
ACT"), with the Commission a registration statement on Form N-2 (File Nos.
333-170228 and 811-21727) (the "ORIGINAL REGISTRATION STATEMENT"), including a
base prospectus ("BASIC PROSPECTUS"), with respect to the Shares. The Fund shall
prepare one or more supplements relating to the Shares (collectively, the
"PROSPECTUS SUPPLEMENT") to the Basic Prospectus, to be filed with the
Commission pursuant to Rule 497 under the Securities Act. The Fund shall furnish
to Xxxxx, for use by Xxxxx, copies of the Basic Prospectus, as supplemented by
the Prospectus Supplement, relating to the Shares. Except where the context
otherwise requires, the Original Registration Statement, as amended when it
became effective, including all documents filed as part thereof, including the
Fund's Statement of Additional Information, and including any information
contained in a Prospectus Supplement subsequently filed with the Commission
pursuant to Rule 497 under the Securities Act is herein called the "REGISTRATION
STATEMENT." The Basic Prospectus, as it may be supplemented by the Prospectus
Supplement, in the form in which such prospectus and/or Prospectus Supplement
have most recently been filed by the Fund with the Commission pursuant to Rule
497 under the Securities Act, is herein called the "PROSPECTUS."
For purposes of this Agreement, all references to the Registration Statement,
the Prospectus, or to any amendment or supplement thereto shall be deemed to
include any copy filed with the Commission pursuant to its Interactive Data
Electronic Application database. For purposes of this Agreement, all references
to the Registration Statement, unless otherwise noted and except as the context
otherwise requires, shall be deemed to include any and all amendments thereto.
2. Placements. Each time that the Fund wishes to issue and sell Shares
hereunder (each, a "PLACEMENT"), it will notify Xxxxx by e-mail notice (or other
method mutually agreed to in writing by the parties) containing the parameters
in accordance with which it desires the Shares to be sold, which shall, at a
minimum, include the number of Shares to be issued (the "PLACEMENT SHARES"), the
time period during which sales are requested to be made, any limitation on the
number of Placement Shares that may be sold in any one day, any minimum price
below which sales may not be made and the discount, commission or other
compensation to be paid by the Fund to Xxxxx,(excluding the Reimbursable Amounts
(as defined in Section 7(e) herein) (a "PLACEMENT NOTICE"), a form of which,
containing such minimum sales parameters necessary, is attached hereto as
Schedule 1. The Placement Notice shall originate from any of the individuals
from the Fund set forth on Schedule 3 (with a copy to each of the other
individuals from the Fund listed on such schedule), and shall be addressed to
each of the individuals from Xxxxx set forth on Schedule 3, as such Schedule 3
may be amended from time to time. The Placement Notice shall be effective upon
receipt by Xxxxx unless and until (i) in accordance with the notice requirement
set forth in Section 4, Xxxxx declines to accept the terms contained therein for
any reason, in its sole discretion, (ii) the entire amount of the Placement
Shares have been sold, (iii) in accordance with the notice requirements set
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forth in Section 4, the Fund or Xxxxx suspends or terminates the Placement
Notice, (iv) the Fund issues a subsequent Placement Notice with parameters
superseding those on the earlier dated Placement Notice, or (v) the Agreement
has been terminated under the provisions of Section 11. The amount of any
discount, commission or other compensation to be paid by the Fund to Xxxxx in
connection with the sale of the Placement Shares shall be calculated in
accordance with the terms set forth in Schedule 2, unless superceded by the
terms and conditions as set forth in the applicable Placement Notice. It is
expressly acknowledged and agreed that neither the Fund nor Xxxxx will have any
obligation whatsoever with respect to a Placement or any Placement Shares unless
and until the Fund delivers a Placement Notice to Xxxxx and Xxxxx does not
decline, within the time period specified in Section 4, such Placement Notice
pursuant to the terms set forth above, and then only upon the terms specified
therein and herein. In the event of a conflict between the terms of this
Agreement and the terms of a Placement Notice, the terms of the Placement Notice
will control.
3. Sale of Placement Shares by Xxxxx. Subject to the terms and conditions
herein set forth, upon the Fund's issuance of a Placement Notice, and unless the
sale of the Placement Shares described therein has been declined, suspended or
otherwise terminated in accordance with the terms of this Agreement, Xxxxx, for
the period specified in the Placement Notice, will use its commercially
reasonable efforts consistent with its normal trading and sales practices to
sell such Placement Shares up to the amount specified, and otherwise in
accordance with the terms of such Placement Notice. Xxxxx will provide written
confirmation to the Fund no later than the opening of the Trading Day (as
defined below) immediately following the Trading Day on which it has made sales
of Placement Shares hereunder setting forth the number of Placement Shares sold
on such day, the compensation payable by the Fund with respect to such sales,
with an itemization of deductions made by Xxxxx (as set forth in Section 5(a))
from the gross proceeds that it receives from such sales, and the Net Proceeds
(as defined below) payable to the Fund. The Fund and the Adviser each
acknowledge that Xxxxx intends to sell the Placement Shares in privately
negotiated transactions and/or any other method permitted by law, including
sales made directly on the New York Stock Exchange (the "NYSE"), the
then-existing trading market for the Shares or sales made to or through a market
maker or through an electronic communications network, or in any other manner
that may be deemed to be an "at-the-market" offering as defined in Rule 415 of
the Securities Act, in each case, at or above the then-current net asset value
of the Fund's common shares of beneficial interest (exclusive of any
distribution, commission or discount) in accordance with Section 23(b) of the
Investment Company Act. As the Fund's agent with respect to any such sale, Xxxxx
covenants that it will comply with all prospectus delivery requirements imposed
under applicable federal and state securities laws. The Fund, the Adviser and
Sub-Adviser each acknowledge and agree that (i) there can be no assurance that
Xxxxx will be successful in selling Placement Shares, and (ii) Xxxxx will not
incur any liability or obligation to the Fund, the Adviser, the Sub-Adviser or
any other person or entity if it does not sell Placement Shares for any reason
other than a failure by Xxxxx to use its commercially reasonable efforts
consistent with its normal trading and sales practices to sell such Placement
Shares as required under this Section 3. For the purposes hereof, "TRADING DAY"
means any day on which Shares are purchased and sold on the principal exchange
or market on which the Shares are listed or quoted.
4. Suspension of Sales. The Fund or Xxxxx may, upon notice to the other party
in writing (including by e-mail correspondence to all of the individuals of the
other party set forth on Schedule 3 or by telephone (confirmed immediately by
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verifiable facsimile transmission or e-mail correspondence to all of the
individuals of the other party set forth on Schedule 3)), suspend or refuse to
undertake any sale of Placement Shares; provided, however, that such suspension
or refusal shall not affect or impair either party's obligations with respect to
any Placement Shares sold hereunder prior to the receipt of such notice. Each of
the parties hereto agrees that no such notice shall be effective against the
other unless it is made to the individuals named on Schedule 3 hereto in
accordance with this Section 4, as such Schedule may be amended from time to
time.
5. Settlement.
(a) Settlement of Placement Shares. Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the third (3rd) Business Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each, a
"SETTLEMENT DATE"). The amount of proceeds to be delivered to the Fund on a
Settlement Date against the receipt of the Placement Shares sold (the "NET
PROCEEDS") will be equal to the aggregate sales price at which such Placement
Shares were sold, after deduction for (i) Xxxxx'x commission, discount or other
compensation for such sales payable by the Fund pursuant to Section 2 hereof (or
as otherwise agreed to in writing as set forth in the Placement Notice), (ii)
Reimbursable Amounts, due and payable by the Fund to Xxxxx hereunder pursuant to
Section 7(e) hereof, and (iii) any transaction fees imposed by any governmental
or self-regulatory organization in respect of such sales.
(b) Delivery of Shares. On or before each Settlement Date, the Fund will,
or will cause its transfer agent to, electronically transfer the Placement
Shares being sold by crediting Xxxxx'x or its designee's account at The
Depository Trust Company through its Deposit and Withdrawal at Custodian
("DWAC") System or by such other means of delivery as may be mutually agreed
upon by the parties hereto and, upon receipt of such Placement Shares, which in
all cases shall be freely tradable, transferable, registered shares in good
deliverable form, Xxxxx will deliver the related Net Proceeds in same day funds
to an account designated by the Fund prior to the Settlement Date. The Fund
agrees that if the Fund defaults on its obligation to deliver Placement Shares
on a Settlement Date, the Fund and the Adviser each agree that, in addition to
and in no way limiting the rights and obligations set forth in Section 9(a)
hereto, it will (i) hold Xxxxx harmless against any loss, claim, damage, or
expense (including reasonable legal fees and expenses), as incurred, arising out
of or in connection with such default by the Fund and (ii) pay to Xxxxx any
commission, discount, or other compensation to which it would otherwise have
been entitled absent such default.
6. Representations and Warranties of the Fund and the Adviser.
(a) Representations and Warranties by the Fund and the Adviser. The Fund
and the Adviser, jointly and severally, represent and warrant to and agree with
Xxxxx as of the date hereof and as of each Representation Date (as defined in
Section 7(j) below) as follows:
(i) The Registration Statement has been declared effective by the
Commission under the Securities Act. Each Prospectus included as part of
the Registration Statement as originally filed or as part of any amendment
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or supplement thereto or filed pursuant to Rule 497 of the Securities Act
complied when so filed in all material respects with the provisions of the
Securities Act and the Investment Company Act. The Commission has not
issued any order preventing or suspending the use of the Prospectus or the
effectiveness of the Registration Statement and no proceedings for such
purpose have been instituted or, to the knowledge of the Fund, are
contemplated by the Commission.
(ii) (A) The Registration Statement in the form in which it became
effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and as of the date hereof, as of
the time of each sale of Placement Shares pursuant to this Agreement (the
"APPLICABLE TIME") and as of each Settlement Date, and (B) the Prospectus
and any amendment or supplement thereto when filed with the Commission
under Rule 497 of the Securities Act and any amendment or supplement
thereto when filed with the Commission and as of the date hereof, as of
each Applicable Time and as of each Settlement Date, complied or will
comply in all material respects with the provisions of the Securities Act
and the Investment Company Act, and each of the Registration Statement and
the Prospectus did not or will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein (in the case
of the Prospectus, in light of the circumstances under which they were
made) not misleading; except that this representation and warranty does
not apply to statements in or omissions from the Registration Statement
and the Prospectus made in reliance upon and in conformity with
information relating to Xxxxx furnished to the Fund in writing by or on
behalf of Xxxxx expressly for use therein.
(iii) All the outstanding shares of capital stock of the Fund have
been duly authorized and validly issued, are fully paid and (except as
described in the Prospectus under "Certain Provisions in the Declaration
of Trust") nonassessable and are free of any preemptive or similar rights
and have been offered and sold by the Fund in compliance with all
applicable federal and state securities laws. No shares of capital stock,
other than common shares of beneficial interest of the Fund, are issued or
outstanding and the capitalization of the Fund conforms in all material
respects to the description thereof in the Registration Statement and the
Prospectus. The Placement Shares have been duly authorized for issuance
and sale pursuant to this Agreement and, when issued, delivered against
payment therefore in accordance with this Agreement, will be validly
issued and fully paid and nonassessable obligations of the Fund; and the
Placement Shares will conform in all material respects to the description
thereof in the Registration Statement and the Prospectus.
(iv) 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, with full power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus and to enter into and perform its obligations
under this Agreement and the Fund Agreements. The Fund is duly registered
and qualified to conduct business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of
5
its business requires such registration or qualification, except where the
failure so to register or to qualify, either alone or in the aggregate,
does not have or would not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), general affairs,
business, properties, business prospects, net assets or results of
operations of the Fund, whether or not occurring in the ordinary course of
business (a "FUND MATERIAL ADVERSE EFFECT"). The Fund has no subsidiaries.
(v) There are no legal or governmental proceedings pending or, to
the knowledge of the Fund, threatened against the Fund or to which the
Fund or any of its properties is subject, that are required to be
described in the Registration Statement or the Prospectus but are not
described as required or that could reasonably be expected to result in a
Fund Material Adverse Effect, or that may have a material, adverse effect
on the ability of the Fund to perform its obligations under this Agreement
or any of the Fund Agreements. All descriptions in the Registration
Statement and the Prospectus of any Fund documents are accurate in all
material respects. There are no agreements, contracts, indentures, leases
or other instruments that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the
Securities Act or Investment Company Act.
(vi) The Fund is not in violation of its Declaration of Trust
("DECLARATION OF TRUST"), bylaws or other organizational documents or any
law, ordinance, administrative or governmental rule or regulation
applicable to the Fund or of any decree of the Commission, the Financial
Industry Regulatory Authority ("FINRA"), any state securities commission,
any national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or any
other agency or any body or official having jurisdiction over the Fund or
in breach or default in the performance of any of the Fund Agreements or
any other obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in 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, except for such violation
or such breach or default that, either alone or in the aggregate, does not
have or would not reasonably be expected to have a Fund Material Adverse
Effect.
(vii) Neither the issuance and sale of the Placement Shares, the
execution, delivery or performance of this Agreement or any of the Fund
Agreements by the Fund, nor the consummation by the Fund of the
transactions contemplated hereby or thereby (A) requires any consent,
approval, authorization or order of or registration or filing with the
Commission, FINRA, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official
having jurisdiction over the Fund (except such as have been already
obtained under the Securities Act, the Investment Company Act, the rules
and regulations of FINRA and the NYSE or compliance with the securities or
Blue Sky laws of various jurisdictions which have been or will be effected
in accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of the Declaration of Trust,
bylaws, or other organizational documents of the Fund or (B) (1) conflicts
6
or will conflict with or constitutes or will constitute a breach of or a
default under any of the Fund Agreements or any other 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 (2) 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 (collectively, a "LIEN") any property or assets of the Fund pursuant
to the terms of any agreement or instrument to which it is a party or by
which it may be bound or to which any of the property or assets of the
Fund is subject, except for such conflict, breach, default, violation or
lien that, either alone or in the aggregate, does not have or would not
reasonably be expected to have a Fund Material Adverse Effect or a
material adverse effect on the ability of the Fund to perform its
obligations under this Agreement or any of the Fund Agreements. The Fund
is not subject to any order of any court or of any arbitrator,
governmental authority or administrative agency.
(viii) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition
(financial or other), business, properties, net assets or results of
operations of the Fund or business prospects (other than as a result of a
change in the financial markets generally) of the Fund, whether or not
arising in the ordinary course of business, (B) there have been no
transactions entered into by the Fund other than those in the ordinary
course of its business as described in 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, except for regular dividends
consistent with past practice.
(ix) The accountants, Deloitte & Touche LLP, who have audited the
financial statements included in, and whose report appears in, the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), are an independent public accounting firm as required
by the Securities Act and Investment Company Act.
(x) The financial statements of the Fund, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement or the Prospectus present fairly the financial
position of the Fund on the basis stated in the Registration Statement at
the respective dates or for the respective periods to which they apply;
such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved except as disclosed therein and
comply with all applicable accounting requirements under the Securities
Act and the Investment Company Act; and the other financial and
statistical information and data included in the Registration Statement or
the Prospectus are accurately derived from such financial statements and
the books and records of the Fund.
(xi) The Fund, subject to the filing of the Prospectus under Rule
497 under the Securities Act, has taken all required action under the
7
Securities Act and the Investment Company Act to make the public offering
and consummate the sale of the Placement Shares as contemplated by this
Agreement.
(xii) 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 each of the
Fund Agreements have been duly executed and delivered by the Fund and each
constitutes the valid and legally binding agreement of the Fund,
enforceable against the Fund in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and subject to the qualification that the
enforceability of the Fund's obligations hereunder and thereunder may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles.
(xiii) Except as disclosed in or contemplated by the Registration
Statement or the Prospectus, subsequent to the respective dates as of
which such information is given in the Registration Statement and the
Prospectus, the Fund has not incurred any material liability or
obligation, direct or contingent, or entered into any transaction, not in
the ordinary course of business, and there has not been any change in the
capital stock (other than in connection with the transactions contemplated
hereunder or pursuant to the Fund's dividend reinvestment plan) or any
change or any development involving or which should reasonably be expected
to involve a Fund Material Adverse Effect or its capitalization, or the
incurrence of any debt by, the Fund.
(xiv) The Fund has not distributed and, prior to the later to occur
of (A) the applicable Settlement Date and (B) completion of the
distribution of the Placement Shares contemplated by the applicable
Placement Notice, will not distribute any offering material in connection
with the offering and sale of the Placement Shares other than the
Registration Statement, the Prospectus, the "sales material" (as defined
in Section 6(a)(xx) below) or other materials permitted by the Securities
Act or the Investment Company Act.
(xv) 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
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 Prospectus (and any amendment or
supplement thereto); and, except as described in the Prospectus (and any
amendment or supplement thereto), none of such permits contains any
restriction that is materially burdensome to the Fund.
(xvi) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with the Fund's Board of Trustees'
general or specific authorization and with the investment policies and
restrictions of the Fund and the applicable requirements of the Securities
8
Act, the Investment Company Act and the Internal Revenue Code of 1986, as
amended, (the "CODE"); (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles, to calculate net asset value and fee
accruals, to maintain accountability for assets and to maintain compliance
with the books and records requirements under the Investment Company Act;
(C) access to assets is permitted only in accordance with the Board of
Trustees' general or specific authorization; and (D) the recorded amount
of assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Fund
maintains "disclosure controls and procedures" (as such term is defined in
Rule 30a-3 under the Investment Company Act).
(xvii) The conduct by the Fund of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of
any patents, patent licenses, trademarks, service marks or trade names
which it does not own, possess or license or sub-license.
(xviii) Except as stated in this Agreement and in the Prospectus,
the Fund has not taken and will not take, directly or indirectly, any
action designed to or which could cause or result in or which will
constitute stabilization or manipulation of the price of the Placement
Shares, or of any securities issued by the Fund, to facilitate the sale or
resale of the Placement Shares in violation of federal securities laws and
no such action has been, or will be, taken by any affiliates of the Fund.
(xix) The Fund is duly registered under the Investment Company Act
as a closed-end, non-diversified management investment company and the
notification of registration of the Fund as an investment company under
the Investment Company Act on Form N-8A has been duly filed with the
Commission, is effective, and, at the time of filing thereof and at all
times through the date hereof conformed in all material respects with all
applicable provisions of the Investment Company Act; no order of
suspension or revocation of such registration under the Investment Company
Act has been issued or proceedings therefor initiated or threatened by the
Commission. The provisions of the Declaration of Trust and the investment
policies and restrictions described in each of the Registration Statement
and the Prospectus, comply in all material respects with the requirements
of the Investment Company Act.
(xx) All advertising, sales literature or other promotional material
(including "prospectus wrappers", "broker kits", "road show slides" and
"road show scripts"), if any, whether in printed or electronic form,
authorized in writing by or prepared by or at the direction of the Fund or
the Adviser for use in connection with the offering and sale of the
Placement Shares (collectively, "SALES MATERIAL") complied and comply in
all material respects with the applicable requirements of the Securities
Act and the rules and interpretations of FINRA. 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.
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(xxi) This Agreement and each of the Fund Agreements complies in all
material respects with all applicable provisions of the Securities Act,
the Investment Company Act and the Advisers Act.
(xxii) No holder of any security of the Fund has any right to
require registration of any Shares, capital stock or any other security of
the Fund because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement.
(xxiii) Except as disclosed in the Registration Statement and the
Prospectus, no trustee of the Fund is an "interested person" (as defined
in the Investment Company Act) of the Fund or an "affiliated person" (as
defined in the Investment Company Act) of Xxxxx.
(xxiv) The Placement Shares are duly listed and admitted and
authorized for trading, subject to official notice of issuance, on the
NYSE.
(xxv) All of the information provided to Xxxxx or to counsel for
Xxxxx 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 in all material
respects.
(xxvi) 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 in any material respect with any provision of the Xxxxxxxx-Xxxxx
Act of 2002 and the rules and regulations promulgated in connection
therewith (the "SARBANES OXLEY ACT"), including Sections 302 and 906
related to certifications.
(xxvii) 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.
(xxviii) 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
Investment Company Act) by the Fund, including policies and procedures
that provide oversight of compliance for each investment adviser,
administrator and transfer agent of the Fund.
(xxix) The Fund carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its business and
value of its properties.
(xxx) The operations of the Fund are and have been conducted at all
times in material compliance with applicable financial recordkeeping and
10
reporting requirements and the money laundering statutes and the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the "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.
(xxxi) Neither the Fund nor, to the knowledge of the Fund, any
director, officer, agent, employee or affiliate of the Fund is aware of or
has taken any action in connection with the Fund, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt
Practice Act of 1977, as amended and the rules and regulations thereunder
(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 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.
(xxxii) Neither the Fund nor, to the knowledge of the Fund, any
director, officer, agent, employee or affiliate 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 the proceeds of the offering, or lend,
contribute or otherwise make available 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 with Respect to the Adviser. The
Adviser represents and warrants to and agrees with Xxxxx as of the date hereof
and as of each Representation Date (as defined in Section 7(j) below) as
follows:
(i) The Adviser is a limited partnership duly organized and validly
existing in good standing under the laws of the State of Illinois, with
full power and authority to own, lease and operate its properties and to
conduct its business as described in each of the Registration Statement
and the Prospectus and is duly registered and qualified to conduct
business and is in good standing in each jurisdiction or place where the
nature of its properties or conduct of its business requires such
registration or qualification, except where the failure so to register or
to qualify, either alone or in the aggregate, does not have or would not
reasonably be expected to have (A) a material adverse effect on the
condition (financial or other), general affairs, business, properties,
business prospects, net assets or results of operations, whether or not
occurring in the ordinary course of business, of the Adviser (an "ADVISER
MATERIAL ADVERSE EFFECT") or (B) a Fund Material Adverse Effect.
11
(ii) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act or the Investment Company Act from acting under the Advisory
Agreement for the Fund as contemplated by the Registration Statement or
the Prospectus. There does not exist any proceeding which could reasonably
be expected to have an Adviser Material Adverse Effect with respect to the
registration of the Adviser with the Commission.
(iii) There are no legal or governmental proceedings pending or, to
the knowledge of the Adviser, threatened against the Adviser that are
required to be described in the Registration Statement or the Prospectus
but are not described as required or that could reasonably be expected to
result in any Adviser Material Adverse Effect or that may have a material,
adverse effect on the ability of the Adviser to perform its obligations
under this Agreement or any of the Adviser Agreements.
(iv) Neither the execution, delivery or performance of this
Agreement or any of the Adviser Agreements by the Adviser, nor the
consummation by the Adviser of the transactions contemplated hereby or
thereby (A) requires the Adviser to obtain any consent, approval,
authorization or other order of, or registration or filing with, the
Commission, FINRA, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official
having jurisdiction over the Adviser, or conflicts or will conflict with
or constitutes or will constitute a breach of or a default under, the
partnership agreement or bylaws or other organizational documents of the
Adviser or (B) conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, any of the Adviser Agreements
or any other agreement, indenture, lease or other instrument to which the
Adviser is a party or by which the Adviser or any of its properties may be
bound, or violates or will violate any statute, law, regulation 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 it is a party or by
which it may be bound or to which any of the property or assets of the
Adviser is subject, except in any case under clause (B) for such conflict,
breach, default, violation or lien that, either alone or in the aggregate,
does not have or would not reasonably be expected to have an Adviser
Material Adverse Effect or a material adverse effect on the ability of the
Adviser to perform its obligations under this Agreement or any of the
Adviser Agreements. The Adviser is not subject to any order of any court
or of any arbitrator, regulatory body, administrative agency or other
governmental body, agency or official.
(v) The Adviser has full power and authority to enter into this
Agreement and each of the Adviser Agreements; the execution and delivery
of, and the performance by the Adviser of its obligations under, this
Agreement and each of the Adviser Agreements have been duly and validly
authorized by the Adviser; and this Agreement and each of the Adviser
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
12
rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and subject to the qualification that the
enforceability of the Adviser's obligations hereunder and thereunder may
be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles whether
enforcement is considered in a proceeding in equity or at law.
(vi) The Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in the
Registration Statement and the Prospectus or under this Agreement and each
of the Adviser Agreements.
(vii) The description of the Adviser in the Registration Statement
or the Prospectus complied as of any effective date of the Registration
Statement and as of the date of the Prospectus, as applicable, and
complies and will comply, as of the date hereof, each Applicable Time and
each Settlement Date, in all material respects with the provisions of the
Securities Act, the Investment Company Act and the Advisers Act 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 (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(viii) Since the date as of which information is given in the
Registration Statement or the Prospectus, except as otherwise stated
therein, there has not occurred any event which would reasonably be
expected to have a material adverse effect on the ability of the Adviser
to perform its obligations under this Agreement and each of the Adviser
Agreements.
(ix) The Adviser has such permits as are necessary to own its
property and to conduct its business in the manner described in the
Prospectus; and 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 impairment of the rights of
the Adviser under any such permit.
(x) None of this Agreement nor any of the Adviser Agreements violate
any applicable provisions of the Investment Company Act and Advisers Act.
(xi) Except as stated in this Agreement, the Registration Statement
or the Prospectus, the Adviser has not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in or which will constitute stabilization or
manipulation of the price of the Placement Shares or any securities issued
by the Fund to facilitate the sale or resale of the Placement Shares in
violation of federal securities laws and the Adviser is not aware of any
such action taken or to be taken by any affiliates of the Adviser
13
(xii) 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 by the Adviser and its supervised
persons.
(c) Representations and Warranties with Respect to the Sub-Adviser. The
Sub-Adviser represents and warrants to and agrees with Xxxxx as of the date
hereof and as of each Representation Date (as defined in Section 7(j) below) as
follows:
(i) The Sub-Adviser is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in each of the
Registration Statement and the Prospectus and is duly registered and
qualified to conduct business and is in good standing in each jurisdiction
or place where the nature of its properties or conduct of its business
requires such registration or qualification, except where the failure so
to register or to qualify, either alone or in the aggregate, does not have
or would not reasonably be expected to have (A) a material adverse effect
on the condition (financial or other), general affairs, business,
properties, business prospects, net assets or results of operations of the
Sub-Adviser (a "SUB-ADVISER MATERIAL ADVERSE EFFECT") or (B) a Fund
Material Adverse Effect.
(ii) The Sub-Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act or the Investment Company Act from acting under the
Sub-Advisory Agreement for the Fund as contemplated by the Registration
Statement or the Prospectus. There does not exist any proceeding which
could reasonably be expected to have a Sub-Adviser Material Adverse Effect
with respect to the registration of the Sub-Adviser with the Commission.
(iii) There are no legal or governmental proceedings pending or, to
the knowledge of the Sub-Adviser, threatened against the Sub-Adviser that
are required to be described in the Registration Statement or the
Prospectus but are not described as required or that could reasonably be
expected to result in a Sub-Adviser Material Adverse Effect or that may
have a material, adverse effect on the ability of the Sub-Adviser to
perform its obligations under this Agreement or the Sub-Advisory
Agreement.
(iv) Neither the execution, delivery or performance of this
Agreement or the Sub-Advisory Agreement by the Sub-Adviser, nor the
consummation by the Sub-Adviser of the transactions contemplated hereby or
thereby (A) requires the Sub-Adviser to obtain any consent, approval,
authorization or other order of, or registration or filing with, the
Commission, FINRA, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official
having jurisdiction over the Sub-Adviser, or conflicts or will conflict
with or constitutes or will constitute a breach of or a default under, the
articles of incorporation or bylaws or other organizational documents of
the Sub-Adviser or (B) conflicts or will conflict with or constitutes or
will constitute a breach of or a default under, the Sub-Advisory Agreement
or any other agreement, indenture, lease or other instrument to which the
Sub-Adviser is a party or by which the Sub-Adviser or any of its
properties may be bound, or violates or will violate any statute, law,
14
regulation or judgment, injunction, order or decree applicable to the
Sub-Adviser or any of its properties or will result in the creation or
imposition of any lien upon any property or assets of the Sub-Adviser
pursuant to the terms of any agreement or instrument to which it is a
party or by which it may be bound or to which any of the property or
assets of the Sub-Adviser is subject, except in any case under clause (B)
for such conflict, breach, default, violation or lien that, either alone
or in the aggregate, does not have or would not reasonably be expected to
have a Sub-Adviser Material Adverse Effect or a material adverse effect on
the ability of the Sub-Adviser to perform its obligations under this
Agreement or the Sub-Advisory Agreement. The Sub-Adviser is not subject to
any order of any court or of any arbitrator, regulatory body,
administrative agency or other governmental body, agency or official.
(v) The Sub-Adviser 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 Sub-Adviser of its obligations under, this
Agreement and the Sub-Advisory Agreement have been duly and validly
authorized by the Sub-Adviser; and this Agreement and the Sub-Advisory
Agreement have been duly executed and delivered by the Sub-Adviser and
constitute the valid and legally binding agreements of the Sub-Adviser,
enforceable against the Sub-Adviser in accordance with their terms, except
as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws and subject to the qualification that the
enforceability of the Sub-Adviser's obligations hereunder and thereunder
may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles whether
enforcement is considered in a proceeding in equity or at law.
(vi) The Sub-Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in the
Registration Statement and the Prospectus or under this Agreement and the
Sub-Advisory Agreement.
(vii) The description of the Sub-Adviser in the Registration
Statement or the Prospectus complied as of any effective date of the
Registration Statement and as of the date of the Prospectus, as
applicable, and complies and will comply, as of the date hereof, each
Applicable Time and each Settlement Date, in all material respects with
the provisions of the Securities Act, Investment Company Act and the
Advisers Act 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 (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading.
(viii) Since the date as of which information is given in the
Registration Statement or the Prospectus, except as otherwise stated
therein, there has not occurred any event which would reasonably be
expected to have a material adverse effect on the ability of the
Sub-Adviser to perform its obligations under this Agreement or the
Sub-Advisory Agreement.
15
(ix) The Sub-Adviser has such permits as are necessary to own its
property and to conduct its business in the manner described in the
Prospectus; and the Sub-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 impairment of
the rights of the Sub-Adviser under any such permit.
(x) None of this Agreement nor the Sub-Advisory Agreement violates
any applicable provisions of the Investment Company Act and the Advisers
Act.
(xi) Except as stated in this Agreement, the Registration Statement
or the Prospectus (or in any amendment or supplement to any of the
foregoing), the Sub-Adviser has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected
to cause or result in or which will constitute stabilization or
manipulation of the price of the Placement Shares or of any securities
issued by the Fund to facilitate the sale or resale of the Placement
Shares in violation of federal securities laws and the Sub-Adviser is not
aware of any such action taken or to be taken by any affiliates of the
Sub-Adviser.
(xii) The Sub-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 by the Sub-Adviser and its
supervised persons.
(d) Certificates. Any certificate signed by any authorized officer of the
Fund, or the Adviser identified on Schedule 3 attached hereto, as such Schedule
may be updated from time to time pursuant to notice properly delivered to Xxxxx
pursuant to Section 12 of this Agreement and delivered to the representatives or
to counsel for Xxxxx shall be deemed a representation and warranty by the Fund
or the Adviser, as the case may be, to Xxxxx as to the matters covered thereby.
7. Covenants of the Fund, the Adviser and the Sub-Adviser. The Fund and the
Adviser, jointly and severally, and (with respect to subsection (e), (h), (j),
(l(ii)), (n), (t) and (v) below only, and only as they relate to the
Sub-Adviser) the Sub-Adviser, covenant and agree with Xxxxx that:
(a) The Fund will promptly advise Xxxxx (i) when, during any period that a
prospectus relating to the offer or sale of Placement Shares is required to be
delivered under the Securities Act, any amendment to the Registration Statement
affecting the Placement Shares shall have become effective, (ii) of any request
by the Commission for any amendment or supplement to the Registration Statement
or the Prospectus, or for any additional information, affecting or in respect of
the Placement Shares, (iii) of the issuance by the Commission of any order
suspending the effectiveness of the Registration Statement affecting the
Placement Shares or the institution or threatening of any proceeding for that
purpose, and (iv) the receipt by the Fund of any notification with respect to
the suspension of the qualification of the Placement Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Fund will not file any amendment to the Registration Statement
affecting the Placement Shares or any supplement to the Prospectus affecting the
Placement Shares unless the Fund has furnished Xxxxx with a copy for its review
16
prior to filing, and will not file any such proposed amendment or supplement
affecting the Placement Shares to which Xxxxx reasonably objects, in any event
until after the end of the period during which a prospectus is required to be
delivered to purchasers of the Placement Shares under the Securities Act.
Subject to the foregoing sentence, the Fund will cause the Prospectus Supplement
to be transmitted to the Commission for filing pursuant to Rule 497 under the
Securities Act. The Fund will use its best efforts to prevent the issuance of
any order suspending the effectiveness of the Registration Statement affecting
the Placement Shares and, if issued, to obtain as soon as possible the
withdrawal thereof. The Fund will timely file the requisite copies of the
Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h) under the
Securities Act, whichever is applicable or, if applicable, will timely file the
certification permitted by Rule 497(j) under the Securities Act and will advise
Xxxxx of the time and manner of such filing.
(b) During any period in which a Prospectus relating to the Placement
Shares is required to be delivered by Xxxxx under the Securities Act with
respect to a pending sale of the Placement Shares, the Fund will comply so far
as it is able with all requirements imposed upon it by the Securities Act and
the Investment Company Act, as from time to time in force, so far as necessary
to permit the continuance of sales of the Placement Shares during such period in
accordance with the provisions hereof and the Prospectus, and will file with the
Commission and the NYSE all documents pursuant to the Securities Act and the
Investment Company Act in the manner and within the time periods required by the
Securities Act and the Investment Company Act. If during such period any event
occurs as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Fund will promptly notify Xxxxx to suspend the offering of
Placement Shares during such period and the Fund will promptly amend or
supplement the Registration Statement or Prospectus so as to correct such
statement or omission or effect such compliance.
(c) During any period in which the Prospectus relating to the Placement
Shares is required to be delivered by Xxxxx under the Securities Act with
respect to a pending sale of the Placement Shares, the Fund will use its best
efforts to cause the Placement Shares to be listed on the NYSE and to qualify,
if necessary, the Placement Shares for sale under the securities laws of such
United States jurisdictions as Xxxxx reasonably designates and to continue such
qualifications in effect so long as required for the distribution of the
Placement Shares; provided, however, that the Fund shall not be required in
connection therewith to qualify as a foreign corporation or dealer in
securities, file a general consent to service of process in any jurisdiction, or
meet any other requirement in connection with this Section 7(c) deemed by the
Fund to be unduly burdensome.
(d) As soon as practicable, but in no event later than the last day of the
18th full calendar month following the calendar quarter in which the effective
date of the Registration Statement falls, the Fund will make generally available
to its security holders an earnings statement, which need not be audited, which
earnings statement shall satisfy the provisions of Section 11(a) and Rule 158 of
the Securities Act.
17
(e) The Fund agrees to pay all costs, fees and expenses incurred in
connection with performance of its obligations hereunder and in connection with
the transactions contemplated under this Agreement, including, without
limitation, (i) all expenses incident to the issuance and delivery of the
Placement Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Shares, (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Placement Shares, (iv) all reasonable fees and expenses of the Fund's
counsel and the Fund's independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts) and the Prospectus, and all amendments and supplements
thereto and this Agreement, (vi) all filing fees, distribution fees, attorneys'
fees and expenses incurred by the Fund or Xxxxx in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Placement Shares for offer and sale under the state
securities or blue sky laws, including, if requested by Xxxxx, the preparation
by counsel for Xxxxx and printing of a "Blue Sky Survey" or other memorandum,
and any supplements thereto, advising Xxxxx of such qualifications,
registrations and exemptions, (vii) the fees and expenses associated with
listing the Placement Shares on the NYSE, (viii) the filing fees incident to,
and the reasonable fees and disbursements of counsel to Xxxxx in connection
with, the review by FINRA of the terms of the sale of the Placement Shares, (ix)
the reasonable fees and expenses of counsel for Xxxxx (provided such fees and
expenses (a) shall not exceed $30,000 in connection with the preparation and
execution of this Agreement and the preparation and filing of the initial
Prospectus Supplement dated as of the date hereof relating to the Placement
Shares and providing the services described in clauses (vi) and (viii) above and
(b) shall not exceed $25,000 on an annual basis in each annual period following
the date of this Agreement), and (x) all other fees, costs and expenses incident
to the performance by the Fund of its obligations hereunder. Except as provided
in Section 7(e)(ix) above with respect to Xxxxx (collectively, the "REIMBURSABLE
AMOUNTS"), the aggregate amount of any discount, commission or other
compensation to be paid by the Fund to Xxxxx in connection with Xxxxx'
performance of its obligations under this Agreement shall be as set forth on
Schedule 2 attached hereto (or as otherwise agreed to in writing as set forth in
the Placement Notice). The Fund shall pay to Xxxxx the Reimbursable Amounts in
addition to such discount, commissions and other compensation payable to Xxxxx
as contemplated by Schedule 2 (or as otherwise agreed to in writing as set forth
in the Placement Notice). Each of the Adviser and Sub-Adviser, severally, agree
to pay all costs, fees and expenses of its respective counsel.
(f) The Fund will use the Net Proceeds as described in the Prospectus.
(g) The Fund will, at any time during the term of this Agreement, as
supplemented from time to time, advise Xxxxx immediately after it shall have
received notice or obtained knowledge thereof, of any information or fact that
would alter or affect in any material respect any opinion, certificate, letter
or other document required to be provided to Xxxxx pursuant to this Agreement.
(h) The Fund will cooperate with any due diligence review conducted by
Xxxxx or its agents, including, without limitation, providing information and
making available documents and senior corporate officers, as Xxxxx may
reasonably request; provided, however, that the Fund shall be required to make
18
available documents and senior corporate officers only (i) at the Fund's
principal offices and (ii) during the Fund's ordinary business hours. The
parties acknowledge that the due diligence review contemplated by this Section
7(h) will include during the term of this Agreement (x) a bring-down diligence
conference among Xxxxx and certain officers of the Fund's operations or legal
departments upon the issuance by the Fund of a Placement Notice and (y) a
quarterly diligence conference to occur within three business days following the
Fund's filing of each of its annual and semi-annual reports on Form N-CSR and
N-CSRS, respectively (the "REPORTS"), and quarterly schedule of investments
whereby the Fund, the Adviser and the Sub-Adviser will make their senior
corporate officers, including portfolio managers, available to address certain
diligence inquiries of Xxxxx and will provide such additional information and
documents as Xxxxx may reasonably request; provided, however that,
notwithstanding anything to the contrary in this Section 7(h), the Fund's
portfolio managers shall not be required to participate with respect to
quarterly diligence conferences to be held in connection with the filing of the
Fund's quarterly schedule of investments.
(i) The Fund agrees that on such dates as the Securities Act shall
require, the Fund will (i) file a Prospectus Supplement with the Commission
under Rule 497 under the Securities Act, which Prospectus Supplement will set
forth, within the relevant period, the amount of Placement Shares sold through
Xxxxx, the Net Proceeds to the Fund and the compensation payable by the Fund to
Xxxxx with respect to such Placement Shares, and (ii) deliver such number of
copies of each such Prospectus Supplement to each exchange or market on which
such sales were effected as may be required by the rules or regulations of such
exchange or market.
(j) During the term of this Agreement, each time the Fund (i) files the
Prospectus relating to the Placement Shares (ii) amends or supplements the
Registration Statement or the Prospectus relating to the Placement Shares by
means of a post-effective amendment, sticker, or supplement (other than a
Prospectus Supplement filed in accordance with Section 7(i) of this Agreement),
or (iii) files a Report (to the extent not already covered by subsection (i) or
(ii) of this Section 7(j)), each of the Fund, the Adviser and Sub-Adviser shall
furnish Xxxxx with a certificate, in the form attached hereto as Exhibit 7(j).
(Each date contemplated in subsections (i), (ii) and (iii) of this Section 7(j)
is referred to herein as a "REPRESENTATION DATE"). With respect to
post-effective amendments to the Registration Statement contemplated by this
Section 7(j), if the Fund is not otherwise permitted to rely on Rule 486(b)
regarding the effective date of a post-effective amendment, the Representation
Date shall be the date the Commission declares such amendment effective and all
Representation Date deliveries relating thereto which are required by Section 7
shall be delivered on or as promptly as practicable following the date of
effectiveness of such amendment. If the Fund is permitted to rely on Rule 486(b)
in connection with the filing of a post-effective amendment, then the
Representation Date shall be the date such post-effective amendment is filed
with the Commission.
(k) Except as otherwise provided in the last sentence of this Section
7(k), on the date hereof and thereafter as of each Representation Date, the Fund
shall cause to be furnished to Xxxxx with a written opinion of Xxxxxxx and
Xxxxxx LLP (the "FUND COUNSEL"), dated the Representation Date, in substantially
the form attached hereto as Exhibit 7(k)(1), but modified, as necessary, to
relate to the Registration Statement and the Prospectus as then amended or
19
supplemented; provided, however, that in lieu of such opinion, counsel may
furnish Xxxxx with a letter to the effect that Xxxxx may rely on a prior opinion
delivered under this Section 7(k) to the same extent as if it were dated the
date of such letter (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended or
supplemented at such Representation Date). Insofar as any opinion of Fund
Counsel relates to or is dependent upon matters governed by Massachusetts law,
Fund Counsel will be permitted to rely on the opinion of Xxxxxxx XxXxxxxxx LLP.
In the event that a Representation Date is triggered by the filing of a Report,
only the opinion identified in Exhibit 7(k)(2) shall be required.
(l) (i) Except as otherwise provided in the last sentence of this Section
7(i), on the date hereof and thereafter as of each Representation Date, the
Adviser shall cause to be furnished to Xxxxx with a written opinion of Xxxxxxx
and Xxxxxx LLP (the "ADVISER COUNSEL"), dated the Representation Date, in
substantially the form attached hereto as Exhibit 7(l)(i), but modified, as
necessary, to relate to the Registration Statement and the Prospectus as then
amended or supplemented; provided, however, that in lieu of such opinion,
counsel may furnish Xxxxx with a letter to the effect that Xxxxx may rely on a
prior opinion delivered under this Section 7(l)(i) to the same extent as if it
were dated the date of such letter (except that statements in such prior opinion
shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented at such Representation Date). In the event that a
Representation Date is triggered by the filing of the Fund's semi-annual report,
no opinion identified in this Section 7(l)(i) shall be required.
(ii) Except as otherwise provided in the last sentence of Section
7(l)(ii), on the date hereof and thereafter as of each Representation Date, the
Sub-Adviser shall cause to be furnished to Xxxxx with a written opinion of Xxxx
Xxxxxxxx LLP (the "SUB-ADVISER COUNSEL"), dated the Representation Date, in
substantially the form attached hereto as Exhibit 7(l)(ii), but modified, as
necessary, to relate to the Registration Statement and the Prospectus as then
amended or supplemented; provided, however, that in lieu of such opinion,
counsel may furnish Xxxxx with a letter to the effect that Xxxxx may rely on a
prior opinion delivered under this Section 7(l)(ii) to the same extent as if it
were dated the date of such letter (except that statements in such prior opinion
shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented at such Representation Date). In the event that a
Representation Date is triggered by the filing of the Fund's semi-annual report,
no opinion in this Section 7(1)(ii) shall be required.
(m) On the date hereof and each date on which a Report is filed, or during
any period in which the Prospectus relating to the Placement Shares is required
to be delivered by Xxxxx, each time that the Registration Statement is amended
or the Prospectus supplemented to include additional financial statements, the
Fund shall cause its independent accountants to furnish Xxxxx letters (the
"COMFORT LETTERS"), dated the date of each such date, in form and substance
satisfactory to Xxxxx, (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of such date,
the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings (the
20
first such letter, the "INITIAL COMFORT LETTER") and (iii) updating the Initial
Comfort Letter with any information that would have been included in the Initial
Comfort Letter had it been given on such date and modified as necessary to
relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter. Notwithstanding the foregoing, in the
event that a Representation Date is triggered by the filing of the Fund's
semi-annual report and to the extent the Fund's independent accountants have not
been engaged by the Fund to perform a review of the Fund's unaudited semi-annual
financial statements in connection with such filing, then no Comfort Letter
contemplated by this Section 7(m) shall be required; provided, however, that in
such case the Fund shall deliver to Xxxxx on the applicable Representation Date
a certificate of the Fund's chief financial officer substantially in the form
attached hereto as Exhibit 7(m) (the "CFO CERTIFICATE").
(n) On the date hereof and thereafter as of each Representation Date, each
of the Fund, the Adviser and the Sub-Adviser shall furnish Xxxxx with a
certificate of its respective Secretary, in form and substance reasonably
satisfactory to Xxxxx.
(o) Each Placement Notice issued by the Fund to Xxxxx shall be deemed to
be an affirmation that the representations and warranties made by it in this
Agreement are true and correct in all material respects at the time such
Placement Notice is issued, and that the Fund has complied in all material
respects with all of the agreements to be performed by it hereunder at or prior
to such time.
(p) The Fund (including its agents and representatives, other than Xxxxx
in its capacity as such) will not make, use, prepare, authorize, approve or
refer to any written communication (as defined in Rule 405 under the Act),
required to be filed with the Commission, that constitutes an offer to sell or
solicitation of an offer to buy Placement Shares hereunder, except by means of
the Prospectus.
(q) The Fund will comply with all requirements imposed upon it by the
Securities Act, the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder (collectively, the "EXCHANGE ACT") and the Investment
Company Act as from time to time in force, so far as necessary to permit the
continuance of sales of, or dealings in, the Placement Shares as contemplated by
the provisions hereof and the Prospectus.
(r) Without the written consent of Xxxxx, the Fund will not, directly or
indirectly, offer to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of any Shares (other than the Placement Shares offered
pursuant to the provisions of this Agreement) or securities convertible into or
exchangeable for Shares, warrants or any rights to purchase or acquire, Shares
during the period beginning on the fifth (5th) Trading Day immediately prior to
the date on which any Placement Notice is delivered to Xxxxx hereunder and
ending on the fifth (5th) Trading Day immediately following the final Settlement
Date with respect to Placement Shares sold pursuant to such Placement Notice;
PROVIDED, HOWEVER, that such restrictions will not be required in connection
with the Fund's issuance or sale of Shares pursuant to (i) the Dividend
Reinvestment Plan, and (ii) conversion of securities or the exercise of
warrants, options or other rights in effect or outstanding as of the date of
this Agreement.
21
(s) The Fund will furnish to Xxxxx and its counsel (at the expense of the
Fund) copies of the Registration Statement, the Prospectus and all amendments
and supplements to the Registration Statement or Prospectus relating to the
registration and issuance of the Placement Shares pursuant to this Agreement
that are filed with the Commission during the period in which a prospectus
relating to the Placement Shares is required to be delivered under the
Securities Act, in each case as soon as reasonably practicable and in such
quantities as Xxxxx may from time to time reasonably request.
(t) Each of the Fund, the Adviser and Sub-Adviser acknowledges and agrees
that Xxxxx has informed the Fund that Xxxxx may, to the extent permitted under
the Securities Act, Exchange Act and the Investment Company Act, purchase and
sell Placement Shares for its own account at the same time as Placement Shares
are being sold by the Fund pursuant to this Agreement, provided that (i) the
Fund shall not be deemed to have authorized or consented to any such purchases
or sales by Xxxxx and (ii) no such purchases or sales shall take place while a
Placement Notice is in effect (except to the extent Xxxxx may engage in sales of
Placement Shares (A) purchased or deemed purchased from the Fund as a "riskless
principal" or in a similar capacity or (B) with respect to errors that cause
Xxxxx to take unplanned principal positions, in each case to the extent such
sales are permitted under the Securities Act, the Exchange Act and the
Investment Company Act).
(u) The Fund will not, directly or indirectly, (i) take any action
designed to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Fund to facilitate the sale or resale of the Placement Shares or
(ii) sell, bid for, or purchase the Placement Shares, or pay anyone any
compensation for soliciting purchases of the Placement Shares other than Xxxxx;
PROVIDED, HOWEVER, the Fund may issue and sell Shares pursuant to the Dividend
Reinvestment Plan (it being understood that the Sub-Adviser shall have no
obligation or liability under this paragraph with respect to acts or omissions
of the Fund and the Adviser, and their respective officers, trustees or
directors).
(v) During the term of this Agreement, each of the Fund, the Adviser and
Sub-Adviser will furnish to Xxxxx such information regarding itself as
reasonably requested by Xxxxx.
8. Conditions to Xxxxx'x Obligations. The obligations of Xxxxx hereunder with
respect to a Placement will be subject to the continuing accuracy and
completeness of the representations and warranties made by the Fund and the
Adviser herein, to the due performance by the Fund and the Adviser of their
respective obligations hereunder, and to the continuing satisfaction (or waiver
by Xxxxx in its sole discretion) of the following additional conditions:
(a) The Registration Statement shall have become effective and shall be
available for the sale of (i) all Placement Shares issued pursuant to all prior
Placements and not yet sold by Xxxxx and (ii) all Placement Shares contemplated
to be issued by the Placement Notice relating to such Placement.
(b) None of the following events shall have occurred and be continuing:
(i) receipt by the Fund of any request for additional information from the
Commission or any other federal or state governmental authority during the
22
period of effectiveness of the Registration Statement, the response to which
would require any amendments or supplements to the Registration Statement or the
Prospectus relating to or affecting the Placement Shares; (ii) the issuance by
the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, including any notice objecting
to the use of the Registration Statement or order pursuant to Section 8(e) of
the Investment Company Act having been issued and proceedings therefor
initiated, or to the knowledge of the Fund, threatened by the Commission; (iii)
receipt by the Fund of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Placement Shares for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; (iv) the occurrence of any event that makes any statement made in
the Registration Statement or the Prospectus untrue in any material respect or
that requires the making of any changes in the Registration Statement or
Prospectus so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and, that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and (v) the
Fund's reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate.
(c) Xxxxx shall not have advised the Fund that the Registration Statement
or Prospectus, or any amendment or supplement thereto, contains an untrue
statement of a material fact regarding Xxxxx that in Xxxxx' opinion is material,
or omits to state a fact regarding Xxxxx that in Xxxxx' opinion is material and
is required to be stated therein or is necessary to make the statements therein,
in light of the circumstances under which it was made, not misleading.
(d) Except as contemplated or disclosed in the Prospectus, there shall not
have been any material change, on a consolidated basis, in the authorized
capital stock of the Fund or any Fund Material Adverse Effect, Adviser Material
Adverse Effect or Sub-Adviser Material Adverse Effect, or any development that
may reasonably be expected to cause a Fund Material Adverse Effect, Adviser
Material Adverse Effect or Sub-Adviser Material Adverse Effect, or a downgrading
in or withdrawal of the rating assigned to any of the Fund's debt or preferred
securities by any rating organization or a public announcement by any rating
organization that it has under surveillance or review its rating of any of the
Fund's debt or preferred securities, the effect of which, in the sole judgment
of Xxxxx (without relieving the Fund of any obligation or liability it may
otherwise have), is so material as to make it impracticable or inadvisable to
proceed with the offering of the Placement Shares on the terms and in the manner
contemplated in the Prospectus.
(e) Xxxxx shall have received the opinion of Fund Counsel required to be
delivered pursuant Section 7(k) on or before the date on which such delivery of
such opinion is required pursuant to Section 7(k).
23
(f) Xxxxx shall have received the opinions of Adviser Counsel and
Sub-Adviser Counsel required to be delivered pursuant Section 7(l) on or before
the date on which such delivery of such opinion is required pursuant to Section
7(l).
(g) Xxxxx shall have received the Comfort Letter, and to the extent
applicable, the CFO Certificate, required to be delivered pursuant Section 7(m)
on or before the date on which such delivery of such letter and CFO Certificate
is required pursuant to Section 7(m).
(h) Xxxxx shall have received the certificates required to be delivered
pursuant to Section 7(j) and Section 7(n) on or before the date on which
delivery of such certificate is required pursuant to Section 7(j) and Section
7(n), respectively.
(i) Trading in the Shares shall not have been suspended on the NYSE.
(j) On each date on which the Fund is required to deliver a certificate
pursuant to Section 7(j), the Fund shall have furnished to Xxxxx such
appropriate further information, certificates and documents as Xxxxx may
reasonably request. All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof. The Fund will furnish Xxxxx
with such conformed copies of such opinions, certificates, letters and other
documents as Xxxxx shall reasonably request.
(k) All filings with the Commission required by Rule 497 under the
Securities Act to have been filed prior to the giving of any Placement Notice
hereunder shall have been made within the applicable time period prescribed for
such filing by Rule 497.
(l) The Placement Shares shall have been approved for listing on the NYSE,
subject only to notice of issuance.
(m) There shall not have occurred any event that would permit Xxxxx to
terminate this Agreement pursuant to Section 11(a).
(n) Prior to the date hereof, FINRA shall have confirmed that it has no
objection with respect to the fairness and reasonableness of the placement terms
and arrangements set forth herein.
9. Indemnification and Contribution.
(a) Indemnification by the Fund and the Adviser. The Fund and the Adviser,
jointly and severally, agree to indemnify and hold harmless Xxxxx, its
directors, members, officers and each person, if any, who controls Xxxxx within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) including any information deemed to
be a part thereof pursuant to Rule 430A or Rule 497 under the Securities
Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein
24
not misleading, or arising out of any untrue statement or alleged untrue
statement of a material fact included in any sales material, any
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;
(2) 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
9(e) below) any such settlement is effected with the written consent of
the Fund and the Adviser; and
(3) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (1) or (2)
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,
the Adviser or Sub-Adviser by Xxxxx expressly for use in the Registration
Statement (or any amendment thereto), any sales material, or in any Prospectus
(or any amendment or supplement thereto).
(b) Indemnification by the Sub-Adviser. The Sub-Adviser agrees to
indemnify and hold harmless Xxxxx, its directors, members, officers and each
person, if any, who controls Xxxxx within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section 9, as incurred by Xxxxx, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions,
relating solely to the description of the Sub-Adviser or information supplied by
the Sub-Adviser for inclusion in the Registration Statement (or any amendment
thereto), any sales material, or any Prospectus (or any amendment or supplement
thereto).
(c) Indemnification by Xxxxx. Xxxxx agrees to indemnify and hold harmless
each of the Fund, the Adviser and the Sub-Adviser, each of their directors,
trustees, members, each of their officers who signed the Registration Statement,
and each person, if any, who controls the Fund, the Adviser or Sub-Adviser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section 9, as
incurred, but only with respect to (i) any failure by Xxxxx to comply with the
prospectus delivery requirements applicable to the Placement Shares; and (ii)
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto), any sales material, or
any Prospectus (or any amendment or supplement thereto) in reliance upon and in
25
conformity with written information furnished to the Fund, the Adviser or the
Sub-Adviser by Xxxxx expressly for use in the Registration Statement (or any
amendment thereto), any sales material, or any Prospectus (or any amendment or
supplement thereto). The Fund, the Adviser and Sub-Adviser acknowledge that
Xxxxx has not furnished any information to the Fund for inclusion in the
Prospectus.
(d) 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 Xxxxx, its directors, members, officers, and each person, if any, who
controls Xxxxx within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act shall be selected by Xxxxx; 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 Securities Act or Section 20 of the Exchange Act shall be
selected by the Fund; counsel to the Adviser and each person, if any, who
controls the Adviser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall be selected by the Adviser and counsel to
the Sub-Advisor and each person, if any, who controls the Sub-Advisor within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall be selected by the Sub-Adviser. 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
Xxxxx and each person, if any, who controls Xxxxx within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange 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 Securities
Act or Section 20 of the Exchange 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 addition to any
local counsel) separate from their own counsel for the Sub-Adviser, 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 9 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.
26
(e) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 9(a)(2) 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.
(f) Other Agreements with Respect to Indemnification and Contribution. The
provisions of this Section 9 hereof shall not affect any agreements among the
Fund, the Adviser and Sub-Adviser with respect to indemnification of each other
or contribution between themselves.
(g) Contribution.
(1) If the indemnification provided for in this Section 9 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 Adviser or the Sub-Adviser, as applicable, on
the one hand and Xxxxx on the other hand from the offering of the
Placement Shares 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 Adviser or the Sub-Adviser, as applicable, on the one hand and of
Xxxxx 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.
(2) The relative benefits received by the Fund and the Adviser or
the Sub-Adviser, as applicable, on the one hand and Xxxxx on the other
hand in connection with the offering of the Placement Shares pursuant to
this Agreement shall be deemed to be in the same respective proportions as
the Net Proceeds from the offering of the Placement Shares pursuant to
this Agreement (before deducting expenses) received by the Fund and the
Adviser or the Sub-Adviser, as applicable, and the total discounts and
commissions received by Xxxxx as calculated in accordance with the terms
set forth in Schedule 2, bear to the aggregate gross proceeds from the
sale of Placement Shares pursuant to this Agreement.
(3) The relative fault of the Fund and the Adviser or the
Sub-Adviser, as applicable, on the one hand and Xxxxx 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 Adviser, by the Sub-Adviser or by Xxxxx and the
27
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(4) The Fund, the Adviser, the Sub-Adviser and Xxxxx agree that it
would not be just and equitable if contribution pursuant to this Section
9(f) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this Section 9(f). The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party
and referred to above in this Section 9(f) 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.
(5) Notwithstanding the provisions of this Section 9(f), Xxxxx shall
not be required to contribute any amount in excess of the amount by which
the total price of the Placement Shares actually distributed by Xxxxx
exceeds the amount of any damages that Xxxxx has otherwise been required
to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
(6) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(7) For purposes of this Section 9(f), each person, if any, who
controls Xxxxx within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
as Xxxxx, and each person who controls the Fund, any Adviser or
Sub-Adviser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each officer of the Fund, the Adviser and
the Sub-Adviser and each trustee, director or member of the Fund, the
Adviser and the Sub-Adviser shall have the same rights to contribution as
the Fund, the Adviser and the Sub-Adviser.
(h) The indemnity and contribution agreements contained in this Section 9
and the representation and warranties of the Fund, the Adviser and the
Sub-Adviser set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of Xxxxx,
its partners, officers or employees, or any person controlling Xxxxx, within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and or by or on behalf of the Fund and/or any Adviser or Sub-Adviser, its
directors and officers or any person who controls the Fund, and/or any Adviser
or Sub-Adviser within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, (ii) delivery and acceptance of the Placement Shares and
payment therefor, or (iii) any termination of this Agreement. A successor to
Xxxxx or to the Fund or any Adviser or Sub-Adviser, its respective directors or
officers, or any person controlling the Fund, or any Adviser or Sub-Adviser,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 9.
28
10. Representations and Agreements to Survive Delivery. All representations
and warranties of the Fund and the Adviser herein or in certificates delivered
pursuant hereto shall survive, as of their respective dates, regardless of (i)
any investigation made by or on behalf of Xxxxx, any controlling persons, or the
Fund and/or any Adviser or Sub-Adviser (or any of their respective officers,
directors or controlling persons), (ii) delivery and acceptance of the Placement
Shares and payment therefor or (iii) any termination of this Agreement.
11. Termination.
(a) Xxxxx shall have the right by giving notice as hereinafter specified
at any time to terminate this Agreement if (i) any Fund Material Adverse Effect
or Adviser Material Adverse Effect, has occurred which, in the reasonable
judgment of Xxxxx, may materially impair the investment quality of the Placement
Shares, (ii) the Fund, the Adviser or Sub-Adviser shall have failed, refused or
been unable to perform any agreement on its part to be performed hereunder;
provided, however, in the case of any failure of the Fund, the Adviser or
Sub-Adviser to deliver (or cause another person to deliver) any certification,
opinion, or letter required under Sections 7(j), 7(k), 7(l) or 7(m) Xxxxx'x
right to terminate shall not arise unless such failure to deliver (or cause to
be delivered) continues for more than thirty (30) days from the date of such
Representation Date pursuant to which such delivery was required; provided,
further, that, Xxxxx shall have the right to suspend its obligations hereunder,
regardless of whether a Placement Notice is pending, beginning on the sixth
(6th) day after the date of any Representation Date if any certification,
opinion, or letter referenced in the foregoing proviso has not yet been (or
caused to be) delivered; (iii) any other condition of Xxxxx'x obligations
hereunder is not fulfilled, or (iv) any suspension or limitation of trading in
the Placement Shares or in securities generally on the NYSE shall have occurred.
Any such termination shall be without liability of any party to any other party
except that the provisions of Section 7(e), Section 9, Section 10, Section 15,
Section 17 and Section 19 hereof shall remain in full force and effect
notwithstanding such termination. If Xxxxx elects to terminate this Agreement as
provided in this Section 11, Xxxxx shall provide the required notice as
specified herein.
(b) The Fund shall have the right, by giving notice as hereinafter
specified to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 7(e), Section 9, Section 10, Section 15,
Section 17 and Section 19 hereof shall remain in full force and effect
notwithstanding such termination.
(c) Xxxxx shall have the right, by giving notice as hereinafter specified
to terminate this Agreement in its sole discretion at any time following the
period of twelve (12) months after the date of this Agreement. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 7(e), Section 9, Section 10, Section 15, Section
17 and Section 19 hereof shall remain in full force and effect notwithstanding
such termination.
(d) This Agreement shall remain in full force and effect unless terminated
pursuant to Sections 11(a), (b) or (c) above or otherwise by mutual agreement of
the parties; provided, however, that any such termination by mutual agreement
29
shall in all cases be deemed to provide that Section 7(e), Section 9, Section
10, Section 15, Section 17 and Section 19 shall remain in full force and effect.
(e) Except as otherwise provided in Sections 11(b) and 11(c), any
termination of this Agreement shall be effective on the date specified in such
notice of termination; provided, however, that such termination shall not be
effective until the close of business on the date of receipt of such notice by
Xxxxx or the Fund or Adviser, as the case may be. If such termination shall
occur prior to the Settlement Date for any sale of Placement Shares, such
Placement Shares shall settle in accordance with the provisions of this
Agreement.
(f) Any Reimbursable Amounts owed to Xxxxx upon a termination in
accordance with this Section 11 shall be payable by the Fund to Xxxxx only to
the extent such Reimbursable Amounts are actually incurred by Xxxxx as
contemplated by FINRA Rule 5110(f)(2)(D).
12. Notices. All notices or other communications required or permitted to be
given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and if sent to Xxxxx, shall be delivered to Xxxxx at
JonesTrading Institutional Services LLC, 00000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000, fax no. (000) 000-0000, Attention: General
Counsel, and Xxxxxxxx Xxxxxxx LLP, 0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000,
fax no. (000) 000-0000, Attention: Xxxxx X. Xxxxxx; if sent to the Fund or, the
Adviser, shall be delivered to First Trust Advisors L.P., Attention: General
Counsel, fax no.: (000) 000-0000), with a copy to Xxxxxxx and Xxxxxx LLP,
Attention: Xxxx X. Xxxx, telephone (000) 000-0000 fax: (000) 000-0000, or if
sent to the Sub-Adviser, shall be delivered to Brookfield Investment Management
Inc., Attention: General Counsel, fax: (000) 000-0000. Each party to this
Agreement may change such address for notices by sending to the parties to this
Agreement written notice of a new address for such purpose. Each such notice or
other communication shall be deemed given (i) when delivered personally or by
verifiable facsimile transmission (with an original to follow) on or before 4:30
p.m., New York City time, on a Business Day or, if such day is not a Business
Day, on the next succeeding Business Day, (ii) on the next Business Day after
timely delivery to a nationally-recognized overnight courier and (iii) on the
Business Day actually received if deposited in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid). For purposes of
this Agreement, "BUSINESS DAY" shall mean any day on which the NYSE and
commercial banks in the City of New York are open for business.
13. Successors. This Agreement shall inure to the benefit of and be binding
upon Xxxxx, the Fund, the Adviser and the Sub-Adviser 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 Xxxxx,
the Fund and the Adviser and their respective successors and the controlling
persons and directors, officers, members and trustees referred to in Section 9
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 Xxxxx, the Fund, the Adviser and the
Sub-Adviser and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Placement
Shares from Xxxxx shall be deemed to be a successor by reason merely of such
purchase.
30
14. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed in such state.
16. General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in
writing by each party whom the condition is meant to benefit. The Section
headings, titled and captions herein are for the convenience of the parties only
and shall not affect the construction or interpretation of this Agreement.
17. Waiver of Jury Trial. The Fund, the Adviser and Xxxxx each hereby
irrevocably waives any right it may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or any transaction
contemplated hereby.
18. Adjustments for Stock Splits. The parties acknowledge and agree that all
share related numbers contained in this Agreement shall be adjusted to take into
account any stock split, stock dividend or similar event effected with respect
to the Shares.
19. Absence of Fiduciary Relationship. The Fund, the Adviser and Sub-Adviser
acknowledge that in connection with the offering of the Placement Shares: (a)
Xxxxx has acted at arms length and owes no fiduciary duties to, the Fund, the
Adviser and Sub-Adviser or any other person; (b) Xxxxx owes the Fund, the
Adviser and Sub-Adviser only those duties and obligations set forth in this
Agreement and prior written agreements (to the extent not superseded by this
Agreement), if any, and (iii) Xxxxx may have interests that differ from those of
the Funds, the Adviser and Sub-Adviser. The Fund, the Adviser and Sub-Adviser
waive to the full extent permitted by applicable law any claims any of them may
have against Xxxxx arising from an alleged breach of fiduciary duty in
connection with the offering of the Placement Shares as contemplated by this
Agreement
20. Limitation of Liability. The Declaration of Trust is on file with the
Secretary of The Commonwealth of Massachusetts. This Agreement is executed on
behalf of the Fund by the Fund's officers as officers and not individually and
the obligations imposed upon the Fund by this Agreement are not binding upon any
of the Fund's shareholders individually but are binding only upon the assets and
property of the Fund.
31
If the foregoing correctly sets forth the understanding between the Fund,
the Adviser and Xxxxx, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Fund, the Adviser, the Sub-Adviser and Xxxxx.
Very truly yours,
FIRST TRUST MORTGAGE INCOME FUND
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President and CEO
FIRST TRUST ADVISORS L.P.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: CFO and COO
BROOKFIELD INVESTMENT MANAGEMENT INC.
By: /s/ Xxx X. Xxxxx
------------------------------------
Name: Xxx X. Xxxxx
Title: Secretary
ACCEPTED AS OF THE DATE
FIRST-ABOVE WRITTEN:
JONESTRADING INSTITUTIONAL SERVICES LLC
By: /s/ Xxxx X. Xxxx
------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Financial Officer
32
SCHEDULE 1
FORM OF PLACEMENT NOTICE
------------------------
From: [ ]
Cc: [ ]
To: [ ]
Subject: Capital On Demand - Placement Notice
Date:
Gentlemen:
Pursuant to the terms and subject to the conditions contained in the Capital On
Demand(TM) Sales Agreement between First Trust Mortgage Income Fund (the
"FUND"), First Trust Advisors L.P., Brookfield Investment Management Inc. and
JonesTrading Institutional Services LLC ("XXXXX") dated June 21, 2012, I hereby
request on behalf of the Fund that Xxxxx sell up to [ ] shares of the Fund's
common shares of beneficial interest, no par value per share, at a minimum
market price of $_______ per share.
The time period during which sales are requested to be made shall be
________________.
[No more than __________ shares may be sold in any one trading day.]
Discount/Commission: ______________________
ADDITIONAL SALES PARAMETERS MAY BE ADDED, SUCH AS SPECIFIC DATES THE SHARES MAY
NOT BE SOLD ON, THE MANNER IN WHICH SALES ARE TO BE MADE BY XXXXX, AND/OR THE
CAPACITY IN WHICH XXXXX MAY ACT IN SELLING SHARES (AS PRINCIPAL, AGENT, OR
BOTH).
ANY AND ALL SALES PARAMETERS TO BE SET FORTH IN A PLACEMENT NOTICE MAY BE
CONVEYED TO XXXXX IN AN E-MAIL NOTICE OR OTHER METHOD MUTUALLY AGREED TO IN
WRITING BY THE PARTIES, AS CONTEMPLATED BY SECTION 2 OF THE AGREEMENT.
S-1
SCHEDULE 2
COMPENSATION
The amount of any discount, commission or other compensation (other than the
Reimbursable Amounts), to be paid by the Fund to Xxxxx shall be between 100 and
300 basis points of the gross proceeds with respect to sales actually effected
by Xxxxx, with the exact amount of such discount, commission or other
compensation to be mutually agreed upon by the parties from time to time, as set
forth in the Placement Notice.
S-2
SCHEDULE 3
JONESTRADING INSTITUTIONAL SERVICES LLC
Xxxxxx "Moe" Xxxxx
Managing Director
JonesTrading Institutional Services LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
xxxx@xxxxxxxxxxxx.xxx
Xxxx X. Xxxx
Chief Financial Officer
JonesTrading Institutional Services LLC
00000 Xxxxxxx Xxxxxx Xxxx Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
(000) 000-0000
xxxxx@xxxxxxxxxxxx.xxx
Xxxxxx X. Xxxxxxxxxxx
Chief Operating Officer & General Counsel
JonesTrading Institutional Services LLC
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
(000) 000-0000
xxxxx@xxxxxxxxxxxx.xxx
Xxxxxx X. Xxxxxxx
Managing Director, Head of Capital Markets
JonesTrading Institutional Services LLC
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
(000) 000-0000
xxxxxxx@xxxxxxxxxxxx.xxx
FIRST TRUST MORTGAGE INCOME FUND
Xxxx X. Xxxxxxx
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000
xxxxxxxx@xxxxxxxxxxxx.xxx
Xxxxx X. Xxxxx
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000
xxxxxx@xxxxxxxxxx.xxx
Xxxxxxxxxxx X. Xxxxxx
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000
xxxxxxx@xxxxxxxxxx.xxx
W. Xxxxx Xxxxxxx
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000
xxxxxxxx@xxxxxxxxxxxx.xxx
Xxxxxx X. Xxxxxxxxx
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000
xxxxxxxxxx@xxxxxxxxxx.xxx
Xxxxxx X. Xxxxx
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000
xxxxxx@xxxxxxxxxx.xxx
Xxxxxx X. Xxxxx
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000
xxxxxx@xxxxxxxxxxxx.xxx
S-3
EXHIBIT 7(J)
FUND OFFICER CERTIFICATE
The undersigned, the duly qualified and elected _______________________ of
First Trust Mortgage Income Fund (the "FUND"), does hereby certify in such
capacity and on behalf of the Fund, pursuant to Section 7(j) of the Sales
Agreement dated June 21, 2012 (the "SALES AGREEMENT") between the Fund, First
Trust Advisers L.P., Brookfield Investment Management Inc. and JonesTrading
Institutional Services LLC, that to the best of the knowledge of the
undersigned:
(i) Except for non-material exceptions as may be set forth on Annex A
hereto, the representations and warranties of the Fund in Section 6(a) of the
Sales Agreement are true and correct on and as of the date hereof, with the same
force and effect as if expressly made on and as of the date hereof; and
(ii) The Fund has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.
By:
------------------------------------
Name:
Title:
Date:
EXHIBIT 7(J) (CONT'D)
ADVISER OFFICER CERTIFICATE
The undersigned, the duly qualified and elected _______________________ of
First Trust Advisers L.P. (the "ADVISER"), an Illinois limited partnership, does
hereby certify in such capacity and on behalf of the Adviser, pursuant to
Section 7(j) of the Sales Agreement dated June 21, 2012 (the "SALES AGREEMENT")
between the Adviser, First Trust Mortgage Income Fund, Brookfield Investment
Management Inc. and JonesTrading Institutional Services LLC, that to the best of
the knowledge of the undersigned:
(i) Except for non-material exceptions as may be set forth on Annex A
hereto, the representations and warranties of the Adviser in Section 6(b) of the
Sales Agreement are true and correct on and as of the date hereof, with the same
force and effect as if expressly made on and as of the date hereof; and
(ii) The Adviser has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.
By:
------------------------------------
Name:
Title:
Date:
EXHIBIT 7(J) (CONT'D)
SUB-ADVISER OFFICER CERTIFICATE
The undersigned, the duly qualified and elected _______________________ of
Brookfield Investment Management Inc. (the "SUB-ADVISER"), a _________
corporation, does hereby certify in such capacity and on behalf of the
Sub-Adviser, pursuant to Section 7(j) of the Sales Agreement dated June 21, 2012
(the "SALES AGREEMENT") between the Sub-Adviser, First Trust Advisors L.P.,
First Trust Mortgage Income Fund and JonesTrading Institutional Services LLC,
that to the best of the knowledge of the undersigned:
(i) Except for non-material exceptions as may be set forth on Annex A
hereto, the representations and warranties of the Sub-Adviser in Section 6(c) of
the Sales Agreement are true and correct on and as of the date hereof, with the
same force and effect as if expressly made on and as of the date hereof; and
(ii) The Sub-Adviser has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.
By:
------------------------------------
Name:
Title:
Date:
EXHIBIT 7(K)(1)
FORM OF OPINION OF FUND COUNSEL
i. The Registration Statement and all post-effective amendments thereto,
if any, are effective under the Act and no stop order with respect thereto has
been issued and no proceeding for that purpose has been instituted or, to the
best of our knowledge, is threatened by the Commission. Any filing of the
Prospectus or any supplements thereto required under Rule 497 under the Act
prior to the date hereof have been made in the manner and within the time
required by such rule.
ii. The Fund is duly licensed and qualified to do business and in good
standing in each jurisdiction in which its ownership or leasing of property or
its conducting of business as described in the Registration Statement and
Prospectus (and any amendment or supplement thereto) requires such
qualification; and the Fund owns, possesses or has obtained and currently
maintains all governmental licenses, permits, consents, orders, approvals and
other authorizations necessary to carry on its business as described in the
Prospectus, except where the failure to obtain such licenses, permits, consents,
orders, approvals and other authorizations, either alone or in the aggregate,
would not have a Fund Material Adverse Effect. The Fund has no subsidiaries.
iii. The Shares conform in all material respects to the description of
them in the Prospectus under the caption "Description of Shares - Common Shares"
in the Prospectus. All of the outstanding Shares have been duly authorized and
are validly issued, fully paid and (except as described in the Prospectus under
the caption "Certain Provisions in the Declaration of Trust") nonassessable. The
Placement Shares have been duly authorized for issuance and sale pursuant to
this Agreement and when issued and delivered against payment therefore in
accordance with the Agreement will have been validly issued and will be fully
paid and nonassessable (except as described in the Prospectus under the caption
"Certain Provisions in the Declaration of Trust"). No person is entitled to any
preemptive or other similar rights with respect to the Placement Shares under
the Declaration of Trust or Bylaws of the Fund or Massachusetts law or, to
counsel's knowledge, otherwise.
iv. The Fund is duly registered with the Commission under the Investment
Company Act as a non-diversified, closed-end management investment company and
all action under the Act and the Investment Company Act, as the case may be,
necessary to make the public offering and consummate the sale of the Placement
Shares as provided in the Agreement has or will have been taken by the Fund. To
such counsel's knowledge, the Fund has not received any notice from the
Commission pursuant to Section 8(e) of the Investment Company Act with respect
to the registration of the Fund with the Commission under the Investment Company
Act.
v. The Fund has full power and authority to enter into this Agreement and
each of the Fund Agreements and to perform all of the terms and provisions
thereof to be carried out by it and (A) each Fund Agreement and the Agreement
has been duly and validly authorized, executed and delivered by the Fund, (B)
each Fund Agreement and the Agreement complies in all material respects with all
applicable provisions of the Act, the Investment Company Act and the Advisers
Act, as the case may be, and (C) assuming due authorization, execution and
delivery by the other parties thereto, each Fund Agreement constitutes the
legal, valid and binding obligation of the Fund enforceable against the Fund in
accordance with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
vi. None of (A) the execution and delivery by the Fund of the Agreement or
the Fund Agreements, (B) the issue, sale and delivery by the Fund of the
Placement Shares as contemplated by the Agreement and (C) the performance by the
Fund of its obligations under the Agreement and the Fund Agreements or
consummation by the Fund of the other transactions contemplated by the Agreement
or the Fund Agreements result in (i) the creation or imposition of any lien,
charge or encumbrance upon the assets of the Fund pursuant to any agreement or
instrument to which the Fund is a party or by which the Fund is bound that is
described in the Registration Statement or the Prospectus or filed as an exhibit
to the Registration Statement, or (ii) conflicts with or will conflict with, or
results or will result in a breach or violation of (a) the Declaration of Trust
or the By-laws of the Fund or (b) any agreement or instrument to which the Fund
is a party or by which the Fund is bound that is described in the Registration
Statement or the Prospectus or filed as an exhibit to the Registration Statement
or (c) any federal or State of Illinois statute, law or regulation (except we
express no opinion as to applicable state securities and blue sky laws, and
except that the indemnification provisions in the Agreement and the Fund
Agreements, insofar as they relate to indemnification for liabilities arising
under the Act, may be against public policy as expressed in the Act and
therefore unenforceable) or (d) order of any court, governmental
instrumentality, securities exchange or association or arbitrator, whether
foreign or domestic, specifically naming the Fund and known to us (provided that
we express no opinion with respect to any financial test or cross-default
provision in any such agreement).
vii. No consent, approval, authorization or order of any court (to our
knowledge) or governmental agency or body or securities exchange or association
is required by the Fund for the consummation by the Fund of the transactions to
be performed by the Fund or the performance by the Fund of all the terms and
provisions to be performed by or on behalf of it in each case as contemplated in
the Agreement and the Fund Agreements, except such as (A) have been obtained
under the Act and the Investment Company Act and (B) may be required under state
securities or "blue sky" or the NYSE in connection with the issuance and sale of
the Placement Shares pursuant to the Agreement.
viii. To our knowledge, there are no contracts or other documents which
are required to be described in the Registration Statement and the Prospectus or
filed as exhibits to the Registration Statement by the Act or the Investment
Company Act which have not been described in the Registration Statement and the
Prospectus or filed as exhibits to the Registration Statement;
ix. The sections in the Prospectus entitled "Certain Provisions in the
Declaration of Trust and By-laws" and "Certain Federal Income Tax Matters" and
the section in the Statement of Additional Information entitled "Certain Federal
Income Tax Matters" is a fair and accurate summary of the principal United
States federal income tax rules currently in effect applicable to the Fund and
to the purchase, ownership and disposition of the Placement Shares, subject to
the qualifications therein.
x. To our knowledge, there is no legal or governmental proceeding pending
against the Fund that is either (i) required to be described in the Registration
Statement or Prospectus that is not already described or (ii) asserts the
invalidity of any of the Fund Agreements.
xi. The Registration Statement, the Prospectus and each amendment or
supplement to the Registration Statement and/or the Prospectus, as of their
respective effective or issue dates (other than the financial statements, the
notes thereto, and supporting schedules included therein or omitted therefrom,
as to which we express no view) and the Fund Agreements complied or comply in
all material respects to the requirements of the Act and the Investment Company
Act
In addition, we have participated in conferences with officers and other
representatives of the Fund, representatives of the independent registered
public accountants for the Fund, and representatives of Xxxxx and their counsel,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed. We have not independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the information included in the Registration Statement and the
Prospectus. Based solely on the participation and discussion described above,
however, nothing has come to our attention that would lead us to believe that
the Registration Statement (except for financial statements and schedules and
other financial or accounting data included therein, as to which we need make no
statement) at the time such Registration Statement became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus (except for financial statements and
schedules and other financial or accounting data included therein, as to which
we need make no statement), at the time filed pursuant to Rule 497 and on the
date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
EXHIBIT 7(K)(2)
MATTERS TO BE COVERED BY
FUND COUNSEL OPINION UPON SEMI-ANNUAL REPORT FILING
We have participated in conferences with officers and other
representatives of the Fund, representatives of the independent registered
public accountants for the Fund, and representatives of Xxxxx and their counsel,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed. We have not independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the information included in the Registration Statement and the
Prospectus. Based solely on the participation and discussion described above,
however, nothing has come to our attention that would lead us to believe that
the Registration Statement (except for financial statements and schedules and
other financial or accounting data included therein, as to which we need make no
statement) at the time such Registration Statement became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus (except for financial statements and
schedules and other financial or accounting data included therein, as to which
we need make no statement), at the time filed pursuant to Rule 497 and on the
date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
EXHIBIT 7(L)(I)
FORM OF OPINION OF ADVISER COUNSEL
i. The Adviser has been duly formed and is validly existing as a limited
partnership under the laws of the State of Illinois with full power and
authority to own or lease all of the assets owned or leased by it and to conduct
its business as described in the Registration Statement and Prospectus and to
enter into and perform its obligations under the Agreement, the Advisory
Agreement and the Sub-Advisory Agreement (collectively, the "Adviser
Agreements").
ii. The Adviser is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment adviser for the Fund as contemplated by the
Advisory Agreement, the Registration Statement and the Prospectus. To such
counsel's knowledge, there does not exist any pending or threatened proceeding
which could reasonably be expected to adversely affect the registration of the
Adviser with the Commission.
iii. The Adviser has full power and authority to enter into each of the
Adviser Agreements and to carry out all the terms and provisions thereof to be
carried out by it, and each of the Adviser Agreements has been duly and validly
authorized, executed and delivered by the Adviser; each Adviser Agreement
complies in all material respects with all provisions of the Securities Act,
Investment Company Act and the Advisers Act; and assuming due authorization,
execution and delivery by the other parties thereto, each of the Advisory
Agreement and the Sub-Advisory Agreement constitutes a legal, valid and binding
obligation of the Adviser, enforceable against the Adviser in accordance with
its terms, subject, as to enforcement, to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law).
iv. Neither (A) the execution and delivery by the Adviser of any Adviser
Agreement nor (B) the consummation by the Adviser of the transactions
contemplated by, or the performance of its obligations under any Adviser
Agreement conflicts or will conflict with, or results or will result in a breach
of, the organizational documents of the Adviser or any agreement or instrument
known to us to which the Adviser is a party or by which the Adviser is bound, or
any federal or Illinois law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association or arbitrator,
whether foreign or domestic, specifically naming the Adviser and known to us,
except in each case for such conflicts or breaches which would not reasonably be
expected, either alone or in the aggregate, to have a material adverse effect on
the Adviser's ability to perform its obligations under the Adviser Agreements,
provided, that we express no opinion with respect to any financial test or
cross-default provision in any such Adviser Agreement.
v. No consent, approval, authorization or order of any court (to our
knowledge), of any governmental agency or body or securities exchange or
association, whether foreign or domestic, is required for the consummation by
the Adviser of the transactions contemplated in, or the performance by the
Adviser of its obligations under, any Adviser Agreement, except (i) such as have
been obtained under the federal securities laws and (ii) may be required by the
NYSE or under state securities or "blue sky" laws, in connection with the
issuance and sale of the Placement Shares pursuant to the Agreement.
vi. To our knowledge, there is no legal or governmental proceeding pending
against the Adviser that is either (i) required to be described in the
Registration Statement or Prospectus that is not already described, (ii) which
would, under Section 9 of the Investment Company Act, make the Adviser
ineligible to act as the Fund's investment adviser or (iii) asserts the
invalidity of any of the Advisor Agreements.
vii. There are no contracts or other documents which are required to be
described in the Registration Statement and the Prospectus or filed as exhibits
to the Registration Statement by the Securities Act or the Investment Company
Act which relate to the Adviser and have not been described in the Registration
Statement and the Prospectus or filed as exhibits to the Registration Statement.
viii. The description in the Prospectus of the Adviser and its business
complies in all material respects with all applicable requirements of the
Securities Act and the Investment Company Act.
In addition, we have participated in conferences with officers and other
representatives of the Adviser, representatives of the independent registered
public accountants for the Fund, and representatives of Xxxxx and their counsel,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed. We have not independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the information included in the Registration Statement and the
Prospectus. Based solely on the participation and discussions described above,
however, nothing has come to our attention that would lead us to believe that
solely with respect to the description of the Adviser, the Registration
Statement (except for financial statements and schedules and other financial or
accounting data included therein, as to which we need make no statement) at the
time such Registration Statement became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; or that the
Prospectus (except for financial statements and schedules and other financial or
accounting data included therein, as to which we need make no statement), at the
time filed pursuant to Rule 497 and on the date hereof, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
EXHIBIT 7(L)(II)
FORM OF OPINION OF SUB-ADVISER COUNSEL
i. The Sub-Adviser has been duly formed and is validly existing as a
corporation under the laws of the State of Delaware with full power and
authority to conduct its business as described in the Registration Statement and
Prospectus and to enter into and perform its obligations under the Agreement and
the Sub-Advisory Agreement (collectively, "Sub-Adviser Agreements").
ii. The Sub-Adviser is duly registered as an investment adviser under the
Advisers Act and, to our knowledge, is not prohibited by the Advisers Act or the
Investment Company Act from acting as investment adviser for the Fund as
contemplated by the Sub-Advisory Agreement, the Registration Statement and the
Prospectus. To such counsel's knowledge, there does not exist any pending or
threatened proceeding, which could reasonably be expected to adversely affect
the registration of the Sub-Adviser with the Commission.
iii. The Sub-Adviser has full power and authority to enter into the
Sub-Adviser Agreements and to carry out the terms and provisions thereof to be
carried out by it, and each of the Sub-Adviser Agreements has been duly and
validly authorized, executed and delivered by the Sub-Adviser; each Sub-Adviser
Agreement complies in all material respects with the Securities Act, the
Investment Company Act and the Advisers Act; and assuming due authorization,
execution and delivery by the other parties thereto, each of the Sub-Adviser
Agreements constitutes a legal, valid and binding obligation of the Sub-Adviser,
enforceable against the Sub-Adviser in accordance with its terms, (1) subject,
as to enforcement, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law) and (2) except as rights to indemnity thereunder may be limited by federal
or state securities laws.
iv. Neither (A) the execution and delivery by the Sub-Adviser of any
Sub-Adviser Agreement nor (B) the consummation by the Sub-Adviser of the
transactions contemplated by, or the performance of its obligations under, any
Sub-Adviser Agreement conflicts or will conflict with, or results or will result
in a breach of, the organizational documents of the Sub-Adviser or any agreement
or instrument known to us to which the Sub-Adviser is a party or by which the
Sub-Adviser is bound, or any federal or Delaware law, rule or regulation, or
order of any court, governmental instrumentality, securities exchange or
association or arbitrator, whether foreign or domestic, specifically naming the
Sub-Adviser and known to us, except in each case for such conflicts or breaches
which would not reasonably be expected, either alone or in the aggregate, have a
material adverse effect on the Sub-Adviser's ability to perform its obligations
under the Sub-Adviser Agreements; provided that we express no opinion with
respect to any financial test or cross-default provision in any such agreement
or instrument.
v. No consent, approval, authorization or order of any court (to our
knowledge), governmental agency or body or securities exchange or association,
whether foreign or domestic, is required for the consummation by the Sub-Adviser
of the transactions contemplated in, or the performance by the Sub-Adviser of
its obligations under, any Sub-Adviser Agreement, except (i) such as have been
obtained under the federal securities laws and (ii) may be required by state
securities or "blue sky" laws, in connection with the issuance and sale of the
Placement Shares pursuant to the Agreement.
vi. To our knowledge, there is no legal or governmental proceeding pending
or threatened against the Sub-Adviser that is either (i) required to be
described in the Registration Statement or Prospectus that is not already
described, (ii) which would, under Section 9 of the Investment Company Act, make
the Sub-Adviser ineligible to act as the Fund's investment adviser or (iii)
asserts the invalidity of any of the Sub-Adviser Agreements.
vii. There are no contracts or other documents that are required to be
described in the Registration Statement and the Prospectus or filed as exhibits
to the Registration Statement by the Securities Act or the Investment Company
Act that relate to the Sub-Adviser and have not been described in the
Registration Statement and the Prospectus or filed as exhibits to the
Registration Statement.
viii. The description in the Prospectus of the Sub-Adviser and its
business complies in all material respects with all applicable requirements of
the Securities Act and the Investment Company Act.
In addition, we have participated in discussions with representatives of
the Sub-Adviser where the contents of the Registration Statement and Prospectus,
so far as they relate to the Sub-Adviser, were discussed and we have reviewed
certain records and documents of the Sub-Adviser. We have not independently
verified and are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the information and statements included in
the Registration Statement and the Prospectus. Based solely on the discussions
described above, however, nothing has come to our attention that would lead us
to believe that solely with respect to the description of the Sub-Adviser, the
Registration Statement (except for financial statements and schedules and other
financial or accounting data included therein, as to which we need make no
statement) at the time such Registration Statement became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus (except for financial statements and
schedules and other financial or accounting data included therein, as to which
we need make no statement), at the time filed pursuant to Rule 497 and on the
date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
EXHIBIT 7(M)
_________ ___, 20__
JonesTrading Institutional Services LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This certificate of First Trust Mortgage Income Fund, a Massachusetts
business trust (the "Fund"), is being delivered on behalf of the Fund by Xxx
Xxxxx, in connection with the Sales Agreement, dated June 21, 2012, among the
Fund, First Trust Advisors L.P., Brookfield Investment Management Inc. and
JonesTrading Institutional Services LLC (the "Agent") in relation to the
issuance and sale from time to time of shares of up to __________ of the Fund's
common shares of beneficial interest through the Agent.
I hereby certify that I am the duly elected Chief Financial Officer of the
Fund.
I have reviewed the Fund's unaudited semi-annual financial statements and
financial highlights as of and for the semi-annual period ended April 30,
20__ attached hereto as Exhibit A and included in the Fund's semi-annual
report on Form N-CSRS (the "Semi-Annual Financial Statements") and for
purposes of this certification, have inquired of other officials of the
Fund, as necessary, who have responsibility for certain financial and
accounting matters.
Nothing has come to my attention based on my review of the Semi-Annual
Financial Statements and my inquiries of other Fund officials as stated
above, that causes me to believe that:
(a) any material modifications should be made to the Semi-Annual
Financial Statements for them to be in conformity with
accounting principles generally accepted in the United States
of America; and
(b) the Semi-Annual Financial Statements do not comply as to form
in all material respects with the applicable accounting
requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, and the rules
and regulations adopted thereunder by the Securities and
Exchange Commission.
[Remainder of page intentionally blank]
Signed by me this _____ day of __________, 20__.
---------------------------------
Name: Xxx Xxxxx
Title: Chief Financial Officer
