DRAFT 5/21/2007
[ ] SHARES
FIRST TRUST/GALLATIN SPECIALTY FINANCE AND
FINANCIAL OPPORTUNITIES FUND
COMMON SHARES OF BENEFICIAL INTEREST
UNDERWRITING AGREEMENT
May 24, 2007
X.X. Xxxxxxx & Sons, Inc.
BB&T Capital Markets, a division of Xxxxx & Xxxxxxxxxxxx,
Inc.
Xxxxxx X. Xxxxx & Co. Incorporated
H&R Block Financial Advisors, Inc.
Xxxxxxx, Xxxxxx & Co.
Xxxxxx, Xxxxx Xxxxx, Incorporated
Xxxxxx Xxxxxx & Company, Inc.
RBC Capital Markets Corporation
Xxxx Xxxx & Co., Inc.
Sterne, Agee & Xxxxx, Inc.
Xxxxxx, Xxxxxxxx & Company, Incorporated
Xxxxxxxxxx Securities, Inc.
As Representatives of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Dear Sir or Madam:
The undersigned, First Trust/Gallatin Specialty Finance and
Financial Opportunities Fund, a Massachusetts business trust (the
"Fund"), First Trust Advisors L.P., an Illinois limited partnership (the
"Adviser"), and Gallatin Asset Management, Inc., a Delaware corporation
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(the "Sub-Adviser") address you as Underwriters and as the
Representatives (the "Representatives") of each of the other persons,
firms and corporations, if any, listed in Schedule I hereto (herein
collectively called "Underwriters"). The Fund proposes to issue and sell
an aggregate of [ ] shares of its common shares of beneficial interest
(the "Firm Shares"), $0.01 par value per share (the "Common Shares"), to
the several Underwriters. The Fund also proposes to sell, upon the terms
and conditions contained in Section 2 hereof, up to [ ] additional Common
Shares (the "Additional Shares," which together with the Firm Shares are
hereinafter collectively referred to as the "Shares").
The Fund, the Adviser and the Sub-Adviser wish to confirm as
follows their agreements with you and the other several Underwriters on
whose behalf you are acting in connection with the several purchases of
the Shares by the Underwriters.
The Fund has entered into an investment management agreement
with the Adviser dated May 24, 2007 (the "Advisory Agreement"), a
Custodian Services Agreement with PFPC Trust Company ("Custodian") dated
April 20, 2007 (the "Custodian Contract"), a Transfer Agency Services
Agreement with PFPC Inc. dated May 25, 2007 (the "Transfer Agency
Agreement"), an Administration and Accounting Services Agreement with
PFPC Inc. dated May 25, 2007 (the "Administration Agreement"), and a
Subscription Agreement with the Adviser dated April 23, 2007 (the
"Subscription Agreement"). In addition, the Fund has adopted a dividend
reinvestment plan (the "Dividend Reinvestment Plan"), pursuant to which
holders of Shares shall have their dividends automatically reinvested in
additional Common Shares of the Fund unless they elect to receive such
dividends in cash. Collectively, the Advisory Agreement, the Custodian
Contract, the Transfer Agency Agreement, the Administration Agreement,
the Subscription Agreement, and the Dividend Reinvestment Plan are herein
referred to as the "Fund Agreements." The Adviser has entered into the
Advisory Agreement, a Sub-Advisory Agreement with the Sub-Adviser dated
May 24, 2007 (the "Sub-Advisory Agreement"), a Corporate Finance Services
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and Consulting Agreement with X.X. Xxxxxxx & Sons, Inc. dated May 24,
2007 (the "Corporate Finance Services and Consulting Agreement")
(collectively, the "Adviser Agreements"). The Sub-Adviser has entered
into the Sub-Advisory Agreement and this Agreement (collectively, the
"Sub-Adviser Agreements"). This Underwriting Agreement is herein referred
to as the "Agreement."
1. Registration Statement and Prospectus. The Fund has
prepared and filed with the Securities and Exchange Commission
(the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended (the "1933 Act"), the
Investment Company Act of 1940, as amended (the "1940 Act"), and
the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Rules and Regulations") and the 1940 Act (the
"1940 Act Rules and Regulations," and together with the 1933 Act
Rules and Regulations, the "Rules and Regulations") a
registration statement on Form N-2 (File No. 333-141457 under
the 1933 Act), including a prospectus and statement of
additional information relating to the Shares, and a
notification of registration of the Fund as an investment
company under the 1940 Act on Form N-8A (File No. 811-22039
under the 1940 Act, the "1940 Act Notification"), and may
pursuant to the Rules and Regulations prepare and file an
additional registration statement relating to a portion of the
Shares pursuant to Rule 462(b) of the 1933 Act Rules and
Regulations (a "Rule 462 Registration Statement"). In addition,
the Fund has prepared and filed, in accordance with Section 12
of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the "1934 Act"),
a registration statement (as amended, the "1934 Act Registration
Statement") on Form 8-A (File No. 001-33477) under the 1934 Act
to register, under Section 12(b) of the 1934 Act, the Shares.
The term "Registration Statement" as used in this
Agreement means the registration statement, as amended at the
time it becomes effective for purposes of Section 11 of the 1933
Act, as such section applies to the respective Underwriters (the
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"Effective Time"), including (i) all documents filed as a part
thereof or incorporated by reference therein, (ii) any
information contained in a prospectus subsequently filed with
the Commission pursuant to Rule 497 under the 1933 Act Rules and
Regulations and deemed to be part of the registration statement
at the Effective Time pursuant to Rule 430A under the 1933 Act
Rules and Regulations and (iii) any Rule 462 Registration
Statement filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the 1933 Act Rules and
Regulations.
The term "Prospectus" as used in this Agreement means
the final prospectus and statement of additional information
incorporated therein by reference as filed by the Fund with the
Commission (i) pursuant to Rule 497(h) under the 1933 Act Rules
and Regulations on or before the second business day after the
date hereof (or such earlier time as may be required under the
1933 Act) or (ii) pursuant to Rule 497(b) under the 1933 Act on
or before the fifth business day after the date hereof (or such
earlier time as may be required under the 1933 Act), or, if no
such filing is required, the final prospectus (including the
final statement of additional information) included in the
Registration Statement at the time it becomes effective, in each
case in the form furnished by the Fund to you for use by the
Underwriters and by dealers in connection with the confirmation
of sales in the offering of the Shares.
The term "Prepricing Prospectus" as used in this
Agreement means each prospectus and statement of additional
information included in the Registration Statement, or amendment
thereof, before it became effective under the 1933 Act and any
prospectus and statement of additional information incorporated
therein by reference filed with the Commission by the Fund with
the consent of the Representatives on behalf of the
Underwriters, pursuant to Rule 497(a) under the 1933 Act Rules
and Regulations.
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The term "Pricing Prospectus" as used in this Agreement
means the Prepricing Prospectus that is included in the
Registration Statement, or otherwise furnished by the Fund to
you for use by the Underwriters and by dealers in connection
with the offering of the Shares, immediately prior to the
Applicable Time (as defined below) and any amendment or
supplement to such Preliminary Prospectus from the Applicable
Time through the Closing Time (as defined below).
The terms "Registration Statement," "Prospectus,"
"Prepricing Prospectus" and "Pricing Prospectus" shall also
include any financial statements and other information included
or incorporated by reference therein. The Fund has furnished the
Representatives with copies of such Registration Statement, each
amendment to such Registration Statement filed with the
Commission and each Prepricing Prospectus.
The term "Pricing Information" as used in this
Agreement means the information relating to (i) the number of
Shares issued and (ii) the offering price of the Shares included
on the cover page of the Prospectus dependent upon such
information.
The term "Disclosure Package" as used in this Agreement
means the Pricing Prospectus taken together with the Pricing
Information.
The term "Sales Materials" as used in this Agreement
means those advertising material, sales literature or other
promotional materials or documents, if any, constituting an
advertisement pursuant to Rule 482 under the 1933 Act Rules and
Regulations authorized or prepared by the Fund or authorized or
prepared on behalf of the Fund by the Adviser, the Sub-Adviser
or any representative thereof for use in connection with the
public offering or sale of the Shares; provided, however, that
Sales Materials do not include any slides, tapes or other
materials or documents that constitute a "written communication"
(as defined in Rule 405 under the 1933 Act) used in connection
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with a "road show" or a "bona fide electronic road show" (each
as defined in Rule 433 under the 1933 Act Rules and Regulations)
related to the offering of Shares contemplated hereby
(collectively, "Road Show Materials").
The term "Applicable Time" as used in this Agreement
means the time as of which this Agreement was entered into,
which shall be [ ], New York City time, on the date of this
Agreement (or such other time as is agreed to by the Fund and
the Representatives on behalf of the Underwriters.
The term "business day" as used in this Agreement means
a day on which the New York Stock Exchange (the "NYSE") is open
for trading. The terms "herein," "hereof," "hereto,"
"hereinafter" and similar terms, as used in this Agreement,
shall in each case refer to this Agreement as a whole and not to
any particular section, paragraph, sentence or other subdivision
of this Agreement. The term "or," as used herein, is not
exclusive.
2. Agreements to Sell and Purchase. The Fund hereby agrees,
subject to all the terms and conditions set forth herein, to
issue and to sell to each Underwriter and, upon the basis of the
representations, warranties and agreements of the Fund, the
Adviser and the Sub-Adviser herein contained and subject to all
of the other terms and conditions set forth herein, each
Underwriter agrees, severally and not jointly, to purchase from
the Fund at a purchase price of $19.10 per Share (the "Price per
Share"), the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto.
The Fund also agrees, subject to all the terms and
conditions set forth herein, to issue and to sell to the
Underwriters and, upon the basis of the representations,
warranties and agreements of the Fund, the Adviser and the
Sub-Adviser herein contained and subject to all the terms and
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conditions set forth herein, the Underwriters shall have the
right to purchase Additional Shares from the Fund, at the
purchase price per share, pursuant to an option (the
"over-allotment option") which may be exercised at any time and
from time to time prior to 9:00 a.m., New York City time, on the
forty-fifth (45th) day after the date of the Prospectus (or if
such forty-fifth (45th) day shall be a Saturday or a Sunday or a
holiday, on the next business day thereafter when the NYSE is
open for trading). Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection with
the offering of the Shares. Upon any exercise of the
over-allotment option, upon the basis of the representations,
warranties and agreements of the Fund, the Adviser and the
Sub-Adviser herein contained and subject to all of the other
terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Fund the number
of Additional Shares (subject to such adjustments as you may
determine to avoid fractional shares) which bears the same
proportion to the number of Additional Shares to be purchased by
the Underwriters as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I (or such number of
Firm Shares increased as set forth in Section 11 hereof) bears
to the aggregate number of Firm Shares.
3. Terms of Public Offering. The Fund and the Adviser have
been advised by you that the Underwriters propose to make a
public offering of their respective portions of the Shares as
soon after the Effective Time and after this Agreement has
become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the Prospectus.
4. Delivery of Shares and Payments Therefor.
(a) Delivery to the Underwriters of and payment to the Fund
for the Firm Shares and compensation of the Underwriters
with respect thereto shall be made at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxx Xxxxxx
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Drive, Chicago, Illinois at 8:00 a.m. central time on May
30, 2007. The place of closing for the Firm Shares and the
Firm Shares Closing Time (as defined below) may be varied
by agreement between the Representatives and the Fund. The
time at which such payment and delivery are actually made
is hereinafter called the "Firm Shares Closing Time."
(b) Delivery to the Underwriters of and payment to the Fund
for any Additional Shares to be purchased by the
Underwriters and compensation of the Underwriters with
respect thereto shall be made at the aforementioned office
of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP at such time
on such date, which may be the same as the Firm Shares
Closing Time, but shall in no event be earlier than the
Firm Shares Closing Time nor earlier than two nor later
than three business days after the giving of the notice
hereinafter referred to, as shall be specified in a
written notice from you on behalf of the Underwriters to
the Fund of the Underwriters' determination to purchase a
number, specified in said notice, of Additional Shares.
Each time at which such payment and delivery with respect
to Additional Shares are actually made is hereinafter
called an "Additional Shares Closing Time." The place of
closing for any Additional Shares and each Additional
Shares Closing Time may be varied by agreement between you
and the Fund. The Firm Shares Closing Time and each
Additional Shares Closing Time each is sometimes referred
to herein as a "Closing Time" and, collectively, as the
"Closing Times."
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(c) The Shares shall be registered in such names and in such
denominations as the Underwriters shall request prior to
1:00 p.m., New York City time, (i) with respect to the
Firm Shares, on the second business day preceding the Firm
Shares Closing Time, and (ii) with respect to the
Additional Shares, on the day of the giving of the written
notice in respect of such Additional Shares. Certificates
for shares will be made available to you in New York City
for inspection and packaging not later than 9:00 a.m., New
York City time, on the business day next preceding the
Firm Shares Closing Time or each Additional Shares Closing
Time, as the case may be. The certificates evidencing the
Firm Shares and any Additional Shares to be purchased
hereunder shall be delivered to you at the Firm Shares
Closing Time or each Additional Shares Closing Time, as
the case may be, against payment of the purchase price
therefor in immediately available funds.
5. Agreements of the Fund, the Adviser and the Sub-Adviser.
The Fund, the Adviser, and (with respect to subsections (b),(h),
(l), (p) and (q) below only as they relate to the Sub-Adviser)
the Sub-Adviser, jointly and severally, agree with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective
under the 1933 Act before the offering of the Shares may
commence, the Fund will use its best efforts to cause the
Registration Statement or such post-effective amendment to
become effective under the 1933 Act as soon as possible.
If it is necessary for a post-effective amendment to the
Registration Statement, or a Rule 462 Registration
Statement under Rule 462(b) under the Securities Act, to
be filed with the Commission and become effective before
the Shares may be sold, the Fund will use its best efforts
9
to cause such post-effective amendment or such
Registration Statement to be filed and become effective as
soon as possible, and the Fund will advise you promptly
and, if requested by you, will confirm such advice in
writing, when such post-effective amendment or such
Registration Statement has become effective. If the
Registration Statement has become effective and the
Prospectus contained therein omits certain information at
the time of effectiveness pursuant to Rule 430A of the
1933 Act Rules and Regulations, the Fund will file a
prospectus including such information pursuant to Rule
497(h) of the 1933 Act Rules and Regulations, as promptly
as practicable, but no later than the second business day
following the earlier of the date of the determination of
the offering price of the Shares or the date the
Prospectus is first used after the Effective Time. If the
Registration Statement has become effective and the
Prospectus contained therein does not so omit such
information, the Fund will file a prospectus or
certification pursuant to Rule 497(c) or (j), as the case
may be, of the 1933 Act Rules and Regulations as promptly
as practicable, but no later than the fifth business day
following the date of the later of the Effective Time or
the commencement of the public offering of the Shares
after the Effective Time. The Fund will advise you
promptly and, if requested by you, will confirm such
advice in writing (i) when the Registration Statement or
such post-effective amendment has become effective, (ii)
when the Prospectus has been timely filed pursuant to Rule
497(c) or Rule 497(h) of the 1933 Act Rules and
Regulations or (iii) when the certification permitted
pursuant to Rule 497(j) of the 1933 Act Rules and
Regulations has been timely filed, whichever is
applicable.
(b) The Fund, and, in the case of (iii)(B) and (iv) below
(with respect to communications received by or
developments relating to the Adviser or the Sub-Adviser,
10
respectively) the Adviser or the Sub-Adviser, will advise
you promptly and, if requested by you, will confirm such
advice in writing: (i) of any request made by the
Commission for amendment of or a supplement to the
Registration Statement, the Prospectus, the Sales
Materials or any Prepricing Prospectus (or any amendment
or supplement to any of the foregoing) or for additional
information, (ii) of the issuance by the Commission, the
National Association of Securities Dealers, Inc. (the
"NASD"), any state securities commission, any national
securities exchange, any arbitrator, any court or any
other governmental, regulatory, self-regulatory or
administrative agency or any official of any order
suspending the effectiveness of the Registration
Statement, prohibiting or suspending the use of the
Prospectus, any Prepricing Prospectus or any Sales
Materials or Road Show Materials, of any notice pursuant
to Section 8(e) of the 1940 Act of the suspension of
qualification of the Shares for offering or sale in any
jurisdiction, or the initiation or contemplated initiation
of any proceeding for any such purposes, (iii) of receipt
by (A) the Fund, any affiliate of the Fund or any
Representatives or attorney of the Fund of any other
material communication from the Commission, or (B) the
Fund, the Adviser, the Sub-Adviser, any affiliate of the
Fund, the Adviser or the Sub-Adviser or any
Representatives or attorney of the Fund, the Adviser or
the Sub-Adviser of any other material communication from
the Commission, the NASD, any state securities commission,
any national securities exchange, any arbitrator, any
court or any other governmental, regulatory,
self-regulatory or administrative agency or any official
relating, in the case of either clause (A) or (B), to the
Fund (if such communication relating to the Fund is
received by such person within three years after the date
of this Agreement), the Registration Statement, the 1940
Act Notification, the Prospectus, any Prepricing
Prospectus, any Sales Materials or Road Show Materials (or
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any amendment or supplement to any of the foregoing) or
this Agreement or any of the Fund Agreements and (iv)
within the period of time referred to in paragraph (f)
below, of any material, adverse change in the condition
(financial or other), general affairs, business,
prospects, properties, net assets or results of operations
of the Fund or any event which should reasonably be
expected to have a material adverse effect on the ability
of the Adviser or the Sub-Adviser to perform its
obligations under this Agreement or any of the Adviser
Agreements or the Sub-Adviser Agreements, respectively
(other than as a result of changes in market conditions
generally), or of the happening of any event which makes
any statement of a material fact made in the Registration
Statement, the Prospectus, any Prepricing Prospectus or
any Sales Materials or Road Show Materials (or any
amendment or supplement to any of the foregoing) untrue or
which requires the making of any additions to or changes
in the Registration Statement, the Prospectus, any
Prepricing Prospectus or any Sales Materials or Road Show
Materials (or any amendment or supplement to any of the
foregoing) in order to state a material fact required by
the 1933 Act, the 1940 Act or the Rules and Regulations to
be stated therein or necessary in order to make the
statements therein (in the case of the Prospectus, any
Prepricing Prospectus or any Sales Materials or Road Show
Materials, in light of the circumstances under which they
were made) not misleading or of the necessity to amend or
supplement the Registration Statement, the Prospectus, any
Prepricing Prospectus or any Sales Materials or Road Show
Materials (or any amendment or supplement to any of the
foregoing) to comply with the 1933 Act, the 1940 Act, the
Rules and Regulations or any other law or order of any
court or regulatory body. If at any time the Commission
shall issue any order suspending the effectiveness of the
Registration Statement, prohibiting or suspending the use
of the Prospectus, any Prepricing Prospectus, any Sales
Materials or any Road Show Materials (or any amendment or
supplement to any of the foregoing) or suspending the
qualification of the Shares for offering or sale in any
jurisdiction, the Fund and the Adviser will use their best
efforts to obtain the withdrawal of such order at the
earliest possible time. If at any time the NASD, any
national securities exchange, any state securities
commission, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or
administrative agency or any official shall issue any
order suspending the effectiveness of the Registration
Statement, prohibiting or suspending the use of the
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Prospectus, any Prepricing Prospectus, any Sales Materials
or any Road Show Materials (or any amendment or supplement
to any of the foregoing) or suspending the qualification
of the Shares for offering or sale in any jurisdiction,
the Fund and the Adviser will use their respective best
efforts to obtain the withdrawal of such order at the
earliest possible time. In the case of any event set forth
in the preceding two sentences, the Sub-Adviser shall, at
the request of the Fund or the Adviser, cooperate with the
Fund and the Adviser, as the case may be, in connection
with reasonable requests made by either of them to
effectuate the purposes of such sentences.
(c) The Fund will furnish to you, without charge, three signed
copies of the Registration Statement, 1934 Act
Registration Statement and the 1940 Act Notification as
originally filed with the Commission and of each amendment
thereto, including financial statements and all exhibits
thereto and will also furnish to you, without charge, such
number of conformed copies of the Registration Statement
as originally filed and of each amendment thereto, with or
without exhibits, as you may reasonably request.
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(d) The Fund will not (i) file any amendment to the
Registration Statement or make any amendment or supplement
to the Prospectus, any Prepricing Prospectus, any Sales
Materials or any Road Show Materials (or any amendment or
supplement to any of the foregoing) of which you shall not
previously have been advised or to which you shall
reasonably object within a reasonable time after being so
advised or (ii) so long as, in the opinion of counsel for
the Underwriters, a Prospectus is required to be delivered
in connection with sales by any Underwriter or dealer,
file any information, documents or reports pursuant to the
1933 Act, the 1940 Act or the 1934 Act, without delivering
a copy of such information, documents or reports to you,
as Representatives of the Underwriters, prior to or
concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Fund has delivered to you, without charge, in such
quantities as you have reasonably requested, copies of
each form of any Prepricing Prospectus. The Fund consents
to the use, in accordance with the provisions of the 1933
Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the
several Underwriters and by dealers, prior to the date of
the Prospectus, of each Prepricing Prospectus so furnished
by the Fund.
(f) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time, for such
period as in the opinion of counsel for the Underwriters a
prospectus is required by the 1933 Act to be delivered in
connection with sales of Shares by any Underwriter or
dealer, the Fund will expeditiously deliver to each
Underwriter and each dealer, without charge, as many
copies of the Prospectus (and of any amendment or
supplement thereto) as you may reasonably request. The
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Fund consents to the use of the Prospectus (and of any
amendments or supplements thereto) in accordance with the
provisions of the 1933 Act and with the securities or Blue
Sky laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the
offering or sale of the Shares and for such period of time
thereafter as the Prospectus is required by law to be
delivered in connection with sales of Shares by any
Underwriter or dealer. If during such period of time any
event shall occur that in the judgment of the Fund or in
the opinion of counsel for the Underwriters is required to
be set forth in the Registration Statement or the
Prospectus (as then amended or supplemented) or should be
set forth therein in order to make the statements therein
(in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading
or if it is necessary to supplement or amend the
Registration Statement or the Prospectus to comply with
the 1933 Act, the 1940 Act, the Rules and Regulations or
any other law, rule or regulation, the Fund will forthwith
notify you of such event, prepare and, subject to the
provisions of paragraph (d) above, promptly file with the
Commission an appropriate amendment or supplement thereto
and will expeditiously furnish to the Underwriters and
dealers, without charge, such number of copies thereof as
they may reasonably request. In the event that the
Registration Statement or the Prospectus is to be amended
or supplemented, the Fund, if requested by you, will
promptly issue a press release announcing or disclosing
the matters to be covered by the proposed amendment or
supplement.
(g) The Fund will cooperate with you and with counsel for the
Underwriters in connection with the registration or
qualification of the Shares for offering and sale by the
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several Underwriters and by dealers under the securities
or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of
process or other documents necessary or appropriate in
order to effect such registration or qualification.
(h) Each of the Adviser and the Sub-Adviser will make
generally available to the Underwriters its staff for
assistance with roadshow presentations as the Underwriters
may reasonably request.
(i) As soon as practicable, but in no event later than the
last day of the eighteenth (18th) full calendar month
following the calendar quarter in which the Effective Time
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) of the 1933 Act and Rule 158
of the 1933 Act Rules and Regulations.
(j) The Fund will comply with the undertaking set forth in
paragraph 6 of Item 33 of Part C of the Registration
Statement.
(k) During the period of three years hereafter, the Fund will
furnish or will have furnished to you (i) as soon as
available, a copy of each report of the Fund mailed to
shareholders or filed with the Commission or furnished to
the NYSE and (ii) from time to time such other information
concerning the Fund as you may reasonably request.
(l) If this Agreement shall terminate or be terminated after
execution pursuant to any provisions hereof (otherwise
than pursuant to the second paragraph of Section 11 hereof
or by notice given by you terminating this Agreement
pursuant to Section 12 hereof) or if this Agreement shall
be terminated by the Underwriters because of (i) any
failure or refusal on the part of the Fund, the Adviser or
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the Sub-Adviser to comply with any term or fulfill any of
the conditions of this Agreement required to be complied
with or fulfilled by them or (ii) the non-occurrence of
any other condition set forth in this Agreement required
to occur in connection with the sale by the Fund of the
Shares, the Fund, the Adviser and the Sub-Adviser, jointly
and severally, agree to reimburse the Representatives for
all out-of-pocket expenses not to exceed the amounts set
forth in Section 13 of this Agreement (including fees and
expenses of counsel for the Underwriters) incurred by you
in connection herewith.
(m) The Fund will direct the investment of the net proceeds of
the offering of the Shares (i) in accordance with the
description set forth in the Prospectus and (ii) in such a
manner as to comply with the investment objectives,
policies and restrictions of the Fund as described in the
Prospectus.
(n) The Fund will file the requisite copies of the Prospectus
with the Commission in a timely fashion pursuant to Rule
497(c) or Rule 497(h) of the 1933 Act Rules and
Regulations, whichever is applicable or, if applicable,
will file in a timely fashion the certification permitted
by Rule 497(j) of the 1933 Act Rules and Regulations and
will advise you of the time and manner of such filing.
(o) The Fund will use its best efforts to have the shares
listed, subject to notice of issuance, on the NYSE
concurrently with the effectiveness of the Registration
Statement and to comply with the rules or regulations of
such exchange.
(p) Except as provided in this Agreement or pursuant to any
dividend reinvestment plan of the Fund, none of the Fund,
the Adviser, the Sub-Adviser or their respective officers,
trustees or directors will sell, contract to sell or
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otherwise dispose of any common stock or any securities
convertible into or exercisable or exchangeable for common
stock or grant any options or warrants to purchase common
stock for a period of 180 days after the date of the
Prospectus, without the prior written consent of the
Representatives (it being understood that the Sub-Adviser
shall have no obligation or liability under this
subsection with respect to the acts or omissions of the
Fund and the Adviser, and their respective officers,
trustees or directors).
(q) Except as stated in this Agreement and in the Prospectus,
none of the Fund, the Adviser or the Sub-Adviser will
take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Shares
(it being understood that the Sub-Adviser shall have no
obligation or liability under this subsection with respect
to the acts or omissions of the Fund and the Adviser).
(r) The Fund will direct the investment of the proceeds of the
offering of the Shares so as to comply with the
requirements of Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), to qualify as a
regulated investment company under the Code.
6. Representations and Warranties of the Fund, the Adviser
and the Sub-Adviser. The Fund, the Adviser, and (with respect to
subsections (b) and (w) below only) the Sub-Adviser jointly and
severally, represent and warrant to each Underwriter as of the
date of this Agreement, as of the Firm Shares Closing Time and
as of each Additional Shares Closing Time, if any, that:
(a) (i)(A) the Registration Statement has heretofore become
effective under the 1933 Act or, with respect to any Rule
462 Registration Statement to be filed to register the
18
offer and sale of Shares pursuant to Rule 462(b) under the
1933 Act, will be filed with the Commission and become
effective under the 1933 Act no later than 10:00 p.m., New
York City time, on the date of determination of the public
offering price for the Shares; (B) no stop order of the
Commission preventing or suspending the use of any
Prepricing Prospectus or Sales Materials or of the
Prospectus or the effectiveness of the Registration
Statement has been issued, and no proceedings for such
purpose have been instituted or, to the Fund's knowledge,
are contemplated by the Commission; and (C) the 1934 Act
Registration Statement has become effective as provided in
Section 12 of the 1934 Act;
(ii)(A) the Registration Statement complied at the Effective
Time, complies as of the date hereof and will comply, as
amended or supplemented, at the Firm Shares Closing Time,
each Additional Shares Closing Time, if any, and at all
times during which a prospectus is required by the 1933
Act to be delivered in connection with any sale of Shares,
in all material respects, with the requirements of the
1933 Act and the 1940 Act; (B) each Prepricing Prospectus
and the Prospectus complied or will comply, at the time it
was filed with the Commission, and the Prospectus will
comply as of its date and, as amended or supplemented, at
the Firm Shares Closing Time, each Additional Shares
Closing Time, if any, and at all times during which a
prospectus is required by the Securities Act to be
delivered in connection with any sale of Shares, in all
material respects with the requirements of the 1933 Act
(including, without limitation, Section 10(a) of the 1933
Act) and the 1940 Act; and (C) each of the Sales Materials
and the Road Show Materials complied, at the time it was
first used in connection with the public offering of the
Shares, and complies as of the date hereof, in all
material respects with the requirements of the 1933 Act
19
(including, without limitation, Rule 482 thereunder, as
applicable), the 1940 Act and the applicable rules and
interpretations of the NASD;
(iii)(A) the Registration Statement as of the Effective Time
did not, the Registration Statement (including any
post-effective amendment thereto declared or deemed to be
effective by the Commission) as of the date hereof does
not, and the Registration Statement (including any
post-effective amendment thereto declared or deemed to be
effective by the Commission) as of the Closing Time will
not, in each case, contain an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading; (B) at no time during the period
that begins as of the Applicable Time and ends at the
Closing Time did or will the Disclosure Package include an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which
they were made, not misleading; (C) at no time during the
period that begins at the time each of the Sales Materials
and each of the Road Show Materials was first used in
connection with the public offering of the Shares and ends
at the Applicable Time did any of the Sales Materials or
the Road Show Materials include an untrue statement of
material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading; and (D) at no time during the period that
begins on the earlier of the date of the Prospectus and
the date the Prospectus is filed with the Commission and
ends at the latest of the Firm Shares Closing Time, the
latest Additional Shares Closing Time, if any, and the end
of the period during which a prospectus is required by the
1933 Act to be delivered in connection with any sale of
20
Shares did or will the Prospectus, as then amended or
supplemented, include an untrue statement of a material
fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that the Fund makes no representation
or warranty with respect to any statement contained in the
Registration Statement, the Disclosure Package, Sales
Materials, Road Show Materials or the Prospectus in
reliance upon and in conformity with information
concerning an Underwriter and furnished in writing by or
on behalf of such Underwriter through the Representatives
to the Fund expressly for use in the Registration
Statement, the Disclosure Package or the Prospectus as
described in Section 8(h) hereof.
(b) All the outstanding Common Shares of the Fund have been
duly authorized and validly issued, are fully paid and
(except as described in the Registration Statement,
Pricing Prospectus and Prospectus) nonassessable and are
free of any preemptive or similar rights, the Shares have
been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and
(except as described in the Registration Statement,
Pricing Prospectus and Prospectus) nonassessable and free
of any preemptive or similar rights and the Common Shares
of the Fund conform to the description thereof in the
Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of
them). Except for the Shares and the Common Shares issued
in accordance with Section 14(a) of the 1940 Act, no other
shares of beneficial interest are issued or outstanding
and the capitalization of the Fund conforms in all
respects to the description thereof in the Registration
21
Statement, the Pricing Prospectus and the Prospectus (or
any amendment or supplement to either of them).
(c) (i) 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, the Pricing Prospectus and the Prospectus (and
any amendment or supplement to either of them); (ii) 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 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),
business, properties, business prospects, net assets or
results of operations, whether or not occurring in the
ordinary course of business (a "Material Adverse Effect")
of the Fund; and (iii) the Fund has no subsidiaries.
(d) 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, the Pricing Prospectus or the Prospectus (and
any amendment or supplement to either of them) but are not
described as required and there are no agreements,
contracts, indentures, leases or other instruments that
are required to be described in the Registration
22
Statement, the Pricing Prospectus or the Prospectus (or
any amendment or supplement to either of them) or to be
filed as an exhibit to the Registration Statement that are
not described or filed as required by the 1933 Act, the
1940 Act or the Rules and Regulations.
(e) The Fund is not in violation of its Declaration of Trust
("Declaration of Trust"), by-laws 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 NASD, 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 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 Material Adverse Effect
on the Fund.
(f) Neither the issuance and sale of the 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 (i) requires any consent, approval,
authorization or order of or registration or filing with
the Commission, the NASD, 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 compliance with the securities or
Blue Sky laws of various jurisdictions which have been or
will be effected in accordance with this Agreement and
except for compliance with the filing requirements of the
23
NASD Division of Corporate Finance) 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 (ii) (A) conflicts
or will conflict with or constitutes or will constitute a
breach of or a default under any agreement, indenture,
lease or other instrument to which the Fund is a party or
by which it or any of its properties may be bound or (B)
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 or would not reasonably be expected to
have a Material Adverse Effect on the Fund. As of the date
hereof, the Fund is not subject to any order of any court
or of any arbitrator, governmental authority or
administrative agency.
(g) Since the date as of which information is given in the
Registration Statement, the Pricing Prospectus and the
Prospectus (and any amendment or supplement to either of
them), except as otherwise stated therein, (i) 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, (ii) there have been no
transactions entered into by the Fund other than those in
the ordinary course of its business as described in the
24
Pricing Prospectus and the Prospectus (and any amendment
or supplement thereto) and (iii) there has been no
dividend or distribution of any kind declared, paid or
made by the Fund on any class of its common stock.
(h) The independent registered public accounting firm,
Deloitte & Touche LLP, who has audited the Statement of
Assets and Liabilities included or incorporated by
reference in the Registration Statement, the Pricing
Prospectus and the Prospectus (and any amendment or
supplement to either of them), is an independent public
accounting firm as required by the 1933 Act, the 1940 Act
and the Rules and Regulations.
(i) The financial statements, together with related schedules
and notes, included or incorporated by reference in the
Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of
them) 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 the other financial and statistical
information and data included in the Registration
Statement, the Pricing Prospectus or the Prospectus (or
any amendment or supplement thereto) are accurately
derived from such financial statements and the books and
records of the Fund.
(j) The Fund, subject to the Registration Statement having
been declared effective and the filing of the Prospectus
under Rule 497 under the 1933 Act Rules and Regulations,
has taken all required action under the 1933 Act, the 1940
25
Act and the Rules and Regulations to make the public
offering and consummate the sale of the Shares as
contemplated by this Agreement.
(k) 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.
(l) Except as disclosed in or contemplated by the Registration
Statement, the Pricing Prospectus or the Prospectus (or
any amendment or supplement to any of them), subsequent to
the respective dates as of which such information is given
in the Registration Statement, the Pricing Prospectus and
the Prospectus (and any amendment or supplement to either
of them), 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 shares of beneficial
interest or any change or any development involving or
which should reasonably be expected to involve a Material
Adverse Effect on the Fund or its capitalization, or the
incurrence of any debt by, the Fund.
(m) The Fund has not distributed and, prior to the later to
occur of (i) the date of the last Closing Time and (ii)
26
completion of the distribution of the Shares, will not
distribute to the public any offering material in
connection with the offering and sale of the Shares other
than the Registration Statement, the Disclosure Package,
the Sales Materials and the Prospectus.
(n) 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 Pricing Prospectus and the
Prospectus (and any amendment or supplement thereto); 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 Pricing
Prospectus and the Prospectus (and any amendment or
supplement thereto); and, except as described in the
Pricing Prospectus and the Prospectus (and any amendment
or supplement thereto), none of such permits contains any
restriction that is materially burdensome to the Fund.
(o) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in
accordance with the Board of Trustees' general or specific
authorization and with the investment policies and
restrictions of the Fund and the applicable requirements
of the 1940 Act and the 1940 Act Rules and Regulations and
the Code; (ii) 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
27
accountability for assets and to maintain compliance with
the books and records requirements under the 1940 Act and
the 1940 Act Rules and Regulations; (iii) access to assets
is permitted only in accordance with the Board of
Trustees' general or specific authorization; and (iv) the
recorded account for assets is compared with existing
assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(p) The conduct by the Fund of its business (as described in
the Pricing Prospectus and 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.
(q) Except as stated in this Agreement, in the Pricing
Prospectus and in the Prospectus (and any amendment or
supplement thereto), 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 Shares
in violation of federal securities laws and no such action
has been, or will be, taken by any affiliates of the Fund.
(r) The Fund is duly registered under the 1940 Act and the
Rules and Regulations as a closed-end, non-diversified
management investment company and the 1940 Act
Notification has been duly filed with the Commission and,
at the time of filing thereof and at all times through the
date hereof the 1940 Act Notification conformed in all
material respects with all applicable provisions of the
1940 Act and the Rules and Regulations; no order of
suspension or revocation of such registration under the
1940 Act and the Rules and Regulations has been issued or
proceedings therefor initiated or threatened by the
28
Commission. The provisions of the Declaration of Trust,
and the investment policies and restrictions described in
each of the Registration Statement, the Pricing Prospectus
and the Prospectus, comply in all material respects with
the requirements of the 1940 Act and the Rules and
Regulations.
(s) There are no Sales Materials other than the definitive
client brochure and the broker selling memo which were
filed with the NASD on April 27, 2007.
(t) This Agreement and each of the Fund Agreements complies in
all material respects with all applicable provisions of
the 1933 Act, the 1940 Act, the Rules and Regulations, the
Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and the rules and regulations of the Commission
promulgated under the Advisers Act (the "Advisers Act
Rules and Regulations").
(u) No holder of any security of the Fund has any right to
require registration of any Shares, Common Shares or any
other security of the Fund because of the filing of the
Registration Statement or consummation of the transactions
contemplated by this Agreement.
(v) The Fund and the Adviser intend to direct the investment
of the proceeds of the offering of the Shares in such a
manner as to comply with the requirements of Subchapter M
of the Code.
(w) In the event that the Fund, the Adviser or the Sub-Adviser
makes available the Road Show Materials or any other
promotional materials intended for use only by qualified
broker-dealers and registered representatives thereof by
means of an Internet web site or similar electronic means,
the Fund, the Adviser or the Sub-Adviser, as applicable,
29
will install and maintain pre-qualification and
password-protection or similar procedures which are
reasonably designed to effectively prohibit access to such
promotional materials by persons other than qualified
broker-dealers and registered representatives thereof (it
being understood that the Sub-Adviser makes no
representation under this subsection with respect to the
acts or omissions of the Fund and the Adviser).
(x) The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus, the
Pricing Prospectus or the Prospectus.
(y) Except as disclosed in the Registration Statement, the
Pricing Prospectus and the Prospectus (or any amendment or
supplement to either of them), no trustee of the Fund is
an "interested person" (as defined in the 1940 Act) of the
Fund or an "affiliated person" (as defined in the 1940
Act) of any Underwriter listed in Schedule I hereto.
(z) The Shares have been approved for listing on the NYSE.
7. Representations and Warranties of the Adviser. The Adviser
represents and warrants to each Underwriter as of the date of
this Agreement, as of the Firm Shares Closing Time and as of
each Additional Shares Closing Time, if any, as follows:
(a) 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, the Pricing Prospectus and the Prospectus (or
any amendment or supplement to either of them) and is duly
registered and qualified to conduct business and is in
good standing in each jurisdiction or place where the
30
nature of its properties or conduct of its business
requires such registration or qualification, except where
the failure so to register or to qualify would not have a
material, adverse affect on the condition (financial or
other), general affairs, business, properties, net assets
or results of operations of the Adviser or the Fund.
(b) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not
prohibited by the Advisers Act, the 1940 Act, the Advisers
Act Rules and Regulations or the 1940 Act Rules and
Regulations from acting under the Advisory Agreement for
the Fund as contemplated by the Registration Statement,
the Pricing Prospectus or the Prospectus (or any amendment
or supplement to either of them). There does not exist any
proceeding which could have a Material Adverse Effect on
the registration of the Adviser with the Commission.
(c) 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, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of
them) but are not described as required or that could
result in any Material Adverse Effect on the Adviser 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.
(d) 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 (i) requires the Adviser to
obtain any consent, approval, authorization or other order
of, or registration or filing with, the Commission, the
NASD, any state securities commission, any national
31
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 (ii) conflicts or will conflict with or
constitutes or will constitute a breach of or a default
under, any agreement, indenture, lease or other instrument
to which the Adviser is a party or by which 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 (ii) 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
Material Adverse Effect on the Adviser or 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.
(e) 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
32
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 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.
(f) The Adviser has the financial resources necessary for the
performance of its services and obligations as
contemplated in the Registration Statement, the Pricing
Prospectus and the Prospectus (or any amendment or
supplement to either of them) or under this Agreement and
each of the Adviser Agreements.
(g) The description of the Adviser and its business, and the
statements attributable to the Adviser, in the
Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of
them) complied and comply in all material respects with
the provisions of the 1933 Act, the 1940 Act, the Advisers
Act, the Rules and Regulations and the Advisers Act Rules
and Regulations and 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 Pricing
Prospectus and the Prospectus, in light of the
circumstances under which they were made) not misleading.
(h) Since the date as of which information is given in the
Registration Statement, the Pricing Prospectus or the
33
Prospectus (or any amendment or supplement to either of
them), except as otherwise stated therein, (i) there has
been no material adverse change in the condition
(financial or other), business, properties, net assets or
results of operations or business prospects of the
Adviser, whether or not arising from the ordinary course
of business, and (ii) there have been no transactions
entered into by the Adviser which are material to the
Adviser other than those in the ordinary course of its
business as described in the Pricing Prospectus and the
Prospectus.
(i) The Adviser has such permits as are necessary to own its
property and to conduct its business in the manner
described in the Pricing Prospectus and the Prospectus
(and any amendment or supplement thereto); 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.
(j) None of this Agreement nor any of the Adviser Agreements
violate any applicable provisions of the 1940 Act, the
1940 Act Rules and Regulations, the Advisers Act and the
Advisers Act Rules and Regulations.
(k) Except as stated in this Agreement, the Registration
Statement, the Pricing Prospectus or the Prospectus (or in
any amendment or supplement to any of the foregoing), 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 Shares or of any securities issued by the Fund to
34
facilitate the sale or resale of the Shares, in each case,
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.
8. Representations and Warranties of the Sub-Adviser. The
Sub-Adviser represents and warrants to each Underwriter as of the
date of this Agreement, as of the Firm Shares Closing Time and as
of each Additional Shares Closing Time, if any, as follows:
(a) 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 conduct its business as described in each of the
Registration Statement, the Pricing Prospectus and the
Prospectus (or any amendment or supplement to either of
them) 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
would not have a material, adverse affect on the condition
(financial or other), general affairs, business,
properties, net assets or results of operations of the
Sub-Adviser or the Fund.
(b) 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, the 1940 Act, the Advisers
Act Rules and Regulations or the 1940 Act Rules and
Regulations from acting under the Sub-Advisory Agreement
for the Fund as contemplated by the Registration
Statement, the Pricing Prospectus or the Prospectus (or
any amendment or supplement to either of them). There does
not exist any proceeding which could have a Material
Adverse Effect on the registration of the Sub-Adviser with
the Commission.
35
(c) 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, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of
them) but are not described as required or that could
result in any Material Adverse Effect on the Sub-Adviser
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.
(d) Neither the execution, delivery or performance of this
Agreement or the Sub-Advisory Agreement by the
Sub-Adviser, nor the consummation by the Adviser of the
transactions contemplated hereby or thereby (i) requires
the Sub-Adviser to obtain any consent, approval,
authorization or other order of, or registration or filing
with, the Commission, the NASD, 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 of the Sub-Adviser or (ii)
conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, any agreement,
indenture, lease or other instrument to which the
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, 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, charge or encumbrance upon any
property or assets of the Sub-Adviser pursuant to the
terms of any agreement or instrument to which it is a
36
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 (ii) 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 Material Adverse Effect on the
Sub-Adviser or 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.
(e) 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.
(f) The Sub-Adviser has the financial resources necessary for
the performance of its services and obligations as
contemplated in the Registration Statement, the Pricing
37
Prospectus and the Prospectus (or any amendment or
supplement to either of them) or under this Agreement and
the Sub-Advisory Agreement.
(g) The description of the Sub-Adviser and its business, and
the statements attributable to the Adviser, in the
Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of
them) complied and comply in all material respects with
the provisions of the 1933 Act, the 1940 Act, the Advisers
Act, the Rules and Regulations and the Advisers Act Rules
and Regulations and 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 Pricing
Prospectus and the Prospectus, in light of the
circumstances under which they were made) not misleading.
(h) Since the date as of which information is given in the
Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of
them), except as otherwise stated therein, (i) there has
been no material adverse change in the condition
(financial or other), business, properties, net assets or
results of operations or business prospects of the
Sub-Adviser, whether or not arising from the ordinary
course of business, and (ii) there have been no
transactions entered into by the Sub-Adviser which are
material to the Sub-Adviser other than those in the
ordinary course of its business as described in the
Pricing Prospectus and the Prospectus.
(i) The Sub-Adviser has such permits (as defined above) as are
necessary to own its property and to conduct its business
in the manner described in the Pricing Prospectus and the
Prospectus (and any amendment or supplement thereto); and
the Sub-Adviser has fulfilled and performed all its
38
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.
(j) None of this Agreement nor the Sub-Advisory Agreement
violates any applicable provisions of the 1940 Act, the
1940 Act Rules and Regulations, the Advisers Act and the
Advisers Act Rules and Regulations.
(k) Except as stated in this Agreement, the Registration
Statement, the Pricing Prospectus 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 Shares or of any securities issued by the Fund to
facilitate the sale or resale of the Shares, in each case,
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.
9. Indemnification and Contribution.
(a) The Fund, the Adviser and the Sub-Adviser, jointly and
severally, agree to indemnify and hold harmless each of
you and each other Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act, from and
against any and all losses, claims, damages, liabilities
and expenses, joint or several (including reasonable costs
of investigation), that (i) arises out of or is based upon
any untrue statement or alleged untrue statement of a
39
material fact contained in the Registration Statement (or
in the Registration Statement as amended by any
post-effective amendment thereof by the Fund) or arises
out of or is based upon any omission or alleged omission
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
(ii) arises out of or is based any untrue statement or
alleged untrue statement of a material fact included in
any Preliminary Prospectus, any Road Show Material, the
Disclosure Package, any Sales Material or the Prospectus
(as it may be amended or supplemented) or arises out of or
is based upon any omission or alleged omission 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; except with respect to
either of the foregoing clause (i) and (ii) insofar as
such losses, claims, damages, liabilities or expenses
arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has
been made therein or omitted therefrom in reliance upon
and in conformity with the information relating to such
Underwriters furnished in writing to the Fund by or on
behalf of any Underwriter through you expressly for use in
connection therewith. The foregoing indemnity agreement
shall be in addition to any liability which the Fund, the
Adviser or the Sub-Adviser may otherwise have.
(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter
in respect of which indemnity may be sought against the
Fund, the Adviser, or the Sub-Adviser, such Underwriter or
such controlling person shall promptly notify in writing
the Fund, the Adviser, or the Sub-Adviser and the Fund,
the Adviser or the Sub-Adviser shall assume the defense
thereof, including the employment of counsel and the
payment of all fees and expenses. Such Underwriter or any
40
such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of
such Underwriter or controlling person unless (i) the
Fund, the Adviser or the Sub-Adviser have agreed in
writing to pay such fees and expenses, (ii) the Fund, the
Adviser or the Sub-Adviser have failed within a reasonable
time to assume the defense and employ counsel or (iii) the
named parties to any such action, suit or proceeding
(including any impleaded parties) include both such
Underwriter or such controlling person and the Fund, the
Adviser or the Sub-Adviser and such Underwriter or such
controlling person shall have been advised by its counsel
that representation of such indemnified party and the
Fund, the Adviser or the Sub-Adviser by the same counsel
would be inappropriate under applicable standards of
professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case
the Fund, the Adviser and the Sub-Adviser shall not have
the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the
Fund, the Adviser and the Sub-Adviser shall, in connection
with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for
the reasonable fees and expenses of only one separate firm
of attorneys (in addition to any local counsel if there is
any action, suit or proceeding in more than one
jurisdiction) at any time for all such Underwriters and
controlling persons not having actual or potential
differing interests with you or among themselves, which
firm shall be designated in writing by the Representatives
41
and that, subject to the requirements of 1940 Act Release
No. 11330, all such fees and expenses shall be reimbursed
promptly as they are incurred. The Fund, the Adviser and
the Sub-Adviser shall not be liable for any settlement of
any such action, suit or proceeding effected without the
written consent of the Fund, the Adviser or the
Sub-Adviser, but if settled with such written consent or
if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the Fund, the Adviser and the
Sub-Adviser agree to indemnify and hold harmless any
Underwriter, to the extent provided in the preceding
paragraph and any such controlling person from and against
any loss, liability, damage or expense by reason by such
settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Fund, the Adviser and the
Sub-Adviser, their trustees, directors, partners, members
or managers, any officers of the Fund who sign the
Registration Statement and any person who controls the
Fund, the Adviser or the Sub-Adviser within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act,
to the same extent as the foregoing indemnity from the
Fund, the Adviser and the Sub-Adviser to each Underwriter,
but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such
Underwriter through you expressly for use in the
Registration Statement, the Disclosure Package, any Road
Show Materials, any Sales Materials, the Prospectus or any
Preliminary Prospectus (or any amendment or supplement
thereto). If any action, suit or proceeding shall be
brought against the Fund, the Adviser or the Sub-Adviser,
any of their trustees, directors, partners, members or
managers, any such officer or any such controlling person,
based on the Registration Statement, the Disclosure
Package, any Road Show Materials, any Sales Materials, the
42
Prospectus or any Preliminary Prospectus (or any
amendment or supplement thereto) and in respect of which
indemnity may be sought against any Underwriter pursuant
to this paragraph (c), such Underwriter shall have the
rights and duties given to each of the Fund, the Adviser
and the Sub-Adviser by paragraph (b) above (except that if
the Fund, the Adviser or the Sub-Adviser shall have
assumed the defense thereof such Underwriter shall not be
required to do so, but may employ separate counsel therein
and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's
expense) and the Fund, the Adviser and the Sub-Adviser,
their trustees, directors, partners, managers or members,
any such officer and any such controlling person shall
have the rights and duties given to the Underwriters by
paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the
Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a)
or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such
losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative
benefits received by the Fund, the Adviser and the
Sub-Adviser on the one hand (treated jointly for this
purpose as one person) and the Underwriters on the other
from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Fund,
43
the Adviser and the Sub-Adviser on the one hand (treated
jointly for this purpose as one person) and of the
Underwriters on the other in connection with the
statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations. The relative
benefits received by the Fund, the Adviser and the
Sub-Adviser on the one hand (treated jointly for this
purpose as one person) and the Underwriters on the other
shall be deemed to be in the same proportion that the
total net proceeds from the offering (before deducting
expenses) received by the Fund bear to the total
underwriting discounts and commissions received by the
Underwriters, in each case, as set forth in the table on
the cover page of the Prospectus. The relative fault of
the Fund, the Adviser and the Sub-Adviser on the one hand
(treated jointly for this purpose as one person) and of
the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact
relates to information supplied by the Fund, the Adviser
and the Sub-Adviser on the one hand (treated jointly for
this purpose as one person) or by the Underwriters on the
other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
statement or omission.
(e) The Fund, the Adviser, the Sub-Adviser and the
Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other
method of allocation that does not take account of the
equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, liabilities
44
and expenses referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating
any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section
9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price of
the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in
proportion to the respective number of Shares set forth
opposite their names in Schedule I (or such number of
Shares increased as set forth in Section 11 hereof) and
not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of
any pending or threatened action, suit or proceeding in
respect of which any indemnified party is or could have
been a party and indemnity could have been sought
hereunder by such indemnified party, unless such
settlement includes an unconditional release of such
indemnified party from all liability from claimants on
claims that are the subject matter of such action, suit or
proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification
or contribution under this Section 8 shall, subject to the
45
requirements of Release No. 11330, be paid by the
indemnifying party to the indemnified party as such
losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements
contained in this Section 9 and the representations and
warranties of each 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 any Underwriter
or any person controlling any Underwriter, the Fund, the
Adviser, the Sub-Adviser or their trustees, directors,
partners, managers, members, officers or any person
controlling the Fund, the Adviser or the Sub-Adviser, (ii)
acceptance of any Shares and payment therefor hereunder
and (iii) any termination of this Agreement. A successor
to any Underwriter or to the Fund, the Adviser or the
Sub-Adviser or their trustees, directors, partners,
managers, members, officers or any person controlling the
Fund, the Adviser or the Sub-Adviser shall be entitled to
the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 9.
(h) The Fund, the Adviser and the Sub-Adviser each acknowledge
that the statements with respect to (1) the public
offering price of the Shares as set forth on the cover
page of the Prospectus and (2) as set forth under the
caption "Underwriting" in the Prospectus (i) the names of
the Underwriters, (ii) the number of Firm Shares set forth
opposite the name of each Underwriter, (iii) the amount of
the selling concessions and reallowances of selling
concessions set forth in the first sentence of the fourth
paragraph, (iv) the sixteenth paragraph and (v) the final
paragraph constitute the only information furnished in
writing by or on behalf of any Underwriter through the
Representative to the Fund expressly for use with
reference to such Underwriter in the Registration
46
Statement or in the Prospectus (as amended or
supplemented). The Underwriters severally confirm that
these statements are correct in all material respects and
were so furnished by or on behalf of the Underwriters
severally for use in the Prospectus.
10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Shares hereunder
are subject to the accuracy of and compliance with the
representations, warranties and agreements of and by each of the
Fund, the Adviser and the Sub-Adviser contained herein on and as
of the Effective Time, the date of the Prospectus (and of any
amendment or supplement thereto) and each of the Closing Times; to
the accuracy and completeness of all statements made by the Fund,
the Adviser, the Sub-Adviser or any of their respective officers
in any certificate delivered to the Representatives or their
counsel pursuant to this Agreement; and to the following
conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective
before the offering of the Shares may commence, the
Registration Statement or such post-effective amendment
shall have become effective not later than 5:30 p.m., New
York City time, on the date hereof or at such later date
and time as shall be consented to in writing by you and
all filings, if any, required by Rules 497 and 430A under
the 1933 Act and the 1933 Act Rules and Regulations shall
have been timely made; no stop order suspending the
effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act shall have been
issued and no proceeding for that purpose shall have been
instituted or, to the knowledge of the Fund, the Adviser
or any Underwriter, threatened by the Commission and any
request of the Commission for additional information (to
47
be included in the Registration Statement, the Pricing
Prospectus or the Prospectus or otherwise) shall have been
complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change or any development
involving a prospective change in or affecting the
condition (financial or otherwise), business, properties,
business prospects, net assets or results of operations,
whether or not occurring in the ordinary course of
business, of the Fund, the Adviser or the Sub-Adviser not
contemplated by the Pricing Prospectus or the Prospectus
which, in your opinion, would materially adversely affect
the market for the Shares, or (ii) any event or
development relating to or involving the Fund, the
Adviser, the Sub-Adviser or any officer, trustee,
director, manager or member of the Fund, the Adviser or
the Sub-Adviser which makes any statement made in the
Pricing Prospectus or the Prospectus (or any amendment or
supplement thereto) untrue or which, in the opinion of the
Fund and its counsel or the Underwriters and their
counsel, requires the making of any addition to or change
in the Pricing Prospectus or the Prospectus (or any
amendment or supplement thereto) in order to state a
material fact required by the 1933 Act, the 1940 Act or
the Rules and Regulations or any other law to be stated
therein or necessary in order to make the statements
therein (in light of the circumstances under which they
were made) not misleading, if amending or supplementing
the Pricing Prospectus or the Prospectus (or any previous
amendment or supplement thereto) to reflect such event or
development would, in your opinion, materially adversely
affect the market for the Shares.
(c) That you shall have received as of each Closing Time an
opinion of Xxxxxxx and Xxxxxx LLP, special counsel for the
Fund, dated as of the date thereof and addressed to you,
48
as the Representatives of the several Underwriters, in
substantially the form attached hereto as Exhibit A. In
rendering its opinion, Xxxxxxx and Xxxxxx LLP may rely, as
to matters of Massachusetts law, upon the opinion of
Xxxxxxx XxXxxxxxx LLP dated as of the date thereof.
(d) That you shall have received as of each Closing Time an
opinion of Xxxxxxx and Xxxxxx LLP, special counsel for the
Adviser, dated as of the date thereof and addressed to
you, as Representatives of the several Underwriters, in
substantially the form attached hereto as Exhibit B.
(e) That you shall have received as of each Closing Time an
opinion of [ ], special counsel for the Sub-Adviser, dated
as of the date thereof and addressed to you, as
Representatives of the several Underwriters, in
substantially the form attached hereto as Exhibit C.
(f) That you shall have received as of each Closing Time an
opinion of Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, dated
as of the date thereof and addressed to you, as the
Representatives of the several Underwriters, with respect
to such matters as you may require and the Fund, the
Adviser, the Sub-Adviser and their respective counsel
shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass
upon such matters.
(g) That you shall have received letters addressed to you, as
the Representatives of the several Underwriters and dated
as of the date hereof and as of the date of each Closing
Time from Deloitte & Touche LLP, the Fund's independent
registered public accounting firm, substantially in the
form attached hereto as Exhibit D.
(h) (i) No order suspending the effectiveness of the
49
Registration Statement or prohibiting or suspending the
use of the Pricing Prospectus or the Prospectus (or any
amendment or supplement to any of the foregoing) or any
Prepricing Prospectus or any Sales Materials or Road Show
Materials shall have been issued and no proceedings for
such purpose or for the purpose of commencing an
enforcement action against the Fund, the Adviser or the
Sub-Adviser or, with respect to the transactions
contemplated by the Pricing Prospectus or the Prospectus
(or any amendment or supplement thereto) and this
Agreement, may be pending before or, to the knowledge of
the Fund, the Adviser, the Sub-Adviser or any Underwriter
or in the reasonable view of counsel to the Underwriters,
shall be threatened or contemplated by the Commission at
or prior to the Firm Shares Closing Time and that any
request for additional information on the part of the
Commission (to be included in the Registration Statement,
the Pricing Prospectus, the Prospectus or otherwise) be
complied with to the satisfaction of the Representatives,
(ii) there shall not have been any change in the shares of
beneficial interest of the Fund nor any increase in debt
of the Fund from that set forth in the Registration
Statement, the Pricing Prospectus or the Prospectus (or
any amendment or supplement to either of them) and the
Fund shall not have sustained any material liabilities or
50
obligations, direct or contingent, other than those
reflected in or contemplated by the Registration
Statement, the Pricing Prospectus or the Prospectus (or
any amendment or supplement to either of them), (iii)
since the date of the Pricing Prospectus or the Prospectus
there shall not have been any material, adverse change in
the condition (financial or otherwise), general affairs,
business, properties, business prospects, net assets or
results of operations, whether or not occurring in the
ordinary course of business, of the Fund, the Adviser or
the Sub-Adviser, (iv) none of the Fund, the Adviser or the
Sub-Adviser shall have sustained any material loss or
interference with their businesses from any court or from
legislative or other governmental action, order or decree
or from any other occurrence not described in the
Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of
them) and (v) all of the representations and warranties of
each of the Fund, the Adviser and the Sub-Adviser
contained in this Agreement shall be true and correct on
and as of the date hereof and as of the Firm Shares
Closing Time as if made on and as of the Firm Shares
Closing Time.
(i) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change or any development
involving a prospective change, in or affecting the
condition (financial or other), general affairs, business,
prospects, properties, net assets or results of operations
of the Fund, the Adviser or the Sub-Adviser not
contemplated by the Pricing Prospectus or the Prospectus
(and any amendment or supplement thereto), which in your
opinion, as the Representatives of the several
Underwriters, would materially, adversely affect the
market for the Shares or (ii) any event or development
relating to or involving the Fund, the Adviser, the
Sub-Adviser or any officer, trustee, director, partner,
manager or member of the Fund, the Adviser or the
Sub-Adviser which makes any statement of a material fact
made in the Pricing Prospectus or the Prospectus (or any
amendment or supplement thereto) untrue or which, in the
opinion of the Fund and its counsel or the Underwriters
and their counsel, requires the making of any addition to
or change in the Pricing Prospectus or the Prospectus (or
any amendment or supplement thereto) in order to state a
material fact required by the 1933 Act, the 1940 Act, the
Rules and Regulations, the Advisers Act, the Advisers Act
Rules and Regulations or any other law to be stated
51
therein or necessary in order to make the statements
therein (in the case of the Pricing Prospectus or the
Prospectus, in light of the circumstances under which they
were made) not misleading, if amending or supplementing
the Pricing Prospectus or the Prospectus (or any amendment
or supplement thereto) to reflect such event or
development would, in your opinion, as the Representatives
of the several Underwriters, materially, adversely affect
the market for the Shares.
(j) That none of the Fund, the Adviser or the Sub-Adviser
shall have failed at performing or complying with, or
prior to the Firm Shares Closing Time to have performed or
complied with, any of the agreements herein contained and
required to be performed or complied with by them at or
prior to the Firm Shares Closing Time.
(k) That you shall have received as of each Closing Time a
certificate, dated such date, of each of the chief
executive officer and chief financial officer of each of
the Fund and the Adviser and of the president and chief
operating officer of the Sub-Adviser certifying that (i)
the signers have carefully examined the Registration
Statement, the Pricing Prospectus, the Prospectus (and any
amendments or supplements to either of them) and this
Agreement, (ii) the representations and warranties of the
Fund (with respect to the certificates from such Fund
officers) the representations and warranties of the
Adviser (with respect to the certificates from such
officers of the Adviser) and the representations and
warranties of the Sub-Adviser (with respect to the
certificates from such officers of the Sub-Adviser) in
this Agreement are true and correct on and as of the date
of the certificate as if made on such date, (iii) since
the date of the Pricing Prospectus and the Prospectus (and
any amendment or supplement thereto), there has not been
52
any material, adverse change in the condition (financial
or otherwise), business, properties, business prospects,
net assets or results of operations, whether or not
occurring in the ordinary course of business, of the Fund
(with respect to the certificates from such Fund officers)
or the Adviser (with respect to the certificates from such
officers of the Adviser) or the Sub-Adviser (with respect
to the certificates from such officers of the
Sub-Adviser), (iv) to the knowledge of such officers after
reasonable investigation, no order suspending the
effectiveness of the Registration Statement or prohibiting
the sale of any of the Shares or having a material,
adverse effect on the Fund (with respect to the
certificates from such Fund officers) or the Adviser (with
respect to the certificates from such officers of the
Adviser) or the Sub-Adviser (with respect to the
certificates from such officers of the Sub-Adviser) has
been issued and no proceedings for any such purpose are
pending before or threatened by the Commission or any
court or other regulatory body, the NASD, any state
securities commission, any national securities exchange,
any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or
any official, (v) each of the Fund (with respect to
certificates from such Fund officers), the Adviser (with
respect to certificates from such officers of the Adviser)
and the Sub-Adviser (with respect to the certificates from
such officers of the Sub-Adviser) has performed and
complied with all agreements that this Agreement requires
it to perform by such Firm Shares Closing Time, (vi) none
of the Fund (with respect to the certificate from such
officers of the Fund), the Adviser (with respect to the
certificate from such officers of the Adviser) or the
Sub-Adviser (with respect to the certificate from such
officers of the Sub-Adviser) has sustained any material
loss or interference with its business from any court or
53
from legislative or other governmental action, order or
decree or from any other occurrence not described in the
Registration Statement, the Pricing Prospectus or the
Prospectus and any amendment or supplement to either of
them and (vii) with respect to the certificate from such
officers of the Fund, there has not been any change in the
shares of beneficial interest of the Fund nor any increase
in the debt of the Fund from that set forth in the Pricing
Prospectus or the Prospectus (or any amendment or
supplement thereto) and the Fund has not sustained any
material liabilities or obligations, direct or contingent,
other than those reflected in the Pricing Prospectus and
the Prospectus (or any amendment or supplement thereto).
(l) That the Fund, the Adviser and the Sub-Adviser shall have
furnished to you such further letters, certificates,
documents and opinions of counsel as you shall reasonably
request (including certificates of officers of the Fund,
the Adviser and the Sub-Adviser).
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if
they are satisfactory in form and substance to you and
your counsel acting in good faith.
Any certificate or document signed by any officer of the Fund,
the Adviser or the Sub-Adviser and delivered to you, as
the Representatives of the Underwriters or to
Underwriters' counsel, shall be deemed a representation
and warranty by the Fund, the Adviser or the Sub-Adviser
to each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to (i) the
54
accuracy of and compliance with the representations and
warranties of the Fund, the Adviser and the Sub-Adviser
contained herein on and as of the Additional Shares
Closing Time as though made on any Additional Shares
Closing Time, (ii) satisfaction on and as of any
Additional Shares Closing Time of the conditions set forth
in this Section 10 except that, if any Additional Shares
Closing Time is other than the Firm Shares Closing Time,
the certificates, opinions and letters referred to in
Sections 10 (c), (d), (e), (f), (g) and (k) and this
paragraph shall be dated the Additional Shares Closing
Time in question and the opinions called for by Sections
10 (c), (d), (e), (f) and (g) shall be revised to reflect
the sale of Additional Shares and (iii) the absence of
circumstances on or prior to the Additional Shares Closing
Time which would permit termination of this Agreement
pursuant to Section 12 hereof if they existed on or prior
to the Firm Shares Closing Time.
11. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the
parties hereto; or (ii) if, at the time this Agreement is
executed and delivered, it is necessary for the Registration
Statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when
the Registration Statement or such post-effective amendment has
become effective. Until such time as this Agreement shall have
become effective, it may be terminated by the Fund by notifying
you, or by you by notifying the Fund (which shall, in turn,
notify the Adviser and the Sub-Adviser; provided, however, that
any failure by the Fund so to notify the effect of such
termination notice by you to the Fund).
If any one or more of the Underwriters shall fail or
refuse to purchase Shares which it or they have agreed to
purchase hereunder and the aggregate number of Shares which such
55
defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate
number of the Shares, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the aggregate
number of Shares set forth opposite its name in Schedule I
hereby bears to the aggregate number of Shares set forth
opposite the names of all non-defaulting Underwriters or in such
other proportion as you may specify in accordance with Section 7
of the Master Agreement Among Underwriters, to purchase Shares
which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase. If any Underwriter or
Underwriters shall fail or refuse to purchase Shares and the
aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares
and arrangements satisfactory to you and the Fund for the
purchase of such Shares by one or more non-defaulting
Underwriters or other party or parties approved by you and the
Fund are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Fund. In any such case which
does not result in termination of this Agreement, either you or
the Fund shall have the right to postpone the Firm Shares
Closing Time, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from
liability in respect to any such default of any such Underwriter
under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any
party not listed in Schedule I hereto who, with your approval
and the approval of the Fund, purchases Shares which a
defaulting Underwriter agreed, but failed or refused, to
purchase.
Any notice under this Section 11 may be made by
telegram, telecopy or telephone but shall be subsequently
confirmed by letter.
56
12. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion without liability on the
part of any Underwriter to the Fund or the Adviser by notice to
the Fund or the Adviser if prior to the Firm Shares Closing Time
or any Additional Shares Closing Time (if different from the Firm
Shares Closing Time and then only as to the Additional Shares), as
the case may be, (i) trading in securities generally on the NYSE,
American Stock Exchange, Nasdaq National Market, Nasdaq SmallCap
Market or the Nasdaq Stock Market shall have been suspended or
limited or minimum prices shall have been established, (ii)
additional governmental restrictions not in force on the date of
this Agreement have been imposed upon trading in securities
generally or a general moratorium on commercial banking activities
shall have been declared by Federal or any state's authorities or
(iii) any outbreak or material escalation of hostilities or other
international or domestic calamity, crisis or change in political,
financial, economic, legal or regulatory conditions, occurs, the
effect of which is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering
of the Shares at the offering price to the public set forth on the
cover page of the Prospectus or to enforce contracts for the
resale of the Shares by the Underwriters. Notice of such
termination may be given to the Fund, the Adviser or the
Sub-Adviser by telegram, telecopy or telephone but shall be
subsequently confirmed by letter.
13. Expenses. The Fund agrees to pay the following costs and
expenses and all other costs and expenses incident to the
performance by the Fund of its obligations hereunder: (a) the
preparation, printing or reproduction, filing (including, without
limitation, the filing or registration fees prescribed by the 1933
Act, the 1934 Act, the 1940 Act and the Rules and Regulations) and
distribution of the Registration Statement (including exhibits
57
thereto), the Prospectus, each Prepricing Prospectus and the 1940
Act Notification and all amendments or supplements to any of them,
(b) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, the
Prospectus, each Prepricing Prospectus, any Sales Materials and
Road Show Materials (and all amendments or supplements to any of
them) as may be reasonably requested for use in connection with
the offering and sale of the Shares, (c) the preparation,
printing, authentication, issuance and delivery of certificates
(if any) for the Shares, including any stamp taxes and transfer
agent and registrar fees payable in connection with the original
issuance and sale of such Shares, (d) the registrations or
qualifications of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in
Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel for the Underwriters relating to the
preparation, printing or reproduction and delivery of the
preliminary and supplemental Blue Sky Memoranda and such
registration and qualification), (e) the fees and expenses of the
Fund's independent accountants, counsel for the Fund and of the
transfer agent, (f) the expenses of delivery to the Underwriters
and dealers (including postage, air freight and the cost of
counting and packaging) of copies of the Prospectus, the
Prepricing Prospectus, any Sales Materials and Road Show Materials
and all amendments or supplements to the Prospectus as may be
requested for use in connection with the offering and sale of the
Shares, (g) the printing (or reproduction) and delivery of this
Agreement, any dealer agreements, the preliminary and supplemental
Blue Sky Memoranda and all other company-authorized agreements or
other documents printed (or reproduced) and delivered in
connection with the offering of the Shares, (h) the filing fees
and the fees and expenses of counsel for the Underwriters in
connection with any filings required to be made with the NASD and
incurred with respect to the review of the offering of the Shares
(including a review of the Sales Materials) by the NASD, which
58
fees and expenses of counsel, together with the fees, expenses and
disbursements of counsel set forth in paragraph (d) of this
Section 13 above, shall not exceed $25,000, exclusive of NASD and
state filing fees, (i) the transportation, lodging, graphics and
other expenses related to the Fund's preparation for and
participation in the roadshow, (j) the listing of the Shares on
the NYSE and (k) an amount not to exceed $50,000 (which includes
the up to $25,000 reimbursement noted in (h) above) payable on the
Closing Date to the Representatives in partial reimbursement of
their expenses (but not including reimbursement for the cost of
one tombstone advertisement in a newspaper that is one-quarter of
a newspaper page or less in size) in connection with the offering.
The Adviser has agreed to pay (1) all organizational
expenses and (2) offering costs (other than sales load, but
including the partial reimbursement of underwriter expenses
described above) of the Fund that exceed $0.04 per common share
purchased by the Underwriters pursuant to this Agreement (the
"Offering Cost Limitation"). The Fund's Sub-Adviser has agreed
to reimburse the Fund's Adviser for one-half of such
organizational and offering costs of the Fund that exceed $0.04
per Share. The Fund shall pay to First Trust Portfolios, L.P.,
an affiliate of the Adviser, in connection with its distribution
assistance in connection with the sale of the Shares, an amount
equal to the lesser of (i) 0.10% of the aggregate price to the
public (as set forth in the Prospectus) of the Firm Shares and
any Additional Shares that may be sold to the Underwriters
pursuant to Section 2 of this Agreement and (ii) the positive
amount by which the Offering Cost Limitation exceeds the actual
offering costs of the Fund or, if the actual offering costs of
the Fund are equal to or greater than the Offering Cost
Limitation, zero.
Notwithstanding the foregoing, in the event that the
sale of the Shares is not consummated pursuant to Section 2
hereof, the Adviser or the Sub-Adviser will pay the costs and
59
expenses of the Fund set forth above in this Section 13(a)
through (i), and reimbursements of Underwriter expenses in
connection with the offering shall be made in accordance with
Section 5(l) hereof.
14. Miscellaneous. Except as otherwise provided in Sections 5, 11
and 12 hereof, notice given pursuant to any provision of this
Agreement shall be in writing and shall be delivered (a) if to
the Fund or the Adviser, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000,
Xxxxx, Xxxxxxxx 00000, Attention: X. Xxxxx Xxxxxxx, (b) if to
the Sub-Adviser, Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx, XX
00000, Attention: Xxx X'Xxxxxxx, and (c) if to you, as
Representatives of the Underwriters, at the office of X.X.
Xxxxxxx & Sons, Inc., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx,
Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, with a copy to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxx, Esq.
This Agreement has been and is made solely for the
benefit of the several Underwriters, the Fund, the Adviser, the
Sub-Adviser their trustees, directors, partners, officers,
managers, members and the other controlling persons referred to
in Section 9 hereof and their respective successors and assigns,
to the extent provided herein and no other person shall acquire
or have any right under or by virtue of this Agreement. Neither
the term "successor" nor the term "successors and assigns" as
used in this Agreement shall include a purchaser from any
Underwriter of any of the Shares in his status as such
purchaser.
15. Applicable Law; Counterparts. This Agreement shall be governed
by and construed in accordance with the laws of the State of New
York.
16. Binding Agreement on the Fund. The Fund's Declaration of Trust
is on file with the Secretary of The Commonwealth of
Massachusetts. This Agreement is executed on behalf of the Fund by
60
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.
This Agreement may be signed in various counterparts
which together constitute one and the same instrument. If signed
in counterparts, this Agreement shall not become effective
unless at least one counterpart hereof shall have been executed
and delivered on behalf of each party hereto.
61
Please confirm that the foregoing correctly sets forth the
agreement among the Fund, the Adviser, the Sub-Adviser and the several
Underwriters.
Very truly yours,
FIRST TRUST/GALLATIN SPECIALTY FINANCE
AND FINANCIAL OPPORTUNITIES FUND
By:_______________________
Title:
FIRST TRUST ADVISORS L.P.
By:_______________________
Title:
GALLATIN ASSET MANAGEMENT, INC.
By:_______________________
Title:
62
Confirmed as of the date
first above written on
behalf of themselves and
the other several Under-
writers named in Schedule
I hereto.
AS REPRESENTATIVE OF THE SEVERAL UNDERWRITERS
X.X. XXXXXXX & SONS, INC.
By: _________________________________
Title:
63
SCHEDULE I
Underwriter Number of Shares
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X.X. Xxxxxxx & Sons, Inc.
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Total
64
EXHIBIT A
FORM OF XXXXXXX AND XXXXXX LLP OPINION REGARDING THE FUND
i. The Registration Statement and all post-effective amendments, 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 has been duly organized and is validly existing as a
business trust in good standing under the laws of The Commonwealth of
Massachusetts, with full power to conduct all the activities conducted by
it, to own or lease all assets owned (or to be owned) or leased (or to be
leased) by it and to conduct its business, all as described in the
Registration Statement, the Pricing Prospectus and Prospectus, and 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 requires such qualification, except where the
failure to be so qualified or be in good standing, either alone or in the
aggregate, would not have a material adverse effect on the Fund, and the
Fund owns, possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary to carry on its
business as contemplated in the Pricing Prospectus and 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 material adverse effect on the Fund. The Fund
has no subsidiaries.
iii. The number of authorized, issued and outstanding shares of Common
Shares of the Fund is as set forth in the Registration Statement, the
Pricing Prospectus and the Prospectus under the caption "Description of
Shares--Common Shares" and in the statement of additional information
under the caption "Statements of Assets and Liabilities." The Common
Shares of the Fund conform in all material respects to the description of
them in the Pricing Prospectus and the Prospectus under the caption
"Description of Shares--Common Shares" in the Prospectus. All the
65
outstanding Common Shares have been duly authorized and are validly
issued, fully paid and (except as described in the Registration
Statement, Pricing Prospectus and Prospectus under the caption "Certain
Provisions in the Declaration of Trust") nonassessable. The Shares to be
issued and delivered to and paid for by the Underwriters in accordance
with the Underwriting Agreement against payment therefor as provided by
the Underwriting Agreement have been duly authorized and when issued and
delivered to the Underwriters as so provided will have been validly
issued and will be fully paid and nonassessable (except as described in
the Registration Statement). No person is entitled to any preemptive or
other similar rights with respect to the Shares under the Declaration of
Trust or By-Laws 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 Shares as provided in the Underwriting Agreement has or will
have been taken by the Fund.
v. The Fund has full power to enter into each of the Underwriting
Agreement, the Advisory Agreement, the Custody Agreement, the Transfer
Agency Agreement, the Administration Agreement, and the Subscription
Agreement (collectively, the "Fund Agreements"), and to perform all of
the terms and provisions thereof to be carried out by it and (A) each
Fund Agreement has been duly and validly authorized, executed and
delivered by the Fund, (B) each Fund Agreement complies in all material
respects with all applicable provisions of 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, (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.
66
vi. None of (A) the execution and delivery by the Fund of the Fund
Agreements, (B) the issue and sale by the Fund of the Shares as
contemplated by the Underwriting Agreement and (C) the performance by the
Fund of its obligations under the Fund Agreements or consummation by the
Fund of the other transactions contemplated by the Fund Agreements
conflicts with or will conflict with, or results or will result in a
breach of, the Declaration of Trust or the By-laws of the Fund or any
agreement or instrument to which the Fund is a party or by which the Fund
is bound that is filed as an exhibit to the Registration Statement, or
any law, rule or regulation which in our experience is normally
applicable to transactions of the type contemplated by the Underwriting
Agreement, or order of any court, governmental instrumentality,
securities exchange or association or arbitrator, whether foreign or
domestic, specifically naming the Fund and known to counsel, except that
we express no opinion as to the securities or "blue sky" laws applicable
in connection with the purchase and distribution of the Shares by the
Underwriters pursuant to the Underwriting Agreement.
vii. No consent, approval, authorization or order of any court (to
counsel's knowledge) or governmental agency or body or securities
exchange or association, whether foreign or domestic, 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 Fund Agreements, except such as (A) have been
obtained under the federal securities laws and (B) may be required by the
New York Stock Exchange or under state securities or "blue sky" laws in
connection with the purchase and distribution of the Shares by the
Underwriters pursuant to the Underwriting Agreement.
viii. The Shares have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance, and the Fund's
Registration Statement on Form 8-A under the 1934 Act is effective.
ix. There are no legal or governmental proceeding pending or, to our
knowledge, threatened against the Fund.
x. The section in the Prospectus entitled "Federal Tax Matters" and the
section in the Statement of Additional Information entitled "Federal Tax
67
Matters" is a fair 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 Shares.
xi. The Registration Statement (except the financial statements and
schedules including the notes and schedules thereto, and other financial
or accounting data included therein or omitted therefrom, as to which we
express no view), at the time it became effective, and the Prospectus
(except as aforesaid), as of the date thereof, complied as to form in all
material respects to the requirements of the Act and the Investment
Company Act.
While we have not checked the accuracy and completeness of or
otherwise verified, and are not passing upon and assume no responsibility
for the accuracy or completeness of, the statements contained in the
Registration Statement, the Disclosure Package or the Prospectus, except
to the limited extent set forth in paragraph (xi) above, in the course of
our review of the contents of the Registration Statement, the Disclosure
Package and the Prospectus with certain officers and employees of the
Fund and the Fund's independent accountants, no facts have come to our
attention that cause us to believe that the Registration Statement, at
the time it became effective (but after giving effect to any changes
incorporated pursuant to Rule 430A under the Act), contained any 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 (except that we express no such view with respect to the
financial statements, including notes and schedules thereto, or any other
financial or accounting data included therein), or that the Prospectus,
as of the date it was filed with the Commission pursuant to Rule 497
under the Act and as of the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that we
express no such view with respect to the financial statements, including
notes and schedules thereto, or any other financial or accounting data
included therein), or that the Disclosure Package, as of the Applicable
Time, contained an untrue statement of a material fact or omitted 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
68
misleading (except that we express no such view with respect to the
financial statements, including notes and schedules thereto, or any other
financial or accounting data included therein).
69
EXHIBIT B
FORM OF XXXXXXX AND XXXXXX LLP OPINION REGARDING THE ADVISER
i. The Adviser has been duly formed and is validly existing as a limited
partnership under the laws of its jurisdiction of incorporation 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, the Pricing Prospectus and Prospectus and to enter into and
perform its obligations under the Underwriting Agreement, the Corporate
Finance Services and Consulting Agreement, the Advisory Agreement and the
Sub-Advisory Agreement.
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.
iii. The Adviser has full power and authority to enter into each of the
Underwriting Agreement, the Advisory Agreement, the Sub-Advisory
Agreement and the Corporate Finance Services and Consulting Agreement
(collectively, the "Adviser Agreements") and to carry out all the terms
and provisions thereof to be carried out by it, and each such agreement
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 Investment Company Act and the Advisers Act; and
assuming due authorization, execution and delivery by the other parties
thereto, each Adviser Agreement constitutes a legal, valid and binding
obligation of the Adviser, enforceable against the 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 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
70
breach of, the organizational documents or by-laws of the Adviser or any
agreement or instrument 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 do not, either alone or in the aggregate,
have a material adverse effect on the Adviser's ability to perform its
obligations under the Adviser Agreements.
v. No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required for the consummation 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 New York Stock Exchange or under state securities or "blue sky" laws,
in connection with the purchase and distribution of the Shares by the
Underwriters pursuant to the Underwriting Agreement.
vii. To our knowledge, there is no legal or governmental proceeding
pending or threatened against the Adviser that is either (i) required to
be described in the Registration Statement or Prospectus that is not
already described or (ii) which would, under Section 9 of the Investment
Company Act, make the Adviser ineligible to act as the Fund's investment
adviser.
We have not checked the accuracy and completeness of or
otherwise verified, and are not passing upon and assume no responsibility
for the accuracy or completeness of, the statements contained in the
Registration Statement, the Disclosure Package or the Prospectus. We have
participated in conferences with representatives of the Adviser at which
the contents of the Registration Statements, the Disclosure Package and
Prospectus were discussed. No facts have come to our attention that cause
us to believe that the description of the Adviser and its business, and
the statements attributable to the Adviser, in the Registration
Statement, at the time it became effective (but after giving effect to
any changes incorporated pursuant to Rule 430A under the Act), contained
any 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 (except that we express no such view with respect
to the financial statements, including notes and schedules thereto, or
any other financial or accounting data included therein), or that the
description of the Adviser and its business, and the statements
attributable to the Adviser, in the Prospectus, as of the date it was
filed with the Commission pursuant to Rule 497 under the Act and as of
the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading (except that we express no such view
71
with respect to the financial statements, including notes and schedules
thereto, or any other financial or accounting data included therein), or
that the Disclosure Package, as of the Applicable Time, contained an
untrue statement of a material fact or omitted 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 (except that we
express no such view with respect to the financial statements, including
notes and schedules thereto, or any other financial or accounting data
included therein).
72
EXHIBIT C
FORM OF OPINION REGARDING THE SUB-ADVISER
i. The Sub-Adviser has been duly formed and is validly existing as a
corporation under the laws of its jurisdiction of organization 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, the Pricing Prospectus and Prospectus and to enter into and
perform its obligations under the Underwriting Agreement and the
Sub-Advisory Agreement.
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 Sub-Advisory Agreement, the Registration Statement
and the Prospectus.
iii. The Adviser has full power and authority to enter into each of the
Underwriting Agreement and the Sub-Advisory Agreement (collectively, the
"Sub-Adviser Agreements") and to carry out all the terms and provisions
thereof to be carried out by it, and each such agreement has been duly
and validly authorized, executed and delivered by the Sub-Adviser; each
Sub-Adviser Agreement complies in all material respects with all
provisions of the Investment Company Act and the Advisers Act; and
assuming due authorization, execution and delivery by the other parties
thereto, each Sub-Adviser Agreement 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 or by-laws of
73
the Sub-Adviser or any agreement or instrument to which the 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 do
not, 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.
v. No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required for the consummation of the
transactions contemplated in, or the performance by the Sub-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 New York Stock Exchange or under state securities or "blue sky"
laws, in connection with the purchase and distribution of the Shares by
the Underwriters pursuant to the Underwriting Agreement.
vii. 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 or (ii) which would, under Section 9 of the Investment
Company Act, make the Sub-Adviser ineligible to act as the Fund's
investment adviser.
We have not checked the accuracy and completeness of or
otherwise verified, and are not passing upon and assume no responsibility
for the accuracy or completeness of, the statements contained in the
Registration Statement, the Disclosure Package or the Prospectus. We have
participated in conferences with representatives of the Sub-Adviser at
which the contents of the Registration Statements, the Disclosure Package
and Prospectus were discussed. No facts have come to our attention that
cause us to believe that the description of the Sub-Adviser and its
business, and the statements attributable to the Adviser, in the
Registration Statement, at the time it became effective (but after giving
effect to any changes incorporated pursuant to Rule 430A under the Act),
contained any 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 (except that we express no such view
with respect to the financial statements, including notes and schedules
thereto, or any other financial or accounting data included therein), or
that the description of the Sub-Adviser and its business, and the
statements attributable to the Adviser, in the Prospectus, as of the date
it was filed with the Commission pursuant to Rule 497 under the Act and
as of the date hereof, contained or contains an untrue statement of a
74
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 (except that we express no
such view with respect to the financial statements, including notes and
schedules thereto, or any other financial or accounting data included
therein), or that the Disclosure Package, as of the Applicable Time,
contained an untrue statement of a material fact or omitted 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
(except that we express no such view with respect to the financial
statements, including notes and schedules thereto, or any other financial
or accounting data included therein).
75
EXHIBIT D
FORM OF DELOITTE & TOUCHE LLP COMFORT LETTER
May 24, 2007
The Board of Trustees of
First Trust/Gallatin Specialty Finance and Financial Opportunities Fund
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
X.X. Xxxxxxx & Sons, Inc. Xxx Xxxxx Xxxxxxxxx Xxxxxx Xx. Xxxxx, Xxxxxxxx
00000
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities
of First Trust/Gallatin Specialty Finance and Financial Opportunities
Fund (the "Fund") as of April 23, 2007 (the "financial statement")
included in Pre-effective Amendment No. 1 and Pre-effective Amendment No.
2 to the Registration Statement on Form N-2 filed by the Fund under the
Securities Act of 1933 (the "1933 Act") (File No. 333-141457) and under
the Investment Company Act of 1940 (the "1940 Act," collectively, the
1933 Act and the 1940 Act, the "Acts") (File No. 811-22039); such
statement and our report with respect to such statement are included in
that Registration Statement. The Registration Statement, as amended at
the time it became effective on May 24, 2007, is herein referred to as
the "Registration Statement."
In connection with the Registration Statement:
1. We are independent auditors with respect to the Fund
within the meaning of the Acts and the applicable rules and
regulations adopted thereunder by the Securities and Exchange
Commission (the "SEC").
2. In our opinion, the financial statement audited by
us and included in the Registration Statement complies as to
form in all respects with the applicable accounting requirements
of the Acts and the related rules and regulations thereunder
76
adopted by the SEC.
3. We have not audited any financial statements of the
Fund as of any date or for any period subsequent to [ ], 2007.
Therefore, we are unable to and do not express any opinion on
the financial position, results of operations, changes in net
assets, or the financial highlights of the Fund as of any date
or for any period subsequent to [ ], 2007.
4. For purposes of this letter we have read the minutes
of all meetings of the Shareholders, the Board of Trustees and
all Committees of the Board of Trustees of the Fund as set forth
in the minute books at the offices of the Fund, officials of the
Fund having advised us that the minutes of all such meetings
through [ ], 2007, were set forth therein.
5. For purposes of this letter, we have read the
information included in the Registration Statement under the
captions listed below and performed the following procedures.
The procedures, which were applied as indicated with respect to
the items presented below consisted of:
--------------------------- --------------------------------------------------
PAGE/CAPTION PROCEDURES AND FINDINGS
--------------------------- --------------------------------------------------
Page 1, We proved the mathematical
Prospectus accuracy of the proceeds to the Fund per
share of $[ ] and in total of $[ ], assuming
a price to public of $[ ] per share, a sales
load of $[ ] per share, and estimated
offering costs of $[ ] per share. We give no
comfort on the assumed amounts utilized in
the calculation described above.
--------------------------- --------------------------------------------------
Page [ ], We proved the mathematical accuracy of the 1 year,
Prospectus, 3 years, 5 years, and 10 years total
Summary of expenses incurred of $[ ], $[ ],$[ ], and $[ ],
Fund Expenses respectively, assuming inclusion of
a sales load of $[ ] and estimated offering
expenses of this offering of $[ ], and a 5%
annual return on an initial investment of
$1,000 in Common Shares and assuming total
annual expenses of [ ]% of net assets. We
give no comfort on the assumed amounts
utilized in the calculation described above.
--------------------------- --------------------------------------------------
The foregoing procedures do not constitute an audit conducted in
77
accordance with auditing standards generally accepted in the United
States of America. Also, they would not necessarily reveal matters of
significance with respect to the comments in the following paragraph.
Accordingly, we make no representations regarding the sufficiency of the
foregoing procedures for your purposes.
6. Fund management has advised us that no financial
data as of any date or for any period subsequent to [ ], 2007,
is available; accordingly, the procedures carried out by us with
respect to changes in financial statement items after [ ], 2007,
have, of necessity, been limited. We have inquired of certain
management of the Fund who have responsibility for financial and
accounting matters whether there was any change as of [ ], 2007
in the shares of beneficial interest, net assets, or long-term
liabilities of the Fund as compared with amounts shown on the [
], 2007 statement of assets and liabilities included in the
Registration Statement. On the basis of these inquiries and our
reading of the minutes as described in 4, nothing came to our
attention that caused us to believe that there was any change in
the shares of beneficial interest, net assets or long-term
liabilities, except in all instances for changes, increases, or
decreases that the Registration Statement discloses have
occurred or may occur.
This letter is solely for the information of the addressees and
to assist the underwriters in conducting and documenting their
investigation of the affairs of the Fund in connection with the offering
of the securities covered by the Registration Statement, and is not to be
used, circulated, quoted or otherwise referred to within or without the
underwriting group for any other purpose, including but not limited to
the registration, purchase or sale of securities, nor is it to be filed
with or referred to in whole or in part in the Registration Statement or
any other document, except that reference may be made to it in the
underwriting agreement or in any list of closing documents pertaining to
the offering of the securities covered by the Registration Statement.
78
