[____________] Shares
FIRST TRUST TAX-ADVANTAGED PREFERRED INCOME FUND
Series M Auction Preferred Shares
($0.01 Par Value)
UNDERWRITING AGREEMENT
September __, 2006
RBC Xxxx Xxxxxxxx Inc.
c/o RBC Capital Markets Corporation
Xxx Xxxxxxx Xxxxx
000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Ladies and Gentlemen:
Each of First Trust Tax-Advantaged Preferred Income Fund, a
Massachusetts business trust (the "Company"), its investment adviser, First
Trust Advisors L.P., an Illinois limited partnership (the "Investment Advisor"
or "First Trust") and its investment sub-advisor, Stonebridge Advisors, LLC (the
"Sub-Advisor" or "Stonebridge") (each, an "Advisor" and together, the
"Advisors") confirms its agreement with RBC Xxxx Xxxxxxxx Inc. (the
"Underwriter") with respect to the issue and sale by the Company and the
purchase by the Underwriter, of an aggregate of [________] shares (the "Shares")
of the Company's Series M Auction Preferred Shares, $0.01 par value, with a
liquidation preference of $25,000 per share.
The Company has entered into an Investment Management Agreement with the
Advisor dated June 27, 2006 (the "Advisory Agreement"), an Administration and
Accounting Services Agreement dated June 27, 2006 with PFPC Inc. (the
"Administration Agreement"), a Custodian Services Agreement with PFPC Trust
Company dated June 27, 2006 (the "Custody Agreement"), and a Transfer Agency
Services Agreement with PFPC, Inc. as transfer agent and registrar for the
Company dated June 27, 2006 (the "Transfer Agency Agreement"). The Company and
the Advisor have entered into an Investment Sub-Advisory Agreement with
Stonebridge dated June 27, 2006 (the "Sub-administration Agreement"). The
Company has also entered into an Auction Agency Agreement with Deutsche Bank
Trust Company Americas dated ____, 2006 (the "Auction Agency Agreement").
Collectively, this Agreement, the Advisory Agreement, the Administration
Agreement, the Custody Agreement, the Transfer Agency Agreement, the
Sub-administration Agreement and the Auction Agency Agreement are referred to
herein as the "Company Agreements." Each of the Company Agreements to which the
Advisor is a party and this Agreement are collectively referred to herein as the
"Advisor Agreements."
The Company has prepared a registration statement on Form N-2 (File Nos.
333-135791 and 333-132639) with respect to the Shares pursuant to the Securities
Act of 1933, as amended (the "Securities Act"), the Investment Company Act of
1940, as amended (the "1940 Act", and collectively with the Securities Act, the
"Acts") and the rules and regulations (the "Rules and Regulations") of the
United States Securities and Exchange Commission (the "Commission") promulgated
under the Securities Act and the 1940 Act. As used in this Agreement, "Effective
Time" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission; "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in such registration
statement, or amendment thereof, before it became effective under the Securities
Act and any prospectus filed with the Commission by the Company with your
consent pursuant to Rule 497 (a) of the Rules and Regulations; "Pricing
Prospectus" means the Preliminary Prospectus that was included in the
Registration Statement immediately prior to the Applicable Time (as defined
below); "Prospectus" means the prospectus in the form first used to confirm
sales of Shares, including the Statement of Additional Information incorporated
therein by reference; "Registration Statement" means such registration
statement, as amended at the Effective Time, including all information deemed to
be a part of the registration statement as of the Effective Time pursuant to
Rule 430A of the Rules and Regulations. If the Company has filed an abbreviated
registration statement to register additional Shares pursuant to Rule 462(b)
under the Securities Act (the "Rule 462 Registration Statement"), then any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462 Registration Statement. For the purpose of this Agreement, the
"Applicable Time" is [____] pm (Eastern time) on the date of this Agreement.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE ADVISORS.
The Company and the Investment Advisor jointly and severally represent
and warrant to you as of the date hereof and as of the Closing Date (as defined
in Section 2 below) and the Company and the Advisors jointly and severally
represent and warrant to you as of the date hereof and as of the Closing Date,
as set forth in paragraphs 1(c), 1(h), 1(j), 1(l), 1(s), 1(t), 1(x), 1(aa) and
1(dd):
(a) A registration statement has been filed with the Commission under the
Securities Act and has become effective under the Securities Act. No stop order
suspending the effectiveness of such registration statement is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of the
Company, threatened by the Commission. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus. Copies of such
registration statement and each of the amendments thereto have been delivered by
the Company to you. The Registration Statement conforms, and any further
amendments or supplements to the Registration Statement will conform, in all
material respects to the requirements of the Acts and the Rules and Regulations.
The Prospectus and the Pricing Prospectus each conforms and, as amended or
supplemented, will conform, in all material respects to the requirements of the
-2-
Acts and the Rules and Regulations. As of the Effective Date, the date hereof
and the Closing Date (as defined below), the Registration Statement does not and
will not, and any further amendments to the Registration Statement will not,
when they become effective, 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; as of its date and the date hereof, the
Prospectus does not, and as amended or supplemented on the Closing Date, will
not, contain an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; the Pricing Prospectus taken
together with the final pricing information to be included on the cover page of
the Prospectus (collectively, the "Disclosure Package"), as of the Applicable
Time, did not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(b) A notification of registration of the Company as an investment company under
the 1940 Act on Form N-8A (the "1940 Act Notification") has been prepared by the
Company in conformity with the 1940 Act and has been filed with the Commission.
(c) The Commission has not issued an order preventing or suspending the use of
any Prospectus relating to the proposed offering of the Shares nor instituted
proceedings for that purpose and no proceedings, for any such purpose have been
instituted or are pending or, to the knowledge of the Company or either Advisor,
are contemplated by the Commission. The 1940 Act Notification complied in all
material respects with the requirements of the 1940 Act and the Rules and
Regulations thereunder and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(d) This Agreement has been duly authorized, executed and delivered by the
Company and each of the other Company Agreements has been duly authorized,
executed and delivered by the Company, and, assuming due authorization,
execution and delivery by the other parties hereto, constitutes a valid, legal,
and binding obligation of the Company, enforceable in accordance with its terms.
The Company has full power and authority to enter into this Agreement and each
of the Company Agreements and to authorize, issue and sell the Shares as
contemplated by this Agreement.
(e) The Company has been duly formed and is validly existing under the laws of
the Commonwealth of Massachusetts as a trust with transferable shares of the
type commonly called a Massachusetts business trust. The Declaration of Trust of
the Company (the "Declaration of Trust"), pursuant to which the Company was
established, confers upon the Trustees named therein, and their successors in
trust, power and authority to own or lease its properties and conduct its
business as described in the Prospectus and the Disclosure Package. The Company
has no direct or indirect subsidiaries. The Company is duly qualified to
transact business and is in good standing in all jurisdictions in which the
conduct of its business requires such qualification; except where the failure to
be so qualified or to be in good standing would not have a material adverse
effect on the condition (financial or otherwise), properties, assets,
liabilities, rights, operations, earnings, business, management or prospects of
the Company, whether or not arising from transactions in the ordinary course of
business (a "Material Adverse Effect").
-3-
(f) The Shares to be issued and sold by the Company have been duly authorized
and when issued and paid for as contemplated herein will be validly issued,
fully paid and non-assessable (except as described in the Registration Statement
and the Disclosure Package); and no preemptive rights of shareholders exist with
respect to any of the Shares or the issue and sale thereof. Neither the filing
of the Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the registration of any
capital stock of the Company.
(g) The Company has authorized capital stock as set forth in the Prospectus and
the Disclosure Package. All of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, were issued in compliance with
federal and state securities laws, are fully paid and non-assessable (except as
described in the Registration Statement) and conform to the description thereof
contained in the Prospectus and the Disclosure Package. The form of
certificates, if any, for the Shares conforms to the relevant law of the
jurisdiction of the Company's organization. Immediately after the issuance and
sale of the Shares to you, no holder of any shares, securities convertible into
or exchangeable or exercisable for shares or options, warrants or other rights
to purchase shares or any other securities of the Company shall have any
existing or future right to acquire any shares of capital stock of the Company,
other than as set forth in the Dividend Reinvestment Plan.
(h) The Company has not distributed and will not distribute any prospectus or
other offering material (including, without limitation, content on the Company's
website that may be deemed to be a prospectus or other offering material) in
connection with the offering and sale of the Shares other than the Registration
Statement, any Preliminary Prospectus, the Prospectus, the Disclosure Package or
other materials permitted by the Acts to be distributed by the Company.
(i) The financial statements of the Company, together with related notes and
schedules as set forth or incorporated by reference in the Registration
Statement, Prospectus and the Disclosure Package present fairly the financial
position of the Company at the indicated dates. Such financial statements and
related schedules have been prepared in accordance with U.S. generally accepted
accounting principles, consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary financial
and statistical data included or incorporated by reference in the Registration
Statement, Prospectus and the Disclosure Package presents fairly the information
shown therein and such data has been compiled on a basis consistent with the
financial statements presented therein and the books and records of the Company.
(j) The Company maintains, or causes its custodian, PFPC Trust Company, to
maintain, a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization and in accordance with the 1940
Act; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles
-4-
and to maintain accountability for assets and to maintain compliance with the
books and records requirements under the 1940 Act; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(k) Deloitte & Touche LLP, which has certified certain financial statements of
the Company and delivered its opinion with respect to certain financial
statements and schedules included or incorporated by reference in the
Registration Statement and the Prospectus, is an independent registered public
accounting firm with respect to the Company within the meaning of the Acts and
the Rules and Regulations.
(l) There is no action, suit, claim, investigation, inquiry or proceeding
pending or, to the knowledge of the Company or either Advisor, threatened
against or affecting the Company before any court or administrative agency or
otherwise (1) that is required to be disclosed in the Registration Statement,
Prospectus or the Disclosure Package and is not so described or (2) which, if
determined adversely to the Company might have a Material Adverse Effect or
prevent or materially delay the consummation of the transactions contemplated
hereby, except as set forth in the Registration Statement, the Prospectus and
the Disclosure Package.
(m) The Company has good and marketable title to all of the assets reflected in
the financial statements (or as described in the Prospectus and the Disclosure
Package) hereinabove described, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such financial statements (or
as described in the Prospectus and the Disclosure Package) or which are not
material in amount. (n) The Company has filed all federal, state, local and
foreign tax returns which have been required to be filed and has paid all taxes
whether or not indicated on such returns and all assessments received by it. All
tax liabilities have been adequately provided for in the financial statements of
the Company, and the Company does not know of any actual or proposed additional
tax assessments. There are no transfer taxes or other similar fees or charges
under federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery of
this Agreement or the issuance by the Company or sale by the Company of the
Shares.
(o) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, as it may be amended or supplemented,
there has not been any material adverse change or any development involving a
prospective change which has had or is reasonably likely to have a Material
Adverse Effect, whether or not occurring in the ordinary course of business, and
there has not been any material transaction entered into or any material
transaction that is probable of being entered into by the Company, other than
transactions in the ordinary course of business and changes and transactions
described in the Prospectus and the Disclosure Package. The Company has no
material contingent obligations that are not disclosed in the Company's
financial statements in the Registration Statement, the Prospectus and the
Disclosure Package.
(p) The Company is not, and with the giving of notice or lapse of time or both,
will not be, in violation of or in default under its Declaration of Trust or
By-Laws or under any agreement, lease, contract, indenture or other instrument
or obligation to which it is a party or by which it, or any of its properties,
-5-
is bound and which default has had or is reasonably likely to have a Material
Adverse Effect. The execution and delivery of this Agreement and each of the
Company Agreements and the consummation of the transactions contemplated herein
and therein and the fulfillment of the terms hereof and thereof do not and will
not, whether with or without notice or the passing of time or both, (i) conflict
with or otherwise violate any of the terms or provisions of the Declaration of
Trust or By-Laws of the Company or (ii) conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any contract,
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company is a party or any order, rule or regulation applicable to the Company of
any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction, which breach or default has had or is
likely to have a Material Adverse Effect.
(q) Each approval, consent, order, authorization, designation, declaration or
filing by or with any regulatory, administrative or other governmental body
necessary in connection with the execution and delivery by the Company of this
Agreement and the consummation of the transactions herein contemplated (except
such additional steps as may be required by the Commission, the National
Association of Securities Dealers, Inc. (the "NASD") or such additional steps as
may be necessary to qualify the Shares for public offering by you under state
securities or Blue Sky laws) has been obtained or made and is in full force and
effect.
(r) The Company has all material licenses, certifications, permits, franchises,
approvals, clearances and other regulatory authorizations ("Permits") from
governmental authorities as are necessary to conduct its businesses as currently
conducted and as currently proposed to be conducted and to own, lease and
operate its properties in the manner described in the Prospectus and the
Disclosure Package. There is no claim, proceeding or controversy, pending or, to
the knowledge of the Company or either Advisor, threatened, involving the status
of or sanctions under any of the Permits. The Company has fulfilled and
performed all of its material obligations with respect to the Permits, and no
event has occurred which allows, or after notice or lapse of time would allow,
the revocation, termination, modification or other impairment of the rights of
the Company under such Permit. None of the Permits contains any restriction that
is materially burdensome on the Company.
(s) To the knowledge of the Company and each Advisor, there are no affiliations
or associations between any member of the NASD and any of the Company's
officers, trustees or security holders, except as set forth in the Registration
Statement or as disclosed in writing to you.
(t) Neither the Company nor either Advisor, nor to the knowledge of the Company
or either Advisor, none of their respective affiliates, has taken or may take,
directly or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Shares to facilitate the sale
or resale of the Shares.
(u) The Company is duly registered under the 1940 Act as a closed-end,
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 the
time of filing any amendment or supplement thereto, conformed in all material
-6-
respects with all applicable provisions of the 1940 Act and the Rules and
Regulations under the 0000 Xxx. The Company has not received any notice from the
Commission pursuant to Section 8(e) of the 1940 Act with respect to the 1940 Act
Notification or the Registration Statement (or any amendment or supplement to
either of them).
(v) The Company carries a fidelity bond sufficient to satisfy the requirements
of Rule 17g-1 under the 1940 Act.
(w) Other than as contemplated by this Agreement, the Company has not incurred
any liability for any finder's or broker's fee, or agent's commission in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
(x) The Company has not sent or received any notice indicating the termination
of or intention to terminate any of the contracts or agreements referred to or
described in the Registration Statement, the Prospectus or the Disclosure
Package, or filed as an exhibit to the Registration Statement, and no such
termination has been threatened by the Company or any other party to any such
contract or agreement. There are no contracts or documents which are required to
be described in the Registration Statement, the Prospectus or the Disclosure
Package or to be filed as exhibits thereto by the Acts or by the Rules and
Regulations which have not been so described and filed as required and such
contracts and documents as are summarized in the Registration Statement, the
Prospectus or the Disclosure Package are fairly summarized in all material
respects.
(y) The Company owns, licenses, or otherwise has rights in all United States and
foreign patents, trademarks, service marks, trade names, copyrights, trade
secrets and other proprietary rights necessary for the conduct of its business
as currently carried on and as proposed to be carried on as described in the
Registration Statement, the Prospectus or the Disclosure Package (collectively
and together with any applications or registrations for the foregoing, the
"Intellectual Property"). Except as specifically described in the Prospectus or
the Disclosure Package, (i) no third parties have obtained rights to any such
Intellectual Property from the Company, other than licenses granted in the
ordinary course and those that would not have a Material Adverse Effect; (ii) to
the Company's knowledge, there is no infringement or misappropriation by the
Company or third parties of any such Intellectual Property; (iii) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the Company's rights in or to any such Intellectual
Property, and the Company is unaware of any facts which would form a basis for
any such claim; and (iv) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging the validity,
enforceability, or scope of any such Intellectual Property, and the Company is
unaware of any facts which would form a basis for any such claim. None of the
technology employed by the Company has been obtained or, to the Company's
knowledge, is being used by the Company in violation of the rights of any person
or third party. The Company knows of no infringement or misappropriation by
others of Intellectual Property.
(z) The conduct of business by the Company complies, and at all times has
complied, in all material respects with federal, state, local and foreign laws,
statutes, ordinances, rules, regulations, decrees, orders, Permits and other
similar items ("Laws") applicable to its business, including, without
-7-
limitation, licensing and certification Laws covering any aspect of the business
of the Company. The Company has not received any notification asserting, nor
does it have knowledge of, any present or past failure to comply with or
violation of any such Laws.
(aa) The information contained in the Registration Statement, the Prospectus and
the Disclosure Package regarding the Company's expectations, plans and
intentions, and any other information that constitutes "forward-looking"
information within the meaning of the Securities Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), were made by the Company on a
reasonable basis and reflect the Company's good faith belief and/or estimate of
the matters described therein.
(bb) The Company, subject to the filing of the Prospectus under Rule 497, has
taken all action required of it under the Acts and the Rules and Regulations to
make the public offering and consummate the sale of the Shares as contemplated
by this Agreement.
(cc) All advertising, sales literature, promotional materials or any other
materials or information (including "prospectus wrappers", "broker kits" and any
roadshow or investor presentations), whether in oral, printed or electronic
form, authorized, provided or prepared by the Company or either Advisor in
connection with the offering and sale of the Shares (collectively, the
"Marketing Materials") complied and comply in all material respects with the
applicable requirements of the Securities Act, the 1940 Act, the Rules and
Regulations and the rules and interpretations of the NASD and if required to be
filed with the NASD under the NASD's conduct rules were so filed. No Marketing
Materials contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Company and
the Advisors make no representations or warranties as to information contained
in or omitted from the Marketing Materials, in reliance upon, and in conformity
with, written information furnished to the Company or the Advisors by you
specifically for use in the preparation thereof. Any advertisement or sales
material authorized by the Company for use in the public offering of the Shares
pursuant to Rule 482 complied with the requirements of Rule 482 of the Rules and
Regulations under the Securities Act.
(dd) This Agreement and each of the Company Agreements complies in all material
respects with all applicable provisions of the 1940 Act, the Rules and
Regulations thereunder, the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and the rules and regulations adopted by the Commission under
the Advisers Act (the "Advisers Act Rules and Regulations").
(ee) The Company has elected or will elect to be treated as a regulated
investment company under Subchapter M of the Code effective for its taxable year
ending October 31, 2006, and intends and expects to qualify as a regulated
investment company under Subchapter M of the Code for the current and all future
taxable years. The Company will distribute timely all of its investment company
taxable income and net capital gain so as to avoid any corporate income tax, and
the Company has taken and will take all actions and has omitted and will omit to
-8-
take all actions as are necessary to be consistent with the foregoing,
including, but not limited to, with respect to the investment of the proceeds of
the offering of Shares contemplated by this Agreement.
(ff) Except as disclosed in the Registration Statement, the Prospectus and the
Disclosure Package (or any amendment or supplement to either of them), no
trustee or officer of the Company or either Advisor is an "interested person"
(as defined in the 0000 Xxx) of the Company or either Advisor or an "affiliated
person" (as defined in the 0000 Xxx) of you.
(gg) Any certificate signed by any officer of the Company and delivered to you
or your counsel in connection with the offering of the Shares contemplated
hereby shall be deemed a representation and warranty by the Company to you and
shall be deemed to be a part of this Section 1 and incorporated herein by this
reference.
2. REPRESENTATIONS AND WARRANTIES OF THE INVESTMENT ADVISOR.
The Investment Advisor represents and warrants to you as of the date
hereof and as of the Closing Date, as follows:
(a) The Investment Advisor has been duly organized and is validly existing as a
limited partnership under the laws of the State of Illinois, with full limited
partnership power and authority to own or lease its properties and conduct its
business as described in the Prospectus and the Disclosure Package. The
Investment Advisor is duly qualified to transact business and is in good
standing in all jurisdictions in which the conduct of its business requires such
qualification, except where the failure to be so qualified or to be in good
standing would not have a Material Adverse Effect.
(b) Each Advisor Agreement has been duly authorized, executed and delivered by
the Investment Advisor, and, assuming due authorization, execution and delivery
by the other parties hereto, constitutes a valid, legal, and binding obligation
of the Investment Advisor, enforceable in accordance with its terms, except as
rights to indemnity hereunder may be limited by federal or state securities
laws. The Investment Advisor has full power and authority to enter into each
Advisor Agreement.
(c) There is no action, suit, claim or proceeding pending or, to the knowledge
of the Investment Advisor, threatened against the Investment Advisor before any
court or administrative agency or otherwise (1) that is required to be described
in the Registration Statement , the Prospectus or the Disclosure Package that
are not so described, or (2) which, if determined adversely to the Investment
Advisor might have a Material Adverse Effect or prevent the consummation of the
transactions contemplated hereby, except as set forth in the Registration
Statement, the Prospectus and the Disclosure Package.
(d) Neither the Investment Advisor, nor to the Investment Advisor's knowledge,
any of its affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the Shares to facilitate the sale or resale of the Shares.
-9-
(e) The Investment Advisor carries, or is covered by, insurance, including, at a
minimum, errors and omissions insurance, in such amounts and covering such risks
as is adequate for the conduct of its businesses and the value of its properties
and as is customary for companies engaged in similar industries. All policies of
insurance insuring the Investment Advisor or its respective businesses, assets,
employees, partners, officers and directors are in full force and effect, and
the Investment Advisor is in compliance with the terms of such policies in all
material respects. There are no claims by the Investment Advisor under any such
policy or instrument as to which an insurance company is denying liability or
defending under a reservation of rights clause.
(f) Other than as contemplated by this Agreement, the Investment Advisor has not
incurred any liability for any finder's or broker's fee, or agent's commission
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(g) The Investment Advisor is not, and with the giving of notice or lapse of
time or both, will not be, in violation of or in default under its Partnership
Agreement or under any agreement, lease, contract, indenture or other instrument
or obligation to which it is a party or by which it, or any of its properties,
is bound and which default has had or is reasonably likely to have a Material
Adverse Effect. The execution and delivery of each Advisor Agreement and the
consummation of the transactions herein and therein contemplated and the
fulfillment of the terms hereof will not (i) conflict with or otherwise violate
the terms and provisions of the Partnership Agreement of the Investment Advisor
or (ii) conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any contract, indenture, mortgage, deed of
trust or other agreement or instrument to which the Investment Advisor is a
party or any order, rule or regulation applicable to the Investment Advisor of
any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction, which breach or default has had or is
reasonably likely to have a Material Adverse Effect.
(h) The Investment Advisor is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act, the 1940 Act, the
Advisers Act Rules and Regulations or the Rules and Regulations under the 1940
Act from acting under the Advisor Agreements as contemplated by the Registration
Statement, the Prospectus and the Disclosure Package.
(i) The Investment Advisor has the financial resources available to it necessary
for the performance of its services and obligations as contemplated in the
Registration Statement, the Prospectus and the Disclosure Package and under this
Agreement and the Advisor Agreements.
(j) The description of the Investment Advisor, its business, and the statements
attributable to the Investment Advisor in the Registration Statement, the
Prospectus and the Disclosure Package or any Preliminary Prospectus complied and
comply in all material respects with the provisions of the Acts, 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 necessary to
make the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading.
-10-
(k) Since the date as of which information is given in the Registration
Statement and the Prospectus through the date hereof, and except as may
otherwise be disclosed in the Disclosure Package, there have been no
transactions entered into by the Investment Advisor which are material to the
Investment Advisor other than in the ordinary course of its business.
(l) Each Advisor Agreement complies in all material respects with all applicable
provisions of the 1940 Act, the Rules and Regulations under the 1940 Act, the
Advisers Act and the Advisers Act Rules and Regulations.
3. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISOR.
The Sub-Advisor represents and warrants to you as of the date hereof and
as of the Closing Date, as follows:
(a) The Sub-Advisor has been duly organized and is validly existing as a limited
liability company under the laws of the State of Connecticut, with full power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement, the Prospectus and the Disclosure
Package. The Sub-Advisor is duly qualified to transact business and is in good
standing in all jurisdictions in which the conduct of its business requires such
qualification; except where the failure to be so qualified or to be in good
standing would not have a Material Adverse Effect.
(b) Each Advisor Agreement to which the Sub-Advisor is a party has been duly
authorized, executed and delivered by the Sub-Advisor, and, assuming the due
authorization, execution and delivery by the other parties hereto, constitutes a
valid, legal, and binding obligation of the Sub-Advisor, enforceable in
accordance with its terms, except as rights to indemnity hereunder may be
limited by federal or state securities laws. The Sub-Advisor has full power and
authority to enter into each Advisor Agreement to which the Sub-Advisor is a
party.
(c) There is no action, suit, claim or proceeding pending or, to the knowledge
of the Sub-Advisor, threatened against the Sub-Advisor before any court or
administrative agency or otherwise which if determined adversely to the
Sub-Advisor might have a Material Adverse Effect or prevent the consummation of
the transactions contemplated hereby, except as set forth in the Registration
Statement, the Prospectus and the Disclosure Package.
(d) Neither the Sub-Advisor, nor to the Sub-Advisor's knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any action designed
to cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Shares to facilitate the sale or resale of the Shares.
(e) The Sub-Advisor carries, or is covered by, insurance, including, at a
minimum, errors and omissions insurance, in such amounts and covering such risks
as is adequate for the conduct of its businesses and the value of its properties
and as is customary for companies engaged in similar industries. All policies of
insurance insuring the Sub-Advisor or its respective businesses, assets,
employees, officers and directors are in full force and effect, and the
-11-
Sub-Advisor is in compliance with the terms of such policies in all material
respects. There are no claims by the Sub-Advisor under any such policy or
instrument as to which an insurance company is denying liability or defending
under a reservation of rights clause.
(f) Other than as contemplated by this Agreement, the Sub-Advisor has not
incurred any liability for any finder's or broker's fee, or agent's commission
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(g) The Sub-Advisor is not, and with the giving of notice or lapse of time or
both, will not be, in violation of or in default under its Articles of
Organization or Operating Agreement or under any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by which
it, or any of its properties, is bound and which default has had or is
reasonably likely to have a Material Adverse Effect. The execution and delivery
of each Advisor Agreement to which the Sub-Advisor is a party and the
consummation of the transactions therein contemplated and the fulfillment of the
terms hereof will not (i) conflict with or otherwise violate the terms and
provisions of the Articles of Organization of the Sub-Advisor or (ii) conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default under, any contract, indenture, mortgage, deed of trust or other
agreement or instrument to which the Sub-Advisor is a party or any order, rule
or regulation applicable to the Sub-Advisor of any court or of any regulatory
body or administrative agency or other governmental body having jurisdiction,
which breach or default has had or is reasonably likely to have a Material
Adverse Effect.
(h) The Sub-Advisor is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act, the 1940 Act, the
Advisers Act Rules and Regulations or the Rules and Regulations under the 1940
Act from acting under the Advisor Agreements (to which such Sub-Advisor is a
party) as contemplated by the Registration Statement, the Prospectus and the
Disclosure Package.
(i) The Sub-Advisor has the financial resources available to it necessary for
the performance of its services and obligations as contemplated in the
Registration Statement, the Prospectus and the Disclosure Package and under this
Agreement and the Advisor Agreements (to which the Sub-Advisor is a party).
(j) The description of the Sub-Advisor, its business, and the statements
attributable to the Sub-Advisor, in the Registration Statement, the Prospectus
and the Disclosure Package or any Preliminary Prospectus complied and comply in
all material respects with the provisions of the Acts, 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 necessary to make the
statements therein (in the case of a prospectus, in light of the circumstances
under which they were made) not misleading.
(k) Since the date as of which information is given in the Registration
Statement and the Prospectus through the date hereof, and except as may
otherwise be disclosed in the Disclosure Package, there have been no
-12-
transactions entered into by the Sub-Advisor which are material to the
Sub-Advisor and the transactions contemplated hereby other than in the ordinary
course of its business.
(l) Each Advisor Agreement to which the Sub-Advisor is a party complies in all
material respects with all applicable provisions of the 1940 Act, the Rules and
Regulations under the 1940 Act, the Advisers Act and the Advisers Act Rules and
Regulations.
4. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Company agrees to
sell to you and you agree to purchase, at a price of $[24,750] per share, the
Shares.
(b) Payment for the Shares to be sold hereunder is to be made in New York
Clearing House funds by federal (same day) funds against delivery of the Shares
to your account. Such payment and delivery are to be made through Full Fast
Delivery through the facilities of The Depository Trust Company, New York, New
York at 9:00 a.m., New York time, on the third business day after the date of
this Agreement or at such other time and date not later than five business days
thereafter as you and the Company shall agree upon, such time and date being
herein referred to as the "Closing Date." As used herein, "business day" means a
day on which the New York Stock Exchange is open for trading and on which banks
in New York are open for business and are not permitted by law or executive
order to be closed. The Shares will be delivered in such denominations and in
such registrations as you request in writing not later than the second full
business day prior to the Closing Date.
5. OFFERING BY THE UNDERWRITER.
It is understood that you are to make a public offering of the Shares as
soon as you deem it advisable to do so. The Shares are to be initially offered
to the public at the initial public offering price set forth in the Prospectus.
You may from time to time thereafter change the public offering price and other
selling terms.
It is further understood that you will act as the sole underwriter in
the offering and sale of the Shares in accordance with this Agreement.
6. COVENANTS OF THE COMPANY AND THE ADVISORS.
(a) The Company and the Investment Advisor, jointly and severally, covenant and
agree with you and, with respect to Sections 6(a)(ii), 6(a)(vii), 6(a)(x) and
6(a)(xi), the Company the Investment Advisor and the Sub-Advisor, jointly and
severally, covenant and agree with you, that:
(i) The Company will (A) use its best efforts to cause the Registration
Statement to become effective or, if the procedure in Rule 430A of the Rules and
Regulations under the Securities Act is followed, to prepare and timely file
with the Commission under Rule 497 of the Rules and Regulations under the
Securities Act a Prospectus in a form approved by you containing information
previously omitted at the time of effectiveness of the Registration Statement in
reliance on Rule 430A of the Rules and Regulations under the Securities Act; (B)
-13-
not file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance with the Rules and Regulations; and (C) file on a timely
basis all reports and any definitive proxy or information statements required to
be filed by the Company with the Commission subsequent to the date of the
Prospectus and prior to the termination of the offering of the Shares by you.
(ii) The Company will not take, directly or indirectly, any action designed to
cause or result in, or that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any securities of
the Company.
(iii) The Company will advise you promptly (A) when the Registration Statement
or any post-effective amendment thereto shall have become effective; (B) of
receipt of any comments from the Commission; (C) of any request of the
Commission for amendment of the Registration Statement or for supplementation of
the Prospectus or for any additional information; and (D) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution of any proceedings
for that purpose. The Company will use its best efforts to prevent the issuance
of any such stop order preventing or suspending the use of the Prospectus and to
obtain as soon as possible the lifting thereof, if issued.
(iv) The Company will cooperate with you in endeavoring to qualify the Shares
for sale under the securities laws of such jurisdictions as you may reasonably
have designated in writing and will make such applications, file such documents,
and furnish such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction where it
is not now so qualified or required to file such a consent. The Company will,
from time to time, prepare and file such statements, reports, and other
documents, as are or may be required to continue such qualifications in effect
for so long a period as you may reasonably request for distribution of the
Shares.
(v) The Company will deliver to, or upon the order of, you, from time to time,
as many copies of any Preliminary Prospectus as you may reasonably request. The
Company will deliver to, or upon the order of, you, during the period when
delivery of a Prospectus is required under the Acts, as many copies of the
Prospectus in final form, or as thereafter amended or supplemented, as you may
reasonably request. The Company will deliver to you such number of copies of the
Registration Statement (including such number of copies of the exhibits filed
therewith that may reasonably be requested) and of all amendments thereto, as
you may reasonably request.
(vi) The Company will comply with the Acts and the Rules and Regulations, and
the Exchange Act, and the rules and regulations of the Commission thereunder, so
as to permit the completion of the distribution of the Shares as contemplated in
this Agreement and the Prospectus. If during the period in which a prospectus is
required by law to be delivered by you or a dealer, any event shall occur as a
result of which, in the judgment of the Company or in your reasonable opinion,
it becomes necessary to amend or supplement the Prospectus in order to make the
-14-
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary at
any time to amend or supplement the Prospectus to comply with any law, the
Company promptly will prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with the law.
(vii) The Company will make generally available to its security holders, as soon
as it is practicable to do so, but in any event not later than 15 months after
the effective date of the Registration Statement, an earning statement (which
need not be audited) in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of Section
11(a) of the Securities Act and Rule 158 of the Rules and Regulations thereunder
and will advise you in writing when such statement has been so made available.
(viii) Except for the Shares, no offering, sale, short sale or other disposition
of any (A) securities of the Company or (B) securities convertible into or
exchangeable or exercisable for securities of the Company or derivative of
securities of the Company (or agreement for such) will be made for a period of
90 days after the date of this Agreement, directly or indirectly, by the Company
otherwise than hereunder or with your prior written consent.
(ix) The Company will use its best efforts to cause the Shares, prior to the
Closing Date, to be assigned ratings of "Aaa" by Xxxxx'x Investor Services, Inc.
("Moody's") and "AAA" by Fitch Ratings, Inc. ("Fitch"), respectively.
(x) The Company shall invest or otherwise use the net proceeds of its sale of
the Shares as described under the heading "Use of Proceeds" in the Prospectus
and the Disclosure Package in such a manner as to comply with the investment
restrictions and the 1940 Act and shall report with the Commission with respect
to the sale of the Shares and the application of the proceeds therefrom as may
be required in accordance with Rule 463 under the Securities Act.
(xi) The Company has elected or will elect to be treated as a regulated
investment company under Subchapter M of the Code effective for its taxable year
ending October 31, 2006, will distribute timely all of its investment company
taxable income and net capital gain so as to avoid any corporate income tax, and
will take all actions and omit to take all actions as are necessary to qualify
as a regulated investment company under Subchapter M of the Code for the current
and all future taxable years and to be consistent otherwise with the foregoing,
including, but not limited to, with respect to the investment of the proceeds of
the offering of Shares contemplated by this Agreement.
(xii) [The Company will maintain a transfer agent and, if necessary under the
jurisdiction of organization of the Company, a registrar for the Shares.]
-15-
7. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company; the cost
of printing and delivering to, or as requested by you, copies of the
Registration Statement, Preliminary Prospectuses, the Prospectus, and the
Underwriter's Selling Memorandum, if any, the filing fees of the Commission; the
filing fees incident to securing any required review by the NASD of the terms of
the sale of the Shares; any fees charged by Fitch, Moody's or any other
securities rating agency for rating the Shares; and the fees and expenses of the
Auction Agent under the Auction Agency Agreement.
The Company shall not, however, be required to pay for any of your
expenses except that if this Agreement shall not be consummated because the
conditions in Section 8 hereof are not satisfied, or because this Agreement is
terminated pursuant to Section 12 hereof, or by reason of any failure, refusal
or inability on the part of the Company to perform any undertaking or satisfy
any condition of this Agreement or to comply with any of the terms hereof on its
part to be performed, unless such failure to satisfy said condition or to comply
with said terms be due to your default or omission, then the Company shall
reimburse you for reasonable out-of-pocket expenses actually incurred, including
all fees and disbursements of counsel, reasonably incurred in connection with
investigating, marketing and proposing to market the Shares or in contemplation
of performing their obligations hereunder; but the Company shall not in any
event be liable to you for damages on account of loss of anticipated profits
from the sale by you of the Shares.
8. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITER.
Your obligation to purchase the Shares on the Closing Date is subject to
the accuracy, as of the Closing Date, of the representations and warranties of
the Company and the Advisors contained herein, and to the performance by the
Company and the Advisors of their covenants and obligations hereunder and to the
following additional conditions:
(a) The Registration Statement and all post-effective amendments thereto shall
have become effective and any and all filings required by Rule 497 and Rule 430A
of the Rules and Regulations shall have been made, and any request of the
Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to you and complied with to
your reasonable satisfaction. No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been issued and
no proceedings for that purpose shall have been taken or, to the knowledge of
the Company, shall be contemplated by the Commission, no stop order suspending
or preventing the use of the Pricing Prospectus shall have been initiated, or to
the knowledge of the Company, shall be contemplated by the Commission; and no
injunction, restraining order, or order of any nature by a federal or state
court of competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance of the Shares.
(b) You shall have received on the Closing Date the opinion of Xxxxxxx and
Xxxxxx LLP, counsel for the Company, dated the Closing Date, addressed to you
-16-
(which states that it may be relied upon by Xxxxxxx Procter LLP, your counsel,
and may state that Xxxxxxx and Xxxxxx LLP relied upon, with respect to
Massachusetts law, an opinion of Xxxxxxx XxXxxxxxxx LLP), to the effect that:
(i) The Company has been duly formed and is validly existing under the laws of
the Commonwealth of Massachusetts as a trust with transferable shares of the
type commonly called a Massachusetts business trust. The Declaration of Trust
confers upon the Trustees named therein, and their successors in trust, power
and authority to own or lease its properties and conduct its business as
described in the Prospectus and the Disclosure Package; and the Company is duly
qualified to transact business in all jurisdictions in which the conduct of its
business requires such qualification, or in which the failure to qualify would
have a Material Adverse Effect.
(ii) The Company has authorized and outstanding common shares of beneficial
interest of the Company (the "Common Shares") as set forth under the caption
"Description of Common Shares" in the Prospectus and the Disclosure Package; all
of the outstanding Common Shares have been duly authorized and validly issued
and are fully paid and non-assessable (except as set forth in the Registration
Statement) and have been offered and sold in compliance with all laws
(including, without limitation, federal and state securities laws). The Company
has authorized preferred shares as set forth under the caption "Description of
Preferred Shares" in the Prospectus. All of the Shares conform in all material
respects to the description thereof contained in the Prospectus and the
Disclosure Package; the Shares to be sold by the Company pursuant to this
Agreement have been duly authorized and will be validly issued, fully paid and
non-assessable (except as set forth in the Registration Statement) when issued
and paid for as contemplated by this Agreement; and no preemptive rights of
shareholders exist with respect to any of the Shares or the issue or sale of the
Shares pursuant to the Company's Declaration of Trust and By-Laws or any other
agreement or instrument known to such counsel. Except as described in or
contemplated by the Prospectus and the Disclosure Package, the Company has no
"senior security" (as such term is defined in Section 18 of the 1940 Act)
outstanding..
(iii) Except as described in or contemplated by the Prospectus, the Disclosure
Package and the Dividend Reinvestment Plan, to the knowledge of such counsel,
there are no outstanding securities of the Company convertible or exchangeable
into or evidencing the right to purchase or subscribe for any shares of
beneficial interest of the Company and there are no outstanding or authorized
options, warrants or rights of any character obligating the Company to issue any
of its shares of beneficial interest or any securities convertible or
exchangeable into or evidencing the right to purchase or subscribe for any such
shares of beneficial interest; and except as described in the Prospectus, to the
knowledge of such counsel, no holder of any securities of the Company or any
other person has the right, contractual or otherwise, which has not been
satisfied or effectively waived, to cause the Company to sell or otherwise issue
to them, or to permit them to underwrite the sale of, any of the Shares or the
right to have any other securities of the Company included in the Registration
Statement or the right, as a result of the filing of the Registration Statement,
to require registration under the Acts of any other securities of the Company.
-17-
(iv) The Registration Statement and any 462(b) Registration Statement have
become effective under the Securities Act; any required filing of the Prospectus
pursuant to Rule 497(h) has been made in the manner and within the time period
required by Rule 497(h); and to the best of such counsel's knowledge after due
investigation, no stop order suspending the effectiveness of the Registration
Statement has been issued under the Securities Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of such
counsel, threatened by the Commission.
(v) The Registration Statement, at the time it became effective under the Acts,
the Prospectus, as of its date, and each amendment or supplement thereto, as of
its respective date, complied as to form in all material respects with the
requirements of the Acts and the applicable rules and regulations thereunder
(except that such counsel need express no opinion as to the financial
statements, related schedules and other financial data included or incorporated
by reference therein).
(vi) The statements under the captions "Management of the Fund - Investment
Management Agreement," "Management of the Fund - Investment Advisor" "Management
of the Fund - Sub-Advisor" "Description of Preferred Shares," "the Auction,"
"Description of Common Shares" and "Certain Provisions in the Declaration of
Trust" in the Prospectus, insofar as such statements constitute a summary of
documents referred to therein or matters of law, fairly summarize in all
material respects the information called for with respect to such documents and
matters by Form N-2.
(vii) The statements made in the Registration Statement and the Prospectus (and
any amendment or supplement thereto through the date of the opinion) under the
caption "Tax Matters" have been reviewed by such counsel and to the extent they
describe or summarize tax laws, legal conclusions, doctrines or practices of the
United States, present a fair and accurate description or summary thereof as of
the date of the opinion.
(viii) This Agreement and each Company Agreement has been duly authorized,
executed and delivered by the Company and complies in all material respects with
all applicable provisions of the 1940 Act, the Advisers Act, the Rules and
Regulations under the 1940 Act and the Advisers Act Rules and Regulations.
(ix) Such counsel does not know of any contracts or documents required to be
filed as exhibits to the Registration Statement or described in the Registration
Statement, the Prospectus or the Disclosure Package which are not so filed or
described as required, and such contracts and documents as are summarized in the
Registration Statement, the Prospectus or the Disclosure Package are fairly
summarized in all material respects.
(x) Such counsel knows of no material legal or governmental proceedings pending
or threatened against the Company except as set forth in the Registration
Statement, the Prospectus and the Disclosure Package.
(xi) The execution and delivery of this Agreement and the Company Agreements (to
which the Company is a party) and the consummation of the transactions herein
contemplated do not and will not conflict with or result in a breach of any of
-18-
the terms or provisions of, or constitute a default under, the Declaration of
Trust or By-Laws of the Company, or any agreement or instrument known to such
counsel to which the Company is a party or by which the Company may be bound.
(xii) The Company Agreements, including this Agreement, have each been duly
authorized by all requisite action on the part of the Company, executed and
delivered by the Company, as of the dates noted therein. Assuming due
authorization, execution and delivery by the other parties thereto, each such
agreement (other than this Agreement) constitutes a valid and binding agreement
of the Company, enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws and except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally.
(xiii) No approval, consent, order, authorization, designation, declaration or
filing by or with any regulatory, administrative or other governmental body is
necessary in connection with the execution and delivery of this Agreement and
the consummation of the transactions herein contemplated (other than as may be
required by the NASD or as required by state securities and Blue Sky laws as to
which such counsel need express no opinion) except such as have been obtained or
made, specifying the same.
(xiv) The Company is duly registered under the 1940 Act as a closed-end,
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 the
time of filing any amendment or supplement thereto, conformed in all material
respects with all applicable provisions of the 1940 Act and the Rules and
Regulations thereunder and, to such counsel's knowledge, the Company has not
received any notice from the Commission pursuant to Section 8(e) of the 1940 Act
with respect to the 1940 Act Notification or the Registration Statement (or any
amendment or supplement to either of them).
The opinion in paragraph 8(b)(ii) will be subject to the qualification
that the shareholders of a Massachusetts business trust may, under some
circumstances, be subject to assessment at the insistence of creditors to pay
the obligations of such trust in the event that its assets are insufficient for
the purpose.
(c) You shall have received on the Closing Date the opinion of Xxxxxxx and
Xxxxxx LLP, counsel for the Investment Advisor, dated the Closing Date addressed
to you (which states that it may be relied upon by Xxxxxxx Procter LLP, your
counsel, and may state that Xxxxxxx and Xxxxxx LLP relied upon, with respect to
Massachusetts law, an opinion of Xxxxxxx XxXxxxxxxx LLP) to the effect that:
(i) The Investment Advisor has been duly organized and is validly existing as a
limited partnership under the laws of the State of Illinois with limited
partnership power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; and the Investment Advisor
is duly qualified to transact business in all jurisdictions in which the conduct
of its business requires such qualification, except where the failure to be so
qualified or to be in good standing would not have a Material Adverse Effect.
-19-
(ii) The Investment Advisor is duly registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act, the 1940 Act, the
Advisers Act Rules and Regulations or the Rules and Regulations under the 1940
Act from acting under the Company Agreements (to which the Investment Advisor is
a party) as contemplated by the Registration Statement and the Prospectus (or
any amendment or supplement thereto).
(iii) Such counsel knows of no material legal or governmental proceedings
pending or threatened against the Investment Advisor except as set forth in the
Prospectus.
(iv) The execution and delivery of each Advisor Agreement and the consummation
of the transactions contemplated therein do not and will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, the partnership agreement of the Investment Advisor, or any agreement or
instrument known to such counsel to which the Investment Advisor is a party or
by which the Investment Advisor may be bound.
(v) Each Advisor Agreement has been duly authorized, executed and delivered by
the Investment Advisor and complies in all material respects with all applicable
provisions of the 1940 Act, the Advisers Act, the Rules and Regulations under
the 1940 Act and the Advisers Act Rules and Regulations, and each Advisor
Agreement (other than this Agreement) constitutes a valid and binding obligation
of the Investment Advisor, enforceable in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited by federal or
state securities laws and except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally.
(vi) The description of the Investment Advisor and its business, and the
statements attributable to the Investment Advisor, in the Registration
Statement, the Prospectus and the Disclosure Package (and any amendment or
supplement thereto) complied and comply in all material respects with the
provisions of the Acts, the Advisers Act, the Rules and Regulations and the
Advisers Act Rules and Regulations.
(d) You shall have received on the Closing Date the opinion of counsel for the
Investment Sub-Advisor (or, as to matters of Delaware law, Morris, Nichols,
Arsht & Xxxxxxx LLP, Delaware counsel to the Sub-Advisor), dated the Closing
Date, addressed to you (and stating that it may be relied upon by Xxxxxxx
Procter LLP, your counsel) to the effect that:
(i) The Sub-Advisor has been duly organized and is validly existing as a limited
liability company under the laws of the State of Connecticut with limited
liability company power and authority to own or lease its properties and conduct
its business as described in the Registration Statement; and the Sub-Advisor is
duly qualified to transact business in all jurisdictions in which the conduct of
its business requires such qualification, except where the failure to be so
qualified or to be in good standing would not have a Material Adverse Effect.
(ii) The Sub-Advisor is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act, the 1940 Act, the
Advisers Act Rules and Regulations or the Rules and Regulations under the 1940
-20-
Act from acting under the Company Agreements (to which the Advisor is a party)
as contemplated by the Registration Statement and the Prospectus (or any
amendment or supplement thereto).
(iii) Such counsel knows of no material legal or governmental proceedings
pending or threatened against the Sub-Advisor except as set forth in the
Prospectus.
(iv) The execution and delivery of each Advisor Agreement to which the
Sub-Advisor is a party and the consummation of the transactions contemplated
therein do not and will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, the Articles of
Organization or Operating Agreement of the Sub-Advisor, or any agreement or
instrument known to such counsel to which the Sub-Advisor is a party or by which
the Sub-Advisor may be bound.
(v) Each Advisor Agreement to which the Sub-Advisor is a party has been duly
authorized, executed and delivered by the Sub-Advisor and complies in all
material respects with all applicable provisions of the 1940 Act, the Advisers
Act, the Rules and Regulations under the 1940 Act and the Advisers Act Rules and
Regulations, and each such agreement (other than this Agreement) constitutes a
valid and binding obligation of the Sub-Advisor, enforceable in accordance with
its terms, except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws and except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally.
(vi) The description of the Sub-Advisor and its business, and the statements
attributable to the Sub-Advisor, in the Registration Statement, the Prospectus
and the Disclosure Package (and any amendment or supplement thereto) complied
and comply in all material respects with the provisions of the Acts, the
Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations.
In addition to the matters set forth in Subsection (b), (c) and (d) of
this Section, the opinions delivered pursuant to Subsection (b), (c) and (d) of
this Section shall also include a statement to the effect that nothing has come
to the attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the Acts (but
after giving effect to any modifications incorporated therein pursuant to Rule
430A under the Securities Act) and as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
that the Disclosure Package, as of the Applicable Time, contained any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of circumstances under which
they were made, not misleading, and (iii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and Regulations and as
of the Closing Date, contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements, in the light
of the circumstances under which they are made, not misleading (except that such
counsel need express no view as to financial statements, related schedules and
other financial data included or incorporated by reference therein). With
respect to such statement, Xxxxxxx and Xxxxxx LLP (with respect to the Company
-21-
and the Investment Advisor) and counsel for the Sub-Advisor (with respect to the
Sub-Advisor) may state that their belief is based upon the procedures set forth
therein, but is without independent check and verification.
(e) You shall have received from Xxxxxxx Procter LLP, your counsel, an opinion
dated the Closing Date, with respect to matters as you reasonably may request,
and such counsel shall have received such papers and information as they request
to enable them to pass upon such matters.
(f) You shall have received, on each of the date hereof and the Closing Date, a
letter dated the date hereof or the Closing Date, as the case may be, in form
and substance satisfactory to you, of Deloitte & Touche LLP confirming that they
are an independent registered public accounting firm within the meaning of the
Acts and the applicable published Rules and Regulations thereunder and stating
that in their opinion the financial statements and schedules examined by them
and included or incorporated by reference in the Registration Statement comply
in form in all material respects with the applicable accounting requirements of
the Acts and the related published Rules and Regulations; and containing such
other statements and information as is ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial and statistical information contained or incorporated by
reference in the Registration Statement and the Prospectus.
(g) You shall have received on the Closing Date a certificate or certificates of
the Company's Chief Executive Officer and Chief Financial Officer to the effect
that, as of the Closing Date, each of them severally represents as follows:
(i) The Registration Statement has become effective under the Securities Act and
1940 Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have been taken
or are, to their knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company contained in Section 1
hereof are true and correct as of the Closing Date;
(iii) All filings required to have been made pursuant to Rules 497 or 430A under
the Securities Act have been made;
(iv) They have carefully examined the Registration Statement and the Prospectus
and, in their opinion, as of the effective date of the Registration Statement,
the statements contained in the Registration Statement were true and correct,
and such Registration Statement and Prospectus did not omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, and since the effective date of the Registration
Statement, no event has occurred which should have been set forth in a
supplement to or an amendment of the Prospectus which has not been so set forth
in such supplement or amendment; and
(v) Since the respective dates as of which information is given in the
Disclosure Package, there has not been any material adverse change or any
-22-
development involving a prospective change, which has had or is reasonably
likely to have a Material Adverse Effect, whether or not arising in the ordinary
course of business.
(h) You shall have received on the Closing Date a certificate or certificates of
the Investment Advisor's President and Chief Financial Officer to the effect
that, as of the Closing Date, the Investment Advisor represents as follows:
(i) The representations and warranties of the Advisor contained in Section 2
hereof are true and correct as of the Closing Date;
(ii) After giving effect to the issuance of the Shares, the Company will have
asset coverage of at least 200% as calculated in accordance with Section 18 of
the 1940 Act;
(iii) They have carefully examined the Registration Statement and the Prospectus
and, in their opinion, as of the effective date of the Registration Statement,
the statements contained in the Registration Statement were true and correct,
and such Registration Statement and Prospectus did not omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, and since the effective date of the Registration
Statement, no event has occurred which should have been set forth in a
supplement to or an amendment of the Prospectus which has not been so set forth
in such supplement or amendment; and
(iv) Since the respective dates as of which information is given in the
Disclosure Package, there has not been any material adverse change or any
development involving a prospective change, which has had or is reasonably
likely to have a Material Adverse Effect, whether or not arising in the ordinary
course of business.
(i) You shall have received on the Closing Date a certificate or certificates of
the Sub-Advisor's President to the effect that, as of the Closing Date, the
Sub-Advisor represents as follows:
(i) The representations and warranties of the Sub-Advisor contained in Section 3
hereof are true and correct as of the Closing Date;
(ii) They have carefully examined the Registration Statement and the Prospectus
and, in their opinion, as of the effective date of the Registration Statement,
the statements contained in the Registration Statement were true and correct,
and such Registration Statement and Prospectus did not omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, and since the effective date of the Registration
Statement, no event has occurred which should have been set forth in a
supplement to or an amendment of the Prospectus which has not been so set forth
in such supplement or amendment; and
(iii) Since the respective dates as of which information is given in the
Disclosure Package, there has not been any material adverse change or any
development involving a prospective change, which has had or is reasonably
likely to have a Material Adverse Effect, whether or not arising in the ordinary
course of business.
-23-
(j) The Company shall have furnished to you such further certificates and
documents confirming the representations and warranties, covenants and
conditions contained herein and related matters as you may reasonably have
requested.
(k) The Shares shall have been rated "Aaa" by Xxxxx'x and "AAA" by Fitch.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to you and to Xxxxxxx Procter LLP, your counsel.
If any of the conditions hereinabove provided for in this Section shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
your obligations hereunder may be terminated by you by notifying the Company of
such termination in writing on or prior to the Closing Date.
In such event, the Company and you shall not be under any obligation to
each other (except to the extent provided in Sections 7, 10 and 17 hereof).
9. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and in effect
or proceedings therefor initiated or threatened.
10. INDEMNIFICATION.
(a) The Company and the Advisors, jointly and severally, agree:
(i) to indemnify and hold harmless you, your partners, members, directors and
officers and each person, if any, who controls you within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities to which you or any such controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon (A) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Pricing Prospectus, the Prospectus or any amendment or supplement thereto, (B)
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(C) any alleged act or failure to act by you in connection with, or relating in
any manner to, the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (A) or (B) above
(provided, however, that neither the Company nor either Advisor shall be liable
under this clause (C) to the extent that it is determined in a final judgment by
a court of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by you through your gross negligence or willful misconduct);
provided, however, that neither the Company or the Advisors will be liable in
any such case to the extent that any such loss, claim, damage or liability
-24-
arises out of or is based upon an untrue statement or alleged untrue statement,
or omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company or an Advisor by or through you
specifically for use in the preparation thereof.
(ii) to reimburse you and each such controlling person upon demand for any legal
or other out-of-pocket expenses reasonably incurred by you or such controlling
person in connection with investigating or defending any such loss, claim,
damage or liability, action or proceeding or in responding to a subpoena or
governmental inquiry related to the offering of the Shares, whether or not you
or such controlling person is a party to any action or proceeding. In the event
that it is finally judicially determined that you are not entitled to receive
payments for legal and other expenses pursuant to this subparagraph, you will
promptly return all sums that had been advanced pursuant hereto.
(b) You agree to indemnify and hold harmless the Company and the Advisors, each
of their respective trustees, each of their officers who have signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities to which the Company or either Advisor or any such trustee, officer,
or controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse any legal or other
expenses reasonably incurred by the Company, the Advisors or any such trustee,
officer, or controlling person in connection with investigating or defending any
such loss, claim, damage, liability, action or proceeding; provided, however,
that you will be liable in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus, the Prospectus or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through you specifically for use in the
preparation thereof.
(c) In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to this Section, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section 10(a) or (b)
shall be available to any party who shall fail to give notice as provided in
this Subsection if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, but the failure to give such notice shall
not relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than on
account of the provisions of Section 10(a) or (b). In case any such proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
-25-
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred (or within 30 days of presentation) the fees and
expenses of the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action.
It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by you in the case
of parties indemnified pursuant to Section 10(a) and by the Company in the case
of parties indemnified pursuant to Section 10(b). The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment. In
addition, the indemnifying party will not, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(d) If the indemnification provided for in this Section is unavailable to or
insufficient to hold harmless an indemnified party under Section 10(a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Advisors (treated as one
person for this purpose) on the one hand and you on the other from the offering
of the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company or the Advisors on the one hand and you on the
other in connection with the statements or omissions which resulted in such
-26-
losses, claims, damages or liabilities, (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Advisors (treated as one person for
this purpose) on the one hand and you on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by you, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault 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 Company or the Advisors on the one hand or you on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Advisors and you agree that it would not be just and
equitable if contributions pursuant to this Subsection were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Subsection. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to above in this Subsection shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Subsection, (i) you shall not be required to contribute any
amount in excess of the underwriting discounts and commissions applicable to the
Shares purchased by you and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) In any proceeding relating to the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be sought under this
Section hereby consents to the jurisdiction of any court having jurisdiction
over any other contributing party, agrees that process issuing from such court
may be served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section shall 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 and the representations and
warranties of the Company and the Advisors 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 you or any person controlling you, the
Company, its trustees or officers or any persons controlling the Company, or the
Advisors, or their respective directors or officers or any persons controlling
either Advisor (ii) acceptance of any Shares and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to you, or to the Company
or either Advisor, their respective directors or officers, or any person
controlling the Company or either Advisor, shall be entitled to the benefits of
the indemnity, contribution and reimbursement agreements contained in this
Section.
(g) In addition to the foregoing indemnification, the Company and the Advisors,
jointly and severally, agree to indemnify and hold harmless you and each person,
if any, who controls you within the meaning of the Securities Act, against any
-27-
losses, claims, damages or liabilities described in the indemnity contained in
Section 10(a), as limited by the proviso set forth therein, with respect to any
advertisement or sales material authorized by the Company for use in the public
offering of the Shares pursuant to Rule 482 of the Rules and Regulations under
the Securities Act.
11. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, or faxed and confirmed as
follows:
if to you, to RBC Xxxx Xxxxxxxx Inc.
c/o RBC Capital Markets Corporation
Xxx Xxxxxxx Xxxxx
000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx
Syndicate Director
Fax: (000) 000-0000
if to the Company, to First Trust Tax-Advantaged Preferred Income Fund
c/o First Trust Advisors L.P.
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: W. Xxxxx Xxxxxxx
if to the Advisor, to First Trust Advisors L.P.
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: W. Xxxxx Xxxxxxx
if to the Sub-Advisor, to Stonebridge Advisors, LLC
Attention: President
12. TERMINATION.
This Agreement may be terminated by you by notice to the Company at any
time prior to the Closing Date if any of the following has occurred: (i) since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change or any development
involving a prospective change, which has had or is reasonably likely to have a
Material Adverse Effect; (ii) any outbreak or escalation of hostilities or
declaration of war or national emergency or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, escalation, declaration, emergency, calamity, crisis or change
in the financial markets of the United States would, in your reasonable
judgment, make it impracticable or inadvisable to market the Shares or to
enforce contracts for the sale of the Shares; (iii) suspension of trading in
-28-
securities generally on the New York Stock Exchange or limitation on prices
(other than limitations on hours or numbers of days of trading) for securities
on such Exchange; (iv) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court or other governmental
authority which in your opinion materially and adversely affects or may
materially and adversely affect the business or operations of the Company; (v)
declaration of a banking moratorium by United States or New York State
authorities; (vi) the suspension of trading of the Company's Common Shares by
the American Stock Exchange, the Commission, or any other governmental
authority; (vii) the taking of any action by any governmental body or agency in
respect of its monetary or fiscal affairs which in your reasonable opinion has a
material adverse effect on the securities markets in the United States; or
(viii) the failure of the conditions set forth in Section 8 of this Agreement to
be fulfilled when required to be fulfilled.
13. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Company, the Advisors and you and the respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Shares from you shall be deemed
a successor or assign merely because of such purchase.
14. INFORMATION PROVIDED BY THE UNDERWRITER.
The Company and you acknowledge and agree that the only information
furnished or to be furnished by you to the Company for inclusion in any
Preliminary Prospectus, Prospectus or the Registration Statement consists of the
information contained in the second paragraph under the heading "Commissions and
Discounts" under the caption "Underwriting" in the Prospectus.
15. NO FIDUCIARY DUTY.
Notwithstanding any preexisting relationship, advisory or otherwise,
between the parties or any oral representations or assurances previously or
subsequently made by you, the Company acknowledges and agrees that:
(a) nothing herein shall create a fiduciary or agency relationship between the
Company and you in connection with any aspect of the offering of securities
hereunder;
(b) you are not acting as an advisor, expert or otherwise, to the Company in
connection with this offering, the sale of the Shares or any other services you
may be deemed to be providing hereunder, including, without limitation, with
respect to the public offering price of the Shares;
(c) the relationship between the Company and you is entirely and solely
commercial, based on arms-length negotiations;
(d) any duties and obligations that you may have to the Company shall be limited
to those duties and obligations specifically stated herein;
-29-
(e) notwithstanding anything in this Agreement to the contrary, the Company
acknowledges that you may have financial interest in the success of the offering
of the Shares that is not limited to the difference between the price to the
public and the purchase price paid to the Company by you for the Shares and you
have no obligation to disclose, or account to the Company for, any of such
additional financial interests; and
(f) you have advised the Company that you have agreements and understandings
with, and owe duties and obligations to, third parties, including purchasers and
potential purchasers of the securities, that may create or exacerbate actual,
potential or apparent conflicts of interest between the Company and you.
16. MASSACHUSETTS BUSINESS TRUST.
A copy of the declaration of trust of the Company is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this Agreement is executed on behalf of the Company by an officer or trustee of
the Company in his or her capacity as an officer or trustee of the Fund and not
individually and that the obligations of or arising out of this instrument are
not binding upon any of the trustees, officers or shareholders individually but
are binding only upon the assets and property of the Company.
17. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements contained
in this Agreement and the representations, warranties and covenants in this
Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of you
or controlling person thereof, or by or on behalf of the Company or the Advisors
or any of their respective directors or officers and (c) delivery of and payment
for the Shares under this Agreement.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof.
This Agreement may only be amended or modified in writing, signed by all
of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit.
[remainder of page intentionally blank]
-30-
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Advisors and
you in accordance with its terms.
Very truly yours,
FIRST TRUST ADVISORS L.P.
By:_________________________________
STONEBRIDGE ADVISORS, LLC
By:_________________________________
FIRST TRUST TAX-ADVANTAGED
PREFERRED INCOME FUND
By:_________________________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
RBC XXXX XXXXXXXX INC.
By:
---------------------------------------
Name:
Title:
-31-
