ENERGY INCOME AND GROWTH FUND
1,700,000 Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
April 30, 2010
RBC Capital Markets Corporation
BB&T Capital Markets, a division of Xxxxx & Xxxxxxxxxxxx, LLC
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxxxxxxx Xxxxxxxx & Co. Inc.
Maxim Group LLC
Xxxxxxxxxxx & Co. Inc.
Wedbush Securities Inc.
Xxxxxxxxxx Securities, Inc.
c/o RBC Capital Markets Corporation
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
Energy Income and Growth Fund, a Massachusetts business trust (the
"Fund"), First Trust Advisors L.P., an Illinois limited partnership (the
"Adviser") and Energy Income Partners LLC, a Delaware limited liability company
(the "Sub-Adviser"), confirm their agreement (this "Agreement") with RBC Capital
Markets Corporation ("RBC") and each of the other Underwriters named in Schedule
A hereto (collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 9 hereof), with
respect to the issue and sale by the Company of a total of 1,700,000 common
shares of beneficial interest, par value $0.01 per share (the "Shares"), and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of Shares set forth in said Schedule A hereto (the "Initial
Securities"), and with respect to the grant by the Company to the Underwriters,
acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of 255,000 additional Shares to cover
over-allotments, if any (the "Over-Allotment Securities"). The Initial
Securities and Over-Allotment Securities are hereinafter called, collectively,
the "Securities."
The Fund, the Adviser and the Sub-Adviser each understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Underwriters deem advisable after this Agreement has been executed and
delivered.
The Fund has entered into an investment management agreement with the
Adviser dated June 24, 2004 (the "Advisory Agreement"), a Custodian Services
Agreement with PFPC Trust Company (the "Custodian") dated May 25, 2004 (the
"Custodian Contract"), a Transfer Agency Agreement with PFPC Inc. dated May 25,
2004 (the "Transfer Agency Agreement") and an Administration and Accounting
Services Agreement with PFPC Inc. dated May 25, 2004 (the "Administration
Agreement"). Collectively, the Advisory Agreement, the Custodian Contract, the
Transfer Agency Agreement and the Administration Agreement are herein referred
to as the "Fund Agreements." The Adviser has entered into the Advisory Agreement
and a Sub-Advisory Agreement with the Sub-Adviser and the Fund dated January 8,
2008 (the "Sub-Advisory Agreement") (collectively, the "Adviser Agreements").
The Sub-Adviser has entered into the Sub-Advisory Agreement and this Agreement.
In addition, the Fund has adopted a dividend reinvestment plan (the "Dividend
Reinvestment Plan") pursuant to which the holders of the Shares shall have their
dividends automatically reinvested in additional Shares unless they elect to
receive such dividends in cash.
The Fund has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the "Securities Act") and the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder (collectively, the "Investment Company
Act"), with the Securities and Exchange Commission (the "Commission") a
registration statement on Form N-2 with respect to the Shares (File Nos.
333-154254 and 811-21549) (the "Original Registration Statement"), including a
base prospectus dated May 8, 2009 included in the Original Registration
Statement at the time it became effective and a base prospectus dated April 9,
2010 included by post-effective amendment No. 4 to the Original Registration
Statement, which base prospectus shall be referred to herein as the "Base
Prospectus". The Base Prospectus, together with the preliminary prospectus
supplement, dated April 29, 2010, filed with the Commission pursuant to Rule 497
under the Securities Act, is herein referred to as the "Preliminary Prospectus."
The Base Prospectus, together with the prospectus supplement to be filed with
the Commission pursuant to Rule 497 and used to confirm sales of the Securities,
is hereinafter referred to as the "Prospectus." Except where the context
otherwise requires, the Original Registration Statement, as amended when it
became effective, including all documents and exhibits filed as part thereof,
and including any information contained in a prospectus filed with the
Commission pursuant to Rule 497 under the Securities Act, and deemed to be part
of the Original Registration Statement at the time of effectiveness pursuant to
Rule 430C under the Securities Act, and also including any Rule 462(d)
Registration Statement referred to below filed pursuant to Rule 462(d) under the
Securities Act is herein called the "Registration Statement." The Preliminary
Prospectus, together with the information set forth on Schedule B hereto (which
information the Underwriters have informed the Company is being conveyed orally
by the Underwriters to prospective purchasers at or prior to the Underwriters'
confirmation of sales of the Securities in the public offering) is hereinafter
referred to as the "Disclosure Package." Any registration statement filed
pursuant to Rule 462(d) under the Securities Act is referred to herein as the
"Rule 462(d) Registration Statement."
For purposes of this Agreement, all references to the Registration
Statement, the Prospectus, the Preliminary Prospectus, the Disclosure Package or
to any amendment or supplement thereto shall be deemed to include any copy filed
with the Commission pursuant to its Interactive Data Electronic Application
database ("IDEA"). For purposes of this Agreement, all references to the
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Registration Statement, unless otherwise noted and except as the context
otherwise requires, shall be deemed to include any and all amendments thereto.
1. Representations and Warranties of the Fund, the Adviser and the
Sub-Adviser.
(a) Representations and Warranties by the Fund, the Adviser and the
Sub-Adviser. The Fund, the Adviser and (with respect to paragraphs (2),
(3), (4) and (22) below only) the Sub-Adviser, jointly and severally,
represent and warrant to and agree with the Underwriters as of the date
hereof, as of the Applicable Time referred to in Section 1(a)(3)
herein, as of the Closing Time referred to in Section 2(c) herein, and
as of each Option Closing Time (if any) referred to in Section 2(b)
herein, as follows:
(1) The Registration Statement has become effective under the Securities
Act, and no stop order suspending the effectiveness of the Registration
Statement or the use of the Preliminary Prospectus or the Prospectus
has been issued, and no proceedings for any such purpose, have been
instituted or are pending or, to the knowledge of the Fund, are
contemplated by the Commission.
(2) At the respective times the Registration Statement, and any subsequent
post-effective amendment thereto, became effective, at the Closing Time
and as of each Option Closing Time (if any), the Registration
Statement, and all amendments and supplements thereto, complied and
will comply in all material respects with the requirements of the
Securities Act and the Investment Company Act, and did not and will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Prospectus nor any
amendment or supplement thereto, as of its date, at the time the
Prospectus or any such amendment or supplement was issued, at the
Closing Time and as of each Option Closing Time (if any), included or
will include any untrue statement of a material fact or omitted or will
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. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Fund by or on behalf of
any Underwriter or its representatives for use in the Registration
Statement or Prospectus, it being understood and agreed that the only
such information furnished to the Company in writing by the
Underwriters or their representatives consists of the information
described in Section 6(b) hereof.
(3) The Disclosure Package as of the Applicable Time does 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. The preceding
sentence does not apply to statements in or omissions from the
Disclosure Package based upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by any
Underwriter or its representative expressly for use therein, it being
understood and agreed that the only such information furnished by the
Underwriters to the Company consists of the information described in
Section 6(b) hereof. As used in this subsection and elsewhere in this
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Agreement "Applicable Time" means 9:15 a.m. (Eastern time) on April 30,
2010 or such other time as agreed by the Fund and the Underwriters.
(4) The Preliminary Prospectus when first filed under Rule 497 and as of
its date complied in all material respects with the Securities Act and
the Investment Company Act, and when filed by electronic transmission
pursuant to IDEA (except as may be permitted by Regulation S-T under
the Securities Act), was substantially identical to the copy thereof
delivered to the Underwriters for use in connection with this offering.
The Prospectus when first filed under Rule 497 and as of its date will
comply in all material respects with the Securities Act and the
Investment Company Act, and when filed by electronic transmission
pursuant to IDEA (except as may be permitted by Regulation S-T under
the Securities Act), will be substantially identical to the copy
thereof delivered to the Underwriters for use in connection with this
offering.
(5) All the outstanding shares of capital stock of the Fund have been duly
authorized and validly issued, are fully paid and (except as described
in the Prospectus under "Certain Provisions in the Declaration of Trust
and Bylaws") nonassessable and are free of any preemptive or similar
rights and have been offered and sold by the Fund in compliance with
all applicable federal and state securities laws. No shares of capital
stock, other than the Shares, are issued or outstanding and the
capitalization of the Fund conforms in all material respects to the
description thereof in the Registration Statement, the Disclosure
Package and the Prospectus. The Securities have been duly authorized
for issuance and sale pursuant to this Agreement and, when issued,
delivered against payment therefore in accordance with this Agreement,
will be validly issued and fully paid and nonassessable obligations of
the Fund; and the Securities will conform in all material respects to
the description thereof in the Registration Statement, the Disclosure
Package and the Prospectus.
(6) The Fund has been duly formed and is validly existing in good standing
as a business trust under the laws of The Commonwealth of
Massachusetts, with full power and authority to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement, the Disclosure Package and the Prospectus and
to enter into and perform its obligations under this Agreement and the
Fund Agreements. The Fund is duly registered and qualified to conduct
business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires
such registration or qualification, except where the failure so to
register or to qualify, either alone or in the aggregate, does not have
or would not reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), general affairs, business,
properties, business prospects, net assets or results of operations of
the Fund, whether or not occurring in the ordinary course of business
(a "Fund Material Adverse Effect"). The Fund has no subsidiaries.
(7) There are no legal or governmental proceedings pending or, to the
knowledge of the Fund, threatened against the Fund or to which the Fund
or any of its properties is subject, that are required to be described
in the Registration Statement, the Disclosure Package or the Prospectus
but are not described as required or that could reasonably be expected
to result in a Fund Material Adverse Effect, or that may have a
material, adverse effect on the ability of the Fund to perform its
4
obligations under this Agreement or any of the Fund Agreements. All
descriptions in the Registration Statement, the Disclosure Package and
the Prospectus of any Fund documents are accurate in all material
respects. There are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement, the Disclosure Package or the Prospectus or to be filed as
an exhibit to the Registration Statement that are not described or
filed as required by the Securities Act or Investment Company Act.
(8) The Fund is not in violation of its Declaration of Trust ("Declaration
of Trust"), bylaws or other organizational documents or any law,
ordinance, administrative or governmental rule or regulation applicable
to the Fund or of any decree of the Commission, the Financial Industry
Regulatory Authority ("FINRA"), any state securities commission, any
national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or
any other agency or any body or official having jurisdiction over the
Fund or in breach or default in the performance of any of the Fund
Agreements or any other obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or in
any agreement, indenture, lease or other instrument to which the Fund
is a party or by which it or any of its properties may be bound, except
for such violation or such breach or default that, either alone or in
the aggregate, does not have or would not reasonably be expected to
have a Fund Material Adverse Effect.
(9) Neither the issuance and sale of the Securities, the execution,
delivery or performance of this Agreement or any of the Fund Agreements
by the Fund, nor the consummation by the Fund of the transactions
contemplated hereby or thereby (A) requires any consent, approval,
authorization or order of or registration or filing with the
Commission, FINRA, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official
having jurisdiction over the Fund (except such as have been already
obtained under the Securities Act, the Investment Company Act, the
rules and regulations of FINRA and the NYSE Amex or compliance with the
securities or Blue Sky laws of various jurisdictions which have been or
will be effected in accordance with this Agreement) or conflicts or
will conflict with or constitutes or will constitute a breach of the
Declaration of Trust, bylaws, or other organizational documents of the
Fund or (B) (1) conflicts or will conflict with or constitutes or will
constitute a breach of or a default under any of the Fund Agreements or
any other agreement, indenture, lease or other instrument to which the
Fund is a party or by which it or any of its properties may be bound or
(2) violates or will violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to the Fund or any of
its properties or will result in the creation or imposition of any
lien, charge or encumbrance upon (collectively, a "lien") any property
or assets of the Fund pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound or to
which any of the property or assets of the Fund is subject, except for
such conflict, breach, default, violation or lien that, either alone or
in the aggregate, does not have or would not reasonably be expected to
have a Fund Material Adverse Effect or a material adverse effect on the
ability of the Fund to perform its obligations under this Agreement or
5
any of the Fund Agreements. The Fund is not subject to any order of any
court or of any arbitrator, governmental authority or administrative
agency.
(10) Since the date as of which information is given in the Registration
Statement, the Disclosure Package and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the condition (financial or other), business, properties, net assets
or results of operations of the Fund or business prospects (other than
as a result of a change in the financial markets generally) of the
Fund, whether or not arising in the ordinary course of business, (B)
there have been no transactions entered into by the Fund other than
those in the ordinary course of its business as described in the
Disclosure Package and the Prospectus and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Fund
on any class of its common stock, except for regular dividends
consistent with past practice.
(11) The accountants, Deloitte & Touche LLP, who have audited the financial
statements included in, and whose report appears in, the Registration
Statement, the Disclosure Package and the Prospectus (and any amendment
or supplement to either of them), are an independent public accounting
firm as required by the Securities Act and Investment Company Act.
(12) The financial statements of the Fund, together with related schedules
and notes, included or incorporated by reference in the Registration
Statement, the Disclosure Package and/or the Prospectus present fairly
the financial position of the Fund on the basis stated in the
Registration Statement, the Disclosure Package and/or the Prospectus at
the respective dates or for the respective periods to which they apply;
such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved except as disclosed therein and
comply with all applicable accounting requirements under the Securities
Act and the Investment Company Act; and the other financial and
statistical information and data included in the Registration
Statement, the Disclosure Package or the Prospectus are accurately
derived from such financial statements and the books and records of the
Fund.
(13) The Fund, subject to the filing of the Prospectus under Rule 497 under
the Securities Act and the post-effective amendment to the Registration
Statement to file legal opinions and this Agreement, has taken all
required action under the Securities Act and the Investment Company Act
to make the public offering and consummate the sale of the Securities
as contemplated by this Agreement.
(14) The execution and delivery of and the performance by the Fund of its
obligations under this Agreement and the Fund Agreements have been duly
and validly authorized by the Fund and this Agreement and each of the
Fund Agreements have been duly executed and delivered by the Fund and
each constitutes the valid and legally binding agreement of the Fund,
enforceable against the Fund in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited by
federal or state securities laws and subject to the qualification that
the enforceability of the Fund's obligations hereunder and thereunder
6
may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights generally and
by general equitable principles.
(15) Except as disclosed in or contemplated by the Registration Statement,
the Disclosure Package or the Prospectus, subsequent to the respective
dates as of which such information is given in the Registration
Statement, the Disclosure Package and the Prospectus, the Fund has not
incurred any material liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business,
and there has not been any change in the capital stock (other than in
connection with the transactions contemplated hereunder or pursuant to
the Fund's dividend reinvestment plan) or any change or any development
involving or which should reasonably be expected to involve a Fund
Material Adverse Effect.
(16) The Fund has not distributed and, prior to the later to occur of (A)
the Closing Time or any Option Closing Time and (B) completion of the
distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the Securities
other than the Registration Statement, the Disclosure Package, the
Prospectus, the "sales material" (as defined in Section 1(a)(22) below)
or other materials permitted by the Securities Act or the Investment
Company Act.
(17) The Fund has such licenses, permits, and authorizations of governmental
or regulatory authorities ("permits") as are necessary to own its
property and to conduct its business in the manner described in the
Disclosure Package and the Prospectus; the Fund has fulfilled and
performed all its material obligations with respect to such permits and
no event has occurred which allows or, after notice or lapse of time,
would allow, revocation or termination thereof or results in any other
material impairment of the rights of the Fund under any such permit,
subject in each case to such qualification as may be set forth in the
Disclosure Package and the Prospectus (and any amendment or supplement
thereto); and, except as described in the Disclosure Package and the
Prospectus (and any amendment or supplement thereto), none of such
permits contains any restriction that is materially burdensome to the
Fund.
(18) The Fund maintains and will maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with the Fund's Board of
Trustees' general or specific authorization and with the investment
policies and restrictions of the Fund and the applicable requirements
of the Securities Act, the Investment Company Act and the Internal
Revenue Code of 1986, as amended, (the "Code"); (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles, to calculate
net asset value and fee accruals, to maintain accountability for assets
and to maintain compliance with the books and records requirements
under the Investment Company Act; (C) access to assets is permitted
only in accordance with the Board of Trustees' general or specific
authorization; and (D) the recorded amount of assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Fund maintains "disclosure
controls and procedures" (as such term is defined in Rule 30a-3 under
the Investment Company Act).
7
(19) The conduct by the Fund of its business (as described in the Disclosure
Package and the Prospectus) does not require it to be the owner,
possessor or licensee of any patents, patent licenses, trademarks,
service marks or trade names which it does not own, possess or license
or sub-license.
(20) Except as stated in this Agreement and in the Disclosure Package and
the Prospectus, the Fund has not taken and will not take, directly or
indirectly, any action designed to or which could cause or result in or
which will constitute stabilization or manipulation of the price of the
Securities, or of any securities issued by the Fund, to facilitate the
sale or resale of the Securities in violation of federal securities
laws and no such action has been, or will be, taken by any affiliates
of the Fund.
(21) The Fund is duly registered under the Investment Company Act as a
closed-end, non-diversified management investment company and the
notification of registration of the Fund as an investment company under
the Investment Company Act on Form N-8A has been duly filed with the
Commission, is effective, and, at the time of filing thereof and at all
times through the date hereof conformed in all material respects with
all applicable provisions of the Investment Company Act; no order of
suspension or revocation of such registration under the Investment
Company Act has been issued or proceedings therefor initiated or
threatened by the Commission. The provisions of the Declaration of
Trust and the investment policies and restrictions described in each of
the Registration Statement, the Disclosure Package and the Prospectus,
comply in all material respects with the requirements of the Investment
Company Act.
(22) All advertising, sales literature or other promotional material
(including "prospectus wrappers", "broker kits", "road show slides" and
"road show scripts"), if any, whether in printed or electronic form,
authorized in writing by or prepared by or at the direction of the Fund
or the Adviser for use in connection with the offering and sale of the
Securities (collectively, "sales material") complied and comply in all
material respects with the applicable requirements of the Securities
Act and the rules and interpretations of FINRA. No sales material
contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(23) This Agreement and each of the Fund Agreements complies in all material
respects with all applicable provisions of the Securities Act, the
Investment Company Act and the Advisers Act.
(24) No holder of any security of the Fund has any right to require
registration of any Shares, capital stock or any other security of the
Fund because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement.
(25) Except as disclosed in the Registration Statement, the Disclosure
Package and the Prospectus, no trustee of the Fund is an "interested
person" (as defined in the Investment Company Act) of the Fund or an
"affiliated person" (as defined in the Investment Company Act) of any
Underwriter.
8
(26) The Securities are duly listed and admitted and authorized for trading,
subject to official notice of issuance, on the NYSE Amex.
(27) All of the information provided to the Underwriters or to counsel for
the Underwriters by the Fund, its officers and Trustees in connection
with letters, filings or other supplemental information provided to
FINRA pursuant to FINRA's conduct rules is true, complete and correct
in all material respects.
(28) There is and has been no failure on the part of the Fund or any of the
Fund's trustees or officers, in their capacities as such, to comply in
any material respect with any provision of the Xxxxxxxx-Xxxxx Act of
2002 and the rules and regulations promulgated in connection therewith
(the "Sarbanes Oxley Act"), including Sections 302 and 906 related to
certifications.
(29) The Fund has filed all tax returns that are required to be filed and
has paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such tax, assessment, fine
or penalty that is currently being contested in good faith by
appropriate actions and except for such taxes, assessments, fines or
penalties the nonpayment of which would not, individually or in the
aggregate, have a Fund Material Adverse Effect.
(30) The Fund has adopted and implemented written policies and procedures
reasonably designed to prevent violation of the Federal Securities Laws
(as that term is defined in Rule 38a-1 under the Investment Company
Act) by the Fund, including policies and procedures that provide
oversight of compliance for each investment adviser, administrator and
transfer agent of the Fund.
(31) The Fund carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of its business and
value of its properties.
(b) Representations and Warranties with Respect to the Adviser. The Adviser
represents and warrants to and agrees with the Underwriters as of the
date hereof, as of the Applicable Time, as of the Closing Time referred
to in Section 2(c) herein, and as of each Option Closing Time (if any)
referred to in Section 2(b) herein, as follows:
(1) The Adviser is a limited partnership duly organized and validly
existing in good standing under the laws of the State of Illinois, with
full power and authority to own, lease and operate its properties and
to conduct its business as described in each of the Registration
Statement, the Disclosure Package and the Prospectus and is duly
registered and qualified to conduct business and is in good standing in
each jurisdiction or place where the nature of its properties or
conduct of its business requires such registration or qualification,
except where the failure so to register or to qualify, either alone or
in the aggregate, does not have or would not reasonably be expected to
have (A) a material adverse effect on the condition (financial or
other), general affairs, business, properties, business prospects, net
assets or results of operations, whether or not occurring in the
ordinary course of business, of the Adviser (an "Adviser Material
Adverse Effect") or (B) a Fund Material Adverse Effect.
9
(2) The Adviser is duly registered with the Commission as an investment
adviser under the Advisers Act and is not prohibited by the Advisers
Act or the Investment Company Act from acting under the Advisory
Agreement for the Fund as contemplated by the Registration Statement,
the Disclosure Package or the Prospectus. There does not exist any
proceeding which could have an Adviser Material Adverse Effect with
respect to the registration of the Adviser with the Commission.
(3) There are no legal or governmental proceedings pending or, to the
knowledge of the Adviser, threatened against the Adviser that are
required to be described in the Registration Statement, the Disclosure
Package or the Prospectus but are not described as required or that
could reasonably be expected to result in any Adviser Material Adverse
Effect or that may have a material, adverse effect on the ability of
the Adviser to perform its obligations under this Agreement or any of
the Adviser Agreements.
(4) Neither the execution, delivery or performance of this Agreement or any
of the Adviser Agreements by the Adviser, nor the consummation by the
Adviser of the transactions contemplated hereby or thereby (A) requires
the Adviser to obtain any consent, approval, authorization or other
order of, or registration or filing with, the Commission, FINRA, any
state securities commission, any national securities exchange, any
arbitrator, any court, regulatory body, administrative agency or other
governmental body, agency or official having jurisdiction over the
Adviser, or conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, the partnership agreement or
bylaws or other organizational documents of the Adviser or (B)
conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, any of the Adviser Agreements or any
other agreement, indenture, lease or other instrument to which the
Adviser is a party or by which the Adviser or any of its properties may
be bound, or violates or will violate any statute, law, regulation or
judgment, injunction, order or decree applicable to the Adviser or any
of its properties or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Adviser
pursuant to the terms of any agreement or instrument to which it is a
party or by which it may be bound or to which any of the property or
assets of the Adviser is subject, except in any case under clause (B)
for such conflict, breach, default, violation or lien that, either
alone or in the aggregate, does not have or would not reasonably be
expected to have an Adviser Material Adverse Effect or a material
adverse effect on the ability of the Adviser to perform its obligations
under this Agreement or any of the Adviser Agreements. The Adviser is
not subject to any order of any court or of any arbitrator, regulatory
body, administrative agency or other governmental body, agency or
official.
(5) The Adviser has full power and authority to enter into this Agreement
and each of the Adviser Agreements; the execution and delivery of, and
the performance by the Adviser of its obligations under, this Agreement
and each of the Adviser Agreements have been duly and validly
authorized by the Adviser; and this Agreement and each of the Adviser
Agreements have been duly executed and delivered by the Adviser and
constitute the valid and legally binding agreements of the Adviser,
enforceable against the Adviser in accordance with their terms, except
as rights to indemnity and contribution hereunder may be limited by
10
federal or state securities laws and subject to the qualification that
the enforceability of the Adviser's obligations hereunder and
thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable
principles whether enforcement is considered in a proceeding in equity
or at law.
(6) The Adviser has the financial resources necessary for the performance
of its services and obligations as contemplated in the Registration
Statement, the Disclosure Package and the Prospectus or under this
Agreement and each of the Adviser Agreements.
(7) The description of the Adviser in the Registration Statement, the
Disclosure Package and the Prospectus complied as of any effective date
of the Registration Statement and as of the date of the Disclosure
Package and the Prospectus, as applicable, and complies and will
comply, as of the date hereof, the Applicable Time, the Closing Time
and as of each Option Closing Time (if any), in all material respects
with the provisions of the Securities Act, the Investment Company Act
and the Advisers Act and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein (in
the case of the Disclosure Package and the Prospectus, in light of the
circumstances under which they were made) not misleading.
(8) Since the date as of which information is given in the Registration
Statement, the Disclosure Package or the Prospectus, except as
otherwise stated therein, there has not occurred any event which would
reasonably be expected to have a material adverse effect on the ability
of the Adviser to perform its obligations under this Agreement and each
of the Adviser Agreements.
(9) The Adviser has such permits as are necessary to own its property and
to conduct its business in the manner described in the Disclosure
Package and the Prospectus; and the Adviser has fulfilled and performed
all its material obligations with respect to such permits and no event
has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
impairment of the rights of the Adviser under any such permit.
(10) None of this Agreement nor any of the Adviser Agreements violate any
applicable provisions of the Investment Company Act and Advisers Act.
(11) Except as stated in this Agreement, the Registration Statement, the
Disclosure Package or the Prospectus, the Adviser has not taken and
will not take, directly or indirectly, any action designed to or which
might reasonably be expected to cause or result in or which will
constitute stabilization or manipulation of the price of the Securities
or any securities issued by the Fund to facilitate the sale or resale
of the Securities in violation of federal securities laws and the
Adviser is not aware of any such action taken or to be taken by any
affiliates of the Adviser.
11
(12) The Adviser has adopted and implemented written policies and procedures
under Rule 206(4)-7 of the Advisers Act reasonably designed to prevent
violation of the Advisers Act by the Adviser and its supervised
persons.
(c) Representations and Warranties with Respect to the Sub-Adviser. The
Sub-Adviser represents and warrants to and agrees with the Underwriters
as of the date hereof, as of the Applicable Time, as of the Closing
Time referred to in Section 2(c) herein, and as of each Option Closing
Time (if any) referred to in Section 2(b) herein, as follows:
(1) The Sub-Adviser is a limited liability company duly organized and
validly existing in good standing under the laws of the State of
Delaware, with full limited liability company power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement, the Disclosure Package and the
Prospectus and is duly registered and qualified to conduct business and
is in good standing in each jurisdiction or place where the nature of
its properties or conduct of its business requires such registration or
qualification, except where the failure so to register or to qualify,
either alone or in the aggregate, does not have or would not reasonably
be expected to have (A) a material adverse effect on the condition
(financial or other), general affairs, business, properties, business
prospects, net assets or results of operations of the Sub-Adviser (a
"Sub-Adviser Material Adverse Effect") or (B) a Fund Material Adverse
Effect.
(2) The Sub-Adviser is duly registered with the Commission as an investment
adviser under the Advisers Act and is not prohibited by the Advisers
Act or the Investment Company Act from acting under the Sub-Advisory
Agreement for the Fund as contemplated by the Registration Statement,
the Disclosure Package or the Prospectus. There does not exist any
proceeding which could have a Sub-Adviser Material Adverse Effect with
respect to the registration of the Sub-Adviser with the Commission.
(3) There are no legal or governmental proceedings pending or, to the
knowledge of the Sub-Adviser, threatened against the Sub-Adviser that
are required to be described in the Registration Statement or the
Prospectus but are not described as required or that could result in a
Sub-Adviser Material Adverse Effect or that may have a material,
adverse effect on the ability of the Sub-Adviser to perform its
obligations under this Agreement or the Sub-Advisory Agreement.
(4) Neither the execution, delivery or performance of this Agreement or the
Sub-Advisory Agreement by the Sub-Adviser, nor the consummation by the
Sub-Adviser of the transactions contemplated hereby or thereby (A)
requires the Sub-Adviser to obtain any consent, approval, authorization
or other order of, or registration or filing with, the Commission,
FINRA, any state securities commission, any national securities
exchange, any arbitrator, any court, regulatory body, administrative
agency or other governmental body, agency or official having
jurisdiction over the Sub-Adviser, or conflicts or will conflict with
or constitutes or will constitute a breach of or a default under, the
limited liability company agreement or bylaws or other organizational
documents of the Sub-Adviser or (B) conflicts or will conflict with or
constitutes or will constitute a breach of or a default under, the
Sub-Advisory Agreement or any other agreement, indenture, lease or
other instrument to which the Sub-Adviser is a party or by which the
12
Sub-Adviser or any of its properties may be bound, or violates or will
violate any statute, law, regulation or judgment, injunction, order or
decree applicable to the Sub-Adviser or any of its properties or will
result in the creation or imposition of any lien upon any property or
assets of the Sub-Adviser pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound or to
which any of the property or assets of the Sub-Adviser is subject,
except in any case under clause (B) for such conflict, breach, default,
violation or lien that, either alone or in the aggregate, does not have
or would not reasonably be expected to have a Sub-Adviser Material
Adverse Effect or a material adverse effect on the ability of the
Sub-Adviser to perform its obligations under this Agreement or the
Sub-Advisory Agreement. The Sub-Adviser is not subject to any order of
any court or of any arbitrator, regulatory body, administrative agency
or other governmental body, agency or official.
(5) The Sub-Adviser has full power and authority to enter into this
Agreement and the Sub-Advisory Agreement; the execution and delivery
of, and the performance by the Sub-Adviser of its obligations under,
this Agreement and the Sub-Advisory Agreement have been duly and
validly authorized by the Sub-Adviser; and this Agreement and the
Sub-Advisory Agreement have been duly executed and delivered by the
Sub-Adviser and constitute the valid and legally binding agreements of
the Sub-Adviser, enforceable against the Sub-Adviser in accordance with
their terms, except as rights to indemnity and contribution hereunder
may be limited by federal or state securities laws and subject to the
qualification that the enforceability of the Sub-Adviser's obligations
hereunder and thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and by general
equitable principles whether enforcement is considered in a proceeding
in equity or at law.
(6) The Sub-Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in the
Registration Statement, the Disclosure Package and the Prospectus or
under this Agreement and the Sub-Advisory Agreement.
(7) The description of the Sub-Adviser in the Registration Statement, the
Disclosure Package and the Prospectus complied as of any effective date
of the Registration Statement and as of the date of the Disclosure
Package and the Prospectus, as applicable, and complies and will
comply, as of the date hereof, each Applicable Time, the Closing Time
and as of each Option Closing Time (if any), in all material respects
with the provisions of the Securities Act, Investment Company Act and
the Advisers Act and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the case
of the Disclosure Package and the Prospectus, in light of the
circumstances under which they were made) not misleading.
(8) Since the date as of which information is given in the Registration
Statement, the Disclosure Package or the Prospectus, except as
otherwise stated therein, there has not occurred any event which would
reasonably be expected to have a material adverse effect on the ability
of the Sub-Adviser to perform its obligations under this Agreement or
the Sub-Advisory Agreement.
13
(9) The Sub-Adviser has such permits as are necessary to own its property
and to conduct its business in the manner described in the Disclosure
Package and the Prospectus; and the Sub-Adviser has fulfilled and
performed all its material obligations with respect to such permits and
no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
impairment of the rights of the Sub-Adviser under any such permit.
(10) None of this Agreement nor the Sub-Advisory Agreement violates any
applicable provisions of the Investment Company Act and the Advisers
Act.
(11) Except as stated in this Agreement, the Registration Statement, the
Disclosure Package or the Prospectus (or in any amendment or supplement
to any of the foregoing), the Sub-Adviser has not taken and will not
take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in or which will constitute
stabilization or manipulation of the price of the Securities or of any
securities issued by the Fund to facilitate the sale or resale of the
Securities in violation of federal securities laws and the Sub-Adviser
is not aware of any such action taken or to be taken by any affiliates
of the Sub-Adviser.
(12) The Sub-Adviser has adopted and implemented written policies and
procedures under Rule 206(4)-7 of the Advisers Act reasonably designed
to prevent violation of the Advisers Act by the Adviser and its
supervised persons.
(d) Certificates. Any certificate signed by any authorized officer of the
Fund or the Adviser delivered to the Underwriters pursuant to Section
10 of this Agreement and delivered to the representatives or to counsel
for the Underwriters shall be deemed a representation and warranty by
the Fund or the Adviser, as the case may be, to the Underwriters as to
the matters covered thereby.
2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set
forth, the Fund agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Fund, at the price per share set forth in Schedule B,
the amount of Initial Securities set forth in Schedule A opposite such
Underwriter's name, plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof.
(b) Over-Allotment Securities. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Fund hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to 255,000 Over-Allotment Securities at
the same price per share as the Underwriters shall pay for the Initial
Securities set forth in Schedule B hereto. Said option may be exercised
only to cover over-allotments in the sale of the Initial Securities by
the Underwriters. Said option may be exercised in whole or in part at
any time and from time to time on or before the 30th day after the date
of the Prospectus upon notice by the Underwriters to the Fund setting
forth the number of shares of the Over-Allotment Securities as to which
the several Underwriters are exercising the option and the settlement
14
time and date. The number of Over-Allotment Securities to be purchased
by each Underwriter shall be the same percentage of the total number of
shares of the Over-Allotment Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the Initial
Securities, plus any additional number of Over-Allotment Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof, subject to such adjustments as the
Underwriters in their absolute discretion shall make to eliminate any
fractional shares. Any such time and date of delivery (an "Option
Closing Time") shall be determined by RBC, but shall not be later than
seven full business days after the exercise of said option, nor in any
event prior to the Closing Time.
(c) Payment. Payment of the purchase price for, and delivery of
certificates, if any, for the Initial Securities shall be made at the
offices of Xxxxxxx and Xxxxxx LLP, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, or at such other place as shall be agreed upon by RBC
and the Fund, at 10:00 A.M. (Eastern time) on May 5, 2010 (unless
postponed in accordance with the provisions of Section 9), or such
other time not later than ten business days after such date as shall be
agreed upon by the Underwriters and the Fund (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Over-Allotment
Securities are purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates, if any, for, such Over-Allotment Securities shall
be made at the above-mentioned offices, or at such other place as shall be
agreed upon by the Underwriters and the Fund, on each Option Closing Time as
specified in the notice from the Underwriters to the Fund.
Delivery of the Securities shall be made to the Underwriters for the
respective accounts of the several Underwriters against payment by the several
Underwriters of the purchase price thereof to or upon the order of the Fund by
wire transfer payable in same-day funds to an account designated by the Fund.
Delivery of the Initial Securities and the Over-Allotment Securities shall be
made through the facilities of The Depository Trust Company, unless the
Underwriters shall otherwise instruct. RBC may (but shall not be obligated to)
make payment of the purchase price for the Initial Securities or the
Over-Allotment Securities, if any, to be purchased by any Underwriter whose
funds have not been received by the Fund at the Closing Time or the relevant
Option Closing Time, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Over-Allotment Securities, if any, shall be in such
denominations and registered in such names as the Underwriters may
request in writing at least one full business day before the Closing
Time or the relevant Option Closing Time, as the case may be. The
certificates, if any, for the Initial Securities and the Over-Allotment
Securities, if any, will be made available for examination and
packaging by the Underwriters in Boston, Massachusetts not later than
noon (Eastern time) on the business day prior to the Closing Time or
the relevant Option Closing Time, as the case may be.
3. Covenants of the Fund, the Adviser and the Sub-Adviser. The Fund, the
Adviser and (with respect to subsection (k) and (m) below only, and only as they
relate to the Sub-Adviser) the Sub-Adviser, jointly and severally, covenant and
agree with the Underwriters that:
15
(a) The Fund will promptly advise the Underwriters (i) when any amendment
to the Registration Statement shall have become effective or the
Prospectus, any amendment or supplement thereto, or any amendment or
supplement to the Preliminary Prospectus shall have been filed, (ii) of
the receipt of any comments from the Commission relating to the
Registration Statement, Prospectus of Preliminary Prospectus, (iii) of
any request by the Commission for any amendment or supplement to the
Registration Statement, the Prospectus or the Preliminary Prospectus,
or for any additional information (iii) of the issuance by the
Commission of any order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use
of the Preliminary Prospectus or the Prospectus or the institution or
threatening of any proceeding for such purposes, and (iv) the receipt
by the Fund of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. During
the time period when the Underwriters are required to deliver the
Prospectus, the Fund will not file any amendment to the Registration
Statement or any amendment or supplement to either the Base Prospectus
or to the Preliminary Prospectus or the Prospectus unless the Fund has
furnished counsel to the Underwriters with a copies of any such
documents for its review within a reasonable amount of time prior to
such filing or use, as the case may be, and will not file or use any
such proposed amendments or supplements to which the Underwriters or
counsel for the Underwriters shall reasonably object. Subject to the
foregoing sentence, the Fund will promptly effect the filings required
by Rule 497 and will take such steps as they deem necessary to
ascertain promptly whether the form of prospectus transmitted for
filing under Rule 497 was received for filing by the Commission and, in
the event that it was not, it will promptly file such prospectus. The
Fund will use its best efforts to prevent the issuance of any order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of the Preliminary Prospectus or
the Prospectus and, if issued, to obtain as soon as possible the
withdrawal thereof. The Fund will timely file the requisite copies of
the Prospectus with the Commission pursuant to Rule 497(c) or Rule
497(h) under the Securities Act, whichever is applicable or, if
applicable, will timely file the certification permitted by Rule 497(j)
under the Securities Act and will advise the Underwriters of the time
and manner of such filing.
(b) At the request of the Underwriters, the Fund will furnish or deliver to
the Underwriters and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents
and certificates of experts, and will also deliver to the Underwriters,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for
each of the Underwriters, during the time period when the Underwriters
are required to deliver the Prospectuses. The copies of the
Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to IDEA, except to the
extent permitted by Regulation S-T.
(c) The Fund has delivered to each Underwriter, without charge, as many
copies of the Preliminary Prospectus as such Underwriter reasonably
requested, and the Fund hereby consents to the use of such copies for
purposes permitted by the Securities Act. The Fund will furnish to each
Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the Securities Act or the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "Exchange Act") such number of copies of any amendments
16
or supplements to the Preliminary Prospectus prepared on or after the
date of this Agreement and the Prospectus (and any amendments or
supplements thereto) as such Underwriter may reasonably request. The
Preliminary Prospectus and the Prospectus and any amendments or
supplements thereto furnished to the Underwriters is or will be, as the
case may be, identical to the electronically transmitted copies thereof
filed with the Commission pursuant to IDEA, except to the extent
permitted by Regulation S-T.
(d) The Fund will comply with all requirements imposed upon it by the
Securities Act and the Investment Company Act as from time to time in
force, so far as necessary to permit the completion of the distribution
of the Securities as contemplated by the provisions hereof, the
Preliminary Prospectus and the Prospectus. If at any time when the
Prospectus is required by the Securities Act to be delivered in
connection with sales of the Securities (including, without limitation,
pursuant to Rule 172), any event shall occur or condition shall exist
as a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Fund, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will
not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, at any such time to amend the Registration Statement
or amend or supplement the Prospectus in order to comply with the
requirements of the Securities Act or the Investment Company Act, the
Fund will promptly prepare and file with the Commission, subject to
Section 3(a) hereof, such amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Fund
will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(e) If there occurs an event or development as a result of which the
Disclosure Package would include an untrue statement of a material fact
or would omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances then prevailing, not
misleading, the Fund will promptly notify the Underwriters so that any
use of the Disclosure Package may cease until it is amended or
supplemented (at the sole cost and expense of the Fund).
(f) The Fund will use its best efforts to cause the Securities to be listed
on the NYSE Amex prior to the date the Securities are issued and to
qualify, if necessary, the Securities for offering and sale under the
applicable securities laws of such United States jurisdictions as the
Underwriters reasonably designate and to continue such qualifications
in effect so long as required for the distribution of the Securities;
provided, however, that the Fund shall not be required in connection
therewith to qualify as a foreign corporation or dealer in securities,
file a general consent to service of process in any jurisdiction, or
meet any other requirement in connection with this Section 3(f) deemed
by the Fund to be unduly burdensome.
(g) As soon as practicable, but in no event later than the last day of the
18th full calendar month following the calendar quarter in which the
effective date of the Registration Statement falls, the Fund will make
generally available to its security holders an earnings statement,
which need not be audited, which earnings statement shall satisfy the
provisions of Section 11(a) and Rule 158 of the Securities Act.
17
(h) The Fund will use the net proceeds received by it from the sale of the
Securities in the manner specified in the Preliminary Prospectus and
the Prospectus under "Use of Proceeds."
(i) The Fund will file with the Commission and the NYSE Amex all documents
pursuant to the Securities Act and the Investment Company Act and the
NYSE Amex in the manner and within the time periods required by the
Securities Act and the Investment Company Act and the NYSE Amex.
(j) The Fund (including its agents and representatives, other than any
Underwriter) will not make, use, prepare, authorize, approve or refer
to any written communication (as defined in Rule 405 under the Act),
including any sales materials, required to be filed with the
Commission, that constitutes an offer to sell or solicitation of an
offer to buy Securities hereunder, except by means of the Preliminary
Prospectus or the Prospectus.
(k) During a period of 60 days from the date of the Prospectus (the
"Lock-Up Period"), the Fund, the Adviser or the Sub-Adviser will not,
without the prior written consent of the Underwriters and subject to
the next sentence of this Section, (A) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option, rights or warrant to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of Shares
or any securities convertible into or exercisable or exchangeable for
Shares or file any registration statement under the Securities Act with
respect to any of the foregoing or (B) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the
Shares, whether any such swap or transaction described in clause (A) or
(B) above is to be settled by delivery of Shares or such other
securities, in cash or otherwise. The restrictions in this Section
shall apply to the Fund's existing "at the market" Share offering
pursuant to that certain Sales Agreement by and between the Fund, the
Adviser, the Sub-Adviser and JonesTrading Institutional Services LLC
(the "At the Market Program") for a period of 45 days from the date of
the Prospectus (the ("ATM Lock-Up Period"). In connection with the At
the Market Program, the parties hereby agree, that notwithstanding the
restrictions of this Section, the Fund shall be permitted to file an
amendment to the Original Registration Statement during the Lock-Up
Period for purposes of updating necessary disclosure relating to the At
the Market Program. Notwithstanding the foregoing, if (1) during the
last 17 days of the Lock-Up Period or the ATM Lock-Up Period, as
applicable, the Fund issues an earnings release or material news or a
material event relating to the Fund, the Adviser or Sub-Adviser occurs,
or (2) prior to the expiration of the Lock-Up Period or the ATM Lock-Up
Period, as applicable, the Fund announces that it will release earnings
results or become aware that material news or a material event will
occur during the 16-day period beginning on the last day of the Lock-Up
Period or the ATM Lock-Up Period, as applicable, then the Lock-Up
Period or the ATM Lock-Up Period, as applicable, shall automatically be
extended and the restrictions imposed by this Section 3(k) shall
continue to apply until the expiration of the 18-day period beginning
on the issuance of the earnings release or the occurrence of the
material news or material event, as applicable, unless the Underwriters
waive, in writing, such extension. The restrictions in this Section
shall not apply to (1) the Securities to be sold hereunder, (2) the
filing of any new shelf registration statement or post-effective
amendment to the Registration Statement to increase the number of
shares of common stock currently covered by the Registration Statement
18
or (3) common stock issued or, for avoidance of doubt, purchased in the
open market pursuant to the Dividend Reinvestment Plan (or any Fund
press release relating to such issuances or purchases) in the ordinary
course consistent with past practice.
(l) The Fund will not, directly or indirectly, (i) take any action designed
to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price
of any security of the Fund to facilitate the sale or resale of the
Securities or (ii) sell, bid for, or purchase the Securities, or pay
anyone any compensation for soliciting purchases of the Securities
other than the Underwriters; provided, however, the Fund may issue and
sell Shares pursuant to the Dividend Reinvestment Plan (it being
understood that the Sub-Adviser shall have no obligation or liability
under this paragraph with respect to acts or omissions of the Fund and
the Adviser, and their respective officers, trustees or directors).
(m) During the term of this Agreement, the Fund, the Adviser and
Sub-Adviser will furnish to the Underwriters such information as
reasonably requested by the Underwriters regarding the Fund, the
Adviser or Sub-Adviser.
4. Payment of Expenses.
(a) The Fund agrees to pay all costs, fees and expenses incurred in
connection with performance of its obligations hereunder and in
connection with the transactions contemplated under this Agreement,
including, without limitation, (i) all expenses incident to the
issuance and delivery of the Securities (including all printing and
engraving costs), (ii) all fees and expenses of the registrar and
transfer agent for the Securities, (iii) all necessary issue, transfer
and other stamp taxes in connection with the issuance and sale of the
Securities, (iv) all actual and reasonable fees and expenses of the
Fund's counsel, the Underwriters' counsel up to $60,000 and the Fund's
independent public or certified public accountants and other advisors,
(v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), the Preliminary Prospectus, the
Prospectus, and all amendments and supplements thereto and this
Agreement, as well as any other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of
the Securities (vi) all filing fees, distribution fees, attorneys' fees
and expenses incurred by the Fund or the Underwriters in connection
with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Securities for
offer and sale under the state securities or blue sky laws, including,
if requested by the Underwriters, the preparation by counsel for the
Underwriters and printing of a "Blue Sky Survey" or other memorandum,
and any supplements thereto, advising the Underwriters of such
qualifications, registrations and exemptions, (vii) the fees and
expenses associated with listing the Securities on the NYSE Amex,
(viii) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the
review by FINRA of the terms of the sale of the Securities, and (ix)
all other fees, costs and expenses incident to the performance by the
Fund of its obligations hereunder.
(b) If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section 5 or Section 8(a) hereof, the Fund, the
Adviser and the Sub-Adviser, jointly and severally, agree that they
shall reimburse the Underwriters for all of their out-of-pocket
19
expenses, including the reasonable fees and disbursements of counsel
for the Underwriters.
5. Conditions to Underwriters' Obligations. The obligations of the several
Underwriters hereunder will be subject to the accuracy and completeness
of the representations and warranties made by the Fund, the Adviser and
the Sub-Adviser contained in Section 1 herein as of the Applicable
Time, the Closing Time and any Option Closing Time, to the due
performance by the Fund and the Adviser of their respective obligations
hereunder, and to the continuing satisfaction (or waiver by the
Underwriters in their sole discretion) of the following additional
conditions:
(a) The Registration Statement, including any Rule 462(d) Registration
Statement, shall have become effective and all filings with the
Commission required by Rule 497 under the Securities Act to have been
filed in connection with the distribution of the Securities shall have
been made within the applicable time period prescribed for such filing
by Rule 497.
(b) At the Closing Time, none of the following events shall have occurred
and be continuing: (i) receipt by the Fund of any request for
additional information from the Commission or any other federal or
state governmental authority during the period of effectiveness of the
Registration Statement, the response to which would require any
amendments or supplements to the Registration Statement, the
Preliminary Prospectus or the Prospectus; (ii) the issuance by the
Commission or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose, including any
notice objecting to the use of the Registration Statement or order
pursuant to Section 8(e) of the Investment Company Act having been
issued and proceedings therefor initiated, or to the knowledge of the
Fund, threatened by the Commission; (iii) receipt by the Fund of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; (iv) the occurrence of any event that makes any statement
made in the Registration Statement, the Preliminary Prospectus, the
Disclosure Package or the Prospectus untrue in any material respect or
that requires the making of any changes in the Registration Statement,
the Preliminary Prospectus, the Disclosure Package or Prospectus so
that, in the case of the Registration Statement, it will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and, that in the case of the Preliminary
Prospectus, the Disclosure Package and/or the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and (v) the Fund's reasonable determination
that a post-effective amendment to the Registration Statement would be
appropriate.
(c) The Underwriters shall not have advised the Fund that the Registration
Statement, Preliminary Prospectus, the Disclosure Package or
Prospectus, or any amendment or supplement thereto, contains an untrue
statement of a material fact regarding the Underwriters that in the
Underwriters' opinion is material, or omits to state a fact regarding
the Underwriters that in the Underwriters' opinion is material and is
required to be stated therein or is necessary to make the statements
therein, in light of the circumstances under which it was made, not
misleading.
20
(d) At the Closing Time, there shall not have been any material change in
the authorized capital stock of the Fund or any Fund Material Adverse
Effect, Adviser Material Adverse Effect or Sub-Adviser Material Adverse
Effect, or any development that may reasonably be expected to cause a
Fund Material Adverse Effect, Adviser Material Adverse Effect or
Sub-Adviser Material Adverse Effect, or a downgrading in or withdrawal
of the rating assigned to any of the Fund's debt or preferred
securities by any rating organization or a public announcement by any
rating organization that it has under surveillance or review its rating
of any of the Fund's debt or preferred securities, the effect of which,
in the case of any such action by a rating organization described
above, in the sole judgment of the Underwriters (without relieving the
Fund of any obligation or liability it may otherwise have), is so
material as to make it impracticable or inadvisable to proceed with the
offering and sale of the Securities on the terms and in the manner
contemplated in the Disclosure Package and the Prospectus.
(e) At the Closing Time, the Underwriters shall have received the favorable
opinions, dated as of the Closing Time, of Xxxxxxx and Xxxxxx LLP and
Xxxxxxx XxXxxxxxx LLP, special Massachusetts Fund counsel
(collectively, "Fund Counsel"), in substantially the form attached
hereto as Exhibit 5(e), together with signed or reproduced copies of
such letters for each of the other Underwriters, to such further effect
as counsel to the Underwriters may reasonably request.
(f) At the Closing Time, the Underwriters shall have received the favorable
opinion, dated as of the Closing Time, of Xxxxxxx and Xxxxxx LLP,
counsel to the Adviser ("Adviser Counsel"), in substantially the form
attached hereto as Exhibit 5(f), together with signed or reproduced
copies of such letters for each of the other Underwriters, to such
further effect as counsel to the Underwriters may reasonably request.
(g) At the Closing Time, the Underwriters shall have received the favorable
opinion, dated as of the Closing Time, of Dechert LLP, counsel to the
Sub-Adviser ("Sub-Adviser Counsel"), in substantially the form attached
hereto as Exhibit 5(g), together with signed or reproduced copies of
such letters for each of the other Underwriters, to such further effect
as counsel to the Underwriters may reasonably request.
(h) At the Closing Time, the Underwriters shall have received the favorable
opinion, dated as of the Closing Time, of Xxxxxxxx Xxxxxxx LLP, counsel
for the Underwriters.
(i) At the Closing Time, the Underwriters shall have received (1)
certificates of the Chief Financial Officer or Chief Accounting Officer
of the Fund, the Adviser and the Sub-Adviser, each dated as of the
Closing Time, in the form attached hereto as Exhibit 5(i) and (2)
certificates of the Secretary of the Fund, the Adviser and the
Sub-Adviser, each dated as of the Closing, in form and substance
reasonably satisfactory to the Underwriter.
(j) At the time of the execution of this Agreement, the Underwriters shall
have received from Deloitte & Touche LLP a letter dated such date, in
form and substance satisfactory to the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement, the Preliminary
Prospectus and the Prospectus.
21
(k) At the Closing Time, the Underwriters shall have received from Deloitte
& Touche LLP a letter dated as of the Closing Time, in form and
substance satisfactory to the Underwriters, to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (j) of this Section, except that the specified date referred
to shall be a date not more than three business days prior to the
Closing Time.
(l) At the Closing Time, the Securities shall have been approved for
listing on the NYSE Amex, subject only to official notice of issuance.
(m) At the time of the execution of this Agreement, the Company shall have
procured for the benefit of the Underwriters lock-up agreements, in the
form of Schedule C attached hereto, from the following Trustees of the
Fund: Xxxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxxx.
(n) In the event that the Underwriters exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the
Over-Allotment Securities, the obligations of the several Underwriters
to purchase the applicable Over-Allotment Securities shall be subject
to the conditions specified in the introductory paragraph of this
Section 5 and to the further condition that, at the applicable Option
Closing Time, the Underwriters shall have received:
(1) Certificates, dated such Option Closing Time, to the effect set forth
in Section 5(i) hereof, and signed by the Chief Financial Officer or
Chief Accounting Officer of the Fund, the Adviser and the Sub-Adviser,
except that the references in such certificate to the Closing Time
shall be changed to refer to such Option Closing Time.
(2) The favorable opinions of Fund Counsel, in form and substance
satisfactory to counsel for the Underwriters, dated such Option Closing
Time, relating to the Over-Allotment Securities to be purchased on such
Option Closing Time and otherwise to the same effect as the opinion
required by Section 5(e) hereof.
(3) The favorable opinion of Adviser Counsel, in form and substance
satisfactory to counsel for the Underwriters, dated such Option Closing
Time, relating to the Over-Allotment Securities to be purchased on such
Option Closing Time and otherwise to the same effect as the opinion
required by Section 5(f) hereof.
(4) The favorable opinion of Sub-Adviser Counsel, in form and substance
satisfactory to counsel for the Underwriters, dated such Option Closing
Time, relating to the Over-Allotment Securities to be purchased on such
Option Closing Time and otherwise to the same effect as the opinion
required by Section 5(g) hereof.
(5) The favorable opinion of Xxxxxxxx Xxxxxxx LLP, counsel for the
Underwriters, dated such Option Closing Time, relating to the
Over-Allotment Securities to be purchased on such Option Closing Time
and otherwise to the same effect as the opinion required by Section
5(h) hereof.
(6) A letter from Deloitte & Touche LLP, in form and substance satisfactory
to the Underwriters and dated such Option Closing Time, substantially
in the same form and substance as the letter furnished to the
Underwriters pursuant to Section 5(k) hereof, except that the
22
"specified date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Option Closing
Time.
(o) At the Closing Time, the Fund shall have furnished to the Underwriters
such appropriate further information, certificates and documents as the
Underwriters may reasonably request. All such opinions, certificates,
letters and other documents will be in compliance with the provisions
hereof. The Fund will furnish the Underwriters with such conformed
copies of such opinions, certificates, letters and other documents as
the Underwriters shall reasonably request.
(p) At the Closing Time and at each Option Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions
as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, contained in this
Agreement; and all proceedings taken by the Fund, the Adviser or the
Sub-Adviser in connection with the issuance and sale of the Securities
as herein contemplated, and in connection with the other transactions
contemplated by this Agreement, shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.
(q) The Securities shall have been approved for listing on the NYSE Amex,
subject only to notice of issuance.
(r) There shall not have ocurred any event that would permit the
Underwriters to terminate this Agreement pursuant to Section 8.
(s) Prior to the date hereof, FINRA shall have confirmed that it has no
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements set forth herein.
(t) If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in
the case of any condition to the purchase of Over-Allotment Securities,
on an Option Closing Time which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant
Over-Allotment Securities, may be terminated by the Underwriters by
notice to the Company at any time at or prior to the Closing Time or
such Option Closing Time, as the case may be, and such termination
shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 11 shall
survive any such termination and remain in full force and effect.
6. Indemnification and Contribution.
(a) Indemnification by the Fund, the Adviser and Sub-Adviser. The Fund, the
Adviser and Sub-Adviser, jointly and severally, agree to indemnify and
hold harmless each Underwriter, its partners, directors, members,
officers and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act as follows:
23
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) including any information deemed
to be a part thereof pursuant to Rule 430A or Rule 497 under the
Securities Act, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact included in
the Preliminary Prospectus, any sales material, the Disclosure Package
or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that (subject to
Section 6(e) below) any such settlement is effected with the written
consent of the Fund and the Adviser; and
(3) against any and all expense whatsoever, as incurred (including the fees
and disbursements of counsel chosen by the Underwriters), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (1) or (2) above,
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the Fund,
the Adviser or Sub-Adviser by any Underwriter expressly for use in the
Registration Statement (or any amendment thereto), in the Preliminary
Prospectus, any sales material, the Disclosure Package or in any Prospectus (or
any amendment or supplement thereto).
(b) Indemnification by the Underwriters. Each Underwriter agrees to
indemnify and hold harmless each of the Fund, the Adviser and the
Sub-Adviser, each of their partners, directors, trustees, members, each
of their officers who signed the Registration Statement, and each
person, if any, who controls the Fund, the Adviser or Sub-Adviser
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this
Section 6, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), the Preliminary
Prospectus, any sales material, the Disclosure Package or any
Prospectus (or any amendment or supplement thereto) in reliance upon
24
and in conformity with written information furnished to the Fund, the
Adviser or the Sub-Adviser by such Underwriter expressly for use in the
Registration Statement (or any amendment thereto), such Preliminary
Prospectus, sales material, Disclosure Package or Prospectus (or any
amendment or supplement thereto). The Fund, the Adviser and Sub-Adviser
acknowledge that the statements set forth in the Preliminary Prospectus
and the Prospectus in (i) the last sentence of the paragraph of the
cover page regarding delivery of the Securities and (ii) under the
heading "Underwriting," (A) the list of Underwriters and their
respective participation in the sale of the Securities, (B) the
sentences related to concessions and re-allowances and (C) the
paragraph related to stabilization, syndicate covering transactions and
penalty bids constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in the Disclosure
Package or the Prospectus.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity
may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder
to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. Counsel to the
indemnified parties shall be selected as follows: counsel to
Underwriters, its partners, directors, members, officers, and each
person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
shall be selected by the Underwriters; counsel to the Fund, its
partners, directors, trustees, members, each of its officers who signed
the Registration Statement and each person, if any, who controls the
Fund within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act shall be selected by the Fund; counsel to the
Adviser and each person, if any, who controls the Adviser within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall be selected by the Adviser and counsel to the
Sub-Advisor and each person, if any, who controls the Sub-Advisor
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall be selected by the Sub-Adviser. An indemnifying
party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel
to the indemnified party. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition
to any local counsel) separate from their own counsel for the
Underwriters and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for the
Fund, each of their partners, directors, trustees, members, each of its
officers who signed the Registration Statement and each person, if any,
who controls the Fund within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, the fees and expenses
of more than one counsel (in addition to any local counsel) separate
from their own counsel for the Adviser, the fees and expenses of more
than one counsel (in addition to any local counsel) separate from their
own counsel for the Sub-Adviser, and the fees and expenses of more than
one counsel, in each case in connection with any one action or separate
but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party
shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such
25
settlement, compromise or consent (i) includes an unconditional release
of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of
the nature contemplated by Section 6(a)(2) effected without its written
consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of
such settlement.
(e) Other Agreements with Respect to Indemnification and Contribution. The
provisions of this Section 6 hereof shall not affect any agreements
among the Fund, the Adviser and Sub-Adviser with respect to
indemnification of each other or contribution between themselves.
(f) Contribution.
(1) If the indemnification provided for in this Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred,
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Fund, the Adviser and Sub-Adviser on the one
hand and the Underwriters on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Fund, the Adviser and Sub-Adviser on the one hand and of the
Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages
or expenses, as well as any other relevant equitable considerations.
(2) The relative benefits received by the Fund, the Adviser and Sub-Adviser
on the one hand and the Underwriters on the other hand in connection
with the offering of the Securities pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net
proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by the Fund and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth on the cover of the Prospectus, bear to the
aggregate initial public offering price of the Securities as set forth
on such cover.
(3) The relative fault of the Fund, the Adviser and Sub-Adviser on the one
hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Fund, by
26
the Adviser, by the Sub-Adviser or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(4) The Fund, the Adviser, the Sub-Adviser and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this
Section 6(f) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 6(f). The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by
an indemnified party and referred to above in this Section 6(f) shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue or alleged untrue statement or omission or alleged
omission.
(5) Notwithstanding the provisions of this Section 6(f), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to
pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
(6) No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
(7) For purposes of this Section 6(f), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each person who controls the
Fund, any Adviser or Sub-Adviser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, each officer of
the Fund, the Adviser and the Sub-Adviser and each trustee, director or
member of the Fund, the Adviser and the Sub-Adviser shall have the same
rights to contribution as the Fund, the Adviser and the Sub-Adviser.
The Underwriters' respective obligations to contribute pursuant to this
Section 6(f) are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A
hereto and not joint.
(g) The indemnity and contribution agreements contained in this Section 6
and the representations and warranties of the Fund, the Adviser and the
Sub-Adviser set forth in this Agreement shall remain operative and in
full force and effect, regardless of (i) any investigation made by or
on behalf of any Underwriter, its partners, officers or employees, or
any person controlling such Underwriter, within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, and or by
or on behalf of the Fund and/or any Adviser or Sub-Adviser, its
directors and officers or any person who controls the Fund, and/or any
Adviser or Sub-Adviser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) delivery and
acceptance of the Securities and payment therefor, or (iii) any
27
termination of this Agreement. A successor to any Underwriter or to the
Fund or the Adviser or the Sub-Adviser, its respective directors or
officers, or any person controlling the Fund, or the Adviser or
Sub-Adviser, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 6.
7. Representations and Agreements to Survive Delivery. All representations
and warranties of the Fund, the Adviser and the Sub-Adviser herein or
in certificates delivered pursuant hereto shall survive, as of their
respective dates, regardless of (i) any investigation made by or on
behalf of the Underwriters, any controlling persons, or the Fund and/or
any Adviser or Sub-Adviser (or any of their respective officers,
directors or controlling persons), (ii) delivery and acceptance of the
Securities to the Underwriters or (iii) any termination of this
Agreement.
8. Termination.
(a) The Underwriters may terminate this Agreement, by notice to the Fund,
at any time on or prior to the Closing Time (and, if any Over-Allotment
Securities are to be purchased on an Option Closing Time which occurs
after the Closing Time, the Underwriters may terminate their
obligations to purchase such Over-Allotment Securities, by notice to
the Fund, at any time on or prior to such Option Closing Time) (i) if
there has been, since the respective dates as of which information is
given in the Preliminary Prospectus or the Prospectus, any Fund
Material Adverse Effect or any Adviser Material Adverse Effect or (ii)
if there has occurred any material adverse change in the financial
markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof, any calamity or
crisis, any acts of terrorism, or any change or development involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to
make it, in the judgment of the Underwriters, impracticable or
inadvisable to market the Securities or to enforce contracts for the
sale of the Securities, or (iii) if trading in any securities of the
Fund has been suspended or materially limited by the Commission or the
NYSE Amex, or if trading generally on the New York Stock Exchange, NYSE
Amex or in the Nasdaq Global Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges
or by such system or by order of the Commission, FINRA or any other
governmental authority, or a material disruption has occurred in
commercial banking or securities settlement or clearance services in
the United States, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Section 8, such
termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that
Sections 1, 4, 6, 8, and 11 hereof shall survive such termination and
remain in full force and effect.
9. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at the Closing Time or an Option Closing Time
to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the remaining
Underwriters shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if,
28
however, the Underwriters shall not have completed such arrangements
within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the number
of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase
the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations
of all non-defaulting Underwriters; or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with
respect to any Option Closing Time which occurs after the Closing Time,
the obligation of the Underwriters to purchase and of the Fund to sell
the Over-Allotment Securities to be purchased and sold on such Option
Closing Time, shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of an Option Closing Time which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Over-Allotment
Securities, as the case may be, the Underwriters shall have the right to
postpone the Closing Time or the relevant Option Closing Time, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 9.
10. Notices. All notices or other communications required or permitted to be
given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and if sent to the Underwriters shall be delivered to RBC
Capital Markets Corporation, 3 World Financial Center, 8th Floor, 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx Xxxxxx, Managing Director, with a
copy to Xxxxxxxx Xxxxxxx LLP, 0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, fax
no. (000) 000-0000, Attention: Xxxxx X. Xxxxxx; if sent to the Fund or, the
Adviser, shall be delivered to First Trust Advisors L.P., Attention: General
Counsel, fax no.: (000) 000-0000, with a copy to Xxxxxxx and Xxxxxx LLP,
Attention: Xxxx X. Xxxx, telephone (000) 000-0000 fax: (000) 000-0000, or if
sent to the Sub-Adviser, shall be delivered to Energy Income Partners LLC,
Attention: Xxx Xxxxxxx, fax: (000) 000-0000. Each party to this Agreement may
change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose. Each such notice or other
communication shall be deemed given (i) when delivered personally or by
verifiable facsimile transmission (with an original to follow) on or before 4:30
p.m., New York City time, on a Business Day or, if such day is not a Business
Day, on the next succeeding Business Day, (ii) on the next Business Day after
timely delivery to a nationally-recognized overnight courier and (iii) on the
Business Day actually received if deposited in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid). For purposes of
this Agreement, "Business Day" shall mean any day on which the NYSE Amex and
commercial banks in the City of New York are open for business.
29
11. Successors. This Agreement shall inure to the benefit of and be binding upon
the Underwriters, the Fund, the Adviser and the Sub-Adviser and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Fund and the Adviser and their respective successors and the
controlling persons and directors, officers, members and trustees referred to in
Section 6 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriters, the Fund,
the Adviser and the Sub-Adviser and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
12. Partial Unenforceability. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS FORMED
AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES OR RULES THEREOF, TO THE EXTENT SUCH PRINCIPLES
WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
14. Submission to Jurisdiction. Each of the parties hereto irrevocably agrees
that any suit, action or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby may be instituted in any United States
federal and New York State courts located in New York, New York, irrevocably
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding; and
irrevocably submits to the non-exclusive jurisdiction of such courts in any such
suit, action or proceeding brought in such a court and waives any other
requirements of or objections to personal jurisdiction with respect thereto.
15. General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in
writing by each party whom the condition is meant to benefit. The Section
headings, titled and captions herein are for the convenience of the parties only
and shall not affect the construction or interpretation of this Agreement.
30
16. Waiver of Jury Trial. The Fund, the Adviser, the Sub-Adviser and the
Underwriters hereby irrevocably waive any right to a trial by jury in respect of
any claim based upon or arising out of this Agreement or any transaction
contemplated hereby.
17. Absence of Fiduciary Relationship. The Fund, the Adviser and Sub-Adviser
acknowledge that in connection with the offering of the Securities: (a) the
Underwriters have acted at arms length and owe no fiduciary duties to, the Fund,
the Adviser and Sub-Adviser or any other person; (b) the Underwriters owe the
Fund, the Adviser and Sub-Adviser only those duties and obligations set forth in
this Agreement and prior written agreements (to the extent not superseded by
this Agreement), if any, and (iii) the Underwriters may have interests that
differ from those of the Funds, the Adviser and Sub-Adviser. The Fund, the
Adviser and Sub-Adviser waive to the full extent permitted by applicable law any
claims any of them may have against any Underwriter arising from an alleged
breach of fiduciary duty in connection with the offering of the Securities as
contemplated by this Agreement.
18. Limitation of Liability. The Declaration of Trust is on file with the
Secretary of The Commonwealth of Massachusetts. This Agreement is executed on
behalf of the Fund by the Fund's officers as officers and not individually and
the obligations imposed upon the Fund by this Agreement are not binding upon any
of the Fund's shareholders individually but are binding only upon the assets and
property of the Fund.
[Remainder of Page Intentionally Blank]
31
If the foregoing correctly sets forth the understanding between the
Fund, the Adviser, the Sub-Adviser and the Underwriters, please so indicate in
the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement between the Fund, the Adviser, the Sub-Adviser
and the Underwriters.
Very truly yours,
ENERGY INCOME AND GROWTH FUND
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: President
FIRST TRUST ADVISORS L.P.
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: President
ENERGY INCOME PARTNERS LLC
By: /s/ Xxx Xxx
--------------------------------
Name: Xxx Xxx
Title: Vice President
32
The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Underwriters as of the date first above written.
RBC Capital Markets Corporation
BB&T Capital Markets, a division of Xxxxx & Xxxxxxxxxxxx, LLC
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxxxxxxx Xxxxxxxx & Co. Inc.
Maxim Group LLC
Xxxxxxxxxxx & Co. Inc.
Wedbush Securities Inc.
Xxxxxxxxxx Securities, Inc.
On their behalf
By: RBC Capital Markets Corporation
By: /s/ Xxxxx Xxxxxx
--------------------------
Name: Xxxxx Xxxxxx
Title: _________________________
33
A-1
SCHEDULE A
Name of Underwriter No. of Initial Securities
------------------- -------------------------
RBC Capital Markets Corporation.................................................... 453,000
Xxxxxxxxxxx & Company Inc.......................................................... 329,000
BB&T Capital Markets, a division of Xxxxx & Xxxxxxxxxxxx, LLC...................... 123,000
Xxxxxx Xxxxxxxxxx Xxxxx LLC........................................................ 58,000
Ladenburg Xxxxxxxx & Co. Inc....................................................... 350,000
Maxim Group LLC.................................................................... 206,000
Wedbush Securities Inc............................................................. 99,000
Xxxxxxxxxx Securities, Inc......................................................... 82,000
-------------------------------
Total: 1,700,000
===============================
X-0
X-0
SCHEDULE B
Price-Related Information
ENERGY INCOME AND GROWTH FUND
Public offering price: $ 24.20 per share
Underwriting discount: $ .9680 per share
Concession to selling group: $ .5808 per share
Proceeds, before expenses to the Company: $23.232 per share
Shares initially offered: 1,200,000
Final Shares offered: 1,700,000
Over-allotment option: 255,000shares
Trade date: April 30, 2010
Closing Time: May 5, 2010
B-1
SCHEDULE C
FORM OF LOCK-UP AGREEMENT
ENERGY INCOME AND GROWTH FUND
Lock-Up Agreement
April 30, 2010
RBC Capital Markets Corporation
BB&T Capital Markets, a division of Xxxxx & Xxxxxxxxxxxx, LLC
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxxxxxxx Xxxxxxxx & Co. Inc.
Maxim Group LLC
Xxxxxxxxxxx & Co. Inc.
Wedbush Securities Inc.
Xxxxxxxxxx Securities, Inc.
c/o RBC Capital Markets Corporation
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Re: Lock-Up Agreement for shares of Energy Income and Growth Fund
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain common
shares of beneficial interest ("Common Stock") of Energy Income and Growth Fund,
a Massachusetts business trust (the "Company") or securities convertible into or
exchangeable or exercisable for shares of Common Stock (collectively, the
"Securities"). The Company proposes to carry out a public offering of Common
Stock (the "Offering") for which you will act as the representative to the
several underwriters (the "Underwriters"). The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising additional capital for its operations. The
undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter agreement (this
"Agreement") in carrying out the Offering and in entering into an Underwriting
Agreement (the "Underwriting Agreement") with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that
the undersigned will not (and will cause any spouse or immediate family member
of the spouse or the undersigned living in the undersigned's household and any
trustee of any trust that holds Securities for the benefit of the undersigned or
such spouse or family member not to), without the prior written consent of RBC
Capital Markets Corporation on behalf of the Underwriters (which consent may be
withheld in its sole discretion), directly or indirectly, (1) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
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otherwise transfer or dispose of (or enter into any transaction or device that
is designed to, or could be expected to, result in the disposition by any person
at any time in the future of) any Securities (including, without limitation,
shares of Common Stock that may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the Securities and
Exchange Commission), (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any economic benefits or risks
of ownership of shares of the Securities, whether any such transaction described
in clause (1) or (2) above is to be settled by delivery of the Common Stock or
such other Securities, in cash or otherwise, or (3) publicly announce an
intention to do any of the foregoing, for a period commencing on the date hereof
and continuing through the close of trading on the date 45 days after the public
offering date set forth on the final prospectus used to sell the Securities in
the Offering (the "Lock-up Period") pursuant to the Underwriting Agreement.
The foregoing restrictions have been expressly agreed to by the
undersigned so as to preclude the undersigned (or such spouse, family member or
trustee) from engaging in any hedging or other transaction that is designed to
or reasonably expected to lead to or result in a disposition of Securities
during the Lock-up Period, even if such Securities would be disposed of by
someone other than such holder. Such prohibited hedging or other transactions
would include, without limitation, any short sale (whether or not against the
box) or any purchase, sale or grant of any right (including, without limitation,
any put or call option) with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any significant
part of its value from the Securities. In addition, the undersigned agrees that,
without the prior written consent of RBC Capital Markets Corporation on behalf
of the Underwriters, it will not, during the Lock-Up Period, make any demand for
or exercise any right with respect to, the registration of any Securities or any
security convertible into or exercisable or exchangeable for the Securities.
The foregoing shall not apply to the following: (1) the registration of
or sale to the Underwriters of Securities pursuant to the Offering and the
Underwriting Agreement, (2) the issuance, or, for avoidance of doubt, the
purchase in the open market, of shares of Common Stock pursuant to Company's
dividend reinvestment plan, in the ordinary course consistent with past practice
(3) bona fide gifts, succession and inheritance by will or intestacy, (4)
transfers to trusts for the benefit of the undersigned, any spouse, immediate
family member or a charitable, educational or religious institution by the
undersigned, or (5) transfers made with the prior written consent of RBC Capital
Markets Corporation on behalf of the Underwriters; provided, however, that in
the case of a transfer under clause (3) or (4), the transferee(s)/donee(s) shall
agree in writing prior to such disposition to be bound by the restrictions set
forth herein and to the extent any interest in the Securities is retained by the
undersigned (or such spouse or family member), the Securities shall remain
subject to the restrictions contained in this Agreement.
Notwithstanding the foregoing, if (1) during the last 17 days of the
Lock-up Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs, or (2) prior to the expiration of
the Lock-up Period, the Company announces that it will release earnings results
or become aware that material news or a material event will occur during the
16-day period beginning on the last day of the Lock-up Period, then the Lock-up
Period shall automatically be extended and the restrictions imposed by this
Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
C-2
material news or material event, as applicable, unless RBC Capital Markets
Corporation, on behalf of the Underwriters, waives, in writing, such extension.
The undersigned also agrees and consents (1) with respect to Securities
held of record by the undersigned, to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of such
Securities as described herein except in compliance with this Agreement, and (2)
with respect to Securities beneficially owned, but not held of record by, the
undersigned, to cause the record holder of such Securities to agree and consent
to the entry of stop transfer instructions with the Company's transfer agent and
registrar against the transfer of such Securities as described herein except in
compliance with this Agreement.
It is understood that, if (1) the Company notifies the undersigned that
it does not intend to proceed with the Offering, (2) the registration statement
filed with the Securities and Exchange Commission with respect to the Offering
is withdrawn, or (3) for any reason the Underwriting Agreement shall terminate
or be terminated prior to payment for and delivery of the Securities to be sold
thereunder, the undersigned will be released from his obligations under this
Agreement.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts formed and to be
performed entirely within the State of New York, without regard to conflicts of
law principles or rules thereof, to the extent such principles would require or
permit the application of the laws of another jurisdiction.
This Agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives and assigns of
the undersigned.
[Remainder of Page Intentionally Left Blank]
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Very truly yours,
Name:
Title:
