[ ] Shares
FIRST TRUST VALUE LINE(R) DIVIDEND FUND
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
August [ ], 2003
X.X. Xxxxxxx & Sons, Inc.
[ ]
As Representatives of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Dear Sir or Madam:
The undersigned, First Trust Value Line(R) Dividend Fund, a
Massachusetts business trust (the "Fund"), and First Trust Advisors, L.P., an
Illinois limited partnership (the "Adviser"), address you as Underwriters and as
the Representatives (the "Representatives") of each of the other persons, firms
and corporations, if any, listed in Schedule I hereto (herein collectively
called "Underwriters"). The Fund proposes to issue and sell an aggregate of [ ]
shares of its common shares of beneficial interest, $0.01 par value per share
(the "Firm Shares"), to the several Underwriters. The Fund also proposes to
sell, upon the terms and conditions contained in Section 2 hereof, up to [ ]
additional common shares (the "Additional Shares," which together with the Firm
Shares are hereinafter collectively referred to as the "Shares").
The Fund and the Adviser wish to confirm as follows their agreements
with you and the other several Underwriters on whose behalf you are acting in
connection with the several purchases of the Shares by the Underwriters.
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The Fund has entered into an investment management agreement with the
Adviser dated [ ], 2003 (the "Advisory Agreement"), a Custodian Services
Agreement with PFPC Trust Company ("Custodian") dated [ ], 2003 (the "Custodian
Contract"), a Transfer Agency Agreement with PFPC Inc. dated [ ], 2003 (the
"Transfer Agency Agreement"), an Organization Expenses and Offering Costs
Agreement with the Adviser dated [ ], 2003 (the "Expense Reimbursement
Agreement"), a Subscription Agreement with the Adviser dated [ ], 2003 (the
"Subscription Agreement") and a Sub-License Agreement with the Adviser dated [
], 2003 (the "Sub-License Agreement"). In addition, the Fund has adopted a
dividend reinvestment plan (the "Dividend Reinvestment Plan"), pursuant to which
holders of Shares shall have their dividends automatically reinvested in
additional common shares of the Fund unless they elect to receive such dividends
in cash. Collectively, the Advisory Agreement, the Custodian Contract, the
Transfer Agency Agreement, the Organizational Expenses and Offering Costs
Agreement, the Subscription Agreement, the Sub-License Agreement and the
Dividend Reinvestment Plan are herein referred to as the "Fund Agreements." The
Adviser has entered into the Advisory Agreement, the Expense Reimbursement
Agreement, a License Agreement with Value Line Publishing Inc. dated May 1,
2002, as amended [ ], 2003 (the "License Agreement"), the Sub-License Agreement
and a Corporate Finance Services and Consulting Agreement with X.X. Xxxxxxx &
Sons, Inc. dated [ ], 2003 (the "Corporate Finance Services and Consulting
Agreement") (collectively, the "Adviser Agreements"). This Underwriting
Agreement is herein referred to as the "Agreement."
1. Registration Statement and Prospectus. The Fund has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Rules and Regulations")
and the 1940 Act (the "1940 Act Rules and Regulations," and together
with the 1933 Act Rules and Regulations, the "Rules and Regulations") a
registration statement on Form N-2 (File No. 333-106392 under the 1933
Page 2
Act) (the "registration statement"), including a prospectus and
statement of additional information relating to the Shares, and a
notification of registration of the Fund as an investment company under
the 1940 Act on Form N-8A (File No. 811-21381 under the 1940 Act, the
"1940 Act Notification"), and may pursuant to the Rules and Regulations
prepare and file an additional registration statement relating to a
portion of the Shares pursuant to Rule 462(b) of the 1933 Act Rules and
Regulations (a "Rule 462 registration statement"). The term
"Registration Statement" as used in this Agreement means the
registration statement (including all financial schedules and
exhibits), as amended at the time it becomes effective under the 1933
Act or, if the registration statement became effective under the 1933
Act prior to the execution of this Agreement, as amended or
supplemented thereto, prior to the execution of this Agreement and
includes any information deemed to be included by Rule 430A under the
1933 Act Rules and Regulations. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the
registration statement will be filed under the 1933 Act and must be
declared effective before the offering of Shares may commence, the term
"Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. If
the Fund has filed a Rule 462 registration statement, then the
reference herein to the term "Registration Statement" shall include
such Rule 462 registration statement. The term "Prospectus" as used in
this Agreement means the prospectus and statement of additional
information in the forms included in the Registration Statement or, if
the prospectus and statement of additional information included in the
Registration Statement omit information in reliance on Rule 430A under
the 1933 Act Rules and Regulations and such information is included in
a prospectus and statement of additional information filed with the
Commission pursuant to Rule 497(h) under the 1933 Act Rules and
Regulations, the term "Prospectus" as used in this Agreement means the
prospectus and statement of additional information in the forms
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included in the Registration Statement as supplemented by the addition
of the information contained in the prospectus (including the statement
of additional information) filed with the Commission pursuant to Rule
497(h). The term "Prepricing Prospectus" as used in this Agreement
means the prospectus and statement of additional information subject to
completion in the form included in the registration statement at the
time of the initial filing of the registration statement with the
Commission and as such prospectus and statement of additional
information shall have been amended from time to time prior to the date
of the Prospectus, together with any other prospectus (including any
other statement of additional information) relating to the Fund other
than the Prospectus. The terms "Registration Statement," "Prospectus"
and "Prepricing Prospectus" shall also include any financial statements
and other information included or incorporated by reference therein.
The Fund has furnished the Representatives with copies of such
Registration Statement, each amendment to such Registration Statement
filed with the Commission and each Prepricing Prospectus.
2. Agreements to Sell and Purchase. The Fund hereby agrees, subject
to all the terms and conditions set forth herein, to issue and to sell
to each Underwriter and, upon the basis of the representations,
warranties and agreements of the Fund and the Adviser herein contained
and subject to all of the other terms and conditions set forth herein,
each Underwriter agrees, severally and not jointly, to purchase from
the Fund at a purchase price of $[ ] per Share (the "Price per Share"),
the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
The Fund also agrees, subject to all the terms and conditions
set forth herein, to issue and to sell to the Underwriters and, upon
the basis of the representations, warranties and agreements of the Fund
and the Adviser herein contained and subject to all the terms and
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conditions set forth herein, the Underwriters shall have the right to
purchase Additional Shares from the Fund, at the purchase price per
share, pursuant to an option (the "over-allotment option") which may be
exercised at any time and from time to time prior to 9:00 A.M., New
York City time, on the 45th day after the date of the Prospectus (or if
such 45th day shall be a Saturday or a Sunday or a holiday, on the next
business day thereafter when the American Stock Exchange (the "AMEX")
is open for trading). Additional Shares may be purchased solely for the
purpose of covering over-allotments made in connection with the
offering of the Shares. Upon any exercise of the over-allotment option,
upon the basis of the representations, warranties and agreements of the
Fund and the Adviser herein contained and subject to all of the other
terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Fund the number of
Additional Shares (subject to such adjustments as you may determine to
avoid fractional shares) which bears the same proportion to the number
of Additional Shares to be purchased by the Underwriters as the number
of Firm Shares set forth opposite the name of such Underwriter in
Schedule I (or such number of Firm Shares increased as set forth in
Section 10 hereof) bears to the aggregate number of Firm Shares.
3. Terms of Public Offering. The Fund and the Adviser have been
advised by you that the Underwriters propose to make a public offering
of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in
your judgment is advisable and initially to offer the Shares upon the
terms set forth in the Prospectus.
4. Delivery of Shares and Payments Therefor.
(a) Delivery to the Underwriters of and payment to the Fund for
the Firm Shares and compensation of the Underwriters with
respect thereto shall be made at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois), 000 Xxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx at 8:00 a.m. central time on August [ ],
Page 5
2003 (the "Closing Date"). The place of closing for the Firm
Shares and the Closing Date may be varied by agreement between
the Representatives and the Fund.
(b) Delivery to the Underwriters of and payment to the Fund for
any Additional Shares to be purchased by the Underwriters and
compensation of the Underwriters with respect thereto shall be
made at the aforementioned office of Skadden, Arps, Slate,
Xxxxxxx & Xxxx (Illinois) at such time on such date (an
"Option Closing Date"), which may be the same as the Closing
Date, but shall in no event be earlier than the Closing Date
nor earlier than two nor later than three business days after
the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the
Underwriters to the Fund of the Underwriters' determination to
purchase a number, specified in said notice, of Additional
Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Additional Shares may be varied
by agreement between you and the Fund.
Page 6
(c) The Shares shall be registered in such names and in such
denominations as the Underwriters shall request prior to 1:00
P.M., New York City time, (i) with respect to the Firm Shares,
on the second business day preceding the Closing Date, and
(ii) with respect to the Additional Shares, on the day of the
giving of the written notice in respect of such Additional
Shares. Certificates for shares will be made available to you
in New York City for inspection and packaging not later than
9:00 A.M., New York City time, on the business day next
preceding the Closing Date or any Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and
any Additional Shares to be purchased hereunder shall be
delivered to you on the Closing Date or the Option Closing
Date, as the case may be, against payment of the purchase
price therefor in immediately available funds.
5. Agreements of the Fund and the Adviser. The Fund and the
Adviser, jointly and severally, agree with the several Underwriters as
follows:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective
under the 1933 Act before the offering of the Shares may
commence, the Fund will use its best efforts to cause the
Registration Statement or such post-effective amendment to
become effective under the 1933 Act as soon as possible. If
the Registration Statement has become effective and the
Prospectus contained therein omits certain information at the
time of effectiveness pursuant to Rule 430A of the 1933 Act
Rules and Regulations, the Fund will file a prospectus
including such information pursuant to Rule 497(h) of the 1933
Act Rules and Regulations, as promptly as practicable, but no
later than the second business day following the earlier of
the date of the determination of the offering price of the
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Shares or the date the Prospectus is first used after the
effective date of the Registration Statement. If the
Registration Statement has become effective and the Prospectus
contained therein does not so omit such information, the Fund
will file a Prospectus or certification pursuant to Rule
497(c) or (j), as the case may be, of the 1933 Act Rules and
Regulations as promptly as practicable, but no later than the
fifth business day following the date of the later of the
effective date of the Registration Statement or the
commencement of the public offering of the Shares after the
effective date of the Registration Statement. The Fund will
advise you promptly and, if requested by you, will confirm
such advice in writing (i) when the Registration Statement or
such post-effective amendment has become effective, (ii) when
the Prospectus has been timely filed pursuant to Rule 497(c)
or Rule 497(h) of the 1933 Act Rules and Regulations or (iii)
when the certification permitted pursuant to Rule 497(j) of
the 1933 Act Rules and Regulations has been timely filed,
whichever is applicable.
(b) The Fund, and in the case of (iii)(B) below, the Adviser, will
advise you promptly and, if requested by you, will confirm
such advice in writing: (i) of any request made by the
Commission for amendment of or a supplement to the
Registration Statement, the Prospectus or any Prepricing
Prospectus (or any amendment or supplement to any of the
foregoing) or for additional information, (ii) of the issuance
by the Commission, the National Association of Securities
Dealers, Inc. (the "NASD"), any state securities commission,
any national securities exchange, any arbitrator, any court or
any other governmental, regulatory, self-regulatory or
administrative agency or any official of any order suspending
the effectiveness of the Registration Statement, prohibiting
or suspending the use of the Prospectus, any Prepricing
Prospectus or any sales material (as hereinafter defined), of
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any notice pursuant to Section 8(e) of the 1940 Act of the
suspension of qualification of the Shares for offering or sale
in any jurisdiction, or the initiation or contemplated
initiation of any proceeding for any such purposes, (iii) of
receipt by (A) the Fund, any affiliate of the Fund or any
Representatives or attorney of the Fund of any other material
communication from the Commission, or (B) the Fund, the
Adviser, any affiliate of the Fund or the Adviser or any
Representatives or attorney of the Fund or the Adviser of any
other material communication from the Commission, the NASD,
any state securities commission, any national securities
exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any
official relating, in the case of either clause (A) or (B), to
the Fund (if such communication relating to the Fund is
received by such person within three years after the date of
this Agreement), the Registration Statement, the 1940 Act
Notification, the Prospectus, any Prepricing Prospectus, any
sales material (as hereinafter defined) (or any amendment or
supplement to any of the foregoing) or this Agreement or any
of the Fund Agreements and (iv) within the period of time
referred to in paragraph (f) below, of any material, adverse
change in the condition (financial or other), general affairs,
business, prospects, properties, net assets or results of
operations of the Fund or any event which should reasonably be
expected to have a material adverse effect on the ability of
the Adviser to perform its obligations under this Agreement or
any of the Adviser Agreements (other than as a result of
changes in market conditions generally), or of the happening
of any event which makes any statement of a material fact made
in the Registration Statement, the Prospectus, any Prepricing
Prospectus or any sales material (or any amendment or
supplement to any of the foregoing) untrue or which requires
the making of any additions to or changes in the Registration
Page 9
Statement, the Prospectus, any Prepricing Prospectus or any
sales material (or any amendment or supplement to any of the
foregoing) in order to state a material fact required by the
1933 Act, the 1940 Act or the Rules and Regulations to be
stated therein or necessary in order to make the statements
therein (in the case of a prospectus or any sales material, in
light of the circumstances under which they were made) not
misleading or of the necessity to amend or supplement the
Registration Statement, the Prospectus, any Prepricing
Prospectus or any sales material (or any amendment or
supplement to any of the foregoing) to comply with the 1933
Act, the 1940 Act, the Rules and Regulations or any other law
or order of any court or regulatory body. If at any time the
Commission shall issue any order suspending the effectiveness
of the Registration Statement, prohibiting or suspending the
use of the Prospectus or any sales material (or any amendment
or supplement to any of the foregoing) or suspending the
qualification of the Shares for offering or sale in any
jurisdiction, the Fund and the Adviser will use their best
efforts to obtain the withdrawal of such order at the earliest
possible time. If at any time the NASD, any national
securities exchange, any state securities commission, any
arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official shall
issue any order suspending the effectiveness of the
Registration Statement, prohibiting or suspending the use of
the Prospectus or any sales material (or any amendment or
supplement to any of the foregoing) or suspending the
qualification of the Shares for offering or sale in any
jurisdiction, the Fund and the Adviser will use their
respective best efforts to obtain the withdrawal of such order
at the earliest possible time.
(c) The Fund will furnish to you, without charge, three signed
copies of the registration statement and the 1940 Act
Page 10
Notification as originally filed with the Commission and of
each amendment thereto, including financial statements and all
exhibits thereto and will also furnish to you, without charge,
such number of conformed copies of the registration statement
as originally filed and of each amendment thereto, with or
without exhibits, as you may reasonably request.
(d) The Fund will not (i) file any amendment to the registration
statement or the Registration Statement or make any amendment
or supplement to the Prospectus, any Prepricing Prospectus or
any sales material (or any amendment or supplement to any of
the foregoing) of which you shall not previously have been
advised or to which you shall reasonably object within a
reasonable time after being so advised or (ii) so long as, in
the opinion of counsel for the Underwriters, a Prospectus is
required to be delivered in connection with sales by any
Underwriter or dealer, file any information, documents or
reports pursuant to the 1933 Act, the 1940 Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
without delivering a copy of such information, documents or
reports to you, as Representatives of the Underwriters, prior
to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Fund has delivered to you, without charge, in such quantities
as you have reasonably requested, copies of each form of any
Prepricing Prospectus. The Fund consents to the use, in
accordance with the provisions of the 1933 Act and with the
securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by dealers,
prior to the date of the Prospectus, of each Prepricing
Prospectus so furnished by the Fund.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time, for such period as
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in the opinion of counsel for the Underwriters a prospectus is
required by the 1933 Act to be delivered in connection with
sales of Shares by any Underwriter or dealer, the Fund will
expeditiously deliver to each Underwriter and each dealer,
without charge, as many copies of the Prospectus (and of any
amendment or supplement thereto) as you may reasonably
request. The Fund consents to the use of the Prospectus (and
of any amendments or supplements thereto) in accordance with
the provisions of the 1933 Act and with the securities or Blue
Sky laws of the jurisdictions in which the Shares are offered
by the several Underwriters and by all dealers to whom Shares
may be sold, both in connection with the offering or sale of
the Shares and for such period of time thereafter as the
Prospectus is required by law to be delivered in connection
with sales of Shares by any Underwriter or dealer. If during
such period of time any event shall occur that in the judgment
of the Fund or in the opinion of counsel for the Underwriters
is required to be set forth in the Registration Statement or
the Prospectus (as then amended or supplemented) or should be
set forth therein in order to make the statements therein (in
the case of the Prospectus, in light of the circumstances
under which they were made) not misleading or if it is
necessary to supplement or amend the Registration Statement or
the Prospectus to comply with the 1933 Act, the 1940 Act, the
Rules and Regulations or any other law, rule or regulation,
the Fund will forthwith notify you of such event, prepare and,
subject to the provisions of paragraph (d) above, promptly
file with the Commission an appropriate amendment or
supplement thereto and will expeditiously furnish to the
Underwriters and dealers, without charge, such number of
copies thereof as they may reasonably request. In the event
that the Registration Statement or the Prospectus is to be
amended or supplemented, the Fund, if requested by you, xxxx
Xxxx 12
promptly issue a press release announcing or disclosing the
matters to be covered by the proposed amendment or supplement.
(g) The Fund will cooperate with you and with counsel for the
Underwriters in connection with the registration or
qualification of the Shares for offering and sale by the
several Underwriters and by dealers under the securities or
Blue Sky laws of such jurisdictions as you may designate and
will file such consents to service of process or other
documents necessary or appropriate in order to effect such
registration or qualification.
(h) The Adviser will make generally available to the Underwriters
its staff for assistance with roadshow presentations as the
Underwriters may reasonably request.
(i) As soon as practicable, but in no event later than the last
day of the 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) of the 1933 Act and Rule 158 of the 1933 Act
Rules and Regulations.
(j) The Fund will comply with the undertaking set forth in
paragraph 6 of Item 33 of Part C of the Registration
Statement.
(k) During the period of three years hereafter, the Fund will
furnish or will have furnished to you (i) as soon as
available, a copy of each report of the Fund mailed to
shareholders or filed with the Commission or furnished to the
AMEX and (ii) from time to time such other information
concerning the Fund as you may reasonably request.
(l) If this Agreement shall terminate or be terminated after
execution pursuant to any provisions hereof (otherwise than
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pursuant to the second paragraph of Section 10 hereof or by
notice given by you terminating this Agreement pursuant to
Section 11 hereof) or if this Agreement shall be terminated by
the Underwriters because of (i) any failure or refusal on the
part of the Fund or the Adviser to comply with any term or
fulfill any of the conditions of this Agreement required to be
complied with or fulfilled by them or (ii) the non-occurrence
of any other condition set forth in this Agreement required to
occur in connection with the sale by the Fund of the Shares,
the Fund and the Adviser, jointly and severally, agree to
reimburse the Representatives for all out-of-pocket expenses
not to exceed the amounts set forth in Section 12 of this
Agreement (including fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
(m) The Fund will direct the investment of the net proceeds of the
offering of the Shares (i) in accordance with the description
set forth in the Prospectus and (ii) in such a manner as to
comply with the investment objectives, policies and
restrictions of the Fund as described in the Prospectus.
(n) The Fund will file the requisite copies of the Prospectus with
the Commission in a timely fashion pursuant to Rule 497(c) or
Rule 497(h) of the 1933 Act Rules and Regulations, whichever
is applicable or, if applicable, will file in a timely fashion
the certification permitted by Rule 497(j) of the 1933 Act
Rules and Regulations and will advise you of the time and
manner of such filing.
(o) The Fund will use its best efforts to have the shares listed,
subject to notice of issuance, on the AMEX concurrently with
the effectiveness of the Registration Statement and to comply
with the rules or regulations of such exchange.
Page 14
(p) Except as provided in this Agreement or pursuant to any
dividend reinvestment plan of the Fund, none of the Fund, the
Adviser or their respective officers, trustees or directors
will sell, contract to sell or otherwise dispose of any common
stock or any securities convertible into or exercisable or
exchangeable for common stock or grant any options or warrants
to purchase common stock for a period of 180 days after the
date of the Prospectus, without the prior written consent of
the Representatives.
(q) Except as stated in this Agreement and in the Prospectus,
neither the Fund nor the Adviser will take, directly or
indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation
of the price of the Shares.
(r) The Fund will direct the investment of the proceeds of the
offering of the Shares so as to comply with the requirements
of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), to qualify as a regulated investment
company under the Code.
6. Representations and Warranties of the Fund and the Adviser.
The Fund and the Adviser, jointly and severally, represent and warrant
to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any
amendment or supplement thereto or filed pursuant to Rule 497
of the 1933 Act Rules and Regulations complied when so filed
in all material respects with the provisions of the 1933 Act,
the 1940 Act and the Rules and Regulations and the Commission
has not issued any order preventing or suspending the use of
the Prepricing Prospectus.
Page 15
(b) The registration statement in the form in which it became or
becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective, the
Prospectus and any amendment or supplement thereto when filed
with the Commission under Rule 497 of the 1933 Act Rules and
Regulations and the 1940 Act Notification when originally
filed with the Commission and any amendment or supplement
thereto when filed with the Commission complied or will comply
in all material respects with the provisions of the 1933 Act,
the 1940 Act and the Rules and Regulations, and each of the
Registration Statement and the Prospectus (or any supplement
or amendment to either of them) did not or will not at any
such times contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they
were made) not misleading; except that this representation and
warranty does not apply to statements in or omissions from the
Registration Statement and the Prospectus (and any amendment
or supplement to either of them) made in reliance upon and in
conformity with information relating to any Underwriter
furnished to the Fund in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) All the outstanding shares of capital stock of the Fund have
been duly authorized and validly issued, are fully paid and
(except as described in the Prospectus under "Certain
Provisions in the Declaration of Trust") nonassessable and are
Page 16
free of any preemptive or similar rights, the Shares have been
duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the
terms hereof, will be validly issued, fully paid and (except
as described in the Prospectus under "Certain Provisions in
the Declaration of Trust") nonassessable and free of any
preemptive or similar rights and the capital stock of the Fund
conforms to the description thereof in the Registration
Statement or the Prospectus (or any amendment or supplement to
either of them). Except for the Shares and the shares of
common stock issued in accordance with Section 14(a) of the
1940 Act, no other shares of capital stock are issued or
outstanding and the capitalization of the Fund conforms in all
respects to the description thereof in the Registration
Statement and the Prospectus (or any amendment or supplement
to either of them).
(d) The Fund has been duly formed and is validly existing in good
standing as a business trust under the laws of The
Commonwealth of Massachusetts, with full power and authority
to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them)
and is duly registered and qualified to conduct business and
is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business
requires such registration or qualification, except where the
failure so to register or to qualify, either alone or in the
aggregate, does not have or would not reasonably be expected
to have a material adverse effect on the condition (financial
or otherwise), business, properties, business prospects, net
assets or results of operations, whether or not occurring in
the ordinary course of business (a "Material Adverse Effect")
of the Fund. The Fund has no subsidiaries.
(e) There are no legal or governmental proceedings pending or, to
the knowledge of the Fund, threatened against the Fund or to
which the Fund or any of its properties is subject, that are
required to be described in the Registration Statement or the
Prospectus (and any amendment or supplement to either of them)
Page 17
but are not described as required and there are no agreements,
contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement to either of them)
or to be filed as an exhibit to the Registration Statement
that are not described or filed as required by the 1933 Act,
the 1940 Act or the Rules and Regulations.
(f) The Fund is not in violation of its Declaration of Trust
("Declaration of Trust"), by-laws or other organizational
documents or any law, ordinance, administrative or
governmental rule or regulation applicable to the Fund or of
any decree of the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator,
any court or any other governmental, regulatory,
self-regulatory or administrative agency or any other agency
or any body or official having jurisdiction over the Fund or
in breach or default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which the Fund is a
party or by which it or any of its properties may be bound,
except for such violation or such breach or default that,
either alone or in the aggregate, does not have or would not
reasonably be expected to have a Material Adverse Effect on
the Fund.
(g) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or any of the Fund
Agreements by the Fund, nor the consummation by the Fund of
the transactions contemplated hereby or thereby (i) requires
any consent, approval, authorization or order of or
registration or filing with the Commission, the NASD, any
state securities commission, any national securities exchange,
any arbitrator, any court, regulatory, body, administrative
Page 18
agency or other governmental body, agency or official having
jurisdiction over the Fund (except compliance with the
securities or Blue Sky laws of various jurisdictions which
have been or will be effected in accordance with this
Agreement and except for compliance with the filing
requirements of the NASD Division of Corporate Finance) or
conflicts or will conflict with or constitutes or will
constitute a breach of the Declaration of Trust, bylaws, or
other organizational documents of the Fund or (ii) (A)
conflicts or will conflict with or constitutes or will
constitute a breach of or a default under any agreement,
indenture, lease or other instrument to which the Fund is a
party or by which it or any of its properties may be bound or
(B) violates or will violate any statute, law, regulation or
filing or judgment, injunction, order or decree applicable to
the Fund or any of its properties or will result in the
creation or imposition of any lien, charge or encumbrance upon
(collectively, a "lien") any property or assets of the Fund
pursuant to the terms of any agreement or instrument to which
it is a party or by which it may be bound or to which any of
the property or assets of the Fund is subject, except for such
conflict, breach, default, violation or lien that, either
alone or in the aggregate, does not have or would not
reasonably be expected to have a Material Adverse Effect on
the Fund. As of the date hereof, the Fund is not subject to
any order of any court or of any arbitrator, governmental
authority or administrative agency.
(h) Since the date as of which information is given in the
Registration Statement and the Prospectus (and any amendment
or supplement to either of them), except as otherwise stated
therein, (i) there has been no material, adverse change in the
condition (financial or other), business, properties, net
assets or results of operations of the Fund or business
prospects (other than as a result of a change in the financial
Page 19
markets generally) of the Fund, whether or not arising in the
ordinary course of business, (ii) there have been no
transactions entered into by the Fund other than those in the
ordinary course of its business as described in the Prospectus
(and any amendment or supplement thereto) and (iii) there has
been no dividend or distribution of any kind declared, paid or
made by the Fund on any class of its common stock.
(i) The accountants, Deloitte & Touche LLP, who have audited the
Statement of Assets and Liabilities included in the
Registration Statement and the Prospectus (and any amendment
or supplement to either of them), are an independent public
accounting firm as required by the 1933 Act, the 1940 Act and
the Rules and Regulations.
(j) The financial statements, together with related schedules and
notes, included or incorporated by reference in the
Registration Statement or the Prospectus (or any amendment or
supplement to either of them) present fairly the financial
position of the Fund on the basis stated in the Registration
Statement at the respective dates or for the respective
periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved except as disclosed therein;
and the other financial and statistical information and data
included in the Registration Statement or the Prospectus (or
any amendment or supplement thereto) are accurately derived
from such financial statements and the books and records of
the Fund.
(k) The Fund, subject to the Registration Statement having been
declared effective and the filing of the Prospectus under Rule
497 under the 1933 Act Rules and Regulations, has taken all
required action under the 1933 Act, the 1940 Act and the Rules
Page 20
and Regulations to make the public offering and consummate the
sale of the Shares as contemplated by this Agreement.
(l) The execution and delivery of and the performance by the Fund
of its obligations under this Agreement and the Fund
Agreements have been duly and validly authorized by the Fund
and this Agreement and each of the Fund Agreements have been
duly executed and delivered by the Fund and each constitutes
the valid and legally binding agreement of the Fund,
enforceable against the Fund in accordance with its terms,
except as rights to indemnity and contribution hereunder may
be limited by federal or state securities laws and subject to
the qualification that the enforceability of the Fund's
obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and
by general equitable principles.
(m) Except as disclosed in or contemplated by the Registration
Statement or the Prospectus (or any amendment or supplement to
either of them), subsequent to the respective dates as of
which such information is given in the Registration Statement
and the Prospectus (and any amendment or supplement to either
of them), the Fund has not incurred any material liability or
obligation, direct or contingent, or entered into any
transaction, not in the ordinary course of business, and there
has not been any change in the capital stock or any change or
any development involving or which should reasonably be
expected to involve a Material Adverse Effect on the Fund or
its capitalization, or the incurrence of any debt by, the
Fund.
(n) The Fund has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the
distribution of the Shares, will not distribute to the public
Page 21
any offering material in connection with the offering and sale
of the Shares other than the Registration Statement, the
Prepricing Prospectus included in Pre-Effective Amendment No.
1 to the registration statement, the Prospectus and the
investor sales material (as hereinafter defined) filed with
the NASD on [ ], 2003.
(o) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("permits") as are
necessary to own its property and to conduct its business in
the manner described in the Prospectus (and any amendment or
supplement thereto); the Fund has fulfilled and performed all
its material obligations with respect to such permits and no
event has occurred which allows or, after notice or lapse of
time, would allow, revocation or termination thereof or
results in any other material impairment of the rights of the
Fund under any such permit, subject in each case to such
qualification as may be set forth in the Prospectus (and any
amendment or supplement thereto); and, except as described in
the Prospectus (and any amendment or supplement thereto), none
of such permits contains any restriction that is materially
burdensome to the Fund.
(p) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance
with the Board of Trustees' general or specific authorization
and with the investment policies and restrictions of the Fund
and the applicable requirements of the 1940 Act, the 1940 Act
Rules and Regulations and the Code; (ii) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles, to calculate net asset value and fee accruals, to
maintain accountability for assets and to maintain compliance
with the books and records requirements under the 1940 Act and
the 1940 Act Rules and Regulations; (iii) access to assets is
Page 22
permitted only in accordance with the Board of Trustees'
general or specific authorization; and (iv) the recorded
account for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with
respect to any differences.
(q) The conduct by the Fund of its business (as described in the
Prospectus) does not require it to be the owner, possessor or
licensee of any patents, patent licenses, trademarks, service
marks or trade names which it does not own, possess or license
or sub-license.
(r) Except as stated in this Agreement and in the Prospectus (and
any amendment or supplement thereto), the Fund has not taken
and will not take, directly or indirectly, any action designed
to or which could cause or result in or which will constitute
stabilization or manipulation of the price of the Shares in
violation of federal securities laws and no such action has
been, or will be, taken by any affiliates of the Fund.
(s) The Fund is duly registered under the 1940 Act and the Rules
and Regulations as a closed-end, diversified management
investment company and the 1940 Act Notification has been duly
filed with the Commission and, at the time of filing thereof
and at all times through the date hereof the 1940 Act
Notification conformed in all material respects with all
applicable provisions of the 1940 Act and the Rules and
Regulations; no order of suspension or revocation of such
registration under the 1940 Act and the Rules and Regulations
has been issued or proceedings therefor initiated or
threatened by the Commission. The provisions of the
Declaration of Trust, and the investment policies and
restrictions described in each of the Registration Statement
and the Prospectus, comply in all material respects with the
requirements of the 1940 Act and the Rules and Regulations.
Page 23
(t) All advertising, sales literature or other promotional
material (including "prospecting letters" and "prospectus
wrappers" (collectively, "investor sales material") and
"broker kits," "road show slides," "road show scripts,"
"broker post-cards" and "broker reference cards"
(collectively, "broker sales material") authorized in writing
by or prepared by the Fund or the Adviser for use in
connection with the offering and sale of the Shares (investor
sales material and broker sales material are collectively
referred to as "sales material") complied and will comply in
all respects with the applicable requirements of the 1933 Act,
the 1933 Act Rules and Regulations and the rules and
interpretations of the NASD and, if required to be filed with
the NASD under the NASD's conduct rules, were so filed and no
such sales material, when read together with the Prospectus,
contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
(u) This Agreement and each of the Fund Agreements complies in all
material respects with all applicable provisions of the 1933
Act, the 1940 Act, the Rules and Regulations, the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and the
rules and regulations of the Commission promulgated under the
Advisers Act (the "Advisers Act Rules and Regulations").
(v) 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.
Page 24
(w) The Fund and the Adviser intend to direct the investment of
the proceeds of the offering of the Shares in such a manner as
to comply with the requirements of Subchapter M of the Code.
(x) In the event that the Fund or the Adviser makes available any
promotional materials intended for use only by qualified
broker-dealers and registered representatives thereof by means
of an Internet web site or similar electronic means, the Fund
or the Adviser will install and maintain pre-qualification and
password-protection or similar procedures which are reasonably
designed to effectively prohibit access to such promotional
materials by persons other than qualified broker-dealers and
registered representatives thereof.
(y) The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus or the
Prospectus.
(z) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them),
no trustee of the Fund is an "interested person" (as defined
in the 0000 Xxx) of the Fund or an "affiliated person" (as
defined in the 0000 Xxx) of any Underwriter listed in Schedule
I hereto.
(aa) The Shares have been approved for listing on the AMEX and the
Fund's registration statement on Form 8-A under the 1934 Act
has become effective.
7. Representations and Warranties of the Adviser. The Adviser
represents and warrants to each Underwriter as follows:
(a) The Adviser is a limited partnership duly organized and
validly existing in good standing under the laws of the State
of Illinois, with full power and authority to own, lease and
operate its properties and to conduct its business as
described in each of the Registration Statement and the
Page 25
Prospectus (or any amendment or supplement to either of them)
and is duly registered and qualified to conduct business and
is in good standing in each jurisdiction or place where the
nature of its properties or conduct of its business requires
such registration or qualification, except where the failure
so to register or to qualify would not have a material,
adverse affect on the condition (financial or other), general
affairs, business, properties, net assets or results of
operations of the Adviser or the Fund.
(b) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not
prohibited by the Advisers Act, the 1940 Act, the Advisers Act
Rules and Regulations or the 1940 Act Rules and Regulations
from acting under the Advisory Agreement for the Fund as
contemplated by the Registration Statement or the Prospectus
(or any amendment or supplement to either of them). There does
not exist any proceeding which could have a Material Adverse
Effect on the registration of the Adviser with the Commission.
(c) There are no legal or governmental proceedings pending or, to
the knowledge of the Adviser, threatened against the Adviser
that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement to
either of them) but are not described as required or that
could result in any Material Adverse Effect on the Adviser or
that may have a material, adverse effect on the ability of the
Adviser to perform its obligations under this Agreement or any
of the Adviser Agreements.
(d) Neither the execution, delivery or performance of this
Agreement or the Advisory Agreement by the Adviser, nor the
consummation by the Adviser of the transactions contemplated
hereby or thereby (i) requires the Adviser to obtain any
Page 26
consent, approval, authorization or other order of, or
registration or filing with, the Commission, the NASD, any
state securities commission, any national securities exchange,
any arbitrator, any court, regulatory body, administrative
agency or other governmental body, agency or official having
jurisdiction over the Adviser or conflicts or will conflict
with or constitutes or will constitute a breach of or a
default under, the partnership agreement or bylaws or other
organizational documents of the Adviser or (ii) conflicts or
will conflict with or constitutes or will constitute a breach
of or a default under, any agreement, indenture, lease or
other instrument to which the Adviser is a party or by which
the Adviser or any of its properties may be bound, or violates
or will violate any statute, law, regulation or judgment,
injunction, order or decree applicable to the Adviser or any
of its properties or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets
of the Adviser pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound
or to which any of the property or assets of the Adviser is
subject, except in any case under clause (ii) for such
conflict, breach, default, violation or lien that, either
alone or in the aggregate, does not have or would not
reasonably be expected to have a Material Adverse Effect on
the Adviser or on the ability of the Adviser to perform its
obligations under this Agreement or any of the Adviser
Agreements. The Adviser is not subject to any order of any
court or of any arbitrator, regulatory body, administrative
agency or other governmental body, agency or official.
(e) The Adviser has full power and authority to enter into this
Agreement and each of the Adviser Agreements; the execution
and delivery of, and the performance by the Adviser of its
obligations under, this Agreement and each of the Adviser
Agreements have been duly and validly authorized by the
Page 27
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 federal or state securities laws
and subject to the qualification that the enforceability of
the Adviser's obligations hereunder and thereunder may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable
principles whether enforcement is considered in a proceeding
in equity or at law.
(f) The Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in
the Registration Statement and the Prospectus (or any
amendment or supplement to either of them) or under this
Agreement and each of the Adviser Agreements.
(g) The description of the Adviser and its business, and the
statements attributable to the Adviser, in the Registration
Statement or the Prospectus (or any amendment or supplement to
either of them) complied and comply in all material respects
with the provisions of the 1933 Act, the 1940 Act, the
Advisers Act, the Rules and Regulations and the Advisers Act
Rules and Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not
misleading.
(h) Since the date as of which information is given in the
Registration Statement or the Prospectus (or any amendment or
Page 28
supplement to either of them), except as otherwise stated
therein, (i) there has been no material adverse change in the
condition (financial or other), business, properties, net
assets or results of operations or business prospects of the
Adviser, whether or not arising from the ordinary course of
business, and (ii) there have been no transactions entered
into by the Adviser which are material to the Adviser other
than those in the ordinary course of its business as described
in the Prospectus.
(i) The Adviser has such permits as are necessary to own its
property and to conduct its business in the manner described
in the Prospectus (and any amendment or supplement thereto);
and the Adviser has fulfilled and performed all its material
obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any
other impairment of the rights of the Adviser under any such
permit.
(j) None of this Agreement nor any of the Adviser Agreements
violate any applicable provisions of the 1940 Act, the 1940
Act Rules and Regulations, the Advisers Act and the Advisers
Act Rules and Regulations.
(k) Except as stated in this Agreement, the Registration Statement
or the Prospectus (or in any amendment or supplement to any of
the foregoing), the Adviser has not taken and will not take,
directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in or which will
constitute stabilization or manipulation of the price of the
Shares or of any securities issued by the Fund to facilitate
the sale or resale of the Shares, in each case, in violation
of federal securities laws and the Adviser is not aware of any
such action taken or to be taken by any affiliates of the
Adviser.
Page 29
8. Indemnification and Contribution.
(a) The Fund and the Adviser, jointly and severally, agree to
indemnify and hold harmless each of you and each other
Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act, from and against any and all
losses, claims, damages, liabilities and expenses, joint or
several (including reasonable costs of investigation), arising
out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement, the Prospectus, any Prepricing Prospectus, any
sales material (as defined in Section 6(t) of this Agreement)
(or any amendment or supplement to any of the foregoing) or
arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances under which they
were made) not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of or are
based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the
information relating to such Underwriters furnished in writing
to the Fund by or on behalf of any Underwriter through you
expressly for use in connection therewith; provided, however,
that the foregoing indemnification contained in this paragraph
(a) with respect to the Prepricing Prospectus contained in
Pre-Effective Amendment No. 1 to the Registration Statement
shall not inure to the benefit of any Underwriter (or to the
benefit of any person controlling such Underwriter) on account
of any such loss, claim, damage, liability or expense arising
from the sale of the Shares by such Underwriter to any person
Page 30
if it is shown that a copy of the Prospectus (which term as
used in this proviso shall not include any statement of
additional information) was not delivered or sent to such
person within the time required by the 1933 Act and the 1933
Act Rules and Regulations and the untrue statement or alleged
untrue statement or omission or alleged omission of a material
fact contained in such Prepricing Prospectus was corrected in
the Prospectus, provided that the Fund has delivered the
Prospectus to the several Underwriters in requisite quantity
on a timely basis to permit proper delivery or sending. The
foregoing indemnity agreement shall be in addition to any
liability which the Fund or the Adviser may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in
respect of which indemnity may be sought against the Fund or
the Adviser, such Underwriter or such controlling person shall
promptly notify the Fund or the Adviser, and the Fund or the
Adviser shall assume the defense thereof, including the
employment of counsel and the payment of all fees and
expenses. Such Underwriter or any such controlling person
shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at
the expense of such Underwriter or controlling person unless
(i) the Fund or the Adviser have agreed in writing to pay such
fees and expenses, (ii) the Fund or the Adviser have failed
within a reasonable time to assume the defense and employ
counsel or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both such
Underwriter or such controlling person and the Fund or the
Adviser and such Underwriter or such controlling person shall
have been advised by its counsel that representation of such
Page 31
indemnified party and the Fund or the Adviser by the same
counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by
the same counsel has been proposed) due to actual or potential
differing interests between them (in which case the Fund and
the Adviser shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such Underwriter
or such controlling person). It is understood, however, that
the Fund and the Adviser shall, in connection with any one
such action, suit or proceeding or separate but substantially
similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses
of only one separate firm of attorneys (in addition to any
local counsel if there is any action, suit or proceeding in
more than one jurisdiction) at any time for all such
Underwriters and controlling persons not having actual or
potential differing interests with you or among themselves,
which firm shall be designated in writing by the
Representatives and that, subject to the requirements of 1940
Act Release No. 11330, all such fees and expenses shall be
reimbursed promptly as they are incurred. The Fund and the
Adviser shall not be liable for any settlement of any such
action, suit or proceeding effected without the written
consent of the Fund or the Adviser, but if settled with such
written consent or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the Fund and
the Adviser agree to indemnify and hold harmless any
Underwriter, to the extent provided in the preceding paragraph
and any such controlling person from and against any loss,
liability, damage or expense by reason by such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Fund and the Adviser, their
trustees, directors, partners, members or managers, any
Page 32
officers of the Fund who sign the Registration Statement and
any person who controls the Fund or the Adviser within the
meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, to the same extent as the foregoing indemnity from
the Fund and the Adviser to each Underwriter, but only with
respect to information relating to such Underwriter furnished
in writing by or on behalf of such Underwriter through you
expressly for use in the Registration Statement, the
Prospectus or the Prepricing Prospectus contained in
Pre-Effective Amendment No. 1 to the Registration Statement.
If any action, suit or proceeding shall be brought against the
Fund or the Adviser, any of their trustees, directors,
partners, members or managers, any such officer or any such
controlling person, based on the Registration Statement, the
Prospectus or any Prepricing Prospectus (or any amendment or
supplement thereto) and in respect of which indemnity may be
sought against any Underwriter pursuant to this paragraph (c),
such Underwriter shall have the rights and duties given to
each of the Fund and the Adviser by paragraph (b) above
(except that if the Fund or the Adviser shall have assumed the
defense thereof such Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in
the defense thereof, but the fees and expenses of such counsel
shall be at such Underwriter's expense) and the Fund and the
Adviser, their trustees, directors, partners, managers or
members, any such officer and any such controlling person
shall have the rights and duties given to the Underwriters by
paragraph (b) above. The foregoing indemnity agreement shall
be in addition to any liability which the Underwriters may
otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or
(c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is
Page 33
appropriate to reflect the relative benefits received by the
Fund and the Adviser on the one hand (treated jointly for this
purpose as one person) and the Underwriters on the other from
the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the
relative fault of the Fund and the Adviser on the one hand
(treated jointly for this purpose as one person) and of the
Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by
the Fund and the Adviser on the one hand (treated jointly for
this purpose as one person) and the Underwriters on the other
shall be deemed to be in the same proportion that the total
net proceeds from the offering (before deducting expenses)
received by the Fund bear to the total underwriting discounts
and commissions received by the Underwriters, in each case, as
set forth in the table on the cover page of the Prospectus.
The relative fault of the Fund and the Adviser on the one hand
(treated jointly for this purpose as one person) and of the
Underwriters on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged
omission to state a material fact relates to information
supplied by the Fund and the Adviser on the one hand (treated
jointly for this purpose as one person) or by the Underwriters
on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission.
Page 34
(e) The Fund, the Adviser and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account
of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending
any such action, suit or proceeding. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required
to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed
to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 8 are
several in proportion to the respective number of Shares set
forth opposite their names in Schedule I (or such number of
Shares increased as set forth in Section 10 hereof) and not
joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which
any indemnified party is or could have been a party and
Page 35
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional
release of such indemnified party from all liability from
claimants on claims that are the subject matter of such
action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or
contribution under this Section 8 shall, subject to the
requirements of Release No. 11330, be paid by the indemnifying
party to the indemnified party as such losses, claims,
damages, liabilities or expenses are incurred. The indemnity
and contribution agreements contained in this Section 8 and
the representations and warranties of each of the Fund and the
Adviser set forth in this Agreement shall remain operative and
in full force and effect, regardless of (i) any investigation
made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Fund, the Adviser or their
trustees, directors, partners, managers, members, officers or
any person controlling the Fund or the Adviser, (ii)
acceptance of any Shares and payment therefor hereunder and
(iii) any termination of this Agreement. A successor to any
Underwriter or to the Fund or the Adviser or their trustees,
directors, partners, managers, members, officers or any person
controlling the Fund or the Adviser shall be entitled to the
benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
(h) The Fund and the Adviser each acknowledge that the statements
with respect to (1) the public offering price of the Shares as
set forth on the cover page of the Prospectus and (2) as set
forth under the caption "Underwriting" in the Prospectus (i)
the names of the Underwriters, (ii) the number of Firm Shares
set forth opposite the name of each Underwriter, (iii) the
amount of the selling concessions and reallowances of selling
Page 36
concessions set forth in the first sentence of the fourth
paragraph, (iv) the penultimate paragraph and (v) the final
paragraph constitute the only information furnished in writing
to the Fund by the Underwriters expressly for use in such
document. The Underwriters severally confirm that these
statements are correct in all material respects and were so
furnished by or on behalf of the Underwriters severally for
use in the Prospectus.
9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Shares hereunder are
subject to the accuracy of and compliance with the representations,
warranties and agreements of and by each of the Fund and the Adviser
contained herein on and as of the date on which the Registration
Statement becomes or became effective, the date of the Prospectus (and
of any amendment or supplement thereto) and the Closing Date and, with
respect to any Additional Shares, any Option Closing Date; to the
accuracy and completeness of all statements made by the Fund, the
Adviser or any of their respective officers in any certificate
delivered to the Representatives or their counsel pursuant to this
Agreement; and to the following conditions:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective
before the offering of the Shares may commence, the
Registration Statement or such post-effective amendment shall
have become effective not later than 5:30 p.m., New York City
time, on the date hereof or at such later date and time as
shall be consented to in writing by you and all filings, if
any, required by Rules 497 and 430A under the 1933 Act and the
1933 Act Rules and Regulations shall have been timely made; no
stop order suspending the effectiveness of the Registration
Statement or order pursuant to Section 8(e) of the 1940 Act
shall have been issued and no proceeding for that purpose
Page 37
shall have been instituted or, to the knowledge of the Fund,
the Adviser or any Underwriter, threatened by the Commission
and any request of the Commission for additional information
(to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change or any development
involving a prospective change in or affecting the condition
(financial or otherwise), business, properties, business
prospects, net assets or results of operations, whether or not
occurring in the ordinary course of business, of the Fund or
the Adviser not contemplated by the Prospectus which, in your
opinion, would materially adversely affect the market for the
Shares, or (ii) any event or development relating to or
involving the Fund or the Adviser or any officer, trustee,
director, manager or member of the Fund or the Adviser which
makes any statement made in the Prospectus (or any amendment
or supplement thereto) untrue or which, in the opinion of the
Fund and its counsel or the Underwriters and their counsel,
requires the making of any addition to or change in the
Prospectus (or any amendment or supplement thereto) in order
to state a material fact required by the 1933 Act, the 1940
Act or the Rules and Regulations or any other law to be stated
therein or necessary in order to make the statements therein
(in light of the circumstances under which they were made) not
misleading, if amending or supplementing the Prospectus (or
any previous amendment or supplement thereto) to reflect such
event or development would, in your opinion, materially
adversely affect the market for the Shares.
(c) That you shall have received on the Closing Date an opinion of
Xxxxxxx and Xxxxxx, special counsel for the Fund, dated the
Closing Date and addressed to you, as the Representatives of
Page 38
the several Underwriters, in substantially the form attached
hereto as Exhibit A. In rendering its opinion, Xxxxxxx and
Xxxxxx may rely, as to matters of Massachusetts law, upon the
opinion of Xxxxxxx XxXxxxxxx LLP dated as of the date thereof.
(d) That you shall have received on the Closing Date an opinion of
Xxxxxxx & Xxxxxx, special counsel for the Adviser, dated the
Closing Date and addressed to you, as Representatives of the
several Underwriters, in substantially the form attached
hereto as Exhibit B.
(e) That you shall have received on the Closing Date an opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), dated the
Closing Date and addressed to you, as the Representatives of
the several Underwriters, with respect to such matters as you
may require and the Fund, the Adviser and their respective
counsel shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon
such matters. In rendering its opinion, Skadden, Arps, Slate,
Xxxxxxx & Xxxx (Illinois) may rely, as to matters of
Massachusetts law, upon the opinion of Xxxxxxx XxXxxxxxx LLP
dated as of the date thereof.
(f) That you shall have received letters addressed to you, as the
Representatives of the several Underwriters and dated each of
the date hereof and the Closing Date from Deloitte & Touche
LLP, independent certified public accountants, substantially
in the form attached hereto as Exhibit C.
(g) (i) No order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the
Prospectus (or any amendment or supplement to any of the
foregoing) or any Prepricing Prospectus or any sales material
shall have been issued and no proceedings for such purpose or
for the purpose of commencing an enforcement action against
Page 39
the Fund or the Adviser or, with respect to the transactions
contemplated by the Prospectus (or any amendment or supplement
thereto) and this Agreement, may be pending before or, to the
knowledge of the Fund, the Adviser or any Underwriter or in
the reasonable view of counsel to the Underwriters, shall be
threatened or contemplated by the Commission at or prior to
the Closing Date and that any request for additional
information on the part of the Commission (to be included in
the Registration Statement, the Prospectus or otherwise) be
complied with to the satisfaction of the Representatives, (ii)
there shall not have been any change in the capital stock of
the Fund nor any increase in debt of the Fund from that set
forth in the Registration Statement or the Prospectus (or any
amendment or supplement to either of them) and the Fund shall
not have sustained any material liabilities or obligations,
direct or contingent, other than those reflected in or
contemplated by the Registration Statement or the Prospectus
(or any amendment or supplement to either of them), (iii)
since the date of the Prospectus there shall not have been any
material, adverse change in the condition (financial or
otherwise), business, properties, business prospects, net
assets or results of operations, whether or not occurring in
the ordinary course of business, of the Fund or the Adviser,
(iv) neither the Fund nor the Adviser shall have sustained any
material loss or interference with their businesses from any
court or from legislative or other governmental action, order
or decree or from any other occurrence not described in the
Registration Statement or the Prospectus (or any amendment or
supplement to either of them) and (v) all of the
representations and warranties of each of the Fund and the
Adviser contained in this Agreement shall be true and correct
on and as of the date hereof and as of the Closing Date as if
made on and as of the Closing Date.
Page 40
(h) That neither the Fund nor the Adviser shall have failed at
performing or complying with, or prior to the Closing Date to
have performed or complied with, any of the agreements herein
contained and required to be performed or complied with by
them at or prior to the Closing Date.
(i) That you shall have received on the Closing Date a
certificate, dated such date, of each of the chief executive
officer and chief financial officer of each of the Fund and
the Adviser certifying that (i) the signers have carefully
examined the Registration Statement, the Prospectus (and any
amendments or supplements to either of them) and this
Agreement, (ii) the representations and warranties of the Fund
(with respect to the certificates from such Fund officers) and
the representations and warranties of the Adviser (with
respect to the certificates from such officers of the Adviser)
in this Agreement are true and correct on and as of the date
of the certificate as if made on such date, (iii) since the
date of the Prospectus (and any amendment or supplement
thereto), there has not been any material, adverse change in
the condition (financial or otherwise), business, properties,
business prospects, net assets or results of operations,
whether or not occurring in the ordinary course of business,
of the Fund (with respect to the certificates from such Fund
officers) or the Adviser (with respect to the certificates
from such officers of the Adviser), (iv) to the knowledge of
such officers after reasonable investigation, no order
suspending the effectiveness of the Registration Statement or
prohibiting the sale of any of the Shares or having a
material, adverse effect on the Fund (with respect to the
certificates from such Fund officers) or the Adviser (with
respect to the certificates from such officers of the Adviser)
has been issued and no proceedings for any such purpose are
pending before or threatened by the Commission or any court or
other regulatory body, the NASD, any state securities
Page 41
commission, any national securities exchange, any arbitrator,
any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official, (v)
each of the Fund (with respect to certificates from such Fund
officers) and the Adviser (with respect to certificates from
such officers of the Adviser) has performed and complied with
all agreements that this Agreement require it to perform by
such Closing Date, (vi) neither the Fund (with respect to the
certificate from such officers of the Fund) nor the Adviser
(with respect to the certificate from such officers of the
Adviser) has sustained any material loss or interference with
its business from any court or from legislative or other
governmental action, order or decree or from any other
occurrence not described in the Registration Statement or the
Prospectus and any amendment or supplement to either of them
and (vii) with respect to the certificate from such officers
of the Fund, there has not been any change in the capital
stock of the Fund nor any increase in the debt of the Fund
from that set forth in the Prospectus (or any amendment or
supplement thereto) and the Fund has not sustained any
material liabilities or obligations, direct or contingent,
other than those reflected in the Prospectus (or any amendment
or supplement thereto).
(j) That the Fund and the Adviser shall have furnished to you such
further letters, certificates, documents and opinions of
counsel as you shall reasonably request (including
certificates of officers of the Fund and the Adviser).
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they
are satisfactory in form and substance to you and your counsel
acting in good faith.
Page 42
Any certificate or document signed by any officer of the Fund
or the Adviser and delivered to you, as the Representatives of
the Underwriters or to Underwriters' counsel, shall be deemed
a representation and warranty by the Fund or the Adviser to
each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to (i) the accuracy of
and compliance with the representations and warranties of the
Fund and the Adviser contained herein on and as of the Option
Closing Date as though made on any Option Closing Date, (ii)
satisfaction on and as of any Option Closing Date of the
conditions set forth in this Section 9 except that, if any
Option Closing Date is other than the Closing Date, the
certificates, opinions and letters referred to in Sections 9
(c), (d), (e), (f) and (i) and this paragraph shall be dated
the Option Closing Date in question and the opinions called
for by Sections 9 (c), (d), (e) and (f) shall be revised to
reflect the sale of Additional Shares and (iii) the absence of
circumstances on or prior to the Option Closing Date which
would permit termination of this Agreement pursuant to Section
11 hereof if they existed on or prior to the Closing Date.
10. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties
hereto; or (ii) if, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective before the
offering of the Shares may commence, when the Registration Statement
or such post-effective amendment has become effective. Until such time
as this Agreement shall have become effective, it may be terminated by
the Fund by notifying you, or by you by notifying the Fund.
Page 43
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they have agreed to purchase hereunder and
the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the
aggregate number of Shares set forth opposite its name in Schedule I
hereby bears to the aggregate number of Shares set forth opposite the
names of all non-defaulting Underwriters or in such other proportion as
you may specify in accordance with Section 7 of the Master Agreement
Among Underwriters, to purchase Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase.
If any Underwriter or Underwriters shall fail or refuse to purchase
Shares and the aggregate number of Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Shares
and arrangements satisfactory to you and the Fund for the purchase of
such Shares by one or more non-defaulting Underwriters or other party
or parties approved by you and the Fund are not made within 36 hours
after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Fund. In any such
case which does not result in termination of this Agreement, either you
or the Fund shall have the right to postpone the Closing Date, but in
no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from
liability in respect to any such default of any such Underwriter under
this Agreement. The term "Underwriter" as used in this Agreement
includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Fund,
purchases Shares which a defaulting Underwriter agreed, but failed or
refused, to purchase.
Page 44
Any notice under this Section 10 may be made by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion without liability on the part
of any Underwriter to the Fund or the Adviser by notice to the Fund or
the Adviser if prior to the Closing Date or any Option Closing Date (if
different from the Closing Date and then only as to the Additional
Shares), as the case may be, (i) trading in securities generally on the
New York Stock Exchange, American Stock Exchange, Nasdaq National
Market, Nasdaq SmallCap Market or the Nasdaq Stock Market shall have
been suspended or limited or minimum prices shall have been
established, (ii) additional governmental restrictions not in force on
the date of this Agreement have been imposed upon trading in securities
generally or a general moratorium on commercial banking activities
shall have been declared by Federal or any state's authorities or (iii)
any outbreak or material escalation of hostilities or other
international or domestic calamity, crisis or change in political,
financial, economic, legal or regulatory conditions, occurs, the effect
of which is such as to make it, in your judgment, impracticable or
inadvisable to commence or continue the offering of the Shares at the
offering price to the public set forth on the cover page of the
Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Fund or
the Adviser by telegram, telecopy or telephone but shall be
subsequently confirmed by letter.
12. Expenses. The Fund agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance
by the Fund of its obligations hereunder: (a) the preparation, printing
or reproduction, filing (including, without limitation, the filing or
registration fees prescribed by the 1933 Act, the 1934 Act, the 1940
Act and the Rules and Regulations) and distribution of the Registration
Statement (including exhibits thereto), the Prospectus, each Prepricing
Page 45
Prospectus and the 1940 Act Notification and all amendments or
supplements to any of them, (b) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Registration Statement,
the Prospectus, each Prepricing Prospectus, any sales material (and all
amendments or supplements to any of them) as may be reasonably
requested for use in connection with the offering and sale of the
Shares, (c) the preparation, printing, authentication, issuance and
delivery of certificates (if any) for the Shares, including any stamp
taxes and transfer agent and registrar fees payable in connection with
the original issuance and sale of such Shares, (d) the registrations or
qualifications of the Shares for offer and sale under the securities or
Blue Sky laws of the several states as provided in Section 5(g) hereof
(including the reasonable fees, expenses and disbursements of counsel
for the Underwriters relating to the preparation, printing or
reproduction and delivery of the preliminary and supplemental Blue Sky
Memoranda and such registration and qualification), (e) the fees and
expenses of the Fund's independent accountants, counsel for the Fund
and of the transfer agent, (f) the expenses of delivery to the
Underwriters and dealers (including postage, air freight and the cost
of counting and packaging) of copies of the Prospectus, the Prepricing
Prospectus, any sales material and all amendments or supplements to the
Prospectus as may be requested for use in connection with the offering
and sale of the Shares, (g) the printing (or reproduction) and delivery
of this Agreement, any dealer agreements, the preliminary and
supplemental Blue Sky Memoranda and all other company-authorized
agreements or other documents printed (or reproduced) and delivered in
connection with the offering of the Shares, (h) the filing fees and the
fees and expenses of counsel for the Underwriters in connection with
any filings required to be made with the NASD and incurred with respect
to the review of the offering of the Shares by the NASD, which fees and
expenses of counsel, together with the fees, expenses and disbursements
of counsel set forth in paragraph (d) of this Section 12 above, shall
Page 46
not exceed $25,000, exclusive of NASD and state filing fees, (i) the
transportation, lodging, graphics and other expenses related to the
Fund's preparation for and participation in the roadshow, (j) the
listing of the Shares on the AMEX and (k) an amount not to exceed
$25,000 payable on the Closing Date to the Representatives in partial
reimbursement of their expenses (but not including reimbursement for
the cost of one tombstone advertisement in a newspaper that is
one-quarter of a newspaper page or less in size) in connection with the
offering.
Notwithstanding the foregoing, in the event that the sale of
the Shares is not consummated pursuant to Section 2 hereof, the Adviser
will pay the costs and expenses of the Fund set forth above in this
Section 12(a) through (i), and reimbursements of Underwriter expenses
in connection with the offering shall be made in accordance with
Section 5(l) hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10
and 11 hereof, notice given pursuant to any provision of this Agreement
shall be in writing and shall be delivered (a) if to the Fund or the
Adviser, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000,
Attention: W. Xxxxx Xxxxxxx, and (b) if to you, as Representatives of
the Underwriters, at the office of X.X. Xxxxxxx & Sons, Inc., Xxx Xxxxx
Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxx, with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois),
000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X.
Xxxx, Esq.
This Agreement has been and is made solely for the benefit of
the several Underwriters, the Fund, the Adviser, their trustees,
directors, partners, officers, managers, members and the other
controlling persons referred to in Section 8 hereof and their
respective successors and assigns, to the extent provided herein and no
other person shall acquire or have any right under or by virtue of this
Page 47
Agreement. Neither the term "successor" or the term "successors and
assigns" as used in this Agreement shall include a purchaser from any
Underwriter of any of the Shares in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of
New York.
15. Binding Agreement on the Fund. The Fund's Declaration of Trust
is on file with the Secretary of The Commonwealth of Massachusetts.
This Agreement is executed on behalf of the Fund by the Fund's officers
as officers and not individually and the obligations imposed upon the
Fund by this Agreement are not binding upon any of the Fund's
shareholders individually but are binding only upon the assets and
property of the Fund.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in
counterparts, this Agreement shall not become effective unless at least
one counterpart hereof shall have been executed and delivered on behalf
of each party hereto.
Page 48
Please confirm that the foregoing correctly sets forth the agreement
among the Fund, the Adviser and the several Underwriters.
Very truly yours,
FIRST TRUST VALUE LINE(R) DIVIDEND FUND
By:
-------------------------------
Title:
FIRST TRUST ADVISORS, L.P.
By:
-------------------------------
Title:
Page 49
Confirmed as of the date
first above written on
behalf of themselves and
the other several Under-
writers named in Schedule
I hereto.
AS REPRESENTATIVE OF THE SEVERAL UNDERWRITERS
X.X. XXXXXXX & SONS, INC.
By:
--------------------------------
Title:
Page 50
SCHEDULE I
Underwriter Number of Shares
----------- ----------------
X.X. Xxxxxxx & Sons, Inc. [ ]
Total [ ]
----
Page 51
EXHIBIT A
Form of Xxxxxxx and Xxxxxx Opinion Regarding the Fund
i. The Registration Statement and all post-effective amendments, if any, are
effective under the Act and no stop order with respect thereto has been issued
and no proceeding for that purpose has been instituted or, to the best of our
knowledge, is threatened by the Commission. Any filing of the Prospectus or any
supplements thereto required under Rule 497 under the Act prior to the date
hereof have been made in the manner and within the time required by such rule.
ii. The Fund has been duly organized and is validly existing as a business
trust in good standing under the laws of The Commonwealth of Massachusetts, with
full power to conduct all the activities conducted by it, to own or lease all
assets owned (or to be owned) or leased (or to be leased) by it and to conduct
its business, all as described in the Registration Statement and Prospectus, and
the Fund is duly licensed and qualified to do business and in good standing in
each jurisdiction in which its ownership or leasing of property or its
conducting of business requires such qualification, except where the failure to
be so qualified or be in good standing, either alone or in the aggregate, would
not have a material adverse effect on the Fund, and the Fund owns, possesses or
has obtained and currently maintains all governmental licenses, permits,
consents, orders, approvals and other authorizations, whether foreign or
domestic, necessary to carry on its business as contemplated in the Prospectus,
except where the failure to obtain such licenses, permits, consents, orders,
approvals and other authorizations, either alone or in the aggregate, would not
have a material adverse effect on the Fund. The Fund has no subsidiaries.
iii. The number of authorized, issued and outstanding shares of Common Shares
of the Fund is as set forth in the Registration Statement and the Prospectus
under the caption Description of Shares--Common Shares" and in the statement of
additional information under the caption "Statements of Assets and Liabilities
as of [ ], 2003." The Common Shares of the Fund conform in all material respects
to the description of them in the Prospectus under the caption "Description of
Shares --Common Shares" in the Prospectus. All the outstanding Common Shares
have been duly authorized and are validly issued, fully paid and (except as
described [below/in the Prospectus under the caption "Certain Provisions in the
Page 52
Declaration of Trust"]) nonassessable. The Shares to be issued and delivered to
and paid for by the Underwriters in accordance with the Underwriting Agreement
against payment therefor as provided by the Underwriting Agreement have been
duly authorized and when issued and delivered to the Underwriters as so provided
will have been validly issued and will be fully paid and nonassessable (except
as described in the Registration Statement). No person is entitled to any
preemptive or other similar rights with respect to the Shares under the
Declaration of Trust or By-Laws of the Fund or Massachusetts law or, to
counsel's knowledge, otherwise.
iv. The Fund is duly registered with the Commission under the Investment
Company Act as a diversified, closed-end management investment company and all
action under the Act and the Investment Company Act, as the case may be,
necessary to make the public offering and consummate the sale of the Shares as
provided in the Underwriting Agreement has or will have been taken by the Fund.
v. The Fund has full power to enter into each of the Underwriting Agreement,
the Advisory Agreement, the Custody Agreement, the Transfer Agency Agreement,
the Subscription Agreement, the Organizational Expenses and Offering Costs
Agreement and the Sub-License Agreement (collectively, the "Fund Agreements")
and to perform all of the terms and provisions thereof to be carried out by it
and (A) each Fund Agreement has been duly and validly authorized, executed and
delivered by the Fund, (B) each Fund Agreement complies in all material respects
with all applicable provisions of the Investment Company Act and the Advisers
Act, as the case may be, and (C) assuming due authorization, execution and
delivery by the other parties thereto, each Fund Agreement constitutes the
legal, valid and binding obligation of the Fund enforceable against the Fund in
accordance with its terms, (1) subject, as to enforcement, to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and to general equitable principles (regardless of whether enforcement is sought
in a proceeding in equity or at law) and (2) except as rights to indemnity
thereunder may be limited by federal or state securities laws.
vi. None of (A) the execution and delivery by the Fund of the Fund Agreements,
(B) the issue and sale by the Fund of the Shares as contemplated by the
Underwriting Agreement and (C) the performance by the Fund of its obligations
under the Fund Agreements or consummation by the Fund of the other transactions
Page 53
contemplated by the Fund Agreements conflicts with or will conflict with, or
results or will result in a breach of, the Declaration of Trust or the By-laws
of the Fund or any agreement or instrument to which the Fund is a party or by
which the Fund is bound that is filed as an exhibit to the Registration
Statement, or any law, rule or regulation which in our experience is normally
applicable to transactions of the type contemplated by the Underwriting
Agreement, or order of any court, governmental instrumentality, securities
exchange or association or arbitrator, whether foreign or domestic, specifically
naming the Fund and known to counsel, except that we express no opinion as to
the securities or "blue sky" laws applicable in connection with the purchase and
distribution of the Shares by the Underwriters pursuant to the Underwriting
Agreement.
vii. No consent, approval, authorization or order of any court (to counsel's
knowledge) or governmental agency or body or securities exchange or association,
whether foreign or domestic, is required by the Fund for the consummation by the
Fund of the transactions to be performed by the Fund or the performance by the
Fund of all the terms and provisions to be performed by or on behalf of it in
each case as contemplated in the Fund Agreements, except such as (A) have been
obtained under the federal securities laws and (B) may be required by the
American Stock Exchange or under state securities or "blue sky" laws in
connection with the purchase and distribution of the Shares by the Underwriters
pursuant to the Underwriting Agreement.
viii. The Shares have been approved for listing on the American Stock
Exchange, subject to official notice of issuance, and the Fund's Registration
Statement on Form 8-A under the 1934 Act is effective.
ix. There are no legal or governmental proceeding pending or, to our
knowledge, threatened against the Fund.
x. The Fund does not require any tax or other rulings to enable it to qualify
as a regulated investment company under Subchapter M of the Code.
xi. The section in the Prospectus entitled "Tax Matters" and the section in
the Statement of Additional Information entitled "Tax Matters" is a fair summary
of the principal United States federal income tax rules currently in effect
applicable to the Fund and to the purchase, ownership and disposition of the
Shares.
Page 54
xii. The Registration Statement (except the financial statements and schedules
including the notes and schedules thereto, and other financial or accounting
data included therein or omitted therefrom, as to which we express no view), at
the time it became effective, and the Prospectus (except as aforesaid), as of
the date thereof, complied as to form in all material respects to the
requirements of the Act and the Investment Company Act.
While we have not checked the accuracy and completeness of or otherwise
verified, and are not passing upon and assume no responsibility for the accuracy
or completeness of, the statements contained in the Registration Statement or
the Prospectus, except to the limited extent set forth in paragraph (xi) above,
in the course of our review of the contents of the Registration Statement and
the Prospectus with certain officers and employees of the Fund and the Fund's
independent accountants, no facts have come to our attention that cause us to
believe that the Registration Statement, at the time it became effective (but
after giving effect to any changes incorporated pursuant to Rule 430A under the
Act), contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (except that we express no such view with respect to the
financial statements, including notes and schedules thereto, or any other
financial or accounting data included therein), or that the Prospectus, as of
the date it was filed with the Commission pursuant to Rule 497 under the Act and
as of the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except that we express no such view with respect to the
financial statements, including notes and schedules thereto, or any other
financial or accounting data included therein).
Page 55
EXHIBIT B
Form of Xxxxxxx and Xxxxxx Opinion Regarding the Adviser
i. The Adviser has been duly formed and is validly existing as a limited
partnership under the laws of its jurisdiction of incorporation with full power
and authority to own or lease all of the assets owned or leased by it and to
conduct its business as described in the Registration Statement and Prospectus
and to enter into and perform its obligations under the Underwriting Agreement,
the Corporate Finance Services and Consulting Agreement, the Advisory Agreement,
and the License Agreement.
ii. The Adviser is duly registered as an investment adviser under the Advisers
Act and is not prohibited by the Advisers Act or the Investment Company Act from
acting as investment adviser for the Fund as contemplated by the Advisory
Agreement, the Registration Statement and the Prospectus.
iii. The Adviser has full power and authority to enter into each of the
Underwriting Agreement, the Advisory Agreement, the License Agreement and the
Corporate Finance Services and Consulting Agreement (collectively, the "Adviser
Agreements") and to carry out all the terms and provisions thereof to be carried
out by it, and each such agreement has been duly and validly authorized,
executed and delivered by the Adviser; each Adviser Agreement complies in all
material respects with all provisions of the Investment Company Act and the
Advisers Act; and assuming due authorization, execution and delivery by the
other parties thereto, each Adviser Agreement constitutes a legal, valid and
binding obligation of the Adviser, enforceable against the Adviser in accordance
with its terms, (1) subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (2) except as rights to indemnity thereunder
may be limited by federal or state securities laws.
iv. Neither (A) the execution and delivery by the Adviser of any Adviser
Agreement nor (B) the consummation by the Adviser of the transactions
contemplated by, or the performance of its obligations under any Adviser
Agreement conflicts or will conflict with, or results or will result in a breach
of, the organizational documents or by-laws of the Adviser or any agreement or
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instrument to which the Adviser is a party or by which the Adviser is bound, or
any federal or Illinois law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association or arbitrator,
whether foreign or domestic, specifically naming the Adviser and known to us,
except in each case for such conflicts or breaches which do not, either alone or
in the aggregate, have a material adverse effect on the Adviser's ability to
perform its obligations under the Adviser Agreements.
v. No consent, approval, authorization or order of any court, governmental
agency or body or securities exchange or association, whether foreign or
domestic, is required for the consummation of the transactions contemplated in,
or the performance by the Adviser of its obligations under, any Adviser
Agreement, except (i) such as have been obtained under the federal securities
laws and (ii) may be required by the American Stock Exchange or under state
securities or "blue sky" laws, in connection with the purchase and distribution
of the Shares by the Underwriters pursuant to the Underwriting Agreement.
vii. To our knowledge, there is no legal or governmental proceeding pending or
threatened against the Adviser that is either (i) required to be described in
the Registration Statement or Prospectus that is not already described or (ii)
which would, under Section 9 of the Investment Company Act, make the Adviser
ineligible to act as the Fund's investment adviser.
We have not checked the accuracy and completeness of or otherwise
verified, and are not passing upon and assume no responsibility for the accuracy
or completeness of, the statements contained in the Registration Statement or
the Prospectus. We have participated in conferences with representatives of the
Adviser at which the contents of the Registration Statements and Prospectus were
discussed. No facts have come to our attention that cause us to believe that the
description of the Adviser and its business, and the statements attributable to
the Adviser, in the Registration Statement, at the time it became effective (but
after giving effect to any changes incorporated pursuant to Rule 430A under the
Act), contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (except that we express no such view with respect to the
financial statements, including notes and schedules thereto, or any other
financial or accounting data included therein), or that the description of the
Page 57
Adviser and its business, and the statements attributable to the Adviser, in the
Prospectus, as of the date it was filed with the Commission pursuant to Rule 497
under the Act and as of the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that we express
no such view with respect to the financial statements, including notes and
schedules thereto, or any other financial or accounting data included therein).
Page 58
EXHIBIT C
Form of Deloitte & Touche LLP Comfort Letter
August [ ], 2003
The Board of Trustees of
First Trust Value Line(R) Dividend Fund
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
X.X. Xxxxxxx & Sons, Inc. Xxx Xxxxx Xxxxxxxxx Xxxxxx Xx. Xxxxx, Xxxxxxxx 00000
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of
First Trust Value Line(R) Dividend Fund (the "Fund") as of [ ], 2003 (the
"financial statement") included in Pre-effective Amendment No. [ ] to the
Registration Statement on Form N-2 filed by the Fund under the Securities Act of
1933 (the "1933 Act") (File No. 333-106392) and under the Investment Company Act
of 1940 (the "1940 Act," collectively, the 1933 Act and the 1940 Act, the
"Acts") (File No. 811-21381); such statement and our report with respect to such
statement are included in that Registration Statement. The Registration
Statement, as amended at the time it became effective on August [ ], 2003, is
herein referred to as the "Resgistration Statement."
In connection with the Registration Statement:
1. We are independent auditors with respect to the Fund within
the meaning of the Acts and the applicable rules and regulations
adopted thereunder by the Securities and Exchange Commission (the
"SEC").
2. In our opinion, the financial statement audited by us and
included in the Registration Statement complies as to form in all
respects with the applicable accounting requirements of the Acts and
the related rules and regulations thereunder adopted by the SEC.
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3. We have not audited any financial statements of the Fund as
of any date or for any period subsequent to August [ ], 2003.
Therefore, we are unable to and do not express any opinion on the
financial position, results of operations, changes in net assets, or
the financial highlights of the Fund as of any date or for any period
subsequent to August [ ], 2003.
4. For purposes of this letter we have read the minutes of all
meetings of the Shareholders, the Board of Trustees and all Committees
of the Board of Trustees of the Fund as set forth in the minute books
at the offices of the Fund, officials of the Fund having advised us
that the minutes of all such meetings through August [ ], 2003, were
set forth therein.
5. For purposes of this letter, we have read the information
included in the Registration Statement under the captions listed below
and performed the following procedures. The procedures, which were
applied as indicated with respect to the items presented below
consisted of:
--------------------------- ----------------------------------------------------
Page/Caption Procedures and Findings
--------------------------- ----------------------------------------------------
--------------------------- ----------------------------------------------------
Page 1, Prospectus We proved the mathematical accuracy of
the proceeds to the Fund per share of $[ ] and in
total of $[ ], assuming a price to public of $[ ]
per share, a sales load of $0.675 per share, and
estimated offering costs of $0.030 per share. We
give no comfort on the assumed amounts utilized in
the calculation described above.
--------------------------- ----------------------------------------------------
--------------------------- ----------------------------------------------------
Page [ ], Prospectus, We proved the mathematical accuracy of the 1 year,
Summary of 3 years, 5 years, and 10 years total expenses
Fund Expenses incurred of $57, $77, $99, and $162, respectively,
assuming inclusion of a sales load of $45 and
estimated offering expenses of this offering of $2,
and a 5% annual return on an initial investment of
$1,000 in Common Shares and assuming total annual
expenses of 1.0% of net assets. We give no comfort
on the assumed amounts utilized in the calculation
described above.
--------------------------- ----------------------------------------------------
The foregoing procedures do not constitute an audit conducted in accordance with
auditing standards generally accepted in the United States of America. Also,
they would not necessarily reveal matters of significance with respect to the
Page 60
comments in the following paragraph. Accordingly, we make no representations
regarding the sufficiency of the foregoing procedures for your purposes.
6. Fund management has advised us that no financial data as of
any date or for any period subsequent to August [ ], 2003, is
available; accordingly, the procedures carried out by us with respect
to changes in financial statement items after August [ ], 2003, have,
of necessity, been limited. We have inquired of certain management of
the Fund who have responsibility for financial and accounting matters
whether there was any change as of August [ ], 2003 in the capital
stock, net assets, or long-term liabilities of the Fund as compared
with amounts shown on the August [ ], 2003 statement of assets and
liabilities included in the Registration Statement. On the basis of
these inquiries and our reading of the minutes as described in 4,
nothing came to our attention that caused us to believe that there was
any change in capital stock, net assets or long-term liabilities,
except in all instances for changes, increases, or decreases that the
Registration Statement discloses have occurred or may occur.
This letter is solely for the information of the addressees and to
assist the underwriters in conducting and documenting their investigation of the
affairs of the Fund in connection with the offering of the securities covered by
the Registration Statement, and is not to be used, circulated, quoted or
otherwise referred to within or without the underwriting group for any other
purpose, including but not limited to the registration, purchase or sale of
securities, nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.
Page 61
