[ ] SHARES
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND
COMMON SHARES OF BENEFICIAL INTEREST, PAR VALUE $0.01 PER SHARE
UNDERWRITING AGREEMENT
May [ ], 2013
May [ ], 2013
Xxxxxx Xxxxxxx & Co. LLC
Citigroup Global Markets Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
c/x Xxxxxx Xxxxxxx & Co. LLC
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
One Bryant Park
New York, New York 10036
Ladies and Gentlemen:
First Trust Intermediate Duration Preferred & Income Fund, an
unincorporated business trust organized under the laws of the State of
Massachusetts (the "FUND"), is a newly organized, non-diversified, closed-end
management investment company registered under the Investment Company Act of
1940, as amended (the "INVESTMENT COMPANY ACT"). The Fund proposes to issue and
sell to the several Underwriters named in Schedule I hereto (the "UNDERWRITERS")
[ ] shares of its common shares of beneficial interest, par value $0.01 per
share (the "FIRM SHARES"). The Fund also proposes to issue and sell to the
several Underwriters not more than an additional [ ] shares of its common shares
of beneficial interest, par value $0.01 per share (the "ADDITIONAL SHARES") if
and to the extent that you, as managers of the offering (the "REPRESENTATIVES"),
shall have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares granted to the Underwriters in Section 3 hereof. The Firm
Shares and the Additional Shares are hereinafter collectively referred to as the
"SHARES." The common shares of beneficial interest, par value $0.01 per share of
the Fund to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "COMMON SHARES."
First Trust Advisors L.P. (the "ADVISER") acts as the Fund's investment
adviser pursuant to an Investment Management Agreement between the Adviser and
the Fund (the "INVESTMENT ADVISORY AGREEMENT"). Stonebridge Advisors LLC (the
"SUB-ADVISER" and, together with the Adviser, the "INVESTMENT ADVISERS") acts as
the Fund's sub-adviser pursuant to a Sub-Advisory Agreement among the
Sub-Adviser, the Adviser and the Fund (the "SUB-ADVISORY AGREEMENT").
The Fund has filed with the Securities and Exchange Commission (the
"COMMISSION") a notification on Form N-8A (the "NOTIFICATION") of registration
of the Fund as an investment company and a registration statement on Form N-2,
including a prospectus and a statement of additional information incorporated by
reference in the prospectus, relating to the Shares. The registration statement
as amended at the time it becomes effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION STATEMENT";
the prospectus in the form first used to confirm sales of Shares and filed with
the Commission in accordance with Rule 497 of the Securities Act, including the
statement of additional information incorporated therein by reference, is
hereinafter referred to as the "PROSPECTUS." If the Fund has filed an
abbreviated registration statement to register additional Common Shares pursuant
to Rule 462(b) under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"),
then any reference herein to the term "REGISTRATION STATEMENT" shall be deemed
to include such Rule 462 Registration Statement. The Investment Company Act and
the Securities Act are hereinafter referred to collectively as the "ACTS," the
Investment Advisers Act of 1940, as amended, is hereinafter referred to as the
"ADVISERS ACT" and the rules and regulations of the Commission under the Acts,
the Advisers Act and under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT") are hereinafter referred to collectively as the "RULES AND
REGULATIONS."
For purposes of this Agreement, "OMITTING PROSPECTUS" means any
advertisement used in the public offering of the Shares pursuant to Rule 482 of
the Rules and Regulations ("RULE 482") and "TIME OF SALE PROSPECTUS" means the
preliminary prospectus, dated April 22, 2013, including the statement of
additional information incorporated therein by reference, together with the
pricing information as set forth in Schedule III. As used herein, the terms
"Registration Statement," "preliminary prospectus," "Time of Sale Prospectus"
and "Prospectus" shall include the documents, if any, incorporated by reference
therein, including the statement of additional information.
1. Representations and Warranties of the Fund and the Investment Advisers.
The Fund and the Investment Advisers, jointly and severally, represent and
warrant to and agree with each of the Underwriters as of the date hereof, as of
the Applicable Time referred to in Section 1(b)(i) hereof, as of the Closing
Date referred to in Section 5 hereof, and as of each Option Closing Date (if
any) referred to in Section 3 hereof, that:
(a) The Fund meets the requirements for the use of Form N-2 under
the Acts. The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the
knowledge of the Fund or the Investment Advisers, threatened by the
Commission.
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(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Acts and the applicable Rules and
Regulations thereunder, (iii) the Time of Sale Prospectus and any
amendments or supplements thereto do not as of the Applicable Time (as
defined below), and at the time of each sale of the Shares thereafter in
connection with the offering when the Prospectus is not yet available to
prospective purchasers did not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in the
Registration Statement, the Time of Sale Prospectus or the Prospectus
based upon information relating to any Underwriter furnished to the Fund
in writing by such Underwriter through you expressly for use therein.
As used in this subsection and elsewhere in this Agreement,
"Applicable Time" means 5:30 P.M. (Eastern Time) on [ ], 2013 or such
other time as agreed to by the Fund and Xxxxxx Xxxxxxx & Co. LLC.
(c) The Fund has been duly formed, is validly existing as a business
trust in good standing under the laws of the Commonwealth of
Massachusetts, has the power and authority to own its property and to
conduct its business as described in the Time of Sale Prospectus and the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing (i)
could not reasonably be expected to have a material adverse effect on the
Fund's performance of this Agreement or the consummation of any of the
transactions herein contemplated or (ii) could not reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business, operations or properties of the
Fund, whether or not arising from transactions in the ordinary course of
business ("FUND MATERIAL ADVERSE EFFECT"). The Fund has no subsidiaries.
(d) The Fund is registered with the Commission as a
[non-diversified], closed-end management investment company under the
Investment Company Act and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to the
Fund's knowledge or Investment Advisers' knowledge, threatened by the
Commission. No person is serving or acting as an officer or trustee of, or
investment adviser to, the Fund except in accordance with the provisions
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of the Investment Company Act and the Advisers Act. Except as otherwise
disclosed in the Registration Statement, the Time of Sale Prospectus and
the Prospectus, no trustee of the Fund is an "interested person" of the
Fund or an "affiliated person" of any Underwriter (each as defined in the
Investment Company Act).
(e) Each of this Agreement, the Investment Advisory Agreement, the
Sub-Advisory Agreement, the Administrative Agency Agreement between Brown
Brothers Xxxxxxxx & Co., as administrator, and the Fund (the "SERVICE
AGREEMENT"), the Custodian Agreement between Brown Brothers Xxxxxxxx & Co.
(the "CUSTODIAN") and the Fund (the "CUSTODIAN AGREEMENT") and the
Transfer Agency and Service Agreement among Computershare Trust Company,
N.A., Computershare Inc. (collectively, the "TRANSFER AGENT") and the Fund
(the "TRANSFER AGENCY AGREEMENT") (this Agreement, the Investment Advisory
Agreement, the Sub-Advisory Agreement, the Service Agreement, the
Custodian Agreement and the Transfer Agency Agreement being referred to
herein collectively as the "FUNDAMENTAL AGREEMENTS") has been duly
authorized, executed and delivered by the Fund and complies in all
material respects with all applicable provisions of the Acts, the Advisers
Act and the applicable Rules and Regulations. The Fund has adopted the
Dividend Reinvestment Plan (the "PLAN"). Each Fundamental Agreement, other
than this Agreement, and the Plan is a valid and binding agreement of the
Fund, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability.
(f) None of (A) the execution and delivery by the Fund of, and the
performance by the Fund of its obligations under, each Fundamental
Agreement or the adoption by the Fund of the Plan, or (B) the issue and
sale by the Fund of the Shares as contemplated by this Agreement
contravenes or will contravene any provision of applicable law or
Declaration of Trust, as amended to the date hereof (the "DECLARATION") or
by-laws of the Fund or any agreement or other instrument binding upon the
Fund that is material to the Fund, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Fund,
whether foreign or domestic. No consent, approval, authorization, order or
permit of, or qualification with, any governmental body or agency,
self-regulatory organization or court or other tribunal, whether foreign
or domestic, is required for the performance by the Fund of its
obligations under the Fundamental Agreements or the Plan, except such as
have been obtained as required by the Acts, the Advisers Act, the Exchange
Act, or the applicable Rules and Regulations, or by the securities or Blue
Sky laws of the various states and foreign jurisdictions in connection
with the offer and sale of the Shares.
(g) The authorized capital stock of the Fund conforms in all
material respects to the description thereof contained in each of the Time
of Sale Prospectus and the Prospectus, and the Declaration and by-laws of
the Fund, the Fundamental Agreements and the Plan conform in all material
respects to the descriptions thereof contained in each of the Time of Sale
Prospectus and the Prospectus.
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(h) The Declaration and by-laws of the Fund, the Fundamental
Agreements and the Plan comply in all material respects with all
applicable provisions of the Acts, the Advisers Act and the applicable
Rules and Regulations, and all approvals of such documents required under
the Investment Company Act by the Fund's shareholders and Board of
Trustees have been obtained and are in full force and effect.
(i) The Fundamental Agreements (other than this Agreement) and the
Plan are in full force and effect and neither the Fund nor, to the Fund's
or the Investment Advisers' knowledge, any other party to any such
agreement is in default thereunder, and no event has occurred which with
the passage of time or the giving of notice or both would constitute a
default by the Fund thereunder. The Fund is not currently in breach of, or
in default under, any other written agreement or instrument to which it or
its property is bound or affected.
(j) The Common Shares outstanding prior to the issuance of the
Shares have been duly authorized and are validly issued, fully paid and
non-assessable, except that, as set forth in the Registration Statement,
the Time of Sale Prospectus and the Prospectus, shareholders of a
Massachusetts business trust may under certain circumstances be held
personally liable for obligations of the Fund. The Common Shares and
preferred shares, if any, outstanding prior to the issuance of the Shares
are not entitled to preemptive or other similar rights.
(k) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, except that, as set forth in the
Registration Statement, the Time of Sale Prospectus and the Prospectus,
shareholders of a Massachusetts business trust may under certain
circumstances be held personally liable for obligations of the Fund. The
Shares are not entitled to preemptive or other similar rights.
(l) The Shares and any Common Shares outstanding prior to the
issuance of the Shares have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance. The Fund's
Registration Statement on Form 8-A under the Exchange Act is effective.
(m) Each Omitting Prospectus (i) complies with the requirements of
Rule 482, (ii) does not contain any untrue statement of a material fact or
omit to state any material fact necessary to make such information not
misleading, (iii) complied and will comply in all material respects with
the Acts, the Rules and Regulations and the rules and regulations of the
Financial Industry Regulatory Authority, Inc. ("FINRA") and (iv) if
required, has been duly filed with FINRA and FINRA has issued no
objections with respect thereto. Except for the Omitting Prospectuses
identified on Schedule II hereto, the Fund has not prepared, used or
referred to and will not, without your prior written consent, prepare, use
or refer to any prospectus or other advertising material in reliance upon
Rule 482.
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(n) The Fund intends to direct the investment of the proceeds of the
offering described in the Registration Statement, the Time of Sale
Prospectus and the Prospectus in such a manner as to comply with the
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "CODE"), and the Fund is eligible to qualify as a regulated
investment company under Subchapter M of the Code.
(o) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business,
prospects, properties or operations of the Fund from that set forth in the
Time of Sale Prospectus, and there have been no transactions entered into
by the Fund which are material to the Fund other than those in the
ordinary course of its business or as described in the Time of Sale
Prospectus.
(p) There are no legal or governmental proceedings pending or, to
the knowledge of the Fund or the Investment Advisers, threatened to which
the Fund is a party or to which any of the properties of the Fund is
subject (i) other than proceedings accurately described in all material
respects in the Time of Sale Prospectus and the Prospectus and proceedings
that would not have a Fund Material Adverse Effect, or impact the power or
ability of the Fund to perform its obligations under this Agreement or to
consummate the transactions contemplated by the Time of Sale Prospectus
and the Prospectus or (ii) that are required to be described in the
Registration Statement, the Time of Sale Prospectus or the Prospectus and
are not so described; and there are no statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement, the Time of Sale Prospectus or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
(q) The Fund has all necessary consents, authorizations, approvals,
orders (including exemptive orders), certificates and permits of and from,
and has made all declarations and filings with, all governmental
authorities, self-regulatory organizations and courts and other tribunals,
whether foreign or domestic, to own and use its assets and to conduct its
business in the manner described in the Time of Sale Prospectus and the
Prospectus, except to the extent that the failure to obtain or file the
foregoing would not have a Fund Material Adverse Effect.
(r) Each preliminary prospectus (including the statement of
additional information incorporated therein by reference) filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 497 under the Securities Act, complied
when so filed in all material respects with the Acts and the applicable
Rules and Regulations.
(s) The statement of assets and liabilities included in the
Registration Statement, the Time of Sale Prospectus and the Prospectus,
together with the related notes, presents fairly, in all material
respects, the financial position of the Fund as of the date indicated and
said statement has been prepared in conformity with generally accepted
6
accounting principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein); and the other financial and
statistical information and data included in the Registration Statement,
the Time of Sale Prospectus and the Prospectus are accurately derived from
such financial statements and the books and records of the Fund. Deloitte
and Touche LLP, whose report appears in the Time of Sale Prospectus and
the Prospectus and who has certified the financial statements and
supporting schedules, if any, included in the Registration Statement, is
an independent registered public accounting firm as required by the Acts
and the applicable Rules and Regulations.
(t) There are no material restrictions, limitations or regulations
with respect to the ability of the Fund to invest its assets as described
in the Time of Sale Prospectus and the Prospectus, other than as described
therein.
(u) All advertisements authorized by the Fund for use in the
offering of the Shares complied and will comply in all material respects
with the requirements of the Acts, the applicable Rules and Regulations
and the rules and regulations of FINRA and there are no such
advertisements other than (i) the Omitting Prospectuses identified in
Schedule II hereto and (ii) any advertisement that complies with Rule 135a
of the Rules and Regulations and that you have approved in writing.
(v) There are no contracts, agreements or understandings between the
Fund and any person granting such person the right to require the Fund to
file a registration statement under the Securities Act with respect to any
securities of the Fund or to require the Fund to include such securities
with the Shares registered pursuant to the Registration Statement.
(w) The expense summary information set forth in the Time of Sale
Prospectus and the Prospectus under the caption "Summary of Fund Expenses"
has been prepared in accordance with the requirements of Form N-2 and any
fee projections or estimates, if applicable, are reasonably based and
attainable.
(x) Subsequent to the respective dates as of which information is
given in each of the Registration Statement, the Time of Sale Prospectus
and the Prospectus, (i) the Fund has not incurred any material liability
or obligation, direct or contingent, nor entered into any material
transaction; (ii) the Fund has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock (other than, in the event
this representation and warranty is made after the Closing Date, ordinary
and customary dividends declared and payable after the Closing Date); and
(iii) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Fund except in each case as
described in each of the Registration Statement, the Time of Sale
Prospectus and the Prospectus, respectively.
7
(y) The Fund owns or possesses, or can acquire on reasonable terms,
all material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names currently employed by it in
connection with the business now operated by it, and the Fund has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Fund Material Adverse Effect.
(z) The Fund maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. Except as described in
the Time of Sale Prospectus and the Prospectus, since the date of the
Fund's most recent audited financial statements included or incorporated
by reference in the Prospectus, there has been (i) no material weakness in
the Fund's internal control over financial reporting (whether or not
remediated) and (ii) no change in the Fund's internal control over
financial reporting that has materially affected, or is reasonably likely
to materially affect, the Fund's internal control over financial
reporting. The Fund maintains "disclosure controls and procedures" (as
such term is defined in Rule 30a-3 under the Investment Company Act) and
such disclosure controls and procedures are effective as required by the
Investment Company Act and the applicable Rules and Regulations.
(aa) Neither the Fund nor any employee nor agent of the Fund has
made any payment of funds of the Fund or received or retained any funds,
which payment, receipt or retention is of a character required to be
disclosed in the Time of Sale Prospectus, the Prospectus or the
Registration Statement.
(bb) Computershare Trust Company, N.A. is duly enrolled as a
participant in the Fast Automated Transfer Program (FAST) of The
Depository Trust Company ("DTC").
(cc) The Fund does not own any real property and the Fund does not
hold under lease any real property or buildings.
(dd) Neither the Fund nor any of its subsidiaries or affiliates, any
trustee, officer, or employee, nor, to the Fund's knowledge, any agent or
representative of the Fund or of any of its subsidiaries or affiliates,
has taken or will take any action in furtherance of an offer, payment,
8
promise to pay, or authorization or approval of the payment or giving of
money, property, gifts or anything else of value, directly or indirectly,
to any "government official" (including any officer or employee of a
government or government-owned or controlled entity or of a public
international organization, or any person acting in an official capacity
for or on behalf of any of the foregoing, or any political party or party
official or candidate for political office) to influence official action
or secure an improper advantage; and the Fund and its subsidiaries and
affiliates have conducted their businesses in compliance with applicable
anti-corruption laws including, without limitation, the Foreign Corrupt
Practices Act of 1977, as amended (the "FCPA"), and have instituted and
maintain and will continue to maintain policies and procedures designed to
promote and achieve compliance with such laws and with the representation
and warranty contained herein.
(ee) There is and has been no failure on the part of the Fund or any
of the Fund's trustees or officers, in their capacities as such, to comply
in all material respects with any provision of the Xxxxxxxx-Xxxxx Act of
2002 and the rules and regulations promulgated in connection therewith
applicable to them.
(ff) The operations of the Fund and its subsidiaries are and have
been conducted at all times in compliance with all applicable financial
recordkeeping and reporting requirements, including those of the Bank
Secrecy Act, as amended by Title III of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money
laundering statutes of jurisdictions where the Fund conducts business, the
rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the "ANTI-MONEY LAUNDERING LAWS"), and
no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Fund or any of
its subsidiaries with respect to the Anti-Money Laundering Laws is pending
or, to the knowledge of the Fund or the Investment Advisers, threatened.
(gg) (i) Neither the Fund nor any trustee, officer, or employee
thereof, nor, to the Fund's knowledge, any agent, affiliate or
representative of the Fund, is an individual or entity ("PERSON") that is,
or is owned or controlled by a Person that is:
(A) the subject of any sanctions administered or enforced by
the U.S. Department of Treasury's Office of Foreign Assets Control
("OFAC"), the United Nations Security Council ("UNSC"), the European
Union ("EU"), Her Majesty's Treasury ("HMT"), or other relevant
sanctions authority (collectively, "SANCTIONS"), or
(B) located, organized or resident in a country or territory
that is the subject of Sanctions (including, without limitation,
Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan and Syria).
9
(ii) The Fund will not, directly or indirectly, use the
proceeds of the offering, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other Person:
(A) to fund or facilitate any activities or business of or
with any Person or in any country or territory that, at the time of
such funding or facilitation, is the subject of Sanctions; or
(B) in any other manner that will result in a violation of
Sanctions by any Person (including any Person participating in the
offering, whether as underwriter, advisor, investor or otherwise).
(iii) For the past 5 years, the Fund has not knowingly engaged
in, is not now knowingly engaged in, and will not knowingly engage in, any
dealings or transactions with any Person, or in any country or territory,
that at the time of the dealing or transaction is or was the subject of
Sanctions.
2. Representations and Warranties of the Investment Advisers. Each
Investment Adviser, severally and not jointly and with respect to itself only,
represents and warrants to and agrees with each of the Underwriters as of the
date hereof, as of the Applicable Time, as of the Closing Date referred to in
Section 5 hereof, and as of each Option Closing Date (if any) referred to in
Section 3 hereof, that:
(a) Such Investment Adviser has been duly organized, is validly
existing as a limited partnership, in the case of the Adviser, and as a
limited liability company, in the case of the Sub-Adviser, each in good
standing under the laws of the jurisdiction of its organization, has the
power and authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing (i) could not
reasonably be expected to have a material adverse effect on such
Investment Adviser's performance of this Agreement or the consummation of
any of the transactions herein contemplated or (ii) could not reasonably
be expected to have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business, operations or properties of
such Investment Adviser, whether or not arising from transactions in the
ordinary course of business ("INVESTMENT ADVISER MATERIAL ADVERSE
EFFECT"). Such Investment Adviser has no subsidiaries.
(b) Such Investment 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 under the Investment Advisory
Agreement as an investment adviser to the Fund as contemplated by the Time
of Sale Prospectus and the Prospectus, in the case of the Adviser, or from
acting as the sub-adviser under the Sub-Advisory Agreement, in the case of
the Sub-Adviser, and no order of suspension or revocation of such
10
registration has been issued or proceedings therefor initiated or, to the
knowledge of such Investment Adviser, threatened by the Commission.
(c) Each of this Agreement, the Investment Advisory Agreement, the
Sub-Advisory Agreement, the Structuring Fee Agreement and the Syndication
Fee Agreement by and among the Adviser, the Sub-Adviser and Xxxxxx Xxxxxxx
& Co. LLC (the "XXXXXX XXXXXXX FEE AGREEMENTS"), the Structuring Fee
Agreement by and among the Adviser, the Sub-Adviser and Citigroup Global
Markets Inc. (the "CITI FEE AGREEMENT"), the Structuring Fee Agreement by
and among the Adviser, the Sub-Adviser and Xxxxxxx Lynch, Xxxxxx, Xxxxxx &
Xxxxx Incorporated (the "XXXXXXX FEE AGREEMENT"), the Structuring Fee
Agreement by and among the Adviser, the Sub-Adviser and [ ] (the " [ ] FEE
AGREEMENT")] (this Agreement, the Investment Advisory Agreement, the
Sub-Advisory Agreement, the Xxxxxx Xxxxxxx Fee Agreements, the Citi Fee
Agreement, the Xxxxxxx Fee Agreement, and the [ ] Fee Agreement] are
referred to herein, collectively, as the "ADVISER AGREEMENTS") to which
such Investment Adviser is a party has been duly authorized, executed and
delivered by such Investment Adviser and complies in all material respects
with all applicable provisions of the Acts, the Advisers Act and the
applicable Rules and Regulations. Each of the Adviser Agreements to which
such Investment Adviser is a party is a valid and binding agreement of
such Investment Adviser, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and by equitable principles of general applicability.
(d) The execution and delivery by such Investment Adviser of, and
the performance by such Investment Adviser of its obligations under the
Adviser Agreements to which such Investment Adviser is a party will not
contravene any provision of applicable law or the partnership agreement,
in the case of the Adviser, or the operating agreement, in the case of the
Sub-Adviser, of such Investment Adviser or any agreement or other
instrument binding upon the Investment Adviser that is material to such
Investment Adviser, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over such Investment Adviser,
whether foreign or domestic. No consent, approval, authorization, order or
permit of, or qualification with, any governmental body or agency,
self-regulatory organization or court or other tribunal, whether foreign
or domestic, is required for the performance by such Investment Adviser of
its obligations under the Adviser Agreements to which such Investment
Adviser is a party, except such as have been obtained as required by the
Acts, the Advisers Act, the Exchange Act or the applicable Rules and
Regulations, or by the securities or Blue Sky laws of the various states
and foreign jurisdictions in connection with the offer and sale of the
Shares.
(e) There are no legal or governmental proceedings pending or, to
the knowledge of such Investment Adviser, threatened to which such
Investment Adviser is a party or to which the Investment Adviser or any
parent of the Investment Adviser or any partners, members, directors,
officers or employees of the foregoing is a party or to which any of the
properties of such Investment Adviser is subject (i) other than
11
proceedings accurately described in all material respects in the Time of
Sale Prospectus and the Prospectus and proceedings that would not have an
Investment Adviser Material Adverse Effect, or on the power or ability of
such Investment Adviser to perform its obligations under this Agreement or
to consummate the transactions contemplated by the Time of Sale Prospectus
and the Prospectus or (ii) that are required to be described in the
Registration Statement or the Prospectus and are not so described; and
there are no statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement, the Time of Sale
Prospectus or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(f) Such Investment Adviser has all necessary consents,
authorizations, approvals, orders (including exemptive orders),
certificates and permits of and from, and has made all declarations and
filings with, all governmental authorities, self-regulatory organizations
and courts and other tribunals, whether foreign or domestic, to own and
use its assets and to conduct its business in the manner described in the
Time of Sale Prospectus and the Prospectus, except to the extent that the
failure to obtain or file the foregoing would not have an Investment
Adviser Material Adverse Effect or a Fund Material Adverse Effect.
(g) Such Investment Adviser has the financial resources available to
it necessary for the performance of its services and obligations as
contemplated in the Time of Sale Prospectus and the Prospectus and by the
Adviser Agreements to which such Investment Adviser is a party.
(h) The Investment Advisory Agreement and the Sub-Advisory Agreement
to which such Investment Adviser is a party are in full force and effect
and neither the Fund nor any Investment Adviser is in default thereunder,
and, no event has occurred which with the passage of time or the giving of
notice or both would constitute a default under such document. Such
Investment Adviser is not in violation of its organizational documents or
in default under any agreement, indenture or instrument, where such
violation or default would reasonably be expected to have an Investment
Adviser Material Adverse Effect.
(i) All information furnished by such Investment Adviser for use in
the Registration Statement, the Time of Sale Prospectus and the
Prospectus, including, without limitation, the description of such
Investment Adviser, does not, and on the Closing Date will not, contain
any untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business,
prospects, properties or operations of such Investment Adviser from that
set forth in the Time of Sale Prospectus, and there have been no
transactions entered into by such Investment Adviser which are material to
12
such Investment Adviser other than those in the ordinary course of its
business or as described in the Time of Sale Prospectus.
(k) Neither such Investment Adviser nor any of its subsidiaries or
affiliates, any director, officer, or employee, nor, to the Investment
Adviser's knowledge, any agent or representative of it or of any of its
subsidiaries or affiliates, has taken or will take any action in
furtherance of an offer, payment, promise to pay, or authorization or
approval of the payment or giving of money, property, gifts or anything
else of value, directly or indirectly, to any "government official"
(including any officer or employee of a government or government-owned or
controlled entity or of a public international organization, or any person
acting in an official capacity for or on behalf of any of the foregoing,
or any political party or party official or candidate for political
office) to influence official action or secure an improper advantage; and
the Investment Adviser and its subsidiaries and affiliates have conducted
their businesses in compliance with applicable anti-corruption laws
including, without limitation, the FCPA, and have instituted and maintain
and will continue to maintain policies and procedures designed to promote
and achieve compliance with such laws and with the representation and
warranty contained herein.
(l) In connection with the offering of the Shares, such Investment
Adviser has not taken, directly or indirectly, any action designed to or
that would constitute or that might reasonably be expected to cause or
result in violation of federal securities laws, in stabilization or
manipulation of the price of any security of the Fund to facilitate the
sale or resale of the Shares, and such Investment Adviser is not aware of
any such action taken or to be taken by any affiliates of such Investment
Adviser.
(m) The operations of such Investment Adviser are and have been
conducted at all times in compliance with the Anti-Money Laundering Laws,
and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving such Investment
Adviser with respect to the Anti-Money Laundering Laws is pending or, to
the knowledge of such Investment Adviser, threatened.
(n) (i) Neither such Investment Adviser nor any of its directors,
partners, managers, officers, or employees, nor, to such Investment
Adviser's knowledge, any agent, affiliate or representative of such
Investment Adviser, is a Person that is, or is owned or controlled by a
Person that is:
(A) the subject of any Sanctions, or
(B) located, organized or resident in a country or territory
that is the subject of Sanctions (including, without limitation,
Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan and Syria).
13
(ii) Such Investment Adviser will not, directly or indirectly,
use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other
Person:
(A) to fund or facilitate any activities or business of or
with any Person or in any country or territory that, at the time of
such funding or facilitation, is the subject of Sanctions; or
(B) in any other manner that will result in a violation of
Sanctions by any Person (including any Person participating in the
offering, whether as underwriter, advisor, investor or otherwise).
(o) For the past 5 years, such Investment Adviser has not knowingly
engaged in, is not now knowingly engaged in, and will not knowingly engage
in, any dealings or transactions with any Person, or in any country or
territory, that at the time of the dealing or transaction is or was the
subject of Sanctions.
3. Agreements to Sell and Purchase. The Fund hereby agrees to sell to the
several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the Fund
the respective numbers of Firm Shares set forth in Schedule I hereto opposite
its name at $23.875 a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Fund agrees to sell to
the Underwriters the Additional Shares, and the Underwriters shall have the
right to purchase, severally and not jointly, up to [ ] Additional Shares at the
Purchase Price, less an amount per share equal to any dividends or distributions
declared by the Fund and payable on the Firm Shares but not payable on the
Additional Shares. Xxxxxx Xxxxxxx & Co. LLC may exercise this right on behalf of
the Underwriters in whole or from time to time in part by giving written notice
not later than 45 days after the date of this Agreement. Any exercise notice
shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Each
purchase date must be at least one business day after the written notice is
given and may not be earlier than the closing date for the Firm Shares nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. On each
day, if any, that Additional Shares are to be purchased (an "OPTION CLOSING
DATE"), each Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number
of Additional Shares to be purchased on such Option Closing Date as the number
of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
14
The Fund hereby agrees that, without the prior written consent of the
Representatives, on behalf of the Underwriters, it will not, during the period
ending 180 days after the date of the Prospectus, (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any Common Shares or
any securities convertible into or exercisable or exchangeable for Common Shares
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Shares, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Shares or such other securities, in cash or
otherwise or (3) file any registration statement with the Commission relating to
the offering of any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares. Notwithstanding the foregoing, if
(x) during the last 17 days of the 180-day restricted period the Fund issues an
earnings release or material news or a material event relating to the Fund
occurs, or (y) prior to the expiration of the 180-day restricted period, the
Fund announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions imposed in
this clause shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event. The Fund will provide the Representatives, on
behalf of the Underwriters, with prior notice of any such announcement that
gives rise to an extension of the restricted period. The agreements contained in
this paragraph shall not apply to the Shares to be sold hereunder or any Common
Shares issued pursuant to the Plan.
4. Terms of Public Offering. The Fund and the Investment Advisers are
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. The Fund
and the Investment Advisers are further advised by you that the Shares are to be
offered to the public initially at $25.00 a share (the "PUBLIC OFFERING PRICE"),
and to certain dealers selected by you at a price that represents a concession
not in excess of $0.75 a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of $0.10 a share, to any Underwriter or to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares shall be made to the
Fund in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 A.M. (New York City time), on [ ], 2013, or at such other
time on the same or such other date, not later than 10 business days after
Closing Date, as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Fund in Federal or
other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 A.M. (New York City time), on the date specified in the corresponding
notice described in Section 3 or at such other time on the same or on such other
15
date, in any event not later than [ ], 2013, as shall be designated in writing
by you.
The Firm Shares and Additional Shares shall be registered in such names
and in such denominations as you shall request in writing not later than one
full business day prior to the Closing Date or the applicable Option Closing
Date, as the case may be. The Firm Shares and Additional Shares shall be
delivered to you through the facilities of DTC on the Closing Date or an Option
Closing Date, as the case may be, for the respective accounts of the several
Underwriters, with any transfer taxes payable in connection with the transfer of
the Shares to the Underwriters duly paid, against payment of the Purchase Price
therefor.
6. Conditions to the Underwriters' Obligations. The respective obligations
of the Fund and the Investment Advisers and the several obligations of the
Underwriters hereunder are subject to the condition that the Registration
Statement shall have become effective not later than 10:00 A.M. (New York City
time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date or, if earlier, the dates as of which
information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), (1) in the case of the Fund, there shall not have occurred (A)
any change or decrease specified in the letter or letters referred to in
paragraph (h) of this Section 6, or (B) any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business, prospects, properties or operations of the
Fund, whether or not arising from transactions in the ordinary course of
business, from that set forth in the Time of Sale Prospectus and, (2) in
the case of each Investment Adviser, there shall not have occurred any
change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business,
prospects, properties, operations, management or personnel of each
Investment Adviser, whether or not arising from transactions in the
ordinary course of business, from that set forth in the Time of Sale
Prospectus, the effect of which in any case referred to in clause (1) or
(2) above is, in the sole judgment of the Representatives, so material and
adverse and that makes it, in the Representatives' judgment, impracticable
or inadvisable to market the Shares on the terms and in the manner
contemplated in the Time of Sale Prospectus.
(b) The Underwriters shall have received on the Closing Date
certificates, dated the Closing Date, of the chief executive officer and
chief financial officer (or officers acting in similar capacities) of each
of the Fund and the Investment Advisers, to the effect (i) that no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are, as of the Closing Date,
pending before or threatened by the Commission, (ii) that the
16
representations and warranties made by the Fund and the Investment
Advisers contained in this Agreement are true and correct as of the
Closing Date, (iii) that each of the Fund and the Investment Advisers has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing
Date, and (iv) as set forth in Section 6(a) above, with respect to the
Fund or the Investment Advisers, as applicable.
Each officer signing and delivering such a certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) Each of the Investment Advisers and the Fund shall have
performed all of their respective obligations to be performed hereunder on
or prior to the Closing Date.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxx and Xxxxxx LLP, special counsel for the Fund, dated the
Closing Date, substantially in the form attached hereto as Exhibit A and
Exhibit B.
(e) The Underwriters shall have received on the Closing Date (x) an
opinion of Xxxxxxx and Xxxxxx LLP, counsel for the Adviser, substantially
in the form attached hereto as Exhibit C and (y) an opinion of Xxxxxxx and
Xxxxxx LLP, on behalf of the Sub-Adviser, substantially in the form
attached hereto as Exhibit D, each dated the Closing Date.
(f) The Underwriters shall have received on the Closing Date the
favorable opinion of Xxxx, Xxxxxxx & Xxxxxx LLP, counsel for the
Underwriters, dated the Closing Date, and covering such matters as the
Underwriters shall reasonably request.
In rendering the opinions described in Section 6(d) above, as to matters
of Massachusetts law, Xxxxxxx and Xxxxxx LLP may rely on the opinion of Xxxxxxx
XxXxxxxxx LLP, so long as a copy of such opinion of Xxxxxxx XxXxxxxxx LLP is
delivered to you and is in form and substance satisfactory to you and your
counsel, and such opinion of Xxxxxxx XxXxxxxxx LLP expressly permits reliance
thereon by Xxxxxxx and Xxxxxx LLP for purposes of rendering the foregoing
opinion.
(g) The Underwriters shall have received on the Closing Date a
certificate from a duly authorized officer of each of the Custodian and
the Transfer Agent, certifying that the Custodian Agreement, the Service
Agreement and the Transfer Agency Agreement, as applicable, is in full
force and effect and is a valid and binding agreement of the Custodian or
the Transfer Agent, as applicable.
(h) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the
Underwriters, from Deloitte & Touche LLP, independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
17
Registration Statement, the Time of Sale Prospectus and the Prospectus,
provided that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
(i) All filings, applications and proceedings taken by the Fund and
the Investment Advisers in connection with the organization and
registration of the Fund and the Shares under the Acts and the applicable
Rules and Regulations shall be satisfactory in form and substance to you
and counsel for the Underwriters.
(j) No action, suit, proceeding, inquiry or investigation shall have
been instituted or threatened by the Commission which would adversely
affect the Fund's standing as a registered investment company under the
Investment Company Act or the standing of the Adviser or Sub-Adviser as a
registered investment adviser under the Advisers Act.
(k) The Shares shall have been duly authorized for listing on the
New York Stock Exchange, subject only to official notice of issuance
thereof.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Fund and the Investment Advisers, the due authorization and
issuance of the Additional Shares to be sold on such Option Closing Date and
other matters related to the issuance of such Additional Shares, and officers'
certificates and opinions of Xxxxxxx and Xxxxxx LLP, Xxxxxxx XxXxxxxxx LLP and
Xxxx, Gotshal & Xxxxxx LLP to the effect set forth above, except that such
certificates and opinions shall be dated as of the applicable Option Closing
Date and statements and opinions above contemplated to be given as of the
Closing Date shall instead be made and given as of such Option Closing Date.
7. Covenants of the Fund and the Investment Advisers. In further
consideration of the agreements of the Underwriters herein contained, the Fund
and the Investment Advisers, jointly and severally, covenant and agree with each
Underwriter as follows:
(a) To notify you immediately, and confirm such notice in writing,
(i) of the institution of any proceedings pursuant to Section 8(e) of the
Investment Company Act and (ii) of the happening of any event during the
period mentioned in Section 7(h) below which in the judgment of the Fund
makes any statement in the Notification, the Registration Statement the
Time of Sale Prospectus, any Omitting Prospectus or the Prospectus untrue
in any material respect or which requires the making of any change in or
addition to the Notification, the Registration Statement, the Time of Sale
Prospectus, any Omitting Prospectus or the Prospectus in order to make the
statements therein not misleading in any material respect. If at any time
the Commission shall issue any order suspending the effectiveness of the
Registration Statement or an order pursuant to Section 8(e) of the
Investment Company Act, the Fund will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible moment.
18
(b) To furnish to you, without charge, three conformed copies of
each of the Notification and the Registration Statement (including
exhibits thereto) and for delivery to each other Underwriter a conformed
copy of each of the Notification and the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge,
prior to 10:00 A.M. (New York City time) on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 7(e) below, as many copies of the Time of Sale Prospectus,
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(c) During the period during which the Prospectus is required to be
delivered in connection with the sale of the Shares, before amending or
supplementing the Registration Statement, the Time of Sale Prospectus or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 497 under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(d) To furnish to you a copy of each proposed Omitting Prospectus to
be prepared by or on behalf of, used by, or referred to by the Fund and
not to use or refer to any proposed Omitting Prospectus to which you
reasonably object.
(e) If the Time of Sale Prospectus is being used to solicit offers
to buy the Shares at a time when the Prospectus is not yet available to
prospective purchasers and any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Time of Sale
Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if any event
shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration
Statement then on file, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Time of Sale
Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to
any dealer upon request, either amendments or supplements to the Time of
Sale Prospectus so that the statements in the Time of Sale Prospectus as
so amended or supplemented will not, in the light of the circumstances
existing when delivered to a prospective purchaser, be misleading or so
that the Time of Sale Prospectus, as amended or supplemented, will no
longer conflict with the Registration Statement, or so that the Time of
Sale Prospectus, as amended or supplemented, will comply in all material
respects with applicable law.
(f) The Fund will use the net proceeds received by it from the sale
of the Shares in the manner specified in the Time of Sale Prospectus and
the Prospectus.
(g) The Fund and the Investment Advisers will not take any action
designed to cause or result in the manipulation of the price of any
security of the Fund to facilitate the sale of Shares in violation of the
19
Acts or the Exchange Act and the applicable Rules and Regulations, or the
securities or Blue Sky laws of the various states and foreign
jurisdictions in connection with the offer and sale of Shares.
(h) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Fund) to which Shares may have been sold by you on behalf
of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply in all material respects with applicable law.
(i) To use its best efforts to maintain the Fund's qualification as
a regulated investment company under Subchapter M of the Code.
(j) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(k) To make generally available to the Fund's security holders and,
upon request, to you as soon as practicable an earning statement covering
a period of at least twelve months beginning with the first fiscal quarter
of the Fund occurring after the date of this Agreement which shall satisfy
the provisions of Section 11(a) of the Securities Act and the Rules and
Regulations, including Rule 158, of the Commission thereunder.
(l) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the obligations of the
Fund and the Investment Advisers under this Agreement, including: (i) the
fees, disbursements and expenses of the Fund's counsel and the Fund's
accountants in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with
the preparation and filing of the Notification, the Registration
Statement, any preliminary prospectus, the Time of Sale Prospectus, the
Prospectus, and any Omitting Prospectus prepared by or on behalf of, used
by, or referred to by the Fund and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters,
20
including any transfer or other taxes payable thereon, (iii) the cost of
printing or producing any Blue Sky memorandum in connection with the offer
and sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale under
state securities laws as provided in Section 7(j) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with
the Blue Sky memorandum, (iv) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection with
the review and qualification of the offering of the Shares by FINRA, which
fees and disbursements of counsel to the Underwriters shall not exceed
$30,000 in the aggregate, (v) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating
to the Common Shares and all costs and expenses incident to listing the
Shares on the New York Stock Exchange, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (viii) the costs and expenses of
the Fund relating to investor presentations on any "road show" undertaken
in connection with the marketing of the offering of the Shares, including,
without limitation, expenses associated with the preparation or
dissemination of any electronic road show, expenses associated with
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Fund, travel and lodging expenses of the
representatives and officers of the Fund and any such consultants, and the
cost of any aircraft chartered in connection with the road show, (ix) the
document production charges and expenses associated with printing this
Agreement and (x) all other costs and expenses incident to the performance
of the obligations of the Fund hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 8 entitled "Indemnity and Contribution"
and the last paragraph of Section 10 below, the Underwriters will pay all
of their costs and expenses, including fees and disbursements of their
counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may make.
(m) The Fund will not declare or pay any dividend or other
distribution on any of the Common Shares unless a holder of such Common
Shares that was not a holder of record until the close of business on [ ],
2013 would be entitled to receive the full amount thereof.
21
8. Indemnity and Contribution. (a) Each of the Fund and the Investment
Advisers, jointly and severally, agrees to indemnify and hold harmless each
Underwriter, each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, each agent of any Underwriter and each director, officer or affiliate of
any Underwriter within the meaning of Rule 405 under the Securities Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim), (i) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any Omitting Prospectus, any
preliminary prospectus (including any statement of additional information
incorporated therein by reference), the Time of Sale Prospectus, or the
Prospectus or any amendment or supplement thereto, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Fund or the Investment
Advisers in writing by such Underwriter through you expressly for use therein or
(ii) resulting from, related to or arising in connection with the posting of any
Omitting Prospectus, any preliminary prospectus (including any statement of
additional information incorporated therein by reference), the Time of Sale
Prospectus, or the Prospectus or any amendment or supplement thereto on the
website of the Fund, the Adviser, the Sub-Adviser or any affiliate of the
foregoing.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless each of the Fund and the Investment Advisers, its
directors or trustees (as the case may be), and each officer of the Fund
who signs the Registration Statement and each person, if any, who controls
the Fund or any Investment Adviser within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity in Section 8(a)(i) from the Fund and the
Investment Advisers to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the Fund or the
Investment Advisers in writing by such Underwriter through you expressly
for use in the Registration Statement, any preliminary prospectus
(including any statement of additional information incorporated therein by
reference), the Time of Sale Prospectus, any Omitting Prospectus or
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 8(a) or 8(b), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
22
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for (i) the fees
and expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, all persons who are agents of any
Underwriter or all persons who are directors, officers and affiliates of
any Underwriters within the meaning of Section 405 under the Securities
Act, (ii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Fund, its trustees, its officers
who sign the Registration Statement and each person, if any, who controls
the Fund within the meaning of either such Section, and (iii) the fees and
expenses of more than one separate firm (in addition to any local counsel)
for the Investment Advisers, their directors or trustees, as the case may
be, and each person, if any, who controls any of the Investment Advisers
within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons, agents,
directors, officers and affiliates of any Underwriters, such firm shall be
designated in writing by the Representatives. In the case of any such
separate firm for the Fund, and such trustees, officers and control
persons of the Fund, such firm shall be designated in writing by the Fund.
In the case of any such separate firm for the Investment Advisers, and
such directors and control persons of the Investment Advisers, such firm
shall be designated in writing by the Adviser. The indemnifying party
shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences of
this paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding and does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) To the extent the indemnification provided for in Section 8(a)
or 8(b) is unavailable to an indemnified party or insufficient in respect
23
of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Fund and the Investment Advisers on
the one hand and the Underwriters on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause 8(d)(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 8(d)(i) above
but also the relative fault of the Fund and the Investment Advisers on the
one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Fund and the Investment Advisers on the
one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Fund and the total underwriting
discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the
Fund and the Investment Advisers on the one hand and the Underwriters on
the other hand 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 or any of the Investment Advisers or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant
to this Section 8 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint. Each of the
Investment Advisers agrees to pay any amounts that are payable by the Fund
pursuant to this paragraph to the extent that the Fund fails to make all
contributions required to be made by the Fund pursuant to this Section 8.
(e) The Fund, the Investment Advisers and the Underwriters agree
that it would not be just or 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 Section 8(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred
to in Section 8(d) 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 or defending any such
action or claim. 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 at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages that 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
24
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Fund and each of the Investment Advisers contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter, any person controlling any Underwriter or any agent of
any Underwriter or any director, officer and affiliate of any Underwriter
or by or on behalf of any of the Investment Advisers, their officers or
directors or any person controlling the Investment Advisers or by or on
behalf of the Fund, its officers or trustees or any person controlling the
Fund and (iii) acceptance of and payment for any of the Shares.
9. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Fund, if after the execution and delivery of this Agreement
and prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on, or by, as the case may be, any of the New York Stock
Exchange, the NYSE MKT, the NASDAQ Global Market, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Fund shall have been suspended on any exchange
or in any over-the-counter market, (iii) a material disruption in securities
settlement, payment or clearance services in the United States shall have
occurred, (iv) any moratorium on commercial banking activities shall have been
declared by Federal or New York State authorities or (v) there shall have
occurred any outbreak or escalation of hostilities, or any change in financial
markets, currency exchange rates or controls or any calamity or crisis that, in
your judgment, is material and adverse and which, singly or together with any
other event specified in this clause (v), makes it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Shares on the terms and in the manner contemplated in the Time of Sale
Prospectus or the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, 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 to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
25
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased on such date, and arrangements satisfactory to you and
the Fund for the purchase of such Firm Shares are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Fund or the Investment Advisers. In any
such case 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, in the Time of Sale Prospectus,
in the Prospectus or in any other documents or arrangements may be effected. If,
on an Option Closing Date, any Underwriter or Underwriters shall fail or refuse
to purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such Option Closing Date, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase the Additional Shares to be sold on such Option
Closing Date or (ii) purchase not less than the number of Additional Shares that
such non-defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Fund or any of the
Investment Advisers to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Fund or any of the Investment
Advisers shall be unable to perform its obligations under this Agreement, the
Fund and the Investment Advisers, jointly and severally, will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY PROCEEDING OR CLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT. THE FUND AND
THE INVESTMENT ADVISERS AGREE THAT A FINAL JUDGMENT IN ANY PROCEEDING OR CLAIM
ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT BROUGHT IN ANY COURT
SHALL BE CONCLUSIVE AND BINDING UPON THE PARTIES AND MAY BE ENFORCED IN ANY
OTHER COURTS TO THE JURISDICTION OF WHICH SUCH PARTY IS OR MAY BE SUBJECT, BY
SUIT UPON SUCH JUDGMENT.
26
12. Entire Agreement. (a) This Agreement, together with any
contemporaneous written agreements and any prior written agreements (to the
extent not superseded by this Agreement) that relate to the offering of the
Shares, represents the entire agreement between the Fund, the Investment
Advisers and the Underwriters with respect to the preparation of any preliminary
prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the
offering, and the purchase and sale of the Shares.
(b) The Fund and the Investment Advisers acknowledge that in
connection with the offering of the Shares: (i) the Underwriters have
acted at arms length, are not agents of, and owe no fiduciary duties to,
the Fund, the Investment Advisers or any other person, (ii) the
Underwriters owe the Fund and the Investment Advisers only those duties
and obligations set forth in this Agreement and prior written agreements
(to the extent not superseded by this Agreement), if any, and (iii) the
Underwriters may have interests that differ from those of the Fund and the
Investment Advisers. The Fund and the Investment Advisers waive to the
full extent permitted by applicable law any claims any of them may have
against the Underwriters arising from an alleged breach of fiduciary duty
in connection with the offering of the Shares.
13. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
16. Notices. All communications hereunder shall be in writing and
effective only upon receipt and if to the Underwriters shall be delivered,
mailed or sent to you in care of: Xxxxxx Xxxxxxx & Co. LLC, 1585 Broadway, New
York, New York 10036, Attention: Equity Syndicate Desk, with a copy to the Legal
Department; and Citigroup Global Markets Inc., General Counsel (fax no.: (212)
000-0000), and confirmed to the General Counsel, Citigroup Global Markets Inc.,
at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel;
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, One Bryant Park, New York,
New York 10036, Attention: Syndicate Department, with a copy to ECM Legal;
if to the Fund or the Adviser, shall be delivered, mailed or sent to First Trust
Portfolios L.P., 000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000,
Attention: X. Xxxxx Xxxxxxx; and if to the Sub-Adviser, shall be delivered,
mailed or sent to Stonebridge Advisors LLC, 000 Xxxxxxx Xxxx, Xxxxxx, XX 00000,
Attention: [ ].
17. Disclaimer of Liability of Trustees and Beneficiaries. A copy of the
Declaration of Trust of the Fund is on file with the Secretary of State of The
Commonwealth of Massachusetts, and notice hereby is given that this Agreement is
executed on behalf of the Fund by an officer or Trustee of the Fund in his or
her capacity as an officer or Trustee of the Fund and not individually and that
the obligations under or arising out of this Agreement are not binding upon any
27
of the Trustees, officers or shareholders individually but are binding only upon
the assets and properties of the Fund.
[Remainder of page intentionally left blank]
28
Very truly yours,
FIRST TRUST INTERMEDIATE
DURATION PREFERRED &
INCOME FUND
By:
-------------------------------------
Name:
Title:
FIRST TRUST ADVISORS L.P.
By:
-------------------------------------
Name:
Title:
STONEBRIDGE ADVISORS LLC
By:
-------------------------------------
Name:
Title:
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. LLC
Citigroup Global Markets Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Acting severally on behalf of themselves and the several Underwriters named in
Schedule I hereto
By: Xxxxxx Xxxxxxx & Co. LLC
By:
--------------------------------------------
Name: Xxx Xxxxxxxxx
Title: Vice President
By: Citigroup Global Markets Inc.
By:
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
By: Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
By:
--------------------------------------------
Name:
Title:
SCHEDULE I
NUMBER OF FIRM
SHARES TO BE
UNDERWRITER PURCHASED
------------------------------------------------------------- ----------------
Xxxxxx Xxxxxxx & Co. LLC.....................................
Citigroup Global Markets Inc.................................
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated...........
31
-----------------
Total:..............................................
=================
32
SCHEDULE II
OMITTING PROSPECTUSES
1. Retail Omitting Prospectus:
Client guide printed April 22, 2013.
2. The following documents labeled "For Broker/Dealer Use Only":
Broker-dealer guide printed April 22, 2013.
3. Conference Call Schedule Flyer
4. Meeting Invitation Flyer
5. Conference Call Invitation Flyer
33
SCHEDULE III
ORAL INFORMATION, IF ANY, INCLUDED AS PART OF THE TIME OF SALE PROSPECTUS
(1) The number of common shares of beneficial interest (par value $0.01 per
share) offered by the Fund (assuming no exercise of the underwriters'
overallotment option) is [ ], and the number of Additional Shares is [ ].
34
