[_____] Shares
FIRST TRUST ACTIVE DIVIDEND INCOME FUND
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
[_________], 2007
Xxxxxxx Xxxxx & Associates, Inc.
As Representative of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
The undersigned, First Trust Active Dividend Income Fund, a
voluntary association with transferable shares organized and existing
under and by virtue of the laws of The Commonwealth of Massachusetts
(commonly referred to as a Massachusetts business trust) (the "Fund"),
First Trust Advisors L.P., an Illinois limited partnership (the
"Adviser"), and Aviance Capital Management, LLC, a Florida limited
liability company (the "Sub-Adviser"), address you as Underwriters and
as the Representative (the "Representative") 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, $.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, the Adviser and the Sub-Adviser wish to confirm as
follows their agreements with you and the other several Underwriters on
whose behalf you are acting in connection with the several purchases of
the Shares by the Underwriters.
The Fund has entered into an investment advisory agreement with
the Adviser dated [_________], 2007 (the "Advisory Agreement"), an
investment sub-advisory agreement with the Adviser and the Sub-Adviser
dated [_________], 2007 (the "Sub-Advisory Agreement"), an Organization
Expenses and Offering Costs Agreement with the Adviser dated
[_________], 2007 (the "Organization Expenses and Offering Costs
Agreement"), a Custodian Contract with PFPC Trust Company dated
[_________], 2007 (the "Custodian Contract"), an Administration and
Accounting Services Agreement with PFPC Inc. dated [_________], 2007
(the "Administration Agreement"), a Registrar Transfer Agency Agreement
with PFPC Inc. dated [_________], 2007 (the "Transfer Agency Agreement")
and a Subscription Agreement with First Trust Portfolios, L.P. dated
[_________], 2007 (the "Subscription Agreement"). Collectively, the
Advisory Agreement, Sub-Advisory Agreement, Custodian Contract,
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Administration Agreement, Transfer Agency Agreement and Subscription
Agreement are herein referred to as the "Fund Agreements." Collectively,
the Advisory Agreement, the Organization Expenses and Offering Costs
Agreement and the Sub-Advisory Agreement are herein referred to as the
"Advisory 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. 333-143792 under the 1933 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. 811-22080 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, as amended at the time it becomes
effective for purposes of Section 11 of the 1933Act, as such section
applies to the respective Underwriters (the "Effective Time"), including
(i) all documents filed as a part thereof or incorporated by reference
therein, (ii) any information contained in a prospectus subsequently
filed with the Commission pursuant to Rule 497 under the 1933 Act Rules
and Regulations and deemed to be part of the registration statement at
the Effective Time pursuant to Rule 430A under the 1933 Act Rules and
Regulations and (iii) any Rule 462 Registration Statement filed to
register the offer and sale of Shares pursuant to Rule 462(b) under the
1933 Act Rules and Regulations.
The term "Prospectus" as used in this Agreement means the final
prospectus and statement of additional information incorporated therein
by reference as filed by the Fund with the Commission (i) pursuant to
Rule 497(h) under the 1933 Act Rules and Regulations on or before the
second business day after the date hereof (or such earlier time as may
be required under the 0000 Xxx) or (ii) pursuant to Rule 497(b) under
the 1933 Act on or before the fifth business day after the date hereof
(or such earlier time as may be required under the 1933 Act), or, if no
such filing is required, the final prospectus (including the final
statement of additional information) included in the Registration
Statement at the time it becomes effective, in each case in the form
furnished by the Fund to you for use by the Underwriters and by dealers
in connection with the confirmation of sales in the offering of the
Shares.
The term "Prepricing Prospectus" as used in this Agreement
means each prospectus and statement of additional information included
in the Registration Statement, or amendment thereof, before it became
effective under the 1933 Act and any prospectus and statement of
additional information incorporated therein by reference filed with the
Commission by the Fund with the consent of the Representative on behalf
of the Underwriters, pursuant to Rule 497(a) under the 1933 Act Rules
and Regulations.
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The term "Pricing Prospectus" as used in this Agreement means
the Prepricing Prospectus that is included in the Registration
Statement, or otherwise furnished by the Fund to you for use by the
Underwriters and by dealers in connection with the offering of the
Shares, immediately prior to the Applicable Time (as defined below) and
any amendment or supplement to such Prepricing Prospectus from the
Applicable Time through the Closing Date.
The terms "Registration Statement," "Prospectus," "Prepricing
Prospectus" and "Pricing Prospectus" shall also include any financial
statements and other information included or incorporated by reference
therein. The Fund has furnished the Representative with copies of such
Registration Statement, each amendment to such Registration Statement
filed with the Commission and each Prepricing Prospectus.
The term "Pricing Information" as used in this Agreement means
the information relating to (i) the number of Shares issued and (ii) the
offering price of the Shares included on the cover page of the
Prospectus dependent upon such information.
The term "Disclosure Package" as used in this Agreement means
the Pricing Prospectus taken together with the Pricing Information.
The term "Applicable Time" as used in this Agreement means the
time as of which this Agreement was entered into, which shall be [ ],
New York time, on the date of this Agreement (or such other time as is
agreed to by the Fund and the Representative on behalf of the
Underwriters.
2. Agreements to Sell and Purchase. The Fund hereby agrees, subject to
all the terms and conditions set forth herein, to issue and to sell to
each Underwriter and, upon the basis of the representations, warranties
and agreements of the Fund, the Adviser and the Sub-Adviser herein
contained and subject to all of the other terms and conditions set forth
herein, each Underwriter agrees, severally and not jointly, to purchase
from the Fund at a purchase price of $19.10 per Share (the "Price per
Share"), the number of Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
The Fund also agrees, subject to all the terms and conditions
set forth herein, to issue and to sell to the Underwriters and, upon the
basis of the representations, warranties and agreements of the Fund, the
Adviser and the Sub-Adviser herein contained and subject to all the
terms and 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 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 New York Stock Exchange (the "NYSE") is
open for trading). Additional Shares may be purchased solely for the
purpose of covering over-allotments made in connection with the offering
of the Shares. Upon any exercise of the over-allotment option, upon the
basis of the representations, warranties and agreements of the Fund, the
Adviser and the Sub-Adviser, herein contained and subject to all of the
other terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Fund the number of
Additional Shares (subject to such adjustments as you may determine to
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avoid fractional shares) which bears the same proportion to the number
of Additional Shares to be purchased by the Underwriters as the number
of Firm Shares set forth opposite the name of such Underwriter in
Schedule I (or such number of Firm Shares increased as set forth in
Section 11 hereof) bears to the aggregate number of Firm Shares.
3. Terms of Public Offering. The Fund, the Adviser and the
Sub-Adviser have been advised by you that the Underwriters
propose to make a public offering of their respective portions
of the Shares as soon after the Effective Time and after this
Agreement has become effective as in your judgment is advisable
and initially to offer the Shares upon the terms set forth in
the Prospectus.
4. Delivery of Shares and Payments Therefor.
(a) Delivery to the Underwriters of and payment to the Fund for the
Firm Shares and compensation of the Underwriters with respect
thereto shall be made at the offices of Xxxxxxx and Xxxxxx LLP,
Suite 1700, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, XX 00000 at 9:00
a.m. New York time on September 25, 2007 (the "Closing Date").
The place of closing for the Firm Shares and the Closing Date
may be varied by agreement between you 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 Xxxxxxx and Xxxxxx LLP 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.
(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 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 for inspection and packaging not later than 9:00 A.M., New
York, 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.
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5. Agreements of the Fund, the Adviser and the Sub-Adviser. The
Fund, the Adviser and the Sub-Adviser, jointly and severally,
agree with the several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective under the 1933 Act
before the offering of the Shares may commence in compliance
therewith, the Fund will use its best efforts to cause the
Registration Statement or such post-effective amendment to
become effective under the 1933 Act as soon as possible. If it
is necessary for a post-effective amendment to the Registration
Statement, or a Rule 462 Registration Statement under Rule
462(b) under the Securities Act, to be filed with the
Commission and become effective before the Shares may be sold,
the Fund will use its best efforts to cause such post-effective
amendment or such Registration Statement to be filed and become
effective as soon as possible, and the Fund will advise you
promptly and, if requested by you, will confirm such advice in
writing, when such post-effective amendment or such
Registration Statement has become effective. If the
Registration Statement has become effective and the Prospectus
contained therein omits certain information at the time of
effectiveness pursuant to Rule 430A of the 1933 Act Rules and
Regulations, the Fund will file a prospectus including such
information pursuant to Rule 497(h) of the 1933 Act Rules and
Regulations, as promptly as practicable, but no later than the
second business day following the earlier of the date of the
determination of the offering price of the Shares or the date
the Prospectus is first used after the Effective Time. If the
Registration Statement has become effective and the Prospectus
contained therein does not so omit such information, the Fund
will file a Prospectus or certification pursuant to Rule 497(c)
or (j), as the case may be, of the 1933 Act Rules and
Regulations as promptly as practicable, but no later than the
fifth business day following the date of the later of the
Effective Time or the commencement of the public offering of
the Shares after the Effective Time. The Fund will advise you
promptly and, if requested by you, will confirm such advice in
writing (i) when the Registration Statement or such
post-effective amendment has become effective, (ii) when the
Prospectus has been timely filed pursuant to Rule 497(c) or
Rule 497(h) of the 1933 Act Rules and Regulations or (iii) when
the certification permitted pursuant to Rule 497(j) of the 1933
Act Rules and Regulations has been timely filed, whichever is
applicable.
(b) The Fund, and in the case of (iii)(B) and (iv) below, the Adviser
or the Sub-Adviser, will advise you promptly and, if requested
by you, will confirm such advice in writing: (i) of any request
made by the Commission for amendment of or a supplement to the
Registration Statement, the Prospectus 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 Financial Industry Regulatory Authority,
Inc. ("FINRA"), any state securities commission, any national
securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative
agency or any 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 defined in Section 6(t) hereof), 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, the Sub-Adviser, any-affiliate of the Fund, the
Adviser or the Sub-Adviser or any representatives or attorney
of the Fund, the Adviser or the Sub-Adviser of any other
material communication from the Commission, FINRA, any state
securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any 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 (or
any amendment or supplement to any of the foregoing), this
Agreement, any of the Fund Agreements or any of the Advisory
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), business, properties, net
assets or results of operations ("Material Adverse Change") of
the Fund or any event which should reasonably be expected to
have a material adverse effect on the ability of the Adviser or
the Sub-Adviser to perform their respective obligations under
this Agreement or any of the Advisory Agreements, as the case
may be, (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 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 the
Prospectus, any Prepricing 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, any Prepricing 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, the Adviser and
the Sub-Adviser will use their best efforts to obtain the
withdrawal of such order at the earliest possible time. If at
any time FINRA, 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, any Prepricing 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, the Adviser
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and the Sub-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
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 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 Representative of
the Underwriters, prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the Fund
has delivered to you, without charge, in such quantities as you
have reasonably requested, copies of each form of any
Prepricing Prospectus. The Fund consents to the use, in
accordance with the provisions of the 1933 Act and with, the
securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by dealers,
prior to the date of the Prospectus, of each Prepricing
Prospectus so furnished by the Fund.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time, for such period as
in the opinion of counsel for the Underwriters a prospectus is
required by the 1933 Act to be delivered in connection with
sales of Shares by any Underwriter or dealer, the Fund will
expeditiously deliver to each Underwriter and each dealer,
without charge, as many copies of the Prospectus (and of any
amendment or supplement thereto) as you may reasonably request.
The 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
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Shares and for such period of time thereafter as the Prospectus
is required by law to be delivered in connection with sales of
Shares by any Underwriter or dealer. If during such period of
time any event shall occur that in the judgment of the Fund or
in the opinion of counsel for the Underwriters is required to
be set forth in the Registration Statement or the Prospectus
(as then amended or supplemented) or should be set forth
therein in order to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which they
were made) not misleading or if it is necessary to supplement
or amend the Registration Statement or the Prospectus to comply
with the 1933 Act, the 1940 Act, the Rules and Regulations or
any other law, rule or regulation, the Fund will forthwith
notify you of such event, prepare and, subject to the
provisions of paragraph (d) above, promptly file with the
Commission an appropriate amendment or supplement thereto and
will expeditiously furnish to the Underwriters and dealers,
without charge, such number of copies thereof as they may
reasonably request. In the event that the Registration
Statement or the Prospectus is to be amended or supplemented,
the Fund, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by
the proposed amendment or supplement.
(g) The Fund will cooperate with you and with counsel for the
Underwriters in connection with the registration or
qualification of the Shares for offering and sale by the
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; provided, however, that none of
the Fund, the Adviser or the Sub-Adviser shall be obligated to
(i) qualify as a foreign entity in any jurisdiction where it is
not so qualified or (ii) take any action that would subject the
Fund, the Adviser or the Sub-Adviser to service of process in
suits other than those arising out of the offering or sale of
Shares or Additional Shares; provided further that neither the
Adviser nor Sub-Adviser will be obligated to take any action
that would subject the Adviser or Sub-Adviser to income tax in
any jurisdiction and that the Fund will not be obligated
generally to take any action that would subject the Fund to
income tax in any jurisdiction unless no alternative action is
available to so qualify and register the offer and sale of the
Shares in such jurisdiction.
(h) Each of the Adviser and the Sub-Adviser will make generally
available to the Underwriters its staff, for assistance with
roadshow presentations as the Underwriters may reasonably
request.
(i) As soon as practicable, but in no event later than the last day
of the 18th full calendar month following the calendar quarter
in which the Effective Time falls, the Fund will make generally
available to its security holders an earnings statement, which
need not be audited, which earnings statement shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 of the
1933 Act Rules and Regulations.
(j) The Fund will comply with the undertaking set forth in paragraph 6
of Item 33 of Part C of the Registration Statement.
(k) During the period of three years hereafter, the Fund will
furnish or will have furnished to you (i) as soon as available,
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a copy of each report of the Fund mailed to shareholders or
filed with the Commission or furnished to the NYSE and (ii)
from time to time such other information concerning the Fund as
you may reasonably request.
(l) If this Agreement shall terminate or be terminated after execution
pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 11 hereof or by notice given by
you terminating this Agreement pursuant to Section 12 hereof)
or if this Agreement shall be terminated by the Underwriters
because of (i) any failure' or refusal on the part of the Fund,
the Adviser or the Sub-Adviser to comply with any term or
fulfill any of the conditions of this Agreement required to be
complied with or fulfilled by them, or (ii) the non-occurrence
of any other condition of this Agreement required to occur in
connection with the transactions contemplated hereby, the Fund,
the Adviser and the Sub-Adviser, jointly and severally, agree
to reimburse the Representative for all out-of-pocket expenses
not to exceed the amounts set forth in Section 13 of this
Agreement (including fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
(m) The Fund will direct the investment of the net proceeds of the
offering of the Shares (i) in accordance with the description
set forth in the Prospectus and (ii) in such a manner as to
comply with the investment objectives, policies and
restrictions of the Fund as described in the Prospectus.
(n) The Fund will file the requisite copies of the Prospectus with
the Commission in a timely fashion pursuant to Rule 497(c) or
Rule 497(h) of the 1933 Act Rules and Regulations, whichever is
applicable or, if applicable, will file in a timely fashion the
certification permitted by Rule 497(j) of the 1933 Act Rules
and Regulations and will advise you of the time and manner of
such filing.
(o) The Fund will use its best efforts to have the shares listed,
subject to notice of issuance, on the NYSE concurrently with
the effectiveness of the Registration Statement and to comply
with the rules or regulations of such exchange.
(p) Except as provided in this Agreement or pursuant to any
dividend reinvestment plan of the Fund, none of the Fund, the
Adviser, the Sub-Adviser or their respective officers,
9
directors, trustees, members, managers or partners will sell,
contract to sell or otherwise dispose of, any shares of
beneficial interest of the Fund or any securities convertible
into or exercisable or exchangeable for shares of beneficial
interest of the Fund or grant any options or warrants to
purchase shares of beneficial interest of the Fund, for a
period of 180 days after the date of the Prospectus, without
the prior written consent of the Representative.
(q) Except as stated in this Agreement and in the Prospectus, none
of the Fund, the Adviser or the Sub-Adviser will take, directly
or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation
of the price of the Shares.
(r) The Fund will direct the investment of the proceeds of the
offering of the Shares so as to comply with the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), to qualify as a regulated investment company
under the Code.
6. Representations and Warranties of the Fund, the Adviser and the
Sub-Adviser. The Fund and the Adviser, jointly and severally,
with respect to this Section 6 and the Sub-Adviser jointly and
severally with the Fund and the Adviser with respect to
paragraphs (a), (b), (h), (j), (m), (p), (q), (s), (t) and (u)
of this Section 6, and severally with respect to paragraphs
(c), (e), (f), (g), (k), (n), (o), (w) and (x) of this Section
6, hereby represent and warrant to each Underwriter that:
(a) (A) 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 requirements of the 1933 Act, the 1940 Act
and the Rules and Regulations; (B) the Registration Statement
complied at the Effective Time, complies as of the date hereof
and, as amended or supplemented, at the Closing Date, each
Option Closing Date, if any, and at all times during which a
prospectus is required by the 1933 Act to be delivered in
connection with any sale of Shares, will comply, in all
material respects, with the requirements of the 1933 Act, the
1940 Act and the Rules and Regulations; and (C) each Prepricing
Prospectus, the Pricing Prospectus and the Prospectus complied
at the time it was filed with the Commission, and the
Prospectus complies as of the date hereof and, as amended or
supplemented, at the Closing Date and each Option Closing Date,
if any, and at all times during which a prospectus is required
by the 1933 Act to be delivered in connection with any sale of
Shares, will comply, in all material respects, with the
requirements of the 1933 Act (including, without limitation,
Section 10(a) of the 1933 Act), the 1940 Act and the Rules and
Regulations;
(b) (A)(1) The Registration Statement as of the Effective Time did not,
(2) the Registration Statement (including any post-effective
amendment thereto declared or deemed to be effective by the
Commission) as of the date hereof does not, and (3) the
Registration Statement (including any post-effective amendment
thereto declared or deemed to be effective by the Commission),
as of the Closing Date and each Option Closing Date, if any,
will not, in each case, contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; (B) at no time during the period that begins as of
the Applicable Time and ends at the Closing Date did or will
the Disclosure Package include an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(C) at no time during the period that begins on the earlier of
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the date of the Prospectus and the date the Prospectus is filed
with the Commission and ends at the latest of the Closing Date,
the latest Option Closing Date, if any, and the end of the
period during which a prospectus is required by the 1933 Act to
be delivered in connection with any sale of Shares did or will
the Prospectus, as then amended or supplemented, include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that none of the Fund, the
Adviser or the Sub-Adviser makes any representation or warranty
with respect to any statement contained in the Registration
Statement, the Disclosure Package or the Prospectus in reliance
upon and in conformity with information concerning an
Underwriter and furnished in writing by or on behalf of such
Underwriter through the Representative to the Fund expressly
for use in the Registration Statement, the Disclosure Package
or the Prospectus as described in Section 14 hereof;
(c) All the outstanding shares of beneficial interest of the Fund
have been duly authorized and validly issued, are fully paid
and (except as described in the the Registration Statement, the
Pricing Prospectus and the Prospectus under "Certain Provisions
in the Declaration of Trust") nonassessable and are free of any
preemptive or similar rights, the Shares have been duly
authorized and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and (except as described in
the Registration Statement, the Pricing Prospectus and the
Prospectus under "Certain Provisions in the Declaration of
Trust") nonassessable and free of any preemptive or similar
rights and the shares of beneficial interest of the Fund
conform in all material respects to the description thereof in
the Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of them).
Except for the Shares and the shares of beneficial interest
issued in accordance with Section 14(a) of the 1940 Act, no
other shares of beneficial interest are issued or outstanding
and the capitalization of the Fund conforms in all material
respects to the description thereof in the Registration
Statement, the Pricing Prospectus and the Prospectus (or any
amendment or supplement to either of them). The authorized
shares of beneficial interest of the Fund consist of an
unlimited amount of shares of which [_____] are outstanding as
of the date hereof.
(d) (i) The Fund has been duly formed and is validly existing in
good standing as a business trust under the laws of The
Commonwealth of Massachusetts with full power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement, the
Pricing Prospectus and the Prospectus (and any amendment or
supplement to either of them); (ii) the Fund is duly registered
and qualified to conduct business and is in good standing in
each jurisdiction or place where the nature of its properties
or the conduct of its business requires such registration or
qualification, except where the failure so to register or to
qualify does not have a material, adverse effect on the
condition (financial or other), business, properties, net
assets or results of operations, whether or not occurring in
the ordinary course of business ("Material Adverse Effect"), of
the Fund. The Fund has no subsidiaries.
11
(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, the
Pricing Prospectus or the Prospectus (and any amendment or
supplement to either of them) but are not described therein as
required and there are no agreements, contracts, indentures,
leases or other instruments that are required to be described
in the Registration Statement, the Pricing Prospectus or the
Prospectus,(or any amendment or supplement to either of them)
or to be filed as an exhibit to the Registration Statement that
are not described therein or filed therewith 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 (the
"Declaration"), 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, FINRA, any state securities commission, any
national securities exchange, any arbitrator, any court or any
other governmental, regulatory, self-regulatory or
administrative agency or any other agency ,or any body or
official having jurisdiction over the Fund or in breach or
default in the performance of any 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. The Fund maintains and
will maintain processes, systems and controls sufficient to
provide reasonable assurances that the Fund complies and will
continue to comply with the 1933 Act, the 1933 Act Rules and
Regulations, the 1940 Act and the 1940 Act Rules and
Regulations, any law, ordinance, administrative or governmental
rule or regulation applicable to the Fund and any decree of the
Commission, FINRA, any state securities commission, any
national securities exchange, any arbitrator, any court or any
other governmental, regulatory, self-regulatory or
administrative agency or body or any other agency or any body
or official having jurisdiction over 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, FINRA, any state securities
commission, any national securities exchange, any arbitrator,
any court, regulatory, body, administrative agency or other
governmental body, agency or official having jurisdiction over
the Fund (except 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 FINRA's Division of
Corporate Finance) or conflicts or will conflict with or
constitutes or will constitute a breach of the Declaration,
bylaws, or other organizational documents of the Fund or (ii)
(A) conflicts or will conflict with or constitutes or will
constitute a material breach of or a default under any material
agreement, indenture, lease or other instrument to which the
12
Fund is a party or by which it or any of its properties may be
bound or (B) violates or will violate any material 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 material lien,
charge or encumbrance upon 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. 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, the Pricing Prospectus and the
Prospectus (and any amendment or supplement to either of them),
except as otherwise stated therein, (i) there has been no
Material Adverse Change in the 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 Pricing
Prospectus and the Prospectus (and any amendment or supplement
thereto) and (iii) there has been no dividend or distribution
of any kind declared, paid or made by the Fund on any class of
its shares of beneficial interest.
(i) The accountants, Deloitte & Touche LLP who have audited the
Statement of Assets and Liabilities included in the
Registration Statement, the Pricing Prospectus 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, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of them)
present fairly in all material respects the financial position
of the Fund on the basis stated in the Registration Statement
at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes
have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the
periods involved except as disclosed therein; and the other
financial and statistical information and data included in the
Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement thereto) are
accurately derived from such financial statements and the books
and records of the Fund.
(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
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 each of the Fund
Agreements have been duly and validly authorized by the Fund
13
and, assuming due authorization, execution and delivery by the
other parties thereto, 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, the Pricing Prospectus 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, the Pricing Prospectus and the
Prospectus (and any amendment or supplement to either of them),
the Fund has not incurred any liability or obligation, direct
or contingent, or entered into any transaction, not in the
ordinary course of business, and there has not been any change
in the shares of beneficial interest of the Fund or its
capitalization or any Material Adverse Change or any
development involving or which should reasonably be expected to
involve a Material Adverse Change in the Fund 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 any offering
material in connection with the offering and sale of the Shares
other than the Registration Statement, the Pricing Prospectus,
the Prospectus and the investor sales material (as hereinafter
defined) filed with FINRA on [_________], 2007.
(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 Pricing Prospectus and the
Prospectus (and any amendment or supplement thereto); the Fund
has fulfilled and performed all its material obligations with
respect to such permits and no event has occurred which allows
or, after notice or lapse of time, would allow, revocation or
termination thereof or results in any other material impairment
of the rights of the Fund under any such permit, subject in
each case to such qualification as may be set forth in the
Pricing Prospectus and the Prospectus (and any amendment or
supplement thereto), except in the case where any such
impairment would not, individually or in the aggregate, have a
Material Adverse Effect on the Fund; and, except as described
in the Pricing Prospectus and the Prospectus (and any amendment
or supplement thereto), none of such permits contains any
restriction that is materially burdensome to the Fund.
(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
14
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 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
Pricing Prospectus and the Prospectus) does not require it to
be the owner, possessor or licensee of any patents, patent
licenses, trademarks, service marks or trade names which it
does not own, possess or license.
(r) Except as stated in this Agreement, in the Pricing Prospectus
and in the Prospectus (and any amendment or supplement
thereto), the Fund has not taken, 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, and the investment policies
and restrictions described in each of the Registration
Statement, the Pricing Prospectus and the Prospectus, comply in
all material respects with the requirements of the 1940 Act and
the 1940 Act Rules and Regulations.
(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,
the Adviser or the Sub-Adviser for use in connection with the
offering and sale of the Shares (investor sales material and
broker sales material is collectively referred to as "sales
material")) complied and comply in all material respects with
the applicable requirements of the 1933 Act, the 1933 Act Rules
and Regulations and the rules and interpretations of FINRA and,
if required to be filed with FINRA under FINRA's conduct rules,
were so filed and no such sales material, when read together
with the Prospectus, contained or contains an untrue statement
15
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, shares of beneficial interest or
any other security of the Fund because of the filing of the
Registration Statement or consummation of the transactions
contemplated by this Agreement.
(w) In the event that the Fund, the Adviser or the Sub-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, the Adviser or Sub-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.
(x) The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus, the Pricing
Prospectus or the Prospectus.
(y) Except as disclosed in the Registration Statement, the Pricing
Prospectus and the Prospectus (or any amendment or supplement
to either of them), no trustee of the Fund is an "interested
person" (as defined in the 0000 Xxx) of the Fund or an
"affiliated person" (as defined in the 0000 Xxx) of any
Underwriter listed in Schedule I hereto.
(z) The Shares have been approved for listing on the NYSE, subject
to official notice of issuance, the Registration Statement has
become effective under the 1933 Act or, with respect to any
Rule 462 Registration Statement, will become effective under
the 1933 Act upon filing with the Commission no later than
10:00 p.m., New York time, on the date of determination of the
public offering price for the Shares, and the Fund's
registration statement on Form 8-A has become effective under
the 1934 Act.
7. Representations and Warranties of the Adviser. The Adviser
represents and warrants to each Underwriter as follows:
16
(a) The Adviser is a limited partnership duly organized and validly
existing in good standing under the laws of the State of
Illinois, with full power and authority to own, lease and
operate its properties and to conduct its business as described
in each of the Registration Statement, the Pricing Prospectus
and the Prospectus (or any amendment or supplement to either of
them) and is duly registered and qualified to conduct business
and is in good standing in each jurisdiction or place where the
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
Effect on the Adviser, Sub-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 any of the Advisory Agreements for the Fund as
contemplated by the Registration Statement, the Pricing
Prospectus or the Prospectus (or any amendment or supplement to
either of them). There does not exist any proceeding which
could have a material adverse effect on the registration of the
Adviser with the Commission.
(c) The Adviser is not in violation of the 1940 Act, the 1940 Act
Rules and Regulations, the Advisers Act or the Advisers Act
Rules and Regulations, any law, ordinance, administrative or
governmental rule or regulation applicable to the Adviser or
any decree of the Commission, FINRA, any national securities
exchange, any arbitrator, any court or any regulatory body,
administrative agency or other governmental body, agency or
official having jurisdiction over the Adviser. The Adviser
maintains and will maintain processes, systems and controls
sufficient to provide reasonable assurances that the Adviser
complies and will continue to comply with the 1940 Act, the
1940 Act Rules and Regulations, the Advisers Act and the
Advisers Act Rules and Regulations, any law, ordinance,
administrative or governmental rule or regulation applicable to
the Adviser and any decree of the Commission, FINRA, any
national securities exchange, any arbitrator, any court or any
regulatory body, administrative agency or other governmental
body, agency or official having jurisdiction over the Adviser.
(d) There are no legal or governmental proceedings pending or, to
the knowledge of the Adviser, threatened against the Adviser
that are required to be described in the Registration
Statement, the Pricing Prospectus or the Prospectus (or any
amendment or supplement to either of them) but are not
described as required or that could result in any Material
Adverse Change in 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 Advisory
Agreements.
(e) Neither the execution, delivery or performance of this Agreement,
the Subscription Agreement, [the Agreement between the Adviser
and the Sub-Adviser dated [_________], 2007, setting forth the
basic economic terms and material conditions and provisions
governing their relationship (the "Advisory Terms Agreement")]
17
or any of the Advisory Agreements, nor the consummation by the
Adviser of the transactions contemplated hereby or thereby (i)
requires the Adviser to obtain any consent, approval,
authorization or other order of, or registration or filing
with, the Commission, FINRA, any state securities commission,
any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental
body, agency or official having jurisdiction over the Adviser
or conflicts or will conflict with or constitutes or will
constitute a material breach of or a default under, the limited
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 material 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 material 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 material 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 (i) or (ii) as should
not reasonably be expected to have a material adverse effect on
the ability of the Adviser to perform its obligations under
this Agreement, the Subscription Agreement or any of the
Advisory 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 that
would have a Material Adverse Effect on the ability of the
Adviser to perform its obligations under this Agreement or any
of the Advisory Agreements. (f) The Adviser has full power and
authority to enter into this Agreement, the Subscription
Agreement and each of the Advisory Agreements, the execution
and delivery of, and the performance by the Adviser of its
obligations under, this Agreement, the Subscription Agreement
and each of the Advisory Agreements have been duly and validly
authorized by the Adviser and this Agreement, the Subscription
Agreement and each of the Advisory 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.
(g) The Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in
the Registration Statement, the Pricing Prospectus and the
Prospectus (or any amendment or supplement to either of them)
18
or under this Agreement, the Subscription Agreement or any of
the Advisory Agreements.
(h) The description of the Adviser and its business, and the
statements attributable to the Adviser, in the Registration
Statement, the Pricing Prospectus or the Prospectus (or any
amendment or supplement to either of them) complied and comply
in all material respects with the applicable provisions of the
1933 Act, the 1940 Act, the Advisers Act, the Rules and
Regulations and the Advisers Act Rules and Regulations and did
not and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of the
Pricing Prospectus and the Prospectus, in light of the
circumstances under which they were made) not misleading.
(i) Since the date as of which information is given in the
Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of them),
except as otherwise stated therein, there has not occurred any
event that should reasonably be expected to have a material,
adverse effect on the ability of the Adviser to perform its
obligations under this Agreement or each of the Advisory
Agreements.
(j) The Adviser has such licenses, permits and authorizations of
governmental or regulatory authorities ("permits") as are
necessary to own its property and to conduct its business in
the manner described in the Pricing Prospectus and the
Prospectus (and any amendment or supplement thereto), except to
the extent that any failure to have such permits should not
reasonably be expected to have a material, adverse effect on
the ability of the Adviser to perform its obligations under
each of the Advisory Agreements.
(k) This Agreement and each of the Advisory Agreements complies in
all material respects with all applicable provisions of the
1940 Act, the 1940 Rules and Regulations, the Advisers Act and
the Advisers Act Rules and Regulations.
(l) Except as stated in this Agreement, the Registration Statement,
the Pricing Prospectus or the Prospectus (or in any amendment
or supplement to any of the foregoing), the Adviser has not
taken 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.
8. Representations and Warranties of the Sub-Adviser. The
Sub-Adviser represents and warrants to each Underwriter as
follows:
(a) The Sub-Adviser is a limited liability company duly formed and
validly existing in good standing under the laws of the State
of Florida, with full limited liability company power and
authority to own, lease and operate its properties and to
19
conduct its business as described in each of the Registration
Statement, the Pricing Prospectus and the Prospectus (or any
amendment or supplement to either of them) and is duly
registered and qualified to conduct business and is in good
standing in each jurisdiction or place where the nature of its
properties or conduct of its business requires such
registration or qualification, except where the failure so to
register or to qualify would not have a material, adverse
affect on the condition (financial or other), general affairs,
business, properties, net assets or results of operations of
the Sub-Adviser, the Adviser or the Fund.
(b) The Sub-Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited
by the Advisers Act, the 1940 Act, the Advisers Act Rules and
Regulations or the 1940 Act Rules and Regulations from acting
under the Sub-Advisory Agreement for the Fund as contemplated
by the Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of them).
There does not exist any proceeding which could have a Material
Adverse Effect on the registration of the Sub-Adviser with the
Commission.
(c) The Sub-Adviser is not in violation of the 1940 Act, the 1940 Act
Rules and Regulations, the Advisers Act or the Advisers Act
Rules and Regulations, any law, ordinance, administrative or
governmental rule or regulation applicable to the Sub-Adviser
or any decree of the Commission, FINRA, any national securities
exchange, any arbitrator, any court or any regulatory body,
administrative agency or other governmental body, agency or
official having jurisdiction over the Sub-Adviser. The
Sub-Adviser maintains and will maintain processes, systems and
controls sufficient to provide reasonable assurances that the
Sub-Adviser complies and will continue to comply with the 1940
Act, the 1940 Act Rules and Regulations, the Advisers Act and
the Advisers Act Rules and Regulations, any law, ordinance,
administrative or governmental rule or regulation applicable to
the Sub-Adviser and any decree of the Commission, FINRA, any
national securities exchange, any arbitrator, any court or any
regulatory body, administrative agency or other governmental
body, agency or official having jurisdiction over the
Sub-Adviser.
(d) There are no legal or governmental proceedings pending or, to
the knowledge of the Sub-Adviser, threatened against the
Sub-Adviser that are required to be described in the
Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of them)
but are not described as required or that could result in any
material, adverse change in the condition (financial or other),
properties, net assets or results of operations of the
Sub-Adviser or that may have a material, adverse effect on the
ability of the Sub-Adviser to perform its obligations under
this Agreement or the Sub-Advisory Agreement.
(e) Neither the execution, delivery or performance of this Agreement,
the Advisory Terms Agreement or the Sub-Advisory Agreement by
the Sub-Adviser, nor the consummation by the Sub-Adviser of the
transactions contemplated hereby or thereby (i) requires the
20
Sub-Adviser to obtain any consent, approval, authorization or
other order of, or registration or filing with, the Commission,
FINRA, any state securities commission, any national securities
exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or
official having jurisdiction over the Sub-Adviser or conflicts
or will conflict with or constitutes or will constitute a
breach of or a default under, the certificate of formation,
limited liability company agreement, or other organizational
documents of the Sub-Adviser or (ii) conflicts or will conflict
with or constitutes or will constitute a breach of or a default
under, any agreement, indenture, lease or other instrument to
which the Sub-Adviser is a party or by which the Sub-Adviser or
any of its properties may be bound, or violates or will violate
any statute, law, regulation or judgment, injunction, order or
decree applicable to the Sub-Adviser or any of its properties
or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Sub-Adviser pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound
or to which any of the property or assets of the Sub-Adviser is
subject, except in any case under clause (i) or (ii) as would
not have a material adverse effect on the ability of the
Sub-Adviser to perform its obligations under this Agreement or
the Sub-Advisory Agreement. The Sub-Adviser is not subject to
any order of any court or of any arbitrator, regulatory body,
administrative agency or other governmental body, agency or
official.
(f) The Sub-Adviser has full power and authority to enter into this
Agreement and the Sub-Advisory Agreement, the execution and
delivery of, and the performance by the Sub-Adviser of its
obligations under, this Agreement and the Sub-Advisory
Agreement have been duly and validly authorized by the
Sub-Adviser and this Agreement and the Sub-Advisory Agreement
have been duly executed and delivered by the Sub-Adviser and
constitute the valid and legally binding agreements of the
Sub-Adviser, enforceable against the Sub-Adviser in accordance
with their terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state
securities laws and subject to the qualification that the
enforceability of the Sub-Adviser's obligations hereunder and
thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally and by general
equitable principles whether enforcement is considered in a
proceeding in equity or at law.
(g) The Sub-Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in
the Registration Statement, the Pricing Prospectus and the
Prospectus (or any amendment or supplement to either of them)
or under this Agreement or the Sub-Advisory Agreement.
(h) The description of the Sub-Adviser and its business, and the
statements attributable to the Sub-Adviser, in the Registration
Statement, the Pricing Prospectus or the Prospectus (or any
amendment or supplement to either of them) complied and comply
in all material respects with the provisions of the 1933 Act,
the 1940 Act, the Advisers Act, the Rules and Regulations and
the Advisers Act Rules and Regulations and did not and will not
contain an untrue statement of a material fact or omit to state
21
a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Pricing
Prospectus and the Prospectus, in light of the circumstances
under which they were made) not misleading.
(i) Since the date as of which information is given in the
Registration Statement, the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of them),
except as otherwise stated therein, (i) there has been no
material adverse change in the condition (financial or other),
business, properties, net assets or results of operations or
business prospects of the Sub-Adviser, whether or not arising
from the ordinary course of business, and (ii) there have been
no transactions entered into by the Sub-Adviser which are
material to the Sub-Adviser other than those in the ordinary
course of its business as described in the Pricing Prospectus
and the Prospectus.
(j) The Sub-Adviser has such licenses, permits and authorizations
of governmental or regulatory authorities ("permits") as are
necessary to own its property and to conduct its business in
the manner described in the Pricing Prospectus and the
Prospectus (and any amendment or supplement thereto); the
Sub-Adviser has fulfilled and performed all its obligations
with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other
impairment of the rights of the Sub-Adviser under any such
permit.
(k) This Agreement and the Sub-Advisory Agreement each do not violate
any applicable provisions of the 1940 Act, the 1940 Act Rules
and Regulations, the Advisers Act and the Advisers Act Rules
and Regulations.
(l) Except as stated in this Agreement, the Registration Statement,
the Pricing Prospectus or the Prospectus (or in any amendment
or supplement to any of the foregoing), the Sub-Adviser has not
taken and will not take, directly or indirectly, any action
designed to or which might reasonably be expected to cause or
result in or which will constitute stabilization or
manipulation of the price of the Shares or of any securities
issued by the Fund to facilitate the sale or resale of the
Shares, in each case, in violation of federal securities laws
and the Sub-Adviser is not aware of any such action taken or to
be taken by any affiliates of the Sub-Adviser.
9. Indemnification and Contribution.
(a) The Fund, the Adviser and the Sub-Adviser, jointly and severally,
agree to indemnify and hold harmless each of you and each other
Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, from and against any and all
losses, claims, damages, liabilities and expenses, joint or
22
several (including reasonable costs of investigation), that (i)
arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in the
Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Fund) or
arises out of or is based upon any omission or alleged omission
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii)
arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact included in any Prepricing
Prospectus, the Disclosure Package, any sales material or the
Prospectus (as it may be amended or supplemented) or arises out
of or is based upon any omission or alleged omission to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; except with respect to either of the
foregoing clauses (i) and (ii) insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating
to such Underwriters furnished in writing to the Fund by or on
behalf of any Underwriter through you expressly for use in
connection therewith; provided, however, that the foregoing
indemnification contained in this paragraph (a) with respect to
the Pricing Prospectus 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 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 the Pricing
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, the Adviser or the
Sub-Adviser may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in
respect of which indemnity may be sought against the Fund, the
Adviser or the Sub-Adviser, such Underwriter or such
controlling person shall promptly notify the Fund, the Adviser
or the Sub-Adviser and the Fund, the Adviser or the Sub-Adviser
shall assume the defense thereof, including the employment of
counsel and the payment of all fees and expenses. Such
Underwriter or any such controlling person shall have the right
to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of
such Underwriter or controlling person unless (i) the Fund, the
Adviser or the Sub-Adviser have agreed in writing to pay such
23
fees and expenses, (ii) the Fund, the Adviser or the
Sub-Adviser have failed within a reasonable time to assume the
defense and employ counsel or (iii) the named parties to any
such action, suit or proceeding (including any impleaded
parties) include both such Underwriter or such controlling
person and the Fund, the Adviser or the Sub-Adviser and such
Underwriter or such controlling person shall have been advised
by its counsel that representation of such indemnified party
and the Fund, the Adviser or the Sub-Adviser by the same
counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential
differing interests between them (in which case the Fund, the
Adviser and the Sub-Adviser shall not have the right to assume
the defense of such action, suit or proceeding on behalf of
such Underwriter or such controlling person). It is understood,
however, that the Fund, the Adviser and the Sub-Adviser shall,
in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel if there is any
action, suit or proceeding in more than one jurisdiction) at
any time for all such Underwriters and controlling persons not
having actual or potential differing interests with you or
among themselves, which firm shall be designated in writing by
the Representative and that, subject to the requirements of
1940 Act Release No. 11330, all such fees and expenses shall be
reimbursed promptly as they are incurred. The Fund, the Adviser
and the Sub-Adviser shall not be liable for any settlement of
any such action, suit or proceeding effected without the
written consent of the Fund, the Adviser or the Sub-Adviser,
but if settled with such written consent or if there be a final
judgment for the plaintiff in any such action, suit or
proceeding, the Fund, the Adviser and the Sub-Adviser agree to
indemnify and hold harmless any Underwriter, to the extent
provided in the preceding paragraph and any such controlling
person from and against any loss, liability, damage or expense
by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Fund, the Adviser and the Sub-Adviser,
their directors, trustees, members, managers or partners, any
officers of the Fund who sign the Registration Statement and
any person who controls the Fund, the Adviser or the
Sub-Adviser within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, to the same extent as the foregoing
indemnity from the Fund, the Adviser and the Sub-Adviser to
each Underwriter, but only with respect to information relating
to such Underwriter furnished in writing by or on behalf of
such Underwriter through you expressly for use in the
Registration Statement, the Disclosure Package, any sales
material, the Prospectus or any Prepricing Prospectus (or any
amendment or supplement thereto). If any action, suit or
proceeding shall be brought against the Fund, the Adviser or
the Sub-Adviser, any of their directors, trustees, members,
managers or partners, any such officer or any such controlling
person, based on the Registration Statement, the Disclosure
Package, any sales material, 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, the
Adviser and the Sub-Adviser by paragraph (b) above (except that
if the Fund, the Adviser or the Sub-Adviser shall have assumed
the defense thereof such Underwriter shall not be required to
do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such
counsel shall be at such Underwriter's expense) and the Fund,
the Adviser and the Sub-Adviser, their directors, trustees,
members, managers or partners, any such officer and any such
controlling person shall have the rights and duties given to
24
the Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which
the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a) or (c)
hereof in respect of any losses, claims, damages, liabilities
or expenses referred to therein, then an indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute
to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Fund, the Adviser and the
Sub-Adviser on the one hand (treated jointly for this purpose
as one person) and the Underwriters on the other from the
offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative
fault of the Fund, the Adviser and the Sub-Adviser on the one
hand (treated jointly for this purpose as one person) and of
the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the
Fund, the Adviser and the Sub-Adviser on the one hand (treated
jointly for this purpose as one person) and the Underwriters on
the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting
expenses) received by the Fund bear to the total underwriting
discounts and commissions received by the Underwriters, in each
case, as set forth in the table on the cover page of the
Prospectus. The relative fault of the Fund, the Adviser and the
Sub-Adviser on the one hand (treated jointly for this purpose
as one person) and of the Underwriters on the other shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates
to information supplied by the Fund, the Adviser and the
Sub-Adviser on the one hand (treated jointly for this purpose
as one person) or by the Underwriters on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Fund, the Adviser, the Sub-Adviser and the Underwriters agree
that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred
to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating any
claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in
excess of the amount by which the total price of the Shares
underwritten by it and 'distributed to the public exceeds the
amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent
25
misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to the
respective number of Shares set forth opposite their names in
Schedule I (or such number of Shares increased as set forth in
Section 11 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which
any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such indemnified party from all liability from claimants on
claims that are the subject matter of such action, suit or
proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or
contribution under this Section 9 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 9 and the
representations and warranties of each of the Fund, the Adviser
and the Sub-Adviser set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, the Fund, the Adviser, the
Sub-Adviser or their officers, directors, trustees, members,
managers or partners, or any person controlling the Fund, the
Adviser or the Sub-Adviser, (ii) acceptance of any Shares and
payment therefor hereunder and (iii) any termination of this
Agreement. A successor to any Underwriter or to the Fund, the
Adviser or the Sub-Adviser or their officers, directors,
trustees, members, managers or partners, or any person
controlling the Fund, the Adviser or the Sub-Adviser shall be
entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 9.
10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Shares
hereunder are subject to the accuracy of and compliance with
the representations, warranties and agreements of and by each
of the Fund, the Adviser and the Sub-Adviser contained herein
on and as of the Effective Time, the date of the Prospectus
(and of any amendment or supplement thereto) and 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, the Sub-Adviser or
any of their respective officers in any certificate delivered
to the Representative or its 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
26
post-effective amendment shall have become effective not later
than 5:30 p.m., New York 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 to be made by the Fund
pursuant to Rules 497 and 430A under the 1933 Act and the 1933
Act Rules and Regulations shall have been timely made; no stop
order suspending the effectiveness of the Registration
Statement or order pursuant to Section 8(e) of the 1940 Act
shall have been issued and no proceeding for that purpose shall
have been instituted or, to the knowledge of the Fund, the
Adviser, the Sub-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 Pricing Prospectus or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any Material Adverse Change, whether or
not occurring in the ordinary course of business, in the Fund,
the Adviser or the Sub-Adviser not contemplated by the Pricing
Prospectus or the Prospectus (or any amendment or supplement
thereto), which in your opinion, would materially adversely
affect the market for the Shares, or (ii) any event or
development relating to or involving the Fund, the Adviser or
the Sub-Adviser or any officer, director, trustee, member,
partner or manager of the Fund, the Adviser or the Sub-Adviser
which makes any statement made in the Pricing Prospectus or the
Prospectus (or any amendment or supplement thereto) untrue or
which, in the opinion of the Fund and its counsel or the
Underwriters and their counsel, requires the making of any
addition to or change in the Pricing Prospectus or the
Prospectus (or any amendment or supplement thereto) in order to
state a material fact required by the 1933 Act, the 1940 Act or
the Rules and Regulations or any other law to be stated therein
or necessary in order to make the statements therein, in light
of the circumstances in which they are made, not misleading, if
amending or supplementing the Pricing Prospectus or the
Prospectus (or any previous amendment or supplement thereto) to
reflect such event or development would, in your opinion,
materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion of
Xxxxxxx and Xxxxxx LLP, counsel for the Fund, dated the Closing
Date and addressed to you, as the Representative of the several
Underwriters, in substantially the form attached hereto as
Exhibit A. In rendering its opinion, Xxxxxxx and Xxxxxx LLP may
rely, as to matters of Massachusetts law, upon the opinion of
Xxxxxxx XxXxxxxxx LLP dated as of the date thereof.
(d) You shall have received on the Closing Date an opinion of
Xxxxxxx and Xxxxxx LLP, counsel for the Adviser, dated the
Closing Date and addressed to you, as Representative of the
several Underwriters, in substantially the form attached hereto
as Exhibit B.
(e) You shall have received on the Closing Date an Opinion of
[Counsel for the Sub-Adviser], counsel for the Sub-Adviser,
27
dated the Closing Date and addressed to you, as the
Representative of the several Underwriters, in substantially
the form attached hereto as Exhibit C.
(f) You shall have received on the Closing Date an opinion as to
Massachusetts law of Xxxxxxx XxXxxxxxx LLP, special counsel for
the Fund, dated the Closing Date and addressed to you, as the
Representative of the several Underwriters, in substantially
the form attached hereto as Exhibit D.
(g) You shall have received on the Closing Date an opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, dated the Closing
Date and addressed to you, as the Representative of the several
Underwriters, with respect to such matters as you may require
and the Fund, the Adviser, the Sub-Adviser and their respective
counsel shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon
such matters.
(h) You shall have received letters addressed to you, as the
Representative 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 forms heretofore approved by you.
(i) (i) No order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Pricing
Prospectus or the Prospectus (or any amendment or supplement to
any of the foregoing) or any Prepricing Prospectus or any sales
material shall have been issued and no proceedings for such
purpose or for the purpose of commencing an enforcement action
against the Fund, the Adviser or the Sub-Adviser or, with
respect to the transactions contemplated by the Pricing
Prospectus or the Prospectus (or any amendment or supplement
thereto) and this Agreement, may be pending before or, to the
knowledge of the Fund, the Adviser, the Sub-Adviser or any
Underwriter or in the reasonable view of counsel to the
Underwriters, shall be threatened or contemplated by the
Commission at or prior to the Closing Date and that any request
for additional information on the part of the Commission (to be
included in the Registration Statement, the Pricing Prospectus
or the Prospectus or otherwise) be complied with to the
satisfaction of the Representative, (ii) there shall not have
been any change in the shares of beneficial interest of the
Fund or its capitalization nor any incurrence of debt by the
Fund from that set forth in the Registration Statement or the
Pricing Prospectus or the Prospectus (or any amendment or
supplement to either of them) and the Fund shall not have
sustained any material liabilities or obligations, direct or
contingent, other than those reflected in or contemplated by
the Registration Statement or the Pricing Prospectus or the
Prospectus (or any amendment or supplement to either of them),
(iii) since the date of the Pricing Prospectus or the
Prospectus there shall not have been any Material Adverse
Change in the Fund, the Adviser or the Sub-Adviser, (iv) none
of the Fund, the Adviser or the Sub-Adviser shall have
sustained any material loss or interference with their
businesses from any court or from legislative or other
governmental action, order or decree or from any other
28
occurrence not described in the Registration Statement or the
Pricing Prospectus or the Prospectus (or any amendment or
supplement to either of them), and (v) all of the
representations and warranties of each of the Fund, the Adviser
or the Sub-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.
(j) None of the Fund, the Adviser, or the Sub-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.
(k) 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, the Adviser and the
Sub-Adviser certifying that (i) the signers have carefully
examined the Registration Statement, the Pricing Prospectus,
the Prospectus (and any amendments or supplements to either of
them) and this Agreement, (ii) the representations and
warranties of the Fund (with respect to the certificates from
such Fund officers), the representations and warranties of the
Adviser (with respect to the certificates from such officers of
the Adviser), and the representations and warranties of the
Sub-Adviser (with respect to the certificates from such
officers of the Sub-Adviser) in this Agreement are true and
correct on and as of the date of the certificate as if made on
such date, (iii) since the date of the Pricing Prospectus and
the Prospectus (and any amendment or supplement thereto) there
has not been (A) any Material Adverse Change in the Fund (with
respect to the certificates from such Fund, Adviser and
Sub-Adviser officers) or (B) with respect to the certificates
from such officers of the Adviser or the Sub-Adviser, any event
which should reasonably be expected to have a material adverse
effect on the ability of the Adviser or the Sub-Adviser, as the
case may be, to perform their respective obligations under this
Agreement or any of the Advisory Agreements (other than as a
result of changes in market conditions generally), (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 that could result
in any Material Adverse Change in 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
Advisory Agreements (with respect to the certificates from such
officers of the Adviser) or that could result in any Material
Adverse Change in the Sub-Adviser or that may have a Material
Adverse Effect on the ability of the Sub-Adviser to perform its
obligations under this Agreement or the Sub-Advisory Agreement
29
(with respect to the certificates from such officers of the
Sub-Adviser) has been issued and no proceedings for any such
purpose are pending before or threatened by the Commission or
any court or other regulatory body, FINRA, any state securities
commission, any national securities exchange, any arbitrator,
any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official, (v)
each of the Fund (with respect to certificates from such Fund
officers), the Adviser (with respect to certificates from such
officers of the Adviser) and the Sub-Adviser(with respect to
the certificates from such officers of the Sub-Adviser) has
performed and complied with all agreements that this Agreement
require it to perform by such Closing Date, (vi) none of the
Fund (with respect to the certificate from such officers of the
Fund), the Adviser (with respect to the certificate from such
officers of the Adviser) or the Sub-Adviser (with respect to
the certificates from such officers of the Sub-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, the Pricing Prospectus
or the Prospectus and any amendment or supplement to either of
them and (vii) with respect to the certificate from such
officers of the Fund, there has not been any change in the
shares of beneficial interest of the Fund or its capitalization
or any incurrence of debt by the Fund from that set forth in
the Pricing Prospectus or the Prospectus (or any amendment or
supplement thereto) and the Fund has not sustained any material
liabilities or obligations, direct or contingent, other than
those reflected in the Pricing Prospectus and the Prospectus
(or any amendment or supplement thereto) and as provided
herein.
(l) That the Fund, the Adviser and the Sub-Adviser shall have
furnished to you such further letters, certificates, documents
and opinions of counsel as you shall reasonably request
(including certificates of officers of the Fund, the Adviser
and the Sub-Adviser).
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are
sufficiently satisfactory in form and substance to you and your counsel
acting in good faith.
Any certificate or document signed by any officer of the Fund,
the Adviser or the Sub-Adviser and delivered to you, as the
Representative of the Underwriters or to Underwriters' counsel, shall be
deemed a representation and warranty by the Fund, the Adviser or the
Sub-Adviser to each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to (i) the accuracy of and
compliance with the representations and warranties of the Fund, the
Adviser and the Sub-Adviser contained herein on and as of the 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 10 except that, if any Option Closing Date is
other than the Closing Date, the certificates, opinions and letters
referred to in Sections 10 (c), (d), (e), (f), (h), (i) and (m) and this
paragraph shall be dated the Option Closing Date in question and the
opinions called for by Sections 10 (c), (d), (e), (f), (h), (i) and (m)
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 12 hereof
if they existed on or prior to the Closing Date.
11. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
30
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.
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 Xxxxxxx Xxxxx 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.
Any notice under this Section 11 may be made by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
12. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part
of any Underwriter to the Fund, the Adviser or the Sub-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 NYSE, American Stock Exchange 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
31
of the Prospectus or to enforce contracts for the resale of the Shares
by the Underwriters. Notice of such termination may be given to either
of the Fund or the Adviser and the Sub-Adviser by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. Expenses. The Fund agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by the Fund
of its obligations hereunder: (a) the preparation, printing or
reproduction, filing (including, without limitation, the filing or
registration fees prescribed by the 1933 Act, the 1934 Act, the 1940 Act
and the Rules and Regulations) and distribution of the Registration
Statement (including exhibits thereto), the Prospectus, each Prepricing
Prospectus and the 1940 Act Notification and all amendments or
supplements to any of them, (b) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Registration Statement,
the Prospectus, each Prepricing Prospectus and 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 FINRA and incurred with respect to the review of the
offering of the Shares by FINRA, which fees and expenses of counsel,
together with the fees, expenses and disbursements of counsel set forth
in paragraph (d) of this Section 13 above, shall not exceed $25,000,
exclusive of FINRA and state filing fees, (i) the transportation,
lodging, graphics and other expenses related to the Fund's preparation
for and participation in the roadshow, (j) the listing of the Shares on
the NYSE and (k) an amount not to exceed $75,000 payable on the Closing
Date to the Representative in partial reimbursement of their expenses
(but not including reimbursement for the cost of one tombstone
advertisement in a daily newspaper of national circulation that is
one-quarter of a newspaper page or less in size) in connection with the
offering.
The Adviser has agreed to pay (i) all organizational expenses
and (ii) all offering costs of the Fund (other than sales load, but
including a partial reimbursement of certain underwriter expenses) that
exceed 0.2% (or $0.04 per common share) of the Fund's offering price.
32
The Sub-Adviser has agreed to reimburse the Adviser for one-half of such
organizational expenses and offering costs of the Fund that exceed 0.2%
(or $0.04 per common share) of the Fund's offering price.
Notwithstanding the foregoing, in the event that the sale of
the Shares is not consummated pursuant to Section 2 hereof, the Adviser
or the Sub-Adviser will pay the costs and expenses of the Fund set forth
above in this Section 13(a) through (i), and reimbursements of
Underwriter expenses in connection with the offering shall be made in
accordance with Section 5(i) hereof.
14. Information Furnished by the Underwriters. The public offering price
of the Shares as set forth on the cover page of the Prospectus and, as
set forth under the caption "Underwriting" in the Prospectus, (i) your
address and the names of the Underwriters, (ii) the number of Firm
Shares set forth opposite the name of each Underwriter, (iii) the
concession and reallowance amounts in the third paragraph, (iv) the last
sentence of the third paragraph, (v) the statements set forth in the
sixth paragraph, (vi) the first, second and third sentence of the eighth
paragraph, (vii) the statements set forth in the first sentence of the
ninth paragraph and (viii) the statements set forth in the thirteenth
paragraph constitute the only information relating to any Underwriter
furnished to the Fund in writing by or on behalf of the Underwriters
through you as such information is referred to herein, expressly for use
in the Pricing Prospectus, Prospectus, any sales material or any other
material used in connection with the offer or sale of the Shares.
15. Miscellaneous. Except as otherwise provided in Sections 5, 11 and 12
hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (a) if to the Fund or the Adviser,
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000, Attention: W.
Xxxxx Xxxxxxx, (b) if to the Sub-Adviser, [address of Sub-Adviser],
Attention: [________], and (c) if to the Underwriters, 000 Xxxxxxxx
Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxx Xxxxx.
This Agreement has been and is made solely for the benefit of
the several Underwriters, the Fund, the Adviser, the Sub-Adviser, their
officers, directors, trustees, members, managers, partners, and the
other controlling persons referred to in Section 9 hereof and their
respective successors and assigns, to the extent provided herein and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" 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.
16. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
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.
33
17. Disclaimer of Liability of Trustees and Beneficiaries. A copy of the
Declaration is on file with the Secretary of The Commonwealth of
Massachusetts, and notice hereby is given that this Agreement is
executed by the Trustees or officers on behalf of the Trustees under the
Declaration and not individually and that the obligations arising under
this Agreement are not binding upon any of the Trustees, officers or
shareholders individually, but bind only the assets and properties of
the Fund.
34
Please confirm that the foregoing correctly sets forth the
agreement as of the date set forth above among the Fund, the Adviser,
the Sub-Adviser and the several Underwriters.
Very truly yours,
FIRST TRUST
ACTIVE DIVIDEND
INCOME FUND
By: ______________________
Title:
FIRST TRUST ADVISORS L.P.
By: ______________________
Title:
AVIANCE CAPITAL
MANAGEMENT, LLC
By: ______________________
Title:
35
Confirmed as of the date
first above written on behalf
of themselves and the other
several Underwriters named
in Schedule I hereto.
AS REPRESENTATIVE OF THE SEVERAL UNDERWRITERS
By: XXXXXXX XXXXX & ASSOCIATES, INC.
By: ______________________
Title:
36
o SCHEDULE I
o
FIRST TRUST ACTIVE DIVIDEND Income Fund
Underwriter Number of Shares
----------- ----------------
Xxxxxxx Xxxxx & Associates, Inc...........................
Total................................................[_____]
=======
37
EXHIBIT A
Form of Xxxxxxx and Xxxxxx LLP Fund Opinion
o
38
EXHIBIT B
Form of Xxxxxxx and Xxxxxx LLP Adviser Opinion
o
39
o........EXHIBIT C o
Form of [Counsel for the Sub-Adviser] Sub-Adviser Opinion
40
EXHIBIT D o
Form of Xxxxxxx XxXxxxxxx Opinion
41
