FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
UP TO 1,400,000 COMMON SHARES OF BENEFICIAL INTEREST
CAPITAL ON DEMAND(TM)
SALES AGREEMENT
February 23, 2015
JONESTRADING INSTITUTIONAL SERVICES LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
First Trust Specialty Finance and Financial Opportunities Fund, a
Massachusetts business trust (the "FUND"), First Trust Advisors L.P., an
Illinois limited partnership (the "ADVISER") and Confluence Investment
Management LLC, a Delaware limited liability company (the "SUB-ADVISER") confirm
their agreement (this "AGREEMENT") with JonesTrading Institutional Services LLC
("XXXXX") as follows:
1. Issuance and Sale of Shares. The Fund agrees that, from time to time
during the term of this Agreement, on the terms and subject to the conditions
set forth herein, it may issue and sell through Xxxxx, acting as agent and/or
principal, up to one million four hundred thousand (1,400,000) of the Fund's
common shares of beneficial interest, $0.01 par value per share (the "SHARES").
Notwithstanding anything to the contrary contained herein, the parties hereto
agree that compliance with the limitations set forth in this Section 1 on the
number of Shares issued and sold under this Agreement shall be the sole
responsibility of the Fund, and Xxxxx shall have no obligation in connection
with such compliance. The issuance and sale of Shares through Xxxxx will be
effected pursuant to the Registration Statement (as defined below) filed by the
Fund and declared effective by the Securities and Exchange Commission (the
"COMMISSION").
The Fund has entered into an Investment Management Agreement with the
Adviser dated January 3, 2011 (the "ADVISORY AGREEMENT"), an Investment
Sub-Advisory Agreement with the Adviser and the Sub-Adviser dated January 3,
2011 (the "SUB-ADVISORY AGREEMENT"), a Custodian Services Agreement with The
Bank of New York Mellon (the "CUSTODIAN") dated April 20, 2007, (the "CUSTODIAN
CONTRACT"), a Transfer Agency Services Agreement with BNY Mellon Investment
Servicing (US) Inc. dated May 25, 2007 (the "TRANSFER AGENCY AGREEMENT") and an
Administration and Accounting Services Agreement with BNY Mellon Investment
Servicing (US) Inc. dated May 25, 2007 (the "ADMINISTRATION AGREEMENT").
Collectively, the Advisory Agreement, the Sub-Advisory Agreement, the Custodian
Contract, the Transfer Agency Agreement and the Administration Agreement are
herein referred to as the "FUND AGREEMENTS." The Adviser has entered into the
Advisory Agreement, the Sub-Advisory Agreement and this Agreement (collectively,
the "ADVISER AGREEMENTS"). The Sub-Adviser has entered into the Sub-Advisory
Agreement and this Agreement. In addition, the Fund has adopted a dividend
reinvestment plan (the "DIVIDEND REINVESTMENT PLAN") pursuant to which the
holders of Shares shall have their dividends automatically reinvested in
additional Shares unless they elect to receive such dividends in cash.
The Fund has filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the
"SECURITIES ACT") and the Investment Company Act of 1940, as amended, and the
rules and regulations thereunder (collectively, the "INVESTMENT COMPANY ACT"),
with the Commission a registration statement on Form N-2 (File Nos. 333-200618
and 811-22039) (the "ORIGINAL REGISTRATION STATEMENT"), including a base
prospectus ("BASIC PROSPECTUS"), with respect to the Shares. The Fund shall
prepare one or more supplements relating to the Shares (collectively, the
"PROSPECTUS SUPPLEMENT") to the Basic Prospectus, to be filed with the
Commission pursuant to Rule 497 under the Securities Act. The Fund shall furnish
to Xxxxx, for use by Xxxxx, copies of the Basic Prospectus, as supplemented by
the Prospectus Supplement, relating to the Shares. Except where the context
otherwise requires, the Original Registration Statement, as amended when it
became effective, including all documents filed as part thereof, including the
Fund's Statement of Additional Information, and including any information
contained in a Prospectus Supplement subsequently filed with the Commission
pursuant to Rule 497 under the Securities Act is herein called the "REGISTRATION
STATEMENT." The Basic Prospectus, as it may be supplemented by the Prospectus
Supplement, in the form in which such prospectus and/or Prospectus Supplement
have most recently been filed by the Fund with the Commission pursuant to Rule
497 under the Securities Act, is herein called the "PROSPECTUS." For purposes of
this Agreement, all references to the Registration Statement, the Prospectus, or
to any amendment or supplement thereto shall be deemed to include any copy filed
with the Commission pursuant to its Interactive Data Electronic Application
database. For purposes of this Agreement, all references to the Registration
Statement, unless otherwise noted and except as the context otherwise requires,
shall be deemed to include any and all amendments thereto.
2. Placements. Each time that the Fund wishes to issue and sell Shares
hereunder (each, a "PLACEMENT"), it will notify Xxxxx by e-mail notice (or other
method mutually agreed to in writing by the parties) containing the parameters
in accordance with which it desires the Shares to be sold, which shall, at a
minimum, include the number of Shares to be issued (the "PLACEMENT SHARES"), the
time period during which sales are requested to be made, any limitation on the
number of Placement Shares that may be sold in any one day, any minimum price
below which sales may not be made and the discount, commission or other
compensation to be paid by the Fund to Xxxxx,(excluding the Reimbursable Amounts
(as defined in Section 7(e) herein) (a "PLACEMENT NOTICE"), a form of which,
containing such minimum sales parameters necessary, is attached hereto as
Schedule 1. The Placement Notice shall originate from any of the individuals
from the Fund set forth on Schedule 3 (with a copy to each of the other
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individuals from the Fund listed on such schedule), and shall be addressed to
each of the individuals from Xxxxx set forth on Schedule 3, as such Schedule 3
may be amended from time to time. The Placement Notice shall be effective upon
receipt by Xxxxx unless and until (i) in accordance with the notice requirement
set forth in Section 4, Xxxxx declines to accept the terms contained therein for
any reason, in its sole discretion, (ii) the entire amount of the Placement
Shares have been sold, (iii) in accordance with the notice requirements set
forth in Section 4, the Fund or Xxxxx suspends or terminates the Placement
Notice, (iv) the Fund issues a subsequent Placement Notice with parameters
superseding those on the earlier dated Placement Notice, or (v) the Agreement
has been terminated under the provisions of Section 11. The amount of any
discount, commission or other compensation to be paid by the Fund to Xxxxx in
connection with the sale of the Placement Shares shall be calculated in
accordance with the terms set forth in Schedule 2, unless superceded by the
terms and conditions as set forth in the applicable Placement Notice. It is
expressly acknowledged and agreed that neither the Fund nor Xxxxx will have any
obligation whatsoever with respect to a Placement or any Placement Shares unless
and until the Fund delivers a Placement Notice to Xxxxx and Xxxxx does not
decline, within the time period specified in Section 4, such Placement Notice
pursuant to the terms set forth above, and then only upon the terms specified
therein and herein. In the event of a conflict between the terms of this
Agreement and the terms of a Placement Notice, the terms of the Placement Notice
will control.
3. Sale of Placement Shares by Xxxxx. Subject to the terms and conditions
herein set forth, upon the Fund's issuance of a Placement Notice, and unless the
sale of the Placement Shares described therein has been declined, suspended or
otherwise terminated in accordance with the terms of this Agreement, Xxxxx, for
the period specified in the Placement Notice, will use its commercially
reasonable efforts consistent with its normal trading and sales practices to
sell such Placement Shares up to the amount specified, and otherwise in
accordance with the terms of such Placement Notice. Xxxxx will provide written
confirmation to the Fund no later than the opening of the Trading Day (as
defined below) immediately following the Trading Day on which it has made sales
of Placement Shares hereunder setting forth the number of Placement Shares sold
on such day, the compensation payable by the Fund with respect to such sales,
with an itemization of deductions made by Xxxxx (as set forth in Section 5(a))
from the gross proceeds that it receives from such sales, and the Net Proceeds
(as defined below) payable to the Fund. The Fund and the Adviser each
acknowledge that Xxxxx intends to sell the Placement Shares in privately
negotiated transactions and/or any other method permitted by law, including
sales made directly on the New York Stock Exchange ("NYSE"), the then-existing
trading market for the Shares or sales made to or through a market maker or
through an electronic communications network, or in any other manner that may be
deemed to be an "at-the-market" offering as defined in Rule 415 of the
Securities Act, in each case, at or above the then-current net asset value of
the Fund's common shares of beneficial interest (exclusive of any distributing
commission or discount payable by the Fund to Xxxxx pursuant to Section 2
hereof) in accordance with Section 23(b) of the Investment Company Act. As the
Fund's agent with respect to any such sale, Xxxxx covenants that it will comply
with all prospectus delivery requirements imposed under applicable federal and
state securities laws. The Fund, the Adviser and Sub-Adviser each acknowledge
and agree that (i) there can be no assurance that Xxxxx will be successful in
selling Placement Shares, and (ii) Xxxxx will not incur any liability or
obligation to the Fund, the Adviser, the Sub-Adviser or any other person or
entity if it does not sell Placement Shares for any reason other than a failure
by Xxxxx to use its commercially reasonable efforts consistent with its normal
trading and sales practices to sell such Placement Shares as required under this
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Section 3. For the purposes hereof, "TRADING DAY" means any day on which Shares
are purchased and sold on the principal exchange or market on which the Shares
are listed or quoted.
4. Suspension of Sales. The Fund or Xxxxx may, upon notice to the other party
in writing (including by e-mail correspondence to all of the individuals of the
other party set forth on Schedule 3 or by telephone (confirmed immediately by
verifiable facsimile transmission or e-mail correspondence to all of the
individuals of the other party set forth on Schedule 3)), suspend or refuse to
undertake any sale of Placement Shares; provided, however, that such suspension
or refusal shall not affect or impair either party's obligations with respect to
any Placement Shares sold hereunder prior to the receipt of such notice. Each of
the parties hereto agrees that no such notice shall be effective against the
other unless it is made to the individuals named on Schedule 3 hereto in
accordance with this Section 4, as such Schedule may be amended from time to
time.
5. Settlement.
(a) Settlement of Placement Shares. Unless otherwise specified in
the applicable Placement Notice, settlement for sales of Placement Shares will
occur on the third (3rd) Business Day (or such earlier day as is industry
practice for regular-way trading) following the date on which such sales are
made (each, a "SETTLEMENT DATE"). The amount of proceeds to be delivered to the
Fund on a Settlement Date against the receipt of the Placement Shares sold (the
"NET PROCEEDS") will be equal to the aggregate sales price at which such
Placement Shares were sold, after deduction for (i) Xxxxx'x commission, discount
or other compensation for such sales payable by the Fund pursuant to Section 2
hereof (or as otherwise agreed to in writing as set forth in the Placement
Notice) and (ii) any transaction fees imposed by any governmental or
self-regulatory organization in respect of such sales.
(b) Delivery of Shares. On or before each Settlement Date, the Fund
will, or will cause its transfer agent to, electronically transfer the Placement
Shares being sold by crediting Xxxxx'x or its designee's account at The
Depository Trust Company through its Deposit and Withdrawal at Custodian
("DWAC") System or by such other means of delivery as may be mutually agreed
upon by the parties hereto and, upon receipt of such Placement Shares, which in
all cases shall be freely tradable, transferable, registered shares in good
deliverable form, Xxxxx will deliver the related Net Proceeds in same day funds
to an account designated by the Fund prior to the Settlement Date. The Fund
agrees that if the Fund defaults on its obligation to deliver Placement Shares
on a Settlement Date, the Fund and the Adviser each agree that, in addition to
and in no way limiting the rights and obligations set forth in Section 9(a)
hereto, it will (i) hold Xxxxx harmless against any loss, claim, damage, or
expense (including reasonable legal fees and expenses), as incurred, arising out
of or in connection with such default by the Fund and (ii) pay to Xxxxx any
commission, discount, or other compensation to which it would otherwise have
been entitled absent such default.
6. Representations and Warranties of the Fund and the Adviser.
(a) Representations and Warranties by the Fund and the Adviser. The
Fund and the Adviser jointly and severally, represent and warrant to and agree
with Xxxxx as of the date hereof, as of each Representation Date (as defined in
Section 7(j) below) and as of each Applicable Time (as defined in Section
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6(a)(ii) and such representations and warranties to be true and correct in all
material respects as of each Applicable Time) as follows:
(i) The Registration Statement has been declared effective by the
Commission under the Securities Act. Each Prospectus included as part of
the Registration Statement as originally filed or as part of any amendment
or supplement thereto or filed pursuant to Rule 497 of the Securities Act
complied when so filed in all material respects with the provisions of the
Securities Act and the Investment Company Act. The Commission has not
issued any order preventing or suspending the use of the Prospectus or the
effectiveness of the Registration Statement and no proceedings for such
purpose have been instituted or, to the knowledge of the Fund, are
contemplated by the Commission.
(ii) (A) The Registration Statement in the form in which it became
effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and as of the date hereof and as
of the time of each sale of Placement Shares pursuant to this Agreement
(the "APPLICABLE TIME") and as of each Settlement Date, and (B) the
Prospectus and any amendment or supplement thereto when filed with the
Commission under Rule 497 of the Securities Act and any amendment or
supplement thereto when filed with the Commission and as of the date
hereof, as of each Applicable Time and as of each Settlement Date,
complied or will comply in all material respects with the provisions of
the Securities Act and the Investment Company Act, and each of the
Registration Statement and the Prospectus did not or will not at any such
times contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading; except that this
representation and warranty does not apply to statements in or omissions
from the Registration Statement and the Prospectus made in reliance upon
and in conformity with information relating to Xxxxx furnished to the Fund
in writing by or on behalf of Xxxxx expressly for use therein.
(iii) All the outstanding shares of capital stock of the Fund have
been duly authorized and validly issued, are fully paid and (except as
described in the Prospectus under "Certain Provisions in the Declaration
of Trust and By-Laws") nonassessable and are free of any preemptive or
similar rights and have been offered and sold by the Fund in compliance
with all applicable federal and state securities laws. No shares of
capital stock, other than common shares of beneficial interest of the
Fund, are issued or outstanding and the capitalization of the Fund
conforms in all material respects to the description thereof in the
Registration Statement and the Prospectus. The Placement Shares have been
duly authorized for issuance and sale pursuant to this Agreement and, when
issued, delivered against payment therefore in accordance with this
Agreement, will be validly issued and fully paid and nonassessable
obligations of the Fund; and the Placement Shares will conform in all
material respects to the description thereof in the Registration Statement
and the Prospectus.
(iv) 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
5
properties and to conduct its business as described in the Registration
Statement and the Prospectus and to enter into and perform its obligations
under this Agreement and the Fund Agreements. The Fund is duly registered
and qualified to conduct business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or to qualify, either alone or in the aggregate,
does not have or would not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), general affairs,
business, properties, business prospects, net assets or results of
operations of the Fund, whether or not occurring in the ordinary course of
business (a "FUND MATERIAL ADVERSE EFFECT"). The Fund has no subsidiaries.
(v) There are no legal or governmental proceedings pending or, to
the knowledge of the Fund, threatened against the Fund or to which the
Fund or any of its properties is subject, that are required to be
described in the Registration Statement or the Prospectus but are not
described as required or that could reasonably be expected to result in a
Fund Material Adverse Effect, or that may have a material, adverse effect
on the ability of the Fund to perform its obligations under this Agreement
or any of the Fund Agreements. All descriptions in the Registration
Statement and the Prospectus of any Fund documents are accurate in all
material respects. There are no agreements, contracts, indentures, leases
or other instruments that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the
Securities Act or Investment Company Act.
(vi) The Fund is not in violation of its Declaration of Trust
("DECLARATION OF TRUST"), bylaws or other organizational documents or any
law, ordinance, administrative or governmental rule or regulation
applicable to the Fund or of any decree of the Commission, the Financial
Industry Regulatory Authority ("FINRA"), any state securities commission,
any national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or any
other agency or any body or official having jurisdiction over the Fund or
in breach or default in the performance of any of the Fund Agreements or
any other obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which the Fund is a party or by
which it or any of its properties may be bound, except for such violation
or such breach or default that, either alone or in the aggregate, does not
have or would not reasonably be expected to have a Fund Material Adverse
Effect.
(vii) Neither the issuance and sale of the Placement 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 (A) requires any consent,
approval, authorization or order of or registration or filing with the
Commission, FINRA, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official
having jurisdiction over the Fund (except such as have been already
obtained under the Securities Act, the Investment Company Act, the rules
6
and regulations of FINRA and the NYSE or compliance with the securities or
Blue Sky laws of various jurisdictions which have been or will be effected
in accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of the Declaration of Trust,
bylaws, or other organizational documents of the Fund or (B) (1) conflicts
or will conflict with or constitutes or will constitute a breach of or a
default under any of the Fund Agreements or any other agreement,
indenture, lease or other instrument to which the Fund is a party or by
which it or any of its properties may be bound or (2) violates or will
violate any statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Fund or any of its properties or will
result in the creation or imposition of any lien, charge or encumbrance
upon (collectively, a "LIEN") any property or assets of the Fund pursuant
to the terms of any agreement or instrument to which it is a party or by
which it may be bound or to which any of the property or assets of the
Fund is subject, except for such conflict, breach, default, violation or
lien that, either alone or in the aggregate, does not have or would not
reasonably be expected to have a Fund Material Adverse Effect or a
material adverse effect on the ability of the Fund to perform its
obligations under this Agreement or any of the Fund Agreements. The Fund
is not subject to any order of any court or of any arbitrator,
governmental authority or administrative agency.
(viii) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition
(financial or other), business, properties, net assets or results of
operations of the Fund or business prospects (other than as a result of a
change in the financial markets generally) of the Fund, whether or not
arising in the ordinary course of business, (B) there have been no
transactions entered into by the Fund other than those in the ordinary
course of its business as described in the Prospectus and (C) there has
been no dividend or distribution of any kind declared, paid or made by the
Fund on any class of its common stock, except for regular dividends
consistent with past practice.
(ix) The Fund's accountants, Deloitte & Touche LLP, who have audited
the financial statements included in, and whose report appears in, the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), are an independent public accounting firm as required
by the Securities Act and Investment Company Act.
(x) The financial statements of the Fund, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement or the Prospectus present fairly the financial
position of the Fund on the basis stated in the Registration Statement at
the respective dates or for the respective periods to which they apply;
such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved except as disclosed therein and
comply with all applicable accounting requirements under the Securities
Act and the Investment Company Act; and the other financial and
statistical information and data included in the Registration Statement or
the Prospectus are accurately derived from such financial statements and
the books and records of the Fund.
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(xi) The Fund, subject to the filing of the Prospectus under Rule
497 under the Securities Act, has taken all required action under the
Securities Act and the Investment Company Act to make the public offering
and consummate the sale of the Placement Shares as contemplated by this
Agreement.
(xii) The execution and delivery of and the performance by the Fund
of its obligations under this Agreement and the Fund Agreements have been
duly and validly authorized by the Fund and this Agreement and each of the
Fund Agreements have been duly executed and delivered by the Fund and each
constitutes the valid and legally binding agreement of the Fund,
enforceable against the Fund in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and subject to the qualification that the
enforceability of the Fund's obligations hereunder and thereunder may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles.
(xiii) Except as disclosed in or contemplated by the Registration
Statement or the Prospectus, subsequent to the respective dates as of
which such information is given in the Registration Statement and the
Prospectus, the Fund has not incurred any material liability or
obligation, direct or contingent, or entered into any transaction, not in
the ordinary course of business, and there has not been any change in the
capital stock (other than in connection with the transactions contemplated
hereunder or pursuant to the Fund's dividend reinvestment plan) or any
change or any development involving or which should reasonably be expected
to involve a Fund Material Adverse Effect or its capitalization, or the
incurrence of any debt by, the Fund.
(xiv) The Fund has not distributed and, prior to the later to occur
of (A) the applicable Settlement Date and (B) completion of the
distribution of the Placement Shares contemplated by the applicable
Placement Notice, will not distribute any offering material in connection
with the offering and sale of the Placement Shares other than the
Registration Statement, the Prospectus, any "sales material" (as defined
in Section 6(a)(xx) below) or other materials permitted by the Securities
Act or the Investment Company Act.
(xv) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("PERMITS") as are necessary to own
its property and to conduct its business in the manner described in the
Prospectus; the Fund has fulfilled and performed all its material
obligations with respect to such permits and no event has occurred which
allows or, after notice or lapse of time, would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the Fund under any such permit, subject in each case to such
qualification as may be set forth in the Prospectus (and any amendment or
supplement thereto); and, except as described in the Prospectus (and any
amendment or supplement thereto), none of such permits contains any
restriction that is materially burdensome to the Fund.
(xvi) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with the Fund's Board of Trustees'
general or specific authorization and with the investment policies and
8
restrictions of the Fund and the applicable requirements of the Securities
Act, the Investment Company Act and the Internal Revenue Code of 1986, as
amended, (the "CODE"); (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles, to calculate net asset value and fee
accruals, to maintain accountability for assets and to maintain compliance
with the books and records requirements under the Investment Company Act;
(C) access to assets is permitted only in accordance with the Board of
Trustees' general or specific authorization; and (D) the recorded amount
of assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Fund
maintains "disclosure controls and procedures" (as such term is defined in
Rule 30a-3 under the Investment Company Act).
(xvii) The conduct by the Fund of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of
any patents, patent licenses, trademarks, service marks or trade names
which it does not own, possess or license or sub-license.
(xviii) Except as stated in this Agreement and in the Prospectus,
the Fund has not taken and will not take, directly or indirectly, any
action designed to or which could cause or result in or which will
constitute stabilization or manipulation of the price of the Placement
Shares, or of any securities issued by the Fund, to facilitate the sale or
resale of the Placement Shares in violation of federal securities laws and
no such action has been, or will be, taken by any affiliates of the Fund.
(xix) The Fund is duly registered under the Investment Company Act
as a closed-end, non-diversified management investment company and the
notification of registration of the Fund as an investment company under
the Investment Company Act on Form N-8A has been duly filed with the
Commission, is effective, and, at the time of filing thereof and at all
times through the date hereof conformed in all material respects with all
applicable provisions of the Investment Company Act; no order of
suspension or revocation of such registration under the Investment Company
Act has been issued or proceedings therefor initiated or threatened by the
Commission. The provisions of the Declaration of Trust and the investment
policies and restrictions described in each of the Registration Statement
and the Prospectus, comply in all material respects with the requirements
of the Investment Company Act.
(xx) All advertising, sales literature or other promotional material
(including "prospectus wrappers", "broker kits", "road show slides" and
"road show scripts"), if any, whether in printed or electronic form,
authorized in writing by or prepared by or at the direction of the Fund or
the Adviser for use in connection with the offering and sale of the
Placement Shares (collectively, "SALES MATERIAL") complied and comply in
all material respects with the applicable requirements of the Securities
Act and the rules and interpretations of FINRA. No sales material
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
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(xxi) This Agreement and each of the Fund Agreements complies in all
material respects with all applicable provisions of the Securities Act,
the Investment Company Act and the Advisers Act.
(xxii) No holder of any security of the Fund has any right to
require registration of any Shares, capital stock or any other security of
the Fund because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement.
(xxiii) Except as disclosed in the Registration Statement and the
Prospectus, no trustee of the Fund is an "interested person" (as defined
in the Investment Company Act) of the Fund or an "affiliated person" (as
defined in the Investment Company Act) of Xxxxx.
(xxiv) The Placement Shares are duly listed and admitted and
authorized for trading, subject to official notice of issuance, on the
NYSE.
(xxv) All of the information provided to Xxxxx or to counsel for
Xxxxx by the Fund, its officers and Trustees in connection with letters,
filings or other supplemental information provided to FINRA pursuant to
FINRA's conduct rules is true, complete and correct in all material
respects.
(xxvi) There is and has been no failure on the part of the Fund or
any of the Fund's trustees or officers, in their capacities as such, to
comply in any material respect with any provision of the Xxxxxxxx-Xxxxx
Act of 2002 and the rules and regulations promulgated in connection
therewith (the "SARBANES OXLEY ACT"), including Sections 302 and 906
related to certifications.
(xxvii) The Fund has filed all tax returns that are required to be
filed and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such tax, assessment,
fine or penalty that is currently being contested in good faith by
appropriate actions and except for such taxes, assessments, fines or
penalties the nonpayment of which would not, individually or in the
aggregate, have a Fund Material Adverse Effect.
(xxviii) The Fund has adopted and implemented written policies and
procedures reasonably designed to prevent violation of the Federal
Securities Laws (as that term is defined in Rule 38a-1 under the
Investment Company Act) by the Fund, including policies and procedures
that provide oversight of compliance for each investment adviser,
administrator and transfer agent of the Fund.
(xxix) The Fund carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its business and
value of its properties.
(xxx) The operations of the Fund are and have been conducted at all
times in material compliance with applicable financial recordkeeping and
reporting requirements and the money laundering statutes and the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the "MONEY LAUNDERING LAWS") and no action, suit or
proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Fund with respect to the Money
Laundering Laws is pending or, to the knowledge of the Fund, threatened.
10
(xxxi) Neither the Fund nor, to the knowledge of the Fund, any
director, officer, agent, employee or affiliate of the Fund is aware of or
has taken any action in connection with the Fund, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt
Practice Act of 1977, as amended and the rules and regulations thereunder
(the "FCPA") including, without limitation, making use of the mails or any
means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of
any money, or other property, gift, promise to give, or authorization of
the giving of anything of value to any "foreign official" (as such term is
defined in the FCPA) or any foreign political party or official thereof or
any candidate for foreign political office, in contravention of the FCPA
and the Fund, and to the knowledge of the Fund, its affiliates have
conducted their businesses in compliance with the FCPA and have instituted
and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.
(xxxii) Neither the Fund nor, to the knowledge of the Fund, any
director, officer, agent, employee or affiliate of the Fund is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department ("OFAC"); and the Fund will not
directly or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
(b) Representations and Warranties with Respect to the Adviser. The
Adviser represents and warrants to and agrees with Xxxxx as of the date hereof,
as of each Representation Date (as defined in Section 7(j) below) and as of each
Applicable Time (such representations and warranties to be true and correct in
all material respects as of each Applicable Time) as follows:
(i) The Adviser is a limited partnership duly organized and validly
existing in good standing under the laws of the State of Illinois, with
full power and authority to own, lease and operate its properties and to
conduct its business as described in each of the Registration Statement
and the Prospectus and is duly registered and qualified to conduct
business and is in good standing in each jurisdiction or place where the
nature of its properties or conduct of its business requires such
registration or qualification, except where the failure so to register or
to qualify, either alone or in the aggregate, does not have or would not
reasonably be expected to have (A) a material adverse effect on the
condition (financial or other), general affairs, business, properties,
business prospects, net assets or results of operations, whether or not
occurring in the ordinary course of business, of the Adviser (an "ADVISER
MATERIAL ADVERSE EFFECT") or (B) a Fund Material Adverse Effect.
11
(ii) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act or the Investment Company Act from acting under the Advisory
Agreement for the Fund as contemplated by the Registration Statement or
the Prospectus. There does not exist any proceeding which could reasonably
be expected to have an Adviser Material Adverse Effect with respect to the
registration of the Adviser with the Commission.
(iii) There are no legal or governmental proceedings pending or, to
the knowledge of the Adviser, threatened against the Adviser that are
required to be described in the Registration Statement or the Prospectus
but are not described as required or that could reasonably be expected to
result in any Adviser Material Adverse Effect or that may have a material,
adverse effect on the ability of the Adviser to perform its obligations
under this Agreement or any of the Adviser Agreements.
(iv) Neither the execution, delivery or performance of this
Agreement or any of the Adviser Agreements by the Adviser, nor the
consummation by the Adviser of the transactions contemplated hereby or
thereby (A) requires the Adviser to obtain any consent, approval,
authorization or other order of, or registration or filing with, the
Commission, FINRA, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official
having jurisdiction over the Adviser, or conflicts or will conflict with
or constitutes or will constitute a breach of or a default under, the
partnership agreement or bylaws or other organizational documents of the
Adviser or (B) conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, any of the Adviser Agreements
or any other agreement, indenture, lease or other instrument to which the
Adviser is a party or by which the Adviser or any of its properties may be
bound, or violates or will violate any statute, law, regulation or
judgment, injunction, order or decree applicable to the Adviser or any of
its properties or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Adviser pursuant
to the terms of any agreement or instrument to which it is a party or by
which it may be bound or to which any of the property or assets of the
Adviser is subject, except in any case under clause (B) for such conflict,
breach, default, violation or lien that, either alone or in the aggregate,
does not have or would not reasonably be expected to have an Adviser
Material Adverse Effect or a material adverse effect on the ability of the
Adviser to perform its obligations under this Agreement or any of the
Adviser Agreements. The Adviser is not subject to any order of any court
or of any arbitrator, regulatory body, administrative agency or other
governmental body, agency or official.
(v) The Adviser has full power and authority to enter into this
Agreement and each of the Adviser Agreements; the execution and delivery
of, and the performance by the Adviser of its obligations under, this
Agreement and each of the Adviser Agreements have been duly and validly
authorized by the Adviser; and this Agreement and each of the Adviser
Agreements have been duly executed and delivered by the Adviser and
constitute the valid and legally binding agreements of the Adviser,
enforceable against the Adviser in accordance with their terms, except as
rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and subject to the qualification that the
12
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.
(vi) The Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in the
Registration Statement and the Prospectus or under this Agreement and each
of the Adviser Agreements.
(vii) The description of the Adviser in the Registration Statement
or the Prospectus complied as of any effective date of the Registration
Statement and as of the date of the Prospectus, as applicable, and
complies and will comply, as of the date hereof, each Applicable Time and
each Settlement Date, in all material respects with the provisions of the
Securities Act, the Investment Company Act and the Advisers Act and did
not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(viii) Since the date as of which information is given in the
Registration Statement or the Prospectus, except as otherwise stated
therein, there has not occurred any event which would reasonably be
expected to have a material adverse effect on the ability of the Adviser
to perform its obligations under this Agreement and each of the Adviser
Agreements.
(ix) The Adviser has such permits as are necessary to own its
property and to conduct its business in the manner described in the
Prospectus; and the Adviser has fulfilled and performed all its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other impairment of the rights of
the Adviser under any such permit.
(x) None of this Agreement nor any of the Adviser Agreements violate
any applicable provisions of the Investment Company Act and Advisers Act.
(xi) Except as stated in this Agreement, the Registration Statement
or the Prospectus, the Adviser has not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in or which will constitute stabilization or
manipulation of the price of the Placement Shares or any securities issued
by the Fund to facilitate the sale or resale of the Placement Shares 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
(xii) The Adviser has adopted and implemented written policies and
procedures under Rule 206(4)-7 of the Advisers Act reasonably designed to
prevent violation of the Advisers Act by the Adviser and its supervised
persons.
13
(c) Representations and Warranties with Respect to the Sub-Adviser.
The Sub-Adviser represents and warrants to and agrees with Xxxxx as of the date
hereof, as of each Representation Date (as defined in Section 7(j) below) and as
of each Applicable Time (such representations and warranties to be true and
correct in all material respects as of each Applicable Time) as follows:
(i) The Sub-Adviser is a limited liability company duly organized
and validly existing in good standing under the laws of the State of
Delaware, with full limited liability company power and authority to own,
lease and operate its properties and to conduct its business as described
in each of the Registration Statement and the Prospectus and is duly
registered and qualified to conduct business and is in good standing in
each jurisdiction or place where the nature of its properties or conduct
of its business requires such registration or qualification, except where
the failure so to register or to qualify, either alone or in the
aggregate, does not have or would not reasonably be expected to have (A) a
material adverse effect on the condition (financial or other), general
affairs, business, properties, business prospects, net assets or results
of operations of the Sub-Adviser (a "SUB-ADVISER MATERIAL ADVERSE EFFECT")
or (B) a Fund Material Adverse Effect.
(ii) The Sub-Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act or the Investment Company Act from acting under the
Sub-Advisory Agreement for the Fund as contemplated by the Registration
Statement or the Prospectus. There does not exist any proceeding which
could reasonably be expected to have a Sub-Adviser Material Adverse Effect
with respect to the registration of the Sub-Adviser with the Commission.
(iii) There are no legal or governmental proceedings pending or, to
the knowledge of the Sub-Adviser, threatened against the Sub-Adviser that
are required to be described in the Registration Statement or the
Prospectus but are not described as required or that could reasonably be
expected to result in a Sub-Adviser Material Adverse Effect or that may
have a material, adverse effect on the ability of the Sub-Adviser to
perform its obligations under this Agreement or the Sub-Advisory
Agreement.
(iv) Neither the execution, delivery or performance of this
Agreement or the Sub-Advisory Agreement by the Sub-Adviser, nor the
consummation by the Sub-Adviser of the transactions contemplated hereby or
thereby (A) requires the Sub-Adviser to obtain any consent, approval,
authorization or other order of, or registration or filing with, the
Commission, FINRA, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official
having jurisdiction over the Sub-Adviser, or conflicts or will conflict
with or constitutes or will constitute a breach of or a default under, the
limited liability company agreement or bylaws or other organizational
documents of the Sub-Adviser or (B) conflicts or will conflict with or
constitutes or will constitute a breach of or a default under, the
Sub-Advisory Agreement or any other agreement, indenture, lease or other
instrument to which the Sub-Adviser is a party or by which the Sub-Adviser
14
or any of its properties may be bound, or violates or will violate any
statute, law, regulation or judgment, injunction, order or decree
applicable to the Sub-Adviser or any of its properties or will result in
the creation or imposition of any lien upon any property or assets of the
Sub-Adviser pursuant to the terms of any agreement or instrument to which
it is a party or by which it may be bound or to which any of the property
or assets of the Sub-Adviser is subject, except in any case under clause
(B) for such conflict, breach, default, violation or lien that, either
alone or in the aggregate, does not have or would not reasonably be
expected to have a Sub-Adviser Material Adverse Effect or a material
adverse effect on the ability of the Sub-Adviser to perform its
obligations under this Agreement or the Sub-Advisory Agreement. The
Sub-Adviser is not subject to any order of any court or of any arbitrator,
regulatory body, administrative agency or other governmental body, agency
or official.
(v) 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, assuming due authorization, execution
and delivery by the other parties thereto, 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.
(vi) The Sub-Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in the
Registration Statement and the Prospectus or under this Agreement and the
Sub-Advisory Agreement.
(vii) The description of the Sub-Adviser in the Registration
Statement or the Prospectus complied as of any effective date of the
Registration Statement and as of the date of the Prospectus, as
applicable, and complies and will comply, as of the date hereof, each
Applicable Time and each Settlement Date, in all material respects with
the provisions of the Securities Act, Investment Company Act and the
Advisers Act did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading.
(viii) Since the date as of which information is given in the
Registration Statement or the Prospectus, except as otherwise stated
therein, there has not occurred any event which would reasonably be
expected to have a material adverse effect on the ability of the
Sub-Adviser to perform its obligations under this Agreement or the
Sub-Advisory Agreement.
(ix) The Sub-Adviser has such permits as are necessary to own its
property and to conduct its business in the manner described in the
15
Prospectus; and the Sub-Adviser has fulfilled and performed all its
material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof, except where such revocation or
termination would not reasonably be expected to have a Sub-Adviser
Material Adverse Effect.
(x) Neither this Agreement nor the Sub-Advisory Agreement violates
any applicable provisions of the Investment Company Act and the Advisers
Act.
(xi) Except as stated in this Agreement, the Registration Statement
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 Placement Shares or of any securities
issued by the Fund to facilitate the sale or resale of the Placement
Shares 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; provided that any action in connection with the Fund's
Dividend Reinvestment Plan will not be deemed to be within the terms of
this Section.
(xii) The Sub-Adviser has adopted and implemented written policies
and procedures under Rule 206(4)-7 of the Advisers Act reasonably designed
to prevent violation of the Advisers Act by the Adviser and its supervised
persons.
(xiii) (A) The Registration Statement in the form in which it became
effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and as of the date hereof, as of
each Applicable Time and as of each Settlement Date, (B) the Prospectus
and any amendment or supplement thereto when filed with the Commission
under Rule 497 of the Securities Act and any amendment or supplement
thereto when filed with the Commission and as of the date hereof, as of
each Applicable Time and as of each Settlement Date, and (C) any sales
material as of the date hereof, as of each Applicable Time and as of each
Settlement Date, did not or will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein (in the case
of the Prospectus and any sales material, in light of the circumstances
under which they were made) not misleading; provided, however that this
representation and warranty applies only to statements in or omissions
from the Registration Statement, the Prospectus and any sales material
relating solely to the description of the Sub-Adviser or information
supplied by the Sub-Adviser to the Fund and/or the Adviser expressly for
inclusion therein.
(d) Certificates. Any certificate signed by any authorized officer
of the Fund, or the Adviser identified on Schedule 3 attached hereto, as such
Schedule may be updated from time to time pursuant to notice properly delivered
to Xxxxx pursuant to Section 12 of this Agreement and delivered to the
representatives or to counsel for Xxxxx shall be deemed a representation and
warranty by the Fund or the Adviser, as the case may be, to Xxxxx as to the
matters covered thereby.
16
7. Covenants of the Fund, the Adviser and the Sub-Adviser. The Fund, the
Adviser and (with respect to subsection (e), (h), (j), (l(ii)), (n), (t) and (v)
below only, and only as they relate to the Sub-Adviser) the Sub-Adviser, jointly
and severally, covenant and agree with Xxxxx that:
(a) The Fund will promptly advise Xxxxx (i) when, during any period
that a prospectus relating to the offer or sale of Placement Shares is required
to be delivered under the Securities Act, any amendment to the Registration
Statement affecting the Placement Shares shall have become effective, (ii) of
any request by the Commission for any amendment or supplement to the
Registration Statement or the Prospectus, or for any additional information,
affecting or in respect of the Placement Shares, (iii) of the issuance by the
Commission of any order suspending the effectiveness of the Registration
Statement affecting the Placement Shares or the institution or threatening of
any proceeding for that purpose, and (iv) the receipt by the Fund of any
notification with respect to the suspension of the qualification of the
Placement Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose. The Fund will not file any amendment to the
Registration Statement affecting the Placement Shares or any supplement to the
Prospectus affecting the Placement Shares unless the Fund has furnished Xxxxx
with a copy for its review prior to filing, and will not file any such proposed
amendment or supplement affecting the Placement Shares to which Xxxxx reasonably
objects, in any event until after the end of the period during which a
prospectus is required to be delivered to purchasers of the Placement Shares
under the Securities Act. Subject to the foregoing sentence, the Fund will cause
the Prospectus Supplement to be transmitted to the Commission for filing
pursuant to Rule 497 under the Securities Act. The Fund will use its best
efforts to prevent the issuance of any order suspending the effectiveness of the
Registration Statement affecting the Placement Shares and, if issued, to obtain
as soon as possible the withdrawal thereof. The Fund will timely file the
requisite copies of the Prospectus with the Commission pursuant to Rule 497(c)
or Rule 497(h) under the Securities Act, whichever is applicable or, if
applicable, will timely file the certification permitted by Rule 497(j) under
the Securities Act and will advise Xxxxx of the time and manner of such filing.
(b) During any period in which a Prospectus relating to the
Placement Shares is required to be delivered by Xxxxx under the Securities Act
with respect to a pending sale of the Placement Shares, the Fund will comply so
far as it is able with all requirements imposed upon it by the Securities Act
and the Investment Company Act, as from time to time in force, so far as
necessary to permit the continuance of sales of the Placement Shares during such
period in accordance with the provisions hereof and the Prospectus, and will
file with the Commission and the NYSE all documents pursuant to the Securities
Act and the Investment Company Act in the manner and within the time periods
required by the Securities Act and the Investment Company Act. If during such
period any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or Prospectus to
comply with the Securities Act, the Fund will promptly notify Xxxxx to suspend
the offering of Placement Shares during such period and the Fund will promptly
amend or supplement the Registration Statement or Prospectus so as to correct
such statement or omission or effect such compliance.
(c) During any period in which the Prospectus relating to the
Placement Shares is required to be delivered by Xxxxx under the Securities Act
17
with respect to a pending sale of the Placement Shares, the Fund will use its
best efforts to cause the Placement Shares to be listed on the NYSE and to
qualify, if necessary, the Placement Shares for sale under the securities laws
of such United States jurisdictions as Xxxxx reasonably designates and to
continue such qualifications in effect so long as required for the distribution
of the Placement Shares; provided, however, that the Fund shall not be required
in connection therewith to qualify as a foreign corporation or dealer in
securities, file a general consent to service of process in any jurisdiction, or
meet any other requirement in connection with this Section 7(c) deemed by the
Fund to be unduly burdensome.
(d) As soon as practicable, but in no event later than the last day
of the 18th full calendar month following the calendar quarter in which the
effective date of the Registration Statement falls, the Fund will make generally
available to its security holders an earnings statement, which need not be
audited, which earnings statement shall satisfy the provisions of Section 11(a)
and Rule 158 of the Securities Act.
(e) The Fund agrees to pay all costs, fees and expenses incurred in
connection with performance of its obligations hereunder and in connection with
the transactions contemplated under this Agreement, including, without
limitation, (i) all expenses incident to the issuance and delivery of the
Placement Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Shares, (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Placement Shares, (iv) all reasonable fees and expenses of the Fund's
counsel and the Fund's independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts) and the Prospectus, and all amendments and supplements
thereto and this Agreement, (vi) all filing fees, distribution fees, attorneys'
fees and expenses incurred by the Fund or Xxxxx in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Placement Shares for offer and sale under the state
securities or blue sky laws, including, if requested by Xxxxx, the preparation
by counsel for Xxxxx and printing of a "Blue Sky Survey" or other memorandum,
and any supplements thereto, advising Xxxxx of such qualifications,
registrations and exemptions, (vii) the fees and expenses associated with
listing the Placement Shares on the NYSE, (viii) the filing fees incident to,
and the reasonable fees and disbursements of counsel to Xxxxx in connection
with, the review by FINRA of the terms of the sale of the Placement Shares, (ix)
the reasonable fees and expenses of counsel for Xxxxx (provided such fees and
expenses (a) shall not exceed $25,000 in connection with the preparation and
execution of this Agreement and the preparation and filing of the initial
Prospectus Supplement dated as of the date hereof relating to the Placement
Shares and providing the services described in clauses (vi) and (viii) above and
(b) shall not exceed $10,000 on an annual basis in each annual period following
the date of this Agreement) and (x) all other fees, costs and expenses incident
to the performance by the Fund of its obligations hereunder. Except as provided
in Section 7(e)(viii) and (ix) above with respect to Xxxxx (collectively, the
"Reimbursable Amounts"), the aggregate amount of any discount, commission or
other compensation to be paid by the Fund to Xxxxx in connection with Xxxxx'
performance of its obligations under this Agreement shall be as set forth on
Schedule 2 attached hereto (or as otherwise agreed to in writing as set forth in
the Placement Notice). The Fund shall pay to Xxxxx the Reimbursable Amounts in
addition to such discount, commissions and other compensation payable to Xxxxx
as contemplated by Schedule 2 (or as otherwise agreed to in writing as set forth
18
in the Placement Notice). Each of the Adviser and Sub-Adviser, severally, agree
to pay all costs, fees and expenses of its respective counsel.
(f) The Fund will use the Net Proceeds as described in the
Prospectus.
(g) The Fund will, at any time during the term of this Agreement, as
supplemented from time to time, advise Xxxxx immediately after it shall have
received notice or obtained knowledge thereof, of any information or fact that
would alter or affect in any material respect any opinion, certificate, letter
or other document required to be provided to Xxxxx pursuant to this Agreement.
(h) The Fund will cooperate with any due diligence review conducted
by Xxxxx or its agents, including, without limitation, providing information and
making available documents and senior corporate officers, as Xxxxx may
reasonably request; provided, however, that the Fund shall be required to make
available documents and senior corporate officers only (i) at the Fund's
principal offices and (ii) during the Fund's ordinary business hours. The
parties acknowledge that the due diligence review contemplated by this Section
7(h) will include during the term of this Agreement (x) a bring-down diligence
conference among Xxxxx and certain officers of the Fund's operations or legal
departments upon the issuance by the Fund of a Placement Notice and (y) a
diligence conference to occur within three business days following the Fund's
filing of each of its annual and semi-annual reports on Form N-CSR and N-CSRS,
respectively (the "REPORTS") whereby the Fund, the Adviser and the Sub-Adviser
will make their senior corporate officers, including portfolio managers,
available to address certain diligence inquiries of Xxxxx and will provide such
additional information and documents as Xxxxx may reasonably request.
(i) The Fund agrees that on such dates as the Securities Act shall
require, the Fund will (i) file a Prospectus Supplement with the Commission
under Rule 497 under the Securities Act, which Prospectus Supplement will set
forth, within the relevant period, the amount of Placement Shares sold through
Xxxxx, the Net Proceeds to the Fund and the compensation payable by the Fund to
Xxxxx with respect to such Placement Shares, and (ii) deliver such number of
copies of each such Prospectus Supplement to each exchange or market on which
such sales were effected as may be required by the rules or regulations of such
exchange or market.
(j) During the term of this Agreement, each time the Fund (i) files
the Prospectus relating to the Placement Shares (ii) amends or supplements the
Registration Statement or the Prospectus relating to the Placement Shares by
means of a post-effective amendment, sticker, or supplement (other than a
Prospectus Supplement filed in accordance with Section 7(i) of this Agreement),
or (iii) files a Report (to the extent not already covered by subsection (i) or
(ii) of this Section 7(j)), each of the Fund, the Adviser and Sub-Adviser shall
xxxxxxx Xxxxx with a certificate, in the form attached hereto as Exhibit 7(j).
(Each date contemplated in subsections (i), (ii) and (iii) of this Section 7(j)
is referred to herein as a "REPRESENTATION DATE"). With respect to
post-effective amendments to the Registration Statement contemplated by this
Section 7(j), if the Fund is not otherwise permitted to rely on Rule 486(b)
regarding the effective date of a post-effective amendment, the Representation
Date shall be the date the Commission declares such amendment effective and all
Representation Date deliveries relating thereto which are required by Section 7
19
shall be delivered on or as promptly as practicable following the date of
effectiveness of such amendment. If the Fund is permitted to rely on Rule 486(b)
in connection with the filing of a post-effective amendment, then the
Representation Date shall be the date such post-effective amendment is filed
with the Commission.
(k) Except as otherwise provided in the last sentence of this
Section 7(k), on the date hereof and thereafter as of each Representation Date,
the Fund shall cause to be furnished to Xxxxx with a written opinion of Xxxxxxx
and Xxxxxx LLP (the "FUND COUNSEL"), dated the Representation Date, in
substantially the form attached hereto as Exhibit 7(k)(1), but modified, as
necessary, to relate to the Registration Statement and the Prospectus as then
amended or supplemented; provided, however, that in lieu of such opinion,
counsel may xxxxxxx Xxxxx with a letter to the effect that Xxxxx may rely on a
prior opinion delivered under this Section 7(k) to the same extent as if it were
dated the date of such letter (except that statements in such prior opinion
shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented at such Representation Date). Insofar as any opinion of
Fund Counsel relates to or is dependent upon matters governed by Massachusetts
law, Fund Counsel will be permitted to rely on the opinion of Xxxxxx, Xxxxx &
Xxxxxxx LLP. In the event that a Representation Date is triggered by the filing
of a Report, only the opinion identified in Exhibit 7(k)(2) shall be required.
(l) (i) Except as otherwise provided in the last sentence of this
Section 7(i), on the date hereof and thereafter as of each Representation Date,
the Adviser shall cause to be furnished to Xxxxx with a written opinion of
Xxxxxxx and Xxxxxx LLP (the "ADVISER COUNSEL"), dated the Representation Date,
in substantially the form attached hereto as Exhibit 7(l)(i), but modified, as
necessary, to relate to the Registration Statement and the Prospectus as then
amended or supplemented; provided, however, that in lieu of such opinion,
counsel may xxxxxxx Xxxxx with a letter to the effect that Xxxxx may rely on a
prior opinion delivered under this Section 7(l)(i) to the same extent as if it
were dated the date of such letter (except that statements in such prior opinion
shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented at such Representation Date). In the event that a
Representation Date is triggered by the filing of the Fund's semi-annual report,
no opinion identified in this Section 7(l)(i) shall be required.
(ii) Except as otherwise provided in the last sentence of
Section 7(l)(ii), on the date hereof and thereafter as of each Representation
Date, the Sub-Adviser shall cause to be furnished to Xxxxx with a written
opinion of Xxxxx Xxxx LLC (the "SUB-ADVISER COUNSEL"), dated the Representation
Date, in substantially the form attached hereto as Exhibit 7(l)(ii), but
modified, as necessary, to relate to the Registration Statement and the
Prospectus as then amended or supplemented; provided, however, that in lieu of
such opinion, counsel may xxxxxxx Xxxxx with a letter to the effect that Xxxxx
may rely on a prior opinion delivered under this Section 7(l)(ii) to the same
extent as if it were dated the date of such letter (except that statements in
such prior opinion shall be deemed to relate to the Registration Statement and
the Prospectus as amended or supplemented at such Representation Date). In the
event that a Representation Date is triggered by the filing of the Fund's
semi-annual report, no opinion in this Section 7(1)(ii) shall be required.
(m) On the date hereof and each date on which a Report is filed, or
during any period in which the Prospectus relating to the Placement Shares is
20
required to be delivered by Xxxxx, each time that the Registration Statement is
amended or the Prospectus supplemented to include additional financial
statements, the Fund shall cause its independent accountants to furnish Xxxxx
letters (the "COMFORT LETTERS"), dated the date of each such date, in form and
substance satisfactory to Xxxxx, (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of such date,
the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings (the
first such letter, the "INITIAL COMFORT LETTER") and (iii) updating the Initial
Comfort Letter with any information that would have been included in the Initial
Comfort Letter had it been given on such date and modified as necessary to
relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter. Notwithstanding the foregoing, in the
event that a Representation Date is triggered by the filing of the Fund's
semi-annual report and to the extent the Fund's independent accountants have not
been engaged by the Fund to perform a review of the Fund's unaudited semi-annual
financial statements in connection with such filing, then no Comfort Letter
contemplated by this Section 7(m) shall be required; provided, however, that in
such case the Fund shall deliver to Xxxxx on the applicable Representation Date
a certificate of the Fund's chief financial officer substantially in the form
attached hereto as Exhibit 7(m) (the "CFO CERTIFICATE").
(n) On the date hereof and thereafter as of each Representation
Date, each of the Fund, the Adviser and the Sub-Adviser shall xxxxxxx Xxxxx with
a certificate of its respective Secretary, in form and substance reasonably
satisfactory to Xxxxx.
(o) Each Placement Notice issued by the Fund to Xxxxx shall be
deemed to be an affirmation that the representations and warranties made by it
in this Agreement are true and correct in all material respects at the time such
Placement Notice is issued, and that the Fund has complied in all material
respects with all of the agreements to be performed by it hereunder at or prior
to such time.
(p) Except by means of the Prospectus or as otherwise agreed by the
parties, the Fund (including its agents and representatives, other than Xxxxx in
its capacity as such) will not make, use, prepare, authorize, approve or refer
to any written communication (as defined in Rule 405 under the Act and including
without limitation any sales material), required to be filed with the
Commission, that constitutes an offer to sell or solicitation of an offer to buy
Placement Shares hereunder.
(q) The Fund will comply with all requirements imposed upon it by
the Securities Act, the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the "EXCHANGE ACT") and the
Investment Company Act as from time to time in force, so far as necessary to
permit the continuance of sales of, or dealings in, the Placement Shares as
contemplated by the provisions hereof and the Prospectus.
(r) Without the written consent of Xxxxx, the Fund will not,
directly or indirectly, offer to sell, sell, contract to sell, grant any option
to sell or otherwise dispose of any Shares (other than the Placement Shares
offered pursuant to the provisions of this Agreement) or securities convertible
into or exchangeable for Shares, warrants or any rights to purchase or acquire,
21
Shares during the period beginning on the fifth (5th) Trading Day immediately
prior to the date on which any Placement Notice is delivered to Xxxxx hereunder
and ending on the fifth (5th) Trading Day immediately following the final
Settlement Date with respect to Placement Shares sold pursuant to such Placement
Notice; PROVIDED, HOWEVER, that such restrictions will not be required in
connection with the Fund's issuance or sale of Shares pursuant to (i) the
Dividend Reinvestment Plan, and (ii) conversion of securities or the exercise of
warrants, options or other rights in effect or outstanding as of the date of
this Agreement.
(s) The Fund will furnish to Xxxxx and its counsel (at the expense
of the Fund) copies of the Registration Statement, the Prospectus and all
amendments and supplements to the Registration Statement or Prospectus relating
to the registration and issuance of the Placement Shares pursuant to this
Agreement that are filed with the Commission during the period in which a
prospectus relating to the Placement Shares is required to be delivered under
the Securities Act, in each case as soon as reasonably practicable and in such
quantities as Xxxxx may from time to time reasonably request.
(t) Each of the Fund, the Adviser and Sub-Adviser acknowledges and
agrees that Xxxxx has informed the Fund that Xxxxx may, to the extent permitted
under the Securities Act, Exchange Act and the Investment Company Act, purchase
and sell Placement Shares for its own account at the same time as Placement
Shares are being sold by the Fund pursuant to this Agreement, provided that (i)
the Fund shall not be deemed to have authorized or consented to any such
purchases or sales by Xxxxx and (ii) no such purchases or sales shall take place
while a Placement Notice is in effect (except to the extent Xxxxx may engage in
sales of Placement Shares (A) purchased or deemed purchased from the Fund as a
"riskless principal" or in a similar capacity or (B) with respect to errors that
cause Xxxxx to take an unplanned principal positions, in each case to the extent
such sales are permitted under the Securities Act, the Exchange Act and the
Investment Company Act).
(u) The Fund will not, directly or indirectly, (i) take any action
designed to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Fund to facilitate the sale or resale of the Placement Shares or
(ii) sell, bid for, or purchase the Placement Shares, or pay anyone any
compensation for soliciting purchases of the Placement Shares other than Xxxxx;
PROVIDED, HOWEVER, the Fund may issue and sell Shares pursuant to the Dividend
Reinvestment Plan (it being understood that the Sub-Adviser shall have no
obligation or liability under this paragraph with respect to acts or omissions
of the Fund and the Adviser, and their respective officers, trustees or
directors).
(v) During the term of this Agreement, the Fund, the Adviser and
Sub-Adviser will furnish to Xxxxx such information as reasonably requested by
Xxxxx regarding the Fund, the Adviser or Sub-Adviser.
8. Conditions to Xxxxx'x Obligations. The obligations of Xxxxx hereunder with
respect to a Placement will be subject to the continuing accuracy and
completeness of the representations and warranties made by the Fund and the
Adviser herein, to the due performance by the Fund and the Adviser of their
respective obligations hereunder, and to the continuing satisfaction (or waiver
by Xxxxx in its sole discretion) of the following additional conditions:
22
(a) The Registration Statement shall have become effective and shall
be available for the sale of (i) all Placement Shares issued pursuant to all
prior Placements and not yet sold by Xxxxx and (ii) all Placement Shares
contemplated to be issued by the Placement Notice relating to such Placement.
(b) None of the following events shall have occurred and be
continuing: (i) receipt by the Fund of any request for additional information
from the Commission or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement, the response to which
would require any amendments or supplements to the Registration Statement or the
Prospectus relating to or affecting the Placement Shares; (ii) the issuance by
the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, including any notice objecting
to the use of the Registration Statement or order pursuant to Section 8(e) of
the Investment Company Act having been issued and proceedings therefor
initiated, or to the knowledge of the Fund, threatened by the Commission; (iii)
receipt by the Fund of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Placement Shares for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; (iv) the occurrence of any event that makes any statement made in
the Registration Statement or the Prospectus untrue in any material respect or
that requires the making of any changes in the Registration Statement or
Prospectus so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and, that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and (v) the
Fund's reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate.
(c) Xxxxx shall not have advised the Fund that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of a material fact regarding Xxxxx that in Xxxxx' opinion is
material, or omits to state a fact regarding Xxxxx that in Xxxxx' opinion is
material and is required to be stated therein or is necessary to make the
statements therein, in light of the circumstances under which it was made, not
misleading.
(d) Except as contemplated or disclosed in the Prospectus, there
shall not have been any material change, on a consolidated basis, in the
authorized capital stock of the Fund or any Fund Material Adverse Effect,
Adviser Material Adverse Effect or Sub-Adviser Material Adverse Effect, or any
development that may reasonably be expected to cause a Fund Material Adverse
Effect, Adviser Material Adverse Effect or Sub-Adviser Material Adverse Effect,
or a downgrading in or withdrawal of the rating assigned to any of the Fund's
debt or preferred securities by any rating organization or a public announcement
by any rating organization that it has under surveillance or review its rating
of any of the Fund's debt or preferred securities, the effect of which in the
sole judgment of Xxxxx (without relieving the Fund of any obligation or
liability it may otherwise have), is so material as to make it impracticable or
inadvisable to proceed with the offering of the Placement Shares on the terms
and in the manner contemplated in the Prospectus.
23
(e) Xxxxx shall have received the opinion of Fund Counsel required
to be delivered pursuant Section 7(k) on or before the date on which such
delivery of such opinion is required pursuant to Section 7(k).
(f) Xxxxx shall have received the opinions of Adviser Counsel and
Sub-Adviser Counsel required to be delivered pursuant Section 7(l) on or before
the date on which such delivery of such opinion is required pursuant to Section
7(l).
(g) Xxxxx shall have received the Comfort Letter, or to the extent
applicable, the CFO Certificate, required to be delivered pursuant Section 7(m)
on or before the date on which such delivery of such letter or CFO Certificate
is required pursuant to Section 7(m).
(h) Xxxxx shall have received the certificates required to be
delivered pursuant to Section 7(j) and Section 7(n) on or before the date on
which delivery of such certificate is required pursuant to Section 7(j) and
Section 7(n), respectively.
(i) Trading in the Shares shall not have been suspended on the NYSE.
(j) On each date on which the Fund is required to deliver a
certificate pursuant to Section 7(j), the Fund shall have furnished to Xxxxx
such appropriate further information, certificates and documents as Xxxxx may
reasonably request. All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof. The Fund will furnish Xxxxx
with such conformed copies of such opinions, certificates, letters and other
documents as Xxxxx shall reasonably request.
(k) All filings with the Commission required by Rule 497 under the
Securities Act to have been filed prior to the giving of any Placement Notice
hereunder shall have been made within the applicable time period prescribed for
such filing by Rule 497.
(l) The Placement Shares shall have been approved for listing on the
NYSE, subject only to notice of issuance.
(m) There shall not have occurred any event that would permit Xxxxx
to terminate this Agreement pursuant to Section 11(a).
(n) Prior to the date hereof, FINRA shall have confirmed that it has
no objection with respect to the fairness and reasonableness of the placement
terms and arrangements set forth herein.
9. Indemnification and Contribution.
(a) Indemnification by the Fund and the Adviser. The Fund and the
Adviser, jointly and severally, agree to indemnify and hold harmless Xxxxx, its
directors, members, officers and each person, if any, who controls Xxxxx within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) including any information deemed to
be a part thereof pursuant to Rule 430A or Rule 497 under the Securities
Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or arising out of any untrue statement or alleged untrue
statement of a material fact included in any sales material, any
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
24
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
9(e) below) any such settlement is effected with the written consent of
the Fund and the Adviser; and
(3) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (1) or (2)
above,
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the Fund,
the Adviser or Sub-Adviser by Xxxxx expressly for use in the Registration
Statement (or any amendment thereto), any sales material, or in any Prospectus
(or any amendment or supplement thereto).
(b) Indemnification by the Sub-Adviser. The Sub-Adviser agrees to
indemnify and hold harmless Xxxxx, its directors, members, officers and each
person, if any, who controls Xxxxx within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section 9, as incurred by Xxxxx, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions,
relating solely to the description of the Sub-Adviser or information supplied by
the Sub-Adviser for inclusion in the Registration Statement (or any amendment
thereto), any sales material, or any Prospectus (or any amendment or supplement
thereto).
(c) Indemnification by Xxxxx. Xxxxx agrees to indemnify and hold
harmless each of the Fund, the Adviser and the Sub-Adviser, each of their
directors, trustees, members, each of their officers who signed the Registration
Statement, and each person, if any, who controls the Fund, the Adviser or
Sub-Adviser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section
9, as incurred, but only with respect to (i) any failure by Xxxxx to comply with
the prospectus delivery requirements applicable to the Placement Shares; and
(ii) untrue statements or omissions, or alleged untrue statements or omissions,
25
made in the Registration Statement (or any amendment thereto), any sales
material, or any Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Fund, the
Adviser or the Sub-Adviser by Xxxxx expressly for use in the Registration
Statement (or any amendment thereto), any sales material, or any Prospectus (or
any amendment or supplement thereto). The Fund, the Adviser and Sub-Adviser
acknowledge that Xxxxx has not furnished any information to the Fund for
inclusion in the Prospectus.
(d) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. Counsel to the indemnified parties shall be selected as
follows: counsel to Xxxxx, its directors, members, officers, and each person, if
any, who controls Xxxxx within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall be selected by Xxxxx; counsel to the
Fund, its directors, trustees, members, each of its officers who signed the
Registration Statement and each person, if any, who controls the Fund within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall be selected by the Fund; counsel to the Adviser and each person, if any,
who controls the Adviser within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall be selected by the Adviser and counsel
to the Sub-Advisor and each person, if any, who controls the Sub-Advisor within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall be selected by the Sub-Adviser. An indemnifying party may participate
at its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
Xxxxx and each person, if any, who controls Xxxxx within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for the Fund, each of their directors, trustees, members,
each of its officers who signed the Registration Statement and each person, if
any, who controls the Fund within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, the fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
the Adviser, the fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for the Sub-Adviser, and the fees
and expenses of more than one counsel, in each case in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 9 hereof
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
26
(e) Settlement Without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 9(a)(2) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(f) Other Agreements with Respect to Indemnification and
Contribution. The provisions of this Section 9 hereof shall not affect any
agreements among the Fund, the Adviser and Sub-Adviser with respect to
indemnification of each other or contribution between themselves.
(g) Contribution.
(1) If the indemnification provided for in this Section 9 hereof is
for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages
or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i)
in such proportion as is appropriate to reflect the relative benefits
received by the Fund and the Adviser or the Sub-Adviser, as applicable, on
the one hand and Xxxxx on the other hand from the offering of the
Placement Shares pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Fund
and the Adviser or the Sub-Adviser, as applicable, on the one hand and of
Xxxxx on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses,
as well as any other relevant equitable considerations.
(2) The relative benefits received by the Fund and the Adviser or
the Sub-Adviser, as applicable, on the one hand and Xxxxx on the other
hand in connection with the offering of the Placement Shares pursuant to
this Agreement shall be deemed to be in the same respective proportions as
the Net Proceeds from the offering of the Placement Shares pursuant to
this Agreement (before deducting expenses) received by the Fund and the
Adviser or the Sub-Adviser, as applicable, and the total discounts and
commissions received by Xxxxx as calculated in accordance with the terms
set forth in Schedule 2, bear to the aggregate gross proceeds from the
sale of Placement Shares pursuant to this Agreement.
(3) The relative fault of the Fund and the Adviser or the
Sub-Adviser, as applicable, on the one hand and Xxxxx on the other hand
shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied
by the Fund, by the Adviser, by the Sub-Adviser or by Xxxxx and the
27
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(4) The Fund, the Adviser, the Sub-Adviser and Xxxxx agree that it
would not be just and equitable if contribution pursuant to this Section
9(f) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this Section 9(f). The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party
and referred to above in this Section 9(f) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue or
alleged untrue statement or omission or alleged omission.
(5) Notwithstanding the provisions of this Section 9(f), Xxxxx shall
not be required to contribute any amount in excess of the amount by which
the total price of the Placement Shares actually distributed by Xxxxx
exceeds the amount of any damages that Xxxxx has otherwise been required
to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
(6) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(7) For purposes of this Section 9(f), each person, if any, who
controls Xxxxx within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
as Xxxxx, and each person who controls the Fund, any Adviser or
Sub-Adviser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each officer of the Fund, the Adviser and
the Sub-Adviser and each trustee, director or member of the Fund, the
Adviser and the Sub-Adviser shall have the same rights to contribution as
the Fund, the Adviser and the Sub-Adviser.
(h) The indemnity and contribution agreements contained in this
Section 9 and the representation and warranties of the Fund, the Adviser and the
Sub-Adviser set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of Xxxxx,
its partners, officers or employees, or any person controlling Xxxxx, within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and or by or on behalf of the Fund and/or any Adviser or Sub-Adviser, its
directors and officers or any person who controls the Fund, and/or any Adviser
or Sub-Adviser within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, (ii) delivery and acceptance of the Placement Shares and
payment therefor, or (iii) any termination of this Agreement. A successor to
Xxxxx or to the Fund or any Adviser or Sub-Adviser, its respective directors or
officers, or any person controlling the Fund, or any Adviser or Sub-Adviser,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 9.
28
10. Representations and Agreements to Survive Delivery. All representations
and warranties of the Fund and the Adviser herein or in certificates delivered
pursuant hereto shall survive, as of their respective dates, regardless of (i)
any investigation made by or on behalf of Xxxxx, any controlling persons, or the
Fund and/or any Adviser or Sub-Adviser (or any of their respective officers,
directors or controlling persons), (ii) delivery and acceptance of the Placement
Shares and payment therefor or (iii) any termination of this Agreement.
11. Termination.
(a) Xxxxx shall have the right by giving notice as hereinafter
specified at any time to terminate this Agreement if (i) any Fund Material
Adverse Effect or Adviser Material Adverse Effect, has occurred which, in the
reasonable judgment of Xxxxx, may materially impair the investment quality of
the Placement Shares, (ii) the Fund, the Adviser or Sub-Adviser shall have
failed, refused or been unable to perform any agreement on its part to be
performed hereunder; provided, however, in the case of any failure of the Fund,
the Adviser or Sub-Adviser to deliver (or cause another person to deliver) any
certification, opinion, or letter required under Sections 7(j), 7(k), 7(l) or
7(m) Xxxxx'x right to terminate shall not arise unless such failure to deliver
(or cause to be delivered) continues for more than thirty (30) days from the
date of such Representation Date pursuant to which such delivery was required;
provided, further, that, Xxxxx shall have the right to suspend its obligations
hereunder, regardless of whether a Placement Notice is pending, beginning on the
sixth (6th) day after the date of any Representation Date if any certification,
opinion, or letter referenced in the foregoing proviso has not yet been (or
caused to be) delivered; (iii) any other condition of Xxxxx'x obligations
hereunder is not fulfilled, or (iv) any suspension or limitation of trading in
the Placement Shares or in securities generally on the NYSE shall have occurred.
Any such termination shall be without liability of any party to any other party
except that the provisions of Section 7(e), Section 9, Section 10, Section 15,
Section 17 and Section 19 hereof shall remain in full force and effect
notwithstanding such termination. If Xxxxx elects to terminate this Agreement as
provided in this Section 11, Xxxxx shall provide the required notice as
specified herein.
(b) The Fund shall have the right, by giving notice as hereinafter
specified to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 7(e), Section 9, Section 10, Section 15,
Section 17 and Section 19 hereof shall remain in full force and effect
notwithstanding such termination.
(c) Xxxxx shall have the right, by giving notice as hereinafter
specified to terminate this Agreement in its sole discretion at any time
following the period of twelve (12) months after the date of this Agreement. Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 7(e), Section 9, Section 10, Section 15,
Section 17 and Section 19 hereof shall remain in full force and effect
notwithstanding such termination.
(d) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 11(a), (b) or (c) above or otherwise by mutual
agreement of the parties; provided, however, that any such termination by mutual
agreement shall in all cases be deemed to provide that Section 7(e), Section 9,
Section 10, Section 15, Section 17 and Section 19 shall remain in full force and
effect.
29
(e) Except as otherwise provided in Sections 11(b) and 11(c), any
termination of this Agreement shall be effective on the date specified in such
notice of termination; provided, however, that such termination shall not be
effective until the close of business on the date of receipt of such notice by
Xxxxx or the Fund or Adviser, as the case may be. If such termination shall
occur prior to the Settlement Date for any sale of Placement Shares, such
Placement Shares shall settle in accordance with the provisions of this
Agreement.
(f) Any Reimbursable Amounts owed to Xxxxx upon a termination in
accordance with this Section 11 shall be payable by the Fund to Xxxxx only to
the extent such Reimbursable Amounts are actually incurred by Xxxxx as
contemplated by FINRA Rule 5110(f)(2)(D).
12. Notices. All notices or other communications required or permitted to be
given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and if sent to Xxxxx, shall be delivered to Xxxxx at
JonesTrading Institutional Services LLC, 00000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000, fax no. (000) 000-0000, Attention: General
Counsel, with a copy to Xxxxxxxx Xxxxxxx LLP, 0000 Xxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxx 00000, fax no. (000) 000-0000, Attention: Xxxxx X. Xxxxxx; if sent to
the Fund or, the Adviser, shall be delivered to First Trust Advisors L.P.,
Attention: General Counsel, fax no.: (000) 000-0000), with a copy to Xxxxxxx and
Xxxxxx LLP, Attention: Xxxx X. Xxxx, telephone (000) 000-0000 fax: (312)
000-0000, or if sent to the Sub-Adviser, shall be delivered to Confluence
Investment Management LLC, Attention: Xxxxx X. Xxxxxx, fax: (000) 000-0000, with
a copy to Xxxxx Xxxx LLC, Attention: Xxxxxxx X. Xxxxx, fax: (000) 000-0000. Each
party to this Agreement may change such address for notices by sending to the
parties to this Agreement written notice of a new address for such purpose. Each
such notice or other communication shall be deemed given (i) when delivered
personally or by verifiable facsimile transmission (with an original to follow)
on or before 4:30 p.m., New York City time, on a Business Day or, if such day is
not a Business Day, on the next succeeding Business Day, (ii) on the next
Business Day after timely delivery to a nationally-recognized overnight courier
and (iii) on the Business Day actually received if deposited in the U.S. mail
(certified or registered mail, return receipt requested, postage prepaid). For
purposes of this Agreement, "BUSINESS DAY" shall mean any day on which the NYSE
and commercial banks in the City of New York are open for business.
13. Successors. This Agreement shall inure to the benefit of and be binding
upon Xxxxx, the Fund, the Adviser and the Sub-Adviser and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than Xxxxx,
the Fund and the Adviser and their respective successors and the controlling
persons and directors, officers, members and trustees referred to in Section 9
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of Xxxxx, the Fund, the Adviser and the
Sub-Adviser and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Placement
Shares from Xxxxx shall be deemed to be a successor by reason merely of such
purchase.
14. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
30
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed in such state.
16. General Provisions. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in
writing by each party whom the condition is meant to benefit. The Section
headings, titled and captions herein are for the convenience of the parties only
and shall not affect the construction or interpretation of this Agreement.
17. Waiver of Jury Trial. The Fund, the Adviser and Xxxxx each hereby
irrevocably waives any right it may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or any transaction
contemplated hereby.
18. Adjustments for Stock Splits. The parties acknowledge and agree that all
share related numbers contained in this Agreement shall be adjusted to take into
account any stock split, stock dividend or similar event effected with respect
to the Shares.
19. Absence of Fiduciary Relationship. The Fund, the Adviser and Sub-Adviser
acknowledge that in connection with the offering of the Placement Shares: (a)
Xxxxx has acted at arms length and owes no fiduciary duties to, the Fund, the
Adviser and Sub-Adviser or any other person; (b) Xxxxx owes the Fund, the
Adviser and Sub-Adviser only those duties and obligations set forth in this
Agreement and prior written agreements (to the extent not superseded by this
Agreement), if any, and (iii) Xxxxx may have interests that differ from those of
the Funds, the Adviser and Sub-Adviser. The Fund, the Adviser and Sub-Adviser
waive to the full extent permitted by applicable law any claims any of them may
have against Xxxxx arising from an alleged breach of fiduciary duty in
connection with the offering of the Placement Shares as contemplated by this
Agreement
20. Limitation of Liability. The Declaration of Trust is on file with the
Secretary of The Commonwealth of Massachusetts. This Agreement is executed on
behalf of the Fund by the Fund's officers as officers and not individually and
the obligations imposed upon the Fund by this Agreement are not binding upon any
of the Fund's shareholders individually but are binding only upon the assets and
property of the Fund.
31
If the foregoing correctly sets forth the understanding between the Fund, the
Adviser and Xxxxx, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Fund, the Adviser, the Sub-Adviser and Xxxxx.
Very truly yours,
FIRST TRUST SPECIALTY FINANCE AND
FINANCIAL OPPORTUNITIES FUND
By:
----------------------------------
Name:
Title:
FIRST TRUST ADVISORS L.P.
By:
----------------------------------
Name:
Title:
CONFLUENCE INVESTMENT MANAGEMENT LLC
By:
----------------------------------
Name:
Title:
ACCEPTED AS OF THE DATE
FIRST-ABOVE WRITTEN:
JONESTRADING INSTITUTIONAL SERVICES LLC
By:
----------------------------------
Name:
Title:
32
SCHEDULE 1
FORM OF PLACEMENT NOTICE
------------------------
From: [ ]
Cc: [ ]
To: [ ]
Subject: Capital On Demand - Placement Notice
Date:
Gentlemen:
Pursuant to the terms and subject to the conditions contained in the Capital On
Demand(TM) Sales Agreement between First Trust Specialty Finance and Financial
Opportunities Fund (the "FUND"), First Trust Advisors L.P., Confluence
Investment Management LLC and JonesTrading Institutional Services LLC ("XXXXX")
dated February __, 2015, I hereby request on behalf of the Fund that Xxxxx sell
up to ___________ shares of the Fund's common shares of beneficial interest, no
par value per share, at a minimum market price of $_______ per share.
The time period during which sales are requested to be made shall be
________________.
[No more than __________ shares may be sold in any one trading day.]
Discount/Commission: ______________________
ADDITIONAL SALES PARAMETERS MAY BE ADDED, SUCH AS SPECIFIC DATES THE SHARES MAY
NOT BE SOLD ON, THE MANNER IN WHICH SALES ARE TO BE MADE BY XXXXX, AND/OR THE
CAPACITY IN WHICH XXXXX MAY ACT IN SELLING SHARES (AS PRINCIPAL, AGENT, OR
BOTH).
ANY AND ALL SALES PARAMETERS TO BE SET FORTH IN A PLACEMENT NOTICE MAY BE
CONVEYED TO XXXXX IN AN EMAIL NOTICE OR OTHER METHOD MUTUALLY AGREED TO IN
WRITING BY THE PARTIES, AS CONTEMPLATED BY SECTION 2 OF THE AGREEMENT.
S-1
SCHEDULE 2
COMPENSATION
The amount of any discount, commission or other compensation (other than the
Reimbursable Amounts) to be paid by the Fund to Xxxxx shall be between 100 and
300 basis points of the gross proceeds with respect to sales actually effected
by Xxxxx, with the exact amount of such discount, commission or other
compensation to be mutually agreed upon by the parties from time to time, as set
forth in the Placement Notice.
S-2
SCHEDULE 3
JONESTRADING INSTITUTIONAL SERVICES LLC
Xxxxxx "Xxx" Xxxxx Xxxxxx X. Xxxxxxxxxxx
Managing Director Chief Operating Officer & General Counsel
JonesTrading Institutional Services LLC JonesTrading Institutional Services LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000 Xxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
xxxx@xxxxxxxxxxxx.xxx xxxxx@xxxxxxxxxxxx.xxx
Xxxx X. Xxxx Xxxxxx X. Xxxxxxx
Chief Financial Officer Managing Director, Head of Capital Markets
JonesTrading Institutional Services LLC JonesTrading Institutional Services LLC
00000 Xxxxxxx Xxxxxx Xxxx Xxxxx 000 000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000 Xxxx Xxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
xxxxx@xxxxxxxxxxxx.xxx xxxxxxx@xxxxxxxxxxxx.xxx
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
Xxxx X. Xxxxxxx W. Xxxxx Xxxxxxx
000 Xxxx Xxxxxxx Xxxxx 000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000 Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
xxxxxxxx@xxxxxxxxxxxx.xxx xxxxxxxx@xxxxxxxxxxxx.xxx
Xxxxx X. Xxxxx Xxxxxx X. Xxxxxxxxx
000 Xxxx Xxxxxxx Xxxxx 000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000 Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
xxxxxx@xxxxxxxxxx.xxx xxxxxxxxxx@xxxxxxxxxx.xxx
Xxxxxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxx
000 Xxxx Xxxxxxx Xxxxx 000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000 Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
xxxxxxx@xxxxxxxxxx.xxx xxxxxx@xxxxxxxxxx.xxx
S-3
Xxxxxx X. Xxxxx
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000
xxxxxx@xxxxxxxxxxxx.xxx
S-2
EXHIBIT 7(J)
FUND OFFICER CERTIFICATE
The undersigned, the duly qualified and elected _______________________ of
First Trust Specialty Finance and Financial Opportunities Fund (the "FUND"),
does hereby certify in such capacity and on behalf of the Fund, pursuant to
Section 7(j) of the Sales Agreement dated February __, 2015 (the "SALES
AGREEMENT") between the Fund, First Trust Advisers L.P., Confluence Investment
Management LLC and JonesTrading Institutional Services LLC, that to the best of
the knowledge of the undersigned:
(i) Except for non-material exceptions as may be set forth on Annex A
hereto, the representations and warranties of the Fund in Section 6(a) of the
Sales Agreement are true and correct on and as of the date hereof, with the same
force and effect as if expressly made on and as of the date hereof; and
(ii) The Fund has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.
By:
------------------------------
Name:
Title:
Date:
EXHIBIT 7(J) (CONT'D)
ADVISER OFFICER CERTIFICATE
The undersigned, the duly qualified and elected _______________________ of
First Trust Advisers L.P. (the "ADVISER"), an Illinois limited partnership, does
hereby certify in such capacity and on behalf of the Adviser, pursuant to
Section 7(j) of the Sales Agreement dated February __, 2015 (the "SALES
AGREEMENT") between the Adviser, First Trust Specialty Finance and Financial
Opportunities Fund, Confluence Investment Management LLC and JonesTrading
Institutional Services LLC, that to the best of the knowledge of the
undersigned:
(i) Except for non-material exceptions as may be set forth on Annex A
hereto, the representations and warranties of the Adviser in Section 6(b) of the
Sales Agreement are true and correct on and as of the date hereof, with the same
force and effect as if expressly made on and as of the date hereof; and
(ii) The Adviser has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.
By:
------------------------------
Name:
Title:
Date:
EXHIBIT 7(J) (CONT'D)
SUB-ADVISER OFFICER CERTIFICATE
The undersigned, the duly qualified and elected _______________________ of
Confluence Investment Management LLC (the "SUB-ADVISER"), a Delaware limited
liability company, does hereby certify in such capacity and on behalf of the
Sub-Adviser, pursuant to Section 7(j) of the Sales Agreement dated February __,
2015 (the "SALES AGREEMENT") between the Sub-Adviser, First Trust Advisors L.P.,
First Trust Specialty Finance and Financial Opportunities Fund and JonesTrading
Institutional Services LLC, that to the best of the knowledge of the
undersigned:
(i) Except for non-material exceptions as may be set forth on Annex A
hereto, the representations and warranties of the Sub-Adviser in Section 6(c) of
the Sales Agreement are true and correct on and as of the date hereof, with the
same force and effect as if expressly made on and as of the date hereof; and
(ii) The Sub-Adviser has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.
By:
------------------------------
Name:
Title:
Date:
EXHIBIT 7(K)(1)
FORM OF OPINION OF FUND COUNSEL
i. The Registration Statement and all post-effective amendments thereto,
if any, are effective under the Act and no stop order with respect thereto has
been issued and no proceeding for that purpose has been instituted or, to the
best of our knowledge, is threatened by the Commission. Any filing of the
Prospectus or any supplements thereto required under Rule 497 under the Act
prior to the date hereof have been made in the manner and within the time
required by such rule.
ii. The Fund is duly licensed and qualified to do business and in good
standing in each jurisdiction in which its ownership or leasing of property or
its conducting of business as described in the Registration Statement and
Prospectus (and any amendment or supplement thereto) requires such
qualification; and the Fund owns, possesses or has obtained and currently
maintains all governmental licenses, permits, consents, orders, approvals and
other authorizations necessary to carry on its business as described in the
Prospectus, except where the failure to obtain such licenses, permits, consents,
orders, approvals and other authorizations, either alone or in the aggregate,
would not have a Fund Material Adverse Effect. The Fund has no subsidiaries.
iii. The Shares conform in all material respects to the description of
them in the Prospectus under the caption "Description of Shares - Common Shares"
in the Prospectus. All of the outstanding Shares have been duly authorized and
are validly issued, fully paid and (except as described in the Prospectus under
the caption "Certain Provisions in the Declaration of Trust and By-Laws")
nonassessable. The Placement Shares have been duly authorized for issuance and
sale pursuant to this Agreement and when issued and delivered against payment
therefore in accordance with the Agreement will have been validly issued and
will be fully paid and nonassessable (except as described in the Prospectus
under the caption "Certain Provisions in the Declaration of Trust and By-Laws").
No person is entitled to any preemptive or other similar rights with respect to
the Placement Shares under the Declaration of Trust or Bylaws of the Fund or
Massachusetts law or, to counsel's knowledge, otherwise.
iv. The Fund is duly registered with the Commission under the Investment
Company Act as a non-diversified, closed-end management investment company and
all action under the Act and the Investment Company Act, as the case may be,
necessary to make the public offering and consummate the sale of the Placement
Shares as provided in the Agreement has or will have been taken by the Fund. To
such counsel's knowledge, the Fund has not received any notice from the
Commission pursuant to Section 8(e) of the Investment Company Act with respect
to the registration of the Fund with the Commission under the Investment Company
Act.
v. The Fund has full power and authority to enter into this Agreement and
each of the Fund Agreements and to perform all of the terms and provisions
thereof to be carried out by it and (A) each Fund Agreement and the Agreement
has been duly and validly authorized, executed and delivered by the Fund, (B)
each Fund Agreement and the Agreement complies in all material respects with all
applicable provisions of the Act, the Investment Company Act and the Advisers
Act, as the case may be, and (C) assuming due authorization, execution and
delivery by the other parties thereto, each Fund Agreement constitutes the
legal, valid and binding obligation of the Fund enforceable against the Fund in
accordance with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
vi. None of (A) the execution and delivery by the Fund of the Agreement or
the Fund Agreements, (B) the issue, sale and delivery by the Fund of the
Placement Shares as contemplated by the Agreement and (C) the performance by the
Fund of its obligations under the Agreement and the Fund Agreements or
consummation by the Fund of the other transactions contemplated by the Agreement
or the Fund Agreements result in (i) the creation or imposition of any lien,
charge or encumbrance upon the assets of the Fund pursuant to any agreement or
instrument to which the Fund is a party or by which the Fund is bound that is
described in the Registration Statement or the Prospectus or filed as an exhibit
to the Registration Statement, or (ii) conflicts with or will conflict with, or
results or will result in a breach or violation of (a) the Declaration of Trust
or the By-laws of the Fund or (b) any agreement or instrument to which the Fund
is a party or by which the Fund is bound that is described in the Registration
Statement or the Prospectus or filed as an exhibit to the Registration Statement
or (c) any federal or State of Illinois statute, law or regulation (except we
express no opinion as to applicable state securities and blue sky laws, and
except that the indemnification provisions in the Agreement and the Fund
Agreements, insofar as they relate to indemnification for liabilities arising
under the Act, may be against public policy as expressed in the Act and
therefore unenforceable) or (d) order of any court, governmental
instrumentality, securities exchange or association or arbitrator, whether
foreign or domestic, specifically naming the Fund and known to us (provided that
we express no opinion with respect to any financial test or cross-default
provision in any such agreement).
vii. No consent, approval, authorization or order of any court (to our
knowledge) or governmental agency or body or securities exchange or association
is required by the Fund for the consummation by the Fund of the transactions to
be performed by the Fund or the performance by the Fund of all the terms and
provisions to be performed by or on behalf of it in each case as contemplated in
the Agreement and the Fund Agreements, except such as (A) have been obtained
under the Act and the Investment Company Act and (B) may be required under state
securities or "blue sky" or the NYSE in connection with the issuance and sale of
the Placement Shares pursuant to the Agreement.
viii. To our knowledge, there are no contracts or other documents which
are required to be described in the Registration Statement and the Prospectus or
filed as exhibits to the Registration Statement by the Act or the Investment
Company Act which have not been described in the Registration Statement and the
Prospectus or filed as exhibits to the Registration Statement;
ix. The sections in the Prospectus entitled "Certain Provisions in the
Declaration of Trust and By-laws" and "Federal Tax Matters" and the section in
the Statement of Additional Information entitled "Federal Income Tax Matters" is
a fair and accurate summary of the principal United States federal income tax
rules currently in effect applicable to the Fund and to the purchase, ownership
and disposition of the Placement Shares, subject to the qualifications therein.
x. To our knowledge, there is no legal or governmental proceeding pending
against the Fund that is either (i) required to be described in the Registration
Statement or Prospectus that is not already described or (ii) asserts the
invalidity of any of the Fund Agreements.
xi. The Registration Statement, the Prospectus and each amendment or
supplement to the Registration Statement and/or the Prospectus, as of their
respective effective or issue dates (other than the financial statements, the
notes thereto, and supporting schedules included therein or omitted therefrom,
as to which we express no view) and the Fund Agreements complied or comply in
all material respects to the requirements of the Act and the Investment Company
Act
In addition, we have participated in conferences with officers and other
representatives of the Fund, representatives of the independent registered
public accountants for the Fund, and representatives of Xxxxx and their counsel,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed. We have not independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the information included in the Registration Statement and the
Prospectus. Based solely on the participation and discussion described above,
however, nothing has come to our attention that would lead us to believe that
the Registration Statement (except for financial statements and schedules and
other financial or accounting data included therein, as to which we need make no
statement) at the time such Registration Statement became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus (except for financial statements and
schedules and other financial or accounting data included therein, as to which
we need make no statement), at the time filed pursuant to Rule 497 and on the
date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
EXHIBIT 7(K)(2)
MATTERS TO BE COVERED BY
FUND COUNSEL OPINION UPON SEMI-ANNUAL REPORT FILING
We have participated in conferences with officers and other
representatives of the Fund, representatives of the independent registered
public accountants for the Fund, and representatives of Xxxxx and their counsel,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed. We have not independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the information included in the Registration Statement and the
Prospectus. Based solely on the participation and discussion described above,
however, nothing has come to our attention that would lead us to believe that
the Registration Statement (except for financial statements and schedules and
other financial or accounting data included therein, as to which we need make no
statement) at the time such Registration Statement became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus (except for financial statements and
schedules and other financial or accounting data included therein, as to which
we need make no statement), at the time filed pursuant to Rule 497 and on the
date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
EXHIBIT 7(L)(I)
FORM OF OPINION OF ADVISER COUNSEL
i. The Adviser has been duly formed and is validly existing as a limited
partnership under the laws of the State of Illinois with full power and
authority to own or lease all of the assets owned or leased by it and to conduct
its business as described in the Registration Statement and Prospectus and to
enter into and perform its obligations under the Agreement, the Advisory
Agreement and the Sub-Advisory Agreement (collectively, the "Adviser
Agreements").
ii. The Adviser is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment adviser for the Fund as contemplated by the
Advisory Agreement, the Registration Statement and the Prospectus. To such
counsel's knowledge, there does not exist any pending or threatened proceeding
which could reasonably be expected to adversely affect the registration of the
Adviser with the Commission.
iii. The Adviser has full power and authority to enter into each of the
Adviser Agreements and to carry out all the terms and provisions thereof to be
carried out by it, and each of the Adviser Agreements has been duly and validly
authorized, executed and delivered by the Adviser; each Adviser Agreement
complies in all material respects with all provisions of the Securities Act,
Investment Company Act and the Advisers Act; and assuming due authorization,
execution and delivery by the other parties thereto, each of the Advisory
Agreement and the Sub-Advisory Agreement constitutes a legal, valid and binding
obligation of the Adviser, enforceable against the Adviser in accordance with
its terms, subject, as to enforcement, to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law).
iv. Neither (A) the execution and delivery by the Adviser of any Adviser
Agreement nor (B) the consummation by the Adviser of the transactions
contemplated by, or the performance of its obligations under any Adviser
Agreement conflicts or will conflict with, or results or will result in a breach
of, the organizational documents of the Adviser or any agreement or instrument
known to us to which the Adviser is a party or by which the Adviser is bound, or
any federal or Illinois law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association or arbitrator,
whether foreign or domestic, specifically naming the Adviser and known to us,
except in each case for such conflicts or breaches which would not reasonably be
expected, either alone or in the aggregate, to have a material adverse effect on
the Adviser's ability to perform its obligations under the Adviser Agreements,
provided, that we express no opinion with respect to any financial test or
cross-default provision in any such Adviser Agreement.
v. No consent, approval, authorization or order of any court (to our
knowledge), of any governmental agency or body or securities exchange or
association, whether foreign or domestic, is required for the consummation by
the Adviser of the transactions contemplated in, or the performance by the
Adviser of its obligations under, any Adviser Agreement, except (i) such as have
been obtained under the federal securities laws and (ii) may be required by the
NYSE-Amex or under state securities or "blue sky" laws, in connection with the
issuance and sale of the Placement Shares pursuant to the Agreement.
vi. To our knowledge, there is no legal or governmental proceeding pending
against the Adviser that is either (i) required to be described in the
Registration Statement or Prospectus that is not already described, (ii) which
would, under Section 9 of the Investment Company Act, make the Adviser
ineligible to act as the Fund's investment adviser or (iii) asserts the
invalidity of any of the Advisor Agreements.
vii. There are no contracts or other documents which are required to be
described in the Registration Statement and the Prospectus or filed as exhibits
to the Registration Statement by the Securities Act or the Investment Company
Act which relate to the Adviser and have not been described in the Registration
Statement and the Prospectus or filed as exhibits to the Registration Statement.
viii. The description in the Prospectus of the Adviser and its business
complies in all material respects with all applicable requirements of the
Securities Act and the Investment Company Act.
In addition, we have participated in conferences with officers and other
representatives of the Adviser, representatives of the independent registered
public accountants for the Fund, and representatives of Xxxxx and their counsel,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed. We have not independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the information included in the Registration Statement and the
Prospectus. Based solely on the participation and discussions described above,
however, nothing has come to our attention that would lead us to believe that
solely with respect to the description of the Adviser, the Registration
Statement (except for financial statements and schedules and other financial or
accounting data included therein, as to which we need make no statement) at the
time such Registration Statement became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; or that the
Prospectus (except for financial statements and schedules and other financial or
accounting data included therein, as to which we need make no statement), at the
time filed pursuant to Rule 497 and on the date hereof, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
EXHIBIT 7(L)(II)
FORM OF OPINION OF SUB-ADVISER COUNSEL
i. The Sub-Adviser has been duly formed and is validly existing as a
limited liability company under the laws of the State of Delaware with full
power and authority to conduct its business as described in the Registration
Statement and Prospectus and to enter into and perform its obligations under the
Agreement and the Sub-Advisory Agreement (collectively, "Sub-Adviser
Agreements").
ii. The Sub-Adviser is duly registered as an investment adviser under the
Advisers Act and, to our knowledge, is not prohibited by the Advisers Act or the
Investment Company Act from acting as investment adviser for the Fund as
contemplated by the Sub-Advisory Agreement, the Registration Statement and the
Prospectus. To such counsel's knowledge, there does not exist any pending or
threatened proceeding, which could reasonably be expected to adversely affect
the registration of the Sub-Adviser with the Commission.
iii. The Sub-Adviser has full power and authority to enter into the
Sub-Adviser Agreements and to carry out the terms and provisions thereof to be
carried out by it, and each of the Sub-Adviser Agreements has been duly and
validly authorized, executed and delivered by the Sub-Adviser; each Sub-Adviser
Agreement complies in all material respects with the Securities Act, the
Investment Company Act and the Advisers Act; and assuming due authorization,
execution and delivery by the other parties thereto, each of the Sub-Adviser
Agreements constitutes a legal, valid and binding obligation of the Sub-Adviser,
enforceable against the Sub-Adviser in accordance with its terms, (1) subject,
as to enforcement, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law) and (2) except as rights to indemnity thereunder may be limited by federal
or state securities laws.
iv. Neither (A) the execution and delivery by the Sub-Adviser of any
Sub-Adviser Agreement nor (B) the consummation by the Sub-Adviser of the
transactions contemplated by, or the performance of its obligations under, any
Sub-Adviser Agreement conflicts or will conflict with, or results or will result
in a breach of, the organizational documents of the Sub-Adviser or any agreement
or instrument known to us to which the Sub-Adviser is a party or by which the
Sub-Adviser is bound, or any federal or Delaware law, rule or regulation, or
order of any court, governmental instrumentality, securities exchange or
association or arbitrator, whether foreign or domestic, specifically naming the
Sub-Adviser and known to us, except in each case for such conflicts or breaches
which would not reasonably be expected, either alone or in the aggregate, have a
material adverse effect on the Sub-Adviser's ability to perform its obligations
under the Sub-Adviser Agreements; provided that we express no opinion with
respect to any financial test or cross-default provision in any such agreement
or instrument.
v. No consent, approval, authorization or order of any court (to our
knowledge), governmental agency or body or securities exchange or association,
whether foreign or domestic, is required for the consummation by the Sub-Adviser
of the transactions contemplated in, or the performance by the Sub-Adviser of
its obligations under, any Sub-Adviser Agreement, except (i) such as have been
obtained under the federal securities laws and (ii) may be required by state
securities or "blue sky" laws, in connection with the issuance and sale of the
Placement Shares pursuant to the Agreement.
vi. To our knowledge, there is no legal or governmental proceeding pending
or threatened against the Sub-Adviser that is either (i) required to be
described in the Registration Statement or Prospectus that is not already
described, (ii) which would, under Section 9 of the Investment Company Act, make
the Sub-Adviser ineligible to act as the Fund's investment adviser or (iii)
asserts the invalidity of any of the Sub-Adviser Agreements.
vii. There are no contracts or other documents that are required to be
described in the Registration Statement and the Prospectus or filed as exhibits
to the Registration Statement by the Securities Act or the Investment Company
Act that relate to the Sub-Adviser and have not been described in the
Registration Statement and the Prospectus or filed as exhibits to the
Registration Statement.
viii. The description in the Prospectus of the Sub-Adviser and its
business complies in all material respects with all applicable requirements of
the Securities Act and the Investment Company Act.
In addition, we have participated in discussions with representatives of
the Sub-Adviser where the contents of the Registration Statement and Prospectus,
so far as they relate to the Sub-Adviser, were discussed and we have reviewed
certain records and documents of the Sub-Adviser. We have not independently
verified and are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the information and statements included in
the Registration Statement and the Prospectus. Based solely on the discussions
described above, however, nothing has come to our attention that would lead us
to believe that solely with respect to the description of the Sub-Adviser, the
Registration Statement (except for financial statements and schedules and other
financial or accounting data included therein, as to which we need make no
statement) at the time such Registration Statement became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus (except for financial statements and
schedules and other financial or accounting data included therein, as to which
we need make no statement), at the time filed pursuant to Rule 497 and on the
date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
EXHIBIT 7(M)
_________ ___, 20__
JonesTrading Institutional Services LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This certificate of First Trust Specialty Finance and Financial
Opportunities Fund, a Massachusetts business trust (the "Fund"), is being
delivered on behalf of the Fund by [_______], in connection with the Sales
Agreement, dated February __, 2015, among the Fund, First Trust Advisors L.P.,
an Illinois limited partnership, Confluence Investment Management LLC, a
Delaware limited liability company, and JonesTrading Institutional Services LLC
(the "Agent") in relation to the issuance and sale from time to time of shares
of up to 1,400,000 of the Fund's common shares of beneficial interest through
the Agent.
I hereby certify that I am the duly elected Chief Financial Officer of the
Fund.
I have reviewed the Fund's unaudited semi-annual financial statements and
financial highlights as of and for the semi-annual period ended May 31,
201_ attached hereto as Exhibit A and included in the Fund's semi-annual
report on Form N-CSRS (the "Semi-Annual Financial Statements") and for
purposes of this certification, have inquired of other officials of the
Fund, as necessary, who have responsibility for certain financial and
accounting matters.
Nothing has come to my attention based on my review of the Semi-Annual
Financial Statements and my inquiries of other Fund officials as stated
above, that causes me to believe that:
(a) any material modifications should be made to the Semi-Annual
Financial Statements for them to be in conformity with
accounting principles generally accepted in the United States
of America; and
(b) the Semi-Annual Financial Statements do not comply as to form
in all material respects with the applicable accounting
requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, and the rules
and regulations adopted thereunder by the Securities and
Exchange Commission.
Signed by me this _____ day of __________, 20__.
Name:
----------------------------
Title: Chief Financial Officer
