First Trust/Four Corners Senior Floating Rate Income Fund II
(a Massachusetts business trust)
4,000 Auction Market Preferred Stock ("AMPS")
2,000 Shares [___]%, Series A
2,000 Shares [___]%, Series B
Liquidation Preference $25,000 per share
FORM OF PURCHASE AGREEMENT
August [_], 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
First Trust/Four Corners Senior Floating Rate Income Fund II, a
Massachusetts business trust (the "Fund"), proposes, upon the terms and
conditions set forth herein, to issue and sell an aggregate of 4,000 Shares of
its Auction Market Preferred Shares (the "AMPS"). The AMPS will be authorized
by, and subject to the terms and conditions of, the Declaration of Trust, as
amended through [__________], 2004 (the "Charter"), in the form filed as an
exhibit to the Registration Statement referred to in the second following
paragraph to this Agreement, as the same may be amended from time to time. The
Fund and the Fund's investment adviser, First Trust Advisors L.P., an Illinois
limited partnership (the "Investment Adviser") and its investment sub-adviser,
Four Corners Capital Management, LLC, a Delaware limited liability company (the
"Sub-Adviser" and together with the Investment Adviser, the "Advisers") each
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ is acting as representative (in such capacity,
the "Representative"), with respect to the issue and sale by the Fund and the
purchase by the Underwriters, acting severally and not jointly, of the
respective number of AMPS set forth in said Schedule A.
The Fund understands that the Underwriters propose to make a public
offering of the AMPS as soon as the Representative deems advisable after this
Agreement has been executed and delivered.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-115414 and No.
811-21539) covering the registration of the AMPS under the Securities Act of
1933, as amended (the "1933 Act"), including the related preliminary prospectus
or prospectuses, and a notification on Form N-8A of registration (the "1940 Act
Notification") of the Fund as an investment company under the Investment Company
Act of 1940, as amended (the "1940 Act"), and the rules and regulations of the
Commission under the 1933 Act and the 1940 Act (the "Rules and Regulations").
Promptly after execution and delivery of this Agreement, the Fund will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the Rules and Regulations and paragraph (c) or (h) of Rule 497
("Rule 497") of the Rules and Regulations or (ii) if the Fund has elected to
rely upon Rule 434 ("Rule 434") of the Rules and Regulations, prepare and file a
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term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and
Rule 497. The information included in any such prospectus or in any such Term
Sheet, as the case may be, that was omitted from such registration statement at
the time it became effective but that is deemed to be part of such registration
statement at the time it became effective, if applicable, (a) pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b)
pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information."
Each prospectus used before such registration statement became effective, and
any prospectus that omitted, as applicable, the Rule 430A Information or the
Rule 434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, including in each case any statement
of additional information incorporated therein by reference, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto and schedules thereto at the time it became effective and including the
Rule 430A Information or the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the Rules and Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
prospectus in the form first furnished to the Underwriters for use in connection
with the offering of the AMPS, including the Statement of Additional Information
incorporated therein by reference, is herein called the "Prospectus." If Rule
434 is relied on, the term "Prospectus" shall refer to the preliminary
prospectus dated August [_], 2004 together with the Term Sheet and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Advisers. The
Fund and the Advisers jointly and severally represent and warrant to each
Underwriter as of the date hereof and as of the Closing Time referred to in
Section 2(c) hereof, and agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act, or order of
suspension or revocation of registration pursuant to Section 8(e) of
the 1940 Act, and no proceedings for any such purpose have been
instituted or are pending or, to the knowledge of the Fund or the
Advisers, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with in all material respects.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time, the Registration Statement,
the Rule 462(b) Registration Statement, the notification of Form N-8A
and any amendments and supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act, the 1940
Act and the Rules and Regulations and did not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
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supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time, included or will
include any untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Fund will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially
different," as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
Each preliminary prospectus and the prospectus filed as part of
the effective Registration Statement or as part of any amendment
thereto, or filed pursuant to Rule 497 under the 1933 Act, complied
when so filed in all material respects with the Rules and Regulations
and each preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required in
connection with the offering and sale of the AMPS, the Fund has
complied or will comply with the requirements of Rule 111 under the
Rules and Regulations relating to the payment of filing fees thereof.
The foregoing representations in this Section 1(a)(i) do not
apply to statements or omissions relating to the Underwriters made in
reliance on and in conformity with information furnished in writing to
the Fund by or on behalf of the Underwriters or their agents expressly
for use in the Registration Statement, the 462(b) Registration
Statement, the Prospectus or the preliminary prospectus (or any
amendment or supplement to any of the foregoing), or the descriptions
of each of the Advisers (referred to in Sections (1)(b)(iii) and
1(c)(iii) of this Agreement) contained in the foregoing.
(ii) Independent Accountants. As of the date of the report of
the independent accountants contained in the Registration Statement,
the accountants who certified the statement of assets and liabilities
included in the Registration Statement are independent public
accountants as required by the 1933 Act and the Rules and Regulations.
(iii) Financial Statements. The statement of assets and
liabilities included in the Registration Statement and the Prospectus,
together with the related notes, presents fairly in all material
respects the financial position of the Fund at the date indicated; said
statement has been prepared in conformity with U.S. generally accepted
accounting principles ("GAAP").
(iv) Expense Summary. The information set forth in the
Prospectus in the fee table contained in the section of the Prospectus
entitled "Summary of Fund Expenses" has been prepared in accordance
with the requirements of Form N-2 and to the extent estimated or
projected, such estimates or projections are reasonably believed to be
attainable and reasonably based.
(v) No Material Adverse Change. Since the respective dates 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 financial condition, earnings or
business affairs of the Fund, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Fund, other than those in the
ordinary course of business, which are material with respect to the
Fund, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Fund on any class of its capital shares.
(vi) Good Standing of the Fund. The Fund has been duly organized
and is validly existing as a business trust in good standing under the
laws of The Commonwealth of Massachusetts and has power and authority
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to own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement; and the Fund is duly qualified to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not be
expected to result in a Material Adverse Effect.
(vii) No Subsidiaries. The Fund has no subsidiaries.
(viii) Investment Company Status. The Fund is duly registered
with the Commission under the 1940 Act as a closed-end non-diversified
management investment company, and no order of suspension or revocation
of such registration has been issued or proceedings thereunder
initiated or, to the knowledge of the Fund or any Adviser, threatened
by the Commission.
(ix) Officers and Trustees. No person is serving or acting as an
officer, trustee or investment adviser of the Fund except in accordance
with the provisions of the 1940 Act and the Rules and Regulations and
the Investment Advisers Act of 1940, as amended (the "Advisers Act"),
and the rules and regulations of the Commission promulgated under the
Advisers Act (the "Advisers Act Rules and Regulations"). Except as
disclosed in the Registration Statement and the Prospectus (or any
amendment or supplement to either of them), no trustee of the Fund is
(A) an "interested person" (as defined in the ▇▇▇▇ ▇▇▇) of the Fund or
(B) an "affiliated person" (as defined in the ▇▇▇▇ ▇▇▇) of any
Underwriter.
(x) Capitalization. The authorized, issued and outstanding
shares of beneficial interest of the Fund are as set forth in the
Prospectus. All issued and outstanding shares of beneficial interest of
the Fund have been duly authorized and validly issued and are fully
paid and non-assessable, and have been offered and sold or exchanged by
the Fund in compliance with all applicable laws (including, without
limitation, federal and state securities laws); none of the outstanding
shares of beneficial interest of the Fund was issued in violation of
the preemptive or other similar rights of any securityholder of the
Fund.
(xi) Authorization and Description of AMPS. The AMPS to be
purchased by the Underwriters from the Fund have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement
and, when issued and delivered by the Fund pursuant to this Agreement
against payment of the consideration set forth herein, will be validly
issued and fully paid and non-assessable. The AMPS conform to all
statements relating thereto contained in the Prospectus and such
statements conform to the rights set forth in the instruments defining
the same; no holder of the AMPS will be subject to personal liability
by reason of being such a holder; and the issuance of the AMPS is not
subject to the preemptive or other similar rights of any securityholder
of the Fund.
(xii) Absence of Defaults and Conflicts. The Fund is not in
violation of its declaration of trust or by-laws, each as amended from
time to time, or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other 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 (collectively, "Agreements and Instruments") except for
such violations or defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement,
the Investment Management Agreement, the Sub-Advisory Agreement, the
Administration and Accounting Services Agreement, the Custodian
Services Agreement, the Transfer Agency Services Agreement and the
Auction Agency Agreement referred to in the Registration Statement (as
used herein, the "Management Agreement," the "Sub-Advisory Agreement,"
the "Administration Agreement," the "Custodian Agreement," the
4
"Transfer Agency Agreement," and the "Auction Agency Agreement,"
respectively) and the consummation of the transactions contemplated
herein and in the Registration Statement (including the issuance and
sale of the AMPS and the use of the proceeds from the sale of the AMPS
as described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Fund with its obligations hereunder have been duly
authorized by all necessary Fund actions and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Fund pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the declaration of trust
or by-laws of the Fund, each as amended from time to time, or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Fund or any of its assets,
properties or operations, except for such violations that would not
have a Material Adverse Effect. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Fund.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Fund or any Adviser, threatened, against or
affecting the Fund, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
would reasonably be expected to result in a Material Adverse Effect, or
which would prohibit or materially delay the consummation of the
transactions contemplated in this Agreement or the performance by the
Fund of its obligations hereunder.
(xiv) Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto by the 1933 Act, the 1940
Act or by the Rules and Regulations which have not been so described
and filed as required.
(xv) Possession of Intellectual Property. The Fund owns or
possesses, or can acquire on reasonable terms, or otherwise has rights
to, adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by the Fund, and the Fund has not
received any notice or is not otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property that has, or could reasonably be expected to
have, a material adverse effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is or will be necessary or required for the performance by the
Fund of its obligations hereunder, in connection with the offering,
issuance or sale of the AMPS hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained, or with respect to which the failure to so obtain
would not have a Material Adverse Effect, or as may be required under
the 1933 Act, the 1940 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or state securities laws.
5
(xvii) Possession of Licenses and Permits. The Fund possesses
such permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies
necessary to operate its properties and to conduct the business as
contemplated in the Prospectus, the Fund is in compliance with the
terms and conditions of all such Governmental Licenses, except where
the failure to so possess or comply would not have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force
and effect, except when the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and the Fund has not
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which if the subject of
an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xviii) Advertisements. Any advertising, sales literature or
other promotional material (including "prospectus wrappers" and "broker
kits") authorized in writing by or prepared by the Fund or the Advisers
used in connection with the public offering of the AMPS (collectively,
"Sales Material") does 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 light of the circumstances
in which they were made, not misleading. Moreover, all sales material
complied and will comply in all material respects with the applicable
requirements of the 1933 Act, the 1940 Act, the Rules and Regulations
and the rules and interpretations of the NASD, Inc. (the "NASD").
(xix) Subchapter M. The Fund intends to direct the investment of
the proceeds of the offering described in the Registration Statement in
such a manner as to comply with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended ("Subchapter M of the Code"
and the "Code," respectively), and intends to qualify as a regulated
investment company under Subchapter M of the Code.
(xx) Distribution of Offering Materials. The Fund has not
distributed and, prior to the later to occur of (A) the Closing Time
and (B) completion of the distribution of the AMPS, will not distribute
any offering material in connection with the offering and sale of the
AMPS other than the Registration Statement, a preliminary prospectus,
the Prospectus or the Sales Materials; provided, however, that in no
event shall this provision be applicable with respect to any offering
material distributed by any Underwriter without the consent of the Fund
or either Adviser.
(xxi) Accounting Controls. The Fund maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization and with the applicable
requirements of the 1940 Act, the Rules and Regulations and the Code;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain
accountability for assets and to maintain compliance with the books and
records requirements under the 1940 Act and the Rules and Regulations;
(C) access to assets is permitted only in accordance with the
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxii) Absence of Undisclosed Payments. To the Fund's knowledge,
neither the Fund nor any employee or agent of the Fund has made any
payment of funds of the Fund or received or retained any funds, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus (except as disclosed therein).
6
(xxiii) Material Agreements. This Agreement, the Management
Agreement, the Sub-Advisory Agreement, the Administration Agreement,
the Custodian Agreement, the Transfer Agency Agreement and the Auction
Agency Agreement have each been duly authorized by all requisite action
on the part of the Fund and executed and delivered by the Fund, as of
the dates noted therein, and each complies with all applicable
provisions of the 1940 Act in all material respects. Assuming due
authorization, execution and delivery by the other parties thereto,
each such agreement constitutes a valid and 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 public policy and except as
enforcement may be limited by equitable principles or by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws now or hereafter in effect relating to or affecting
creditors' rights and remedies generally (whether considered in a
proceeding in equity or at law).
(xxiv) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities of
the Fund registered pursuant to the Registration Statement or otherwise
registered by the Fund under the 1933 Act.
(xxv) Ratings. The AMPS have been, or prior to the Closing Date
will be, assigned a rating of "Aaa" by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") and "AAA" by Standard & Poor's Rating Group, a division of
the McGraw Hill Companies ("S&P").
(b) Representations and Warranties by the Investment Adviser. The
Investment Adviser represents and warrants to each Underwriter, and in the case
of paragraph (iii) also represent to the Fund, as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, as follows:
(i) Good Standing of the Investment Adviser. The Investment
Adviser has been duly organized and is validly existing and in good
standing as a limited partnership under the laws of the State of
Illinois with full limited partnership power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified to transact business
and is in good standing in each other jurisdiction in which such
qualification is required, except where failure to so qualify or to be
in good standing would not result in a material adverse effect.
(ii) Investment Adviser's Status. The Investment Adviser is duly
registered and in good standing with the Commission as an investment
adviser under the Advisers Act, and is not prohibited by the Advisers
Act or the 1940 Act, or the rules and regulations under such acts, from
acting under the Management Agreement for the Fund as contemplated by
the Prospectus.
(iii) Description of the Investment Adviser. The description of
the Investment Adviser in the Registration Statement and the Prospectus
(and any amendment or supplement to either of them) complied and comply
in all material respects with the provisions of the 1933 Act, the 1940
Act, the Advisers Act, the Rules and Regulations and the Advisers Act
Rules and Regulations and are true and correct and do not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(iv) Capitalization. The Investment Adviser has the financial
resources available to it necessary for the performance of its services
and obligations as contemplated in the Prospectus, this Agreement and
under the Management Agreement and the Sub-Advisory Agreement.
(v) Authorization of Agreements; Absence of Defaults and
Conflicts. This Agreement, the Management Agreement and the
Sub-Advisory Agreement have each been duly authorized, executed and
delivered by the Investment Adviser, and assuming due authorization,
7
execution and delivery by the other parties thereto, such Agreements
constitute valid and binding obligations of the Investment Adviser,
enforceable in accordance with their respective terms, except as rights
to indemnity and contribution hereunder may be limited by federal or
state securities laws and public policy and except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and general equitable principles (whether considered
in a proceeding in equity or at law); and neither the execution and
delivery of this Agreement, the Management Agreement or the
Sub-Advisory Agreement nor the performance by the Investment Adviser of
its obligations hereunder or thereunder will conflict with, or result
in a breach of any of the terms and provisions of, or constitute, with
or without the giving of notice or lapse of time or both, a default
under, any agreement or instrument to which the Investment Adviser is a
party or by which it is bound, the organizational documents of the
Investment Adviser, or to the Investment Adviser's knowledge, by any
law, order, decree, rule or regulation applicable to it of any
jurisdiction, court, federal or state regulatory body, administrative
agency or other governmental body, stock exchange or securities
association having jurisdiction over the Investment Adviser or its
properties or operations; and no consent, approval, authorization or
order of any court or governmental authority or agency is required for
the consummation by the Investment Adviser of the transactions
contemplated by this Agreement, the Management Agreement or the
Sub-Advisory Agreement, except as have been obtained or may be required
under the 1933 Act, the 1940 Act, the 1934 Act, the rules of the New
York Stock Exchange (the "NYSE") or state securities laws.
(vi) No Material Adverse Change. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not occurred
any event which should reasonably be expected to have a material
adverse effect on the ability of the Investment Adviser to perform its
obligations under this Agreement, the Management Agreement and each of
the Sub-Advisory Agreements.
(vii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Investment Adviser, threatened against or
affecting the Investment Adviser or any "affiliated person" (as such
term is defined in the ▇▇▇▇ ▇▇▇) of the Investment Adviser or any
partners, directors, officers or employees of the foregoing, whether or
not arising in the ordinary course of business, which might reasonably
be expected to result in any material adverse change in the financial
condition or earnings, business affairs or business prospects of the
Investment Adviser, materially and adversely affect the properties or
assets of the Investment Adviser or materially impair or adversely
affect the ability of the Investment Adviser to function as an
investment adviser or perform its obligations under the Management
Agreement and each of the Sub-Advisory Agreements, or which is required
to be disclosed in the Registration Statement and the Prospectus.
(viii) Absence of Violation or Default. The Investment Adviser
is not in violation of its organizational documents or in default under
any agreement, indenture or instrument, where such violation or
default would reasonably be expected to have a material adverse effect
on the ability of the Investment Adviser to function as an investment
adviser or perform its obligations under the Management Agreement and
each of the Sub-Advisory Agreements.
(c) Representations and Warranties by the Sub-Adviser. The Sub-Adviser
represents and warrants to each Underwriter, and in the case of paragraph (iii)
also represent to the Fund, as of the date hereof and as of the Closing Time
referred to in Section 2(c) hereof, as follows:
(i) Good Standing of the Sub-Adviser. The Sub-Adviser has been
duly organized and is validly existing and in good standing as a
limited liability company under the laws of the State of Delaware, with
full limited liability company power and authority to own, lease and
8
operate its properties and to conduct its business as described in the
Prospectus and the Sub-Adviser is duly qualified to transact business
and is in good standing in each other jurisdiction in which such
qualification is required, except where the failure to so qualify or to
be in good standing would not have a material adverse effect on the
ability of the Sub-Adviser to function as an investment adviser or
perform its obligations under the Sub-Advisory Agreement to which it is
a party.
(ii) The Sub-Adviser's Status. The Sub-Adviser is duly
registered and in good standing with the Commission as an investment
adviser under the Advisers Act, and is not prohibited by the Advisers
Act or the 1940 Act, or the rules and regulations under such acts, from
acting under the Sub-Advisory Agreement for the Fund as contemplated by
the Prospectus.
(iii) Description of the Sub-Adviser. The description of the
Sub-Adviser in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them) complied and comply in all
material respects with the provisions of the 1933 Act, the 1940 Act,
the Advisers Act, the Rules and Regulations and the Advisers Act Rules
and Regulations and do not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(iv) Capitalization. The Sub-Adviser has the financial
resources available to it necessary for the performance of its services
and obligations as contemplated in the Prospectus, this Agreement and
under the Sub-Advisory Agreement.
(v) Authorization of Agreements; Absence of Defaults and
Conflicts. This Agreement and the Sub-Advisory Agreement have each been
duly authorized, executed and delivered by the Sub-Adviser, and,
assuming due authorization, execution and delivery by the other parties
thereto, such agreements constitute valid and binding obligations of
the Sub-Adviser, enforceable against the Sub-Adviser in accordance with
their respective terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws and public
policy and except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights and remedies generally (whether
considered in a proceeding in equity or at law); and neither the
execution and delivery of this Agreement or the Sub-Advisory Agreement
nor the performance by the Sub-Adviser of its obligations hereunder or
thereunder will conflict with, or result in, a breach of any of the
terms and provisions of, or constitute, with or without the giving of
notice or lapse of time or both, a default under any agreement or
instrument to which the Sub-Adviser is a party or by which it is bound,
the organizational documents of the Sub-Adviser or, to the Sub-Adviser'
knowledge, by any law, order, decree, rule or regulation applicable to
it of any jurisdiction, court, federal or state regulatory body,
administrative agency or other governmental body, stock exchange or
securities association having jurisdiction over the Sub-Adviser or its
respective properties or operations; and no consent, approval,
authorization or order of any court or governmental authority or agency
is required for the consummation by the Sub-Adviser of the transactions
contemplated by this Agreement or the Sub-Advisory Agreement, except as
have been obtained or may be required under the 1933 Act, the 1940 Act,
the 1934 Act, the rules of the NYSE or state securities laws.
(vi) No Material Adverse Change. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not occurred
any event which should reasonably be expected to have a material
adverse effect on the ability of the Sub-Adviser to perform its
obligations under this Agreement and the Sub-Advisory Agreement to
which it is a party.
9
(vii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Sub-Adviser, threatened against or affecting the
Sub-Adviser or any "affiliated person" (as such term is defined in the
▇▇▇▇ ▇▇▇) of the Sub-Adviser or any partners, directors, officers or
employees of the foregoing, whether or not arising in the ordinary
course of business, which would reasonably be expected to have a
material adverse effect on the ability of the Sub-Adviser to function
as an investment adviser or perform its obligations under the
Sub-Advisory Agreement to which it is a party, or which is required to
be disclosed in the Registration Statement and the Prospectus.
(viii) Absence of Violation or Default. the Sub-Adviser is not
in violation of its organizational documents or in default under any
agreement, indenture or instrument, where such violation or default
would reasonably be expected to have a material adverse effect on the
ability of the Sub-Adviser to function as an investment adviser or
perform its obligations under the Sub-Advisory Agreement to which it is
a party.
(d) Officers' Certificates. Any certificate signed by any officer of
the Fund or any Adviser delivered to the Representative or to counsel for the
Underwriters shall be deemed a representation and warranty by the Fund or such
Adviser, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) AMPS. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Fund
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Fund, at the
price per share set forth in Schedule B, the number of AMPS set forth in
Schedule A opposite the name of such Underwriter, plus any additional number of
AMPS which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) Commission. The Fund agrees to pay to the Underwriters a commission
set forth in Schedule B, as compensation to the Underwriters for their
commitments under this Agreement.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the AMPS shall be made at the offices of ▇▇▇▇▇▇▇▇ Chance US
LLP, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or at such other place as
shall be agreed upon by the Representative and the Fund, at 10:00 A.M. (Eastern
time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time)
on any given day) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than
ten business days after such date as shall be reasonably agreed upon by the
Representative and the Fund (such time and date of payment and delivery being
herein called "Closing Time").
Payment shall be made to the Fund by wire transfer of immediately
available funds to a bank account designated by the Fund, against delivery to
the Representative for the respective accounts of the Underwriters of
certificates for the AMPS to be purchased by them. It is understood that each
Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for the AMPS
that it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the AMPS to be purchased by any Underwriter
whose funds have not been received by the Closing Time, but such payment shall
not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the AMPS shall be in
such denominations and registered in such names as the Representative may
request in writing at least one full business day before the Closing Time. The
certificates for the AMPS will be made available for examination and packaging
10
by the Representative in the City of New York not later than 10:00 A.M. (Eastern
time) on the business day prior to the Closing Time.
SECTION 3. Covenants.
(a) The Fund and the Advisers, jointly and severally, covenant with
each Underwriter as follows:
(i) Compliance with Securities Regulations and Commission
Requests. The Fund, subject to Section 3(a)(ii), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Representative promptly, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the AMPS for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Fund will promptly effect the filings
necessary pursuant to Rule 497 and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 497 was received for filing by the
Commission and, in the event that it was not, it will promptly file
such prospectus. The Fund will make reasonable commercial efforts to
prevent the issuance of any stop order, or order of suspension or
revocation of registration pursuant to Section 8(e) of the 1940 Act,
and, if any such stop order or order of suspension or revocation of
registration is issued, to obtain the lifting thereof at the earliest
possible moment.
(ii) Filing of Amendments. The Fund will give the Representative
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, will furnish the Representative with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use
any such document to which the Representative or counsel for the
Underwriters shall reasonably object in writing.
(iii) Delivery of Registration Statements. The Fund has
furnished or will deliver to the Representative and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) and a
signed copy of all consents and certificates of experts, and will also
deliver to the Representative, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(iv) Delivery of Prospectuses. The Fund hereby consents to the
use by each Underwriter of any preliminary prospectus delivered by the
Fund to the Underwriter for purposes permitted by the 1933 Act. The
Fund will furnish to each Underwriter, without charge, during a period
up to 180 days following the Closing Date, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the
11
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(v) Continued Compliance with Securities Laws. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the AMPS, any event shall occur or condition
shall exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters or for the Fund, to amend the
Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the Rules and Regulations, the Fund will promptly prepare and file with
the Commission, subject to Section 3(a)(ii), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Fund will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may
reasonably request.
(vi) Blue Sky Qualifications. The Fund will use its reasonable
best efforts, subject to the reasonable cooperation of the
Underwriters, to qualify the AMPS for offering and sale under the
applicable securities laws of such states and other jurisdictions of
the United States as the Representative and the Fund may designate and
to maintain such qualifications in effect for a period of not less than
one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided,
however, that in no event shall the Fund be obligated to file any
general consent to service of process or to qualify as a foreign
business trust or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the AMPS have been
so qualified, the Fund will file such statements and reports as may be
required by the laws of such jurisdiction to continue such
qualification, if any, in effect for a period of not less than one year
from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(vii) Rule 158. The Fund will make generally available to its
securityholders as soon as practicable an earnings statement, if
applicable, for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Fund will use the net proceeds
received by it from the sale of the AMPS substantially in the manner
specified in the Prospectus under "Use of Proceeds".
(ix) Reporting Requirements. The Fund, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1940 Act and the 1934 Act within the time
periods required by the 1940 Act and the Rules and Regulations and the
1934 Act and the rules and regulations of the Commission thereunder,
respectively.
(x) Subchapter M. The Fund intends to comply with the
requirements of Subchapter M of the Code to qualify as a regulated
investment company under the Code.
(xi) No Manipulation of Market for AMPS. The Fund will not (a)
take, directly or indirectly, any action designed to cause or to result
in, or that 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 AMPS in violation of federal or
state securities laws, and (b) until the Closing Date, (i) sell, bid
for or purchase the AMPS or pay any person any compensation for
12
soliciting purchases of the AMPS or (ii) pay or agree to pay to any
person any compensation for soliciting another to purchase any other
securities of the Fund.
(xii) Rule 462(b) Registration Statement. If the Fund elects to
rely upon Rule 462(b), the Fund shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) by 10:00
A.M., Washington, D.C. time, on the date of this Agreement, and the
Fund shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the 1933 Act.
(xiii) Accountant's Certificate. The Fund will furnish to the
Underwriters, on the date on which delivery is made to the Rating
Agencies, the Accountant's Certificate (as defined in the Charter)
corresponding to the Certificate of Dividend Coverage and Certificate
of Eligible Asset Coverage (as defined in the Charter) for the first
Valuation Date (as defined in the Charter) following the Closing Time.
(b) Except as provided in this Agreement, the Fund will not sell, contract
to sell or otherwise dispose of any of its preferred shares of
beneficial interest of the same series as the AMPS or any securities
convertible into or exercisable or exchangeable for its preferred
shares of beneficial interest of the same series as the AMPS, or grant
any options or warrants to purchase its preferred shares of beneficial
interest of the same series as the AMPS, for a period of 180 days after
the date of the Prospectus, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the AMPS, (iii) the preparation, issuance and delivery of the certificates
for the AMPS to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
AMPS to the Underwriters, (iv) the fees and disbursements of the Fund's counsel,
accountants and other advisers, (v) the qualification of the AMPS under
securities laws in accordance with the provisions of Section 3(a)(vi) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus,
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the AMPS and (ix) the printing of any sales material.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)
hereof, the Fund and each of the Advisers, jointly and severally, agree that
they shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to
the accuracy of the representations and warranties of the Fund and each of the
Advisers contained in Section 1 hereof or in certificates of any officer of the
Fund or each of the Advisers delivered pursuant to the provisions hereof, to the
performance by the Fund and each of the Advisers of their respective covenants
and other obligations hereunder, and to the following further conditions:
13
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective or will have become effective by 5:30 p.m., New York City time on the
date hereof, and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act, no notice
or order pursuant to Section 8(e) of the 1940 Act shall have been issued, and no
proceedings with respect to either shall have been initiated or threatened by
the Commission, and any request on the part of the Commission for additional
information shall have been complied with or waived to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance with
Rule 497 (or a post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of Rule
430A or a certificate must have been filed in accordance with Rule 497(j)) or,
if the Fund has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 497.
(b) Opinion of Counsel for the Fund and the Advisers. At Closing Time,
the Representative shall have received the favorable opinions, dated as of
Closing Time, of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ LLP, counsel for the Fund and First Trust,
substantially in the forms set forth in Exhibit A with respect to the Fund and
Exhibit B with respect to the Investment Adviser, and of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP, counsel for the Sub-Adviser, substantially in the form set forth
in Exhibit C, together with signed or reproduced copies of such letters for each
of the other Underwriters. In giving such opinion such counsel may rely, as to
matters governed by the laws of jurisdictions other than the law of the State of
New York and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representative. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Fund and the Advisers and
certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (i), (ii), (vi), (vii) (solely
as to preemptive or other similar rights arising by operation of law or under
the charter or bylaws of the Fund), (viii) through (x), inclusive, (xiv) (solely
as to the information in the Prospectus under "Description of AMPS") and the
last paragraph of Exhibit A hereto. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the law
of the State of New York and the federal law of the United States, upon the
opinions of counsel satisfactory to the Representative. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Fund and
the Advisers and certificates of public officials.
(d) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the financial condition,
earnings or business affairs of the Fund, whether or not arising in the ordinary
course of business, and the Representative shall have received a certificate of
a duly authorized officer of the Fund and of the chief financial or chief
accounting officer of the Fund and of the President or a Vice President or
Managing Director of each Adviser, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Sections 1(a), (b) and (c) hereof, as applicable, are true and
correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) each of the Fund and the Advisers, respectively, has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, (iv) with respect to the
certificate by an officer of each Adviser only, there has been no material
adverse change in the financial condition, earnings or business affairs of such
Adviser, whether or not arising in the ordinary course of business, and (v) with
respect to the Fund only, no stop order suspending the effectiveness of the
Registration Statement, or order of suspension or revocation of registration
14
pursuant to Section 8(e) of the 1940 Act, has been issued and no proceedings for
any such purpose have been instituted or are pending or are contemplated by the
Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from Deloitte & Touche LLP a
letter dated such date, in form and substance satisfactory to the
Representative, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representative
shall have received from Deloitte & Touche LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(g) Rating. The Fund shall have delivered and you shall have received
evidence satisfactory to you that the AMPS are rated 'Aaa' by ▇▇▇▇▇'▇ and 'AAA'
by S&P as of the Closing Date, and there shall not have been given any notice of
any intended or potential downgrading, or of any review for a potential
downgrading, in the rating by ▇▇▇▇▇'▇ or by Fitch accorded to the AMPS or any
other securities issued by the Fund.
(h) Asset Coverage. As of the Closing Date and assuming the receipt of
the net proceeds from the sale of the AMPS, the 1940 Act Preferred Shares Asset
Coverage and the Preferred Shares Basic Maintenance Amount (each as defined in
the Charter) each will be met.
(i) Additional Documents. At Closing Time, counsel for the Underwriters
shall have been furnished with such other documents as they may require and as
are customarily provided for the purpose of enabling them to pass upon the
issuance and sale of the AMPS as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the Fund
and the Advisers in connection with the organization and registration of the
Fund under the 1940 Act and the issuance and sale of the AMPS as herein
contemplated shall be satisfactory in form and substance to the Representative
and counsel for the Underwriters.
(j) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled by the Fund or the Advisers when and as
required to be fulfilled, this Agreement may be terminated by the Representative
by notice to the Fund at any time at or prior to Closing Time, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7, 8 and 13 shall survive
any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Fund and the Advisers, jointly
and severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, as follows:
(i) 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 the Rule
430A Information and the Rule 434 Information, if applicable, 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 preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
15
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;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(e) below) any such settlement is effected
with the written consent of the Fund; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), 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 (i) or (ii) 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 or an
Adviser by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
further, that the indemnity agreement contained in this Section 6(a) shall not
inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such loss,
liability, claim, damage and expense purchased the Securities which are the
subject thereof if the Prospectus corrected any such alleged untrue statement or
omission and if such Prospectus was delivered to such Underwriter in a timely
manner and if such Underwriter failed to send or give a copy of the Prospectus
to such person at or prior to the written confirmation of the sale of such
Securities to such person.
(b) Indemnification of the Fund, Advisers, Trustees, Directors and
Officers. Each Underwriter severally agrees to indemnify and hold harmless the
Fund and the Advisers, their respective trustees and directors, each of the
Fund's officers who signed the Registration Statement, and each person, if any,
who controls the Fund or an Adviser within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Fund or the Advisers by
such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Indemnification for Marketing Materials. In addition to the
foregoing indemnification, the Fund and the Advisers also, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 6(a),
as limited by the proviso set forth therein, with respect to any sales material.
16
(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. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Fund or an Adviser, as applicable.
In each case such counsel shall be reasonably satisfactory to the indemnified
party, and the indemnifying party shall have the right to assume the defense of
such action. An indemnified 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 party be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from its own counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 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.
(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 reasonable fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 60 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.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Fund or the Advisers on the one
hand and the Underwriters on the other hand from the offering of the AMPS
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 Advisers on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Fund and the Advisers on the one
hand and the Underwriters on the other hand in connection with the offering of
the AMPS pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the AMPS pursuant to
this Agreement (before deducting expenses) received by the Fund and the total
17
underwriting discount received by the Underwriters (whether from the Fund or
otherwise), in each case as set forth on the cover of the Prospectus or, if Rule
434 is used, the corresponding location on the Term Sheet, bear to the aggregate
initial public offering price of the AMPS as set forth on such cover.
The relative fault of the Fund and the Advisers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Fund or the Advisers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Fund, the Advisers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 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.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the AMPS underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Fund and each director of an Adviser, respectively, each
officer of the Fund who signed the Registration Statement, and each person, if
any, who controls the Fund or any Adviser, within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, shall have the same rights to
contribution as the Fund and such Adviser, respectively. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of AMPS set forth opposite their respective names in
Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and covenants contained in this
Agreement or in certificates of officers of the Fund or an Adviser submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Fund or an Adviser, and shall survive delivery
of the AMPS to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative may terminate this
Agreement, by notice to the Fund, at any time at or prior to Closing Time (i) if
there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Fund or an Adviser,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
18
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representative, impracticable or inadvisable to market
the AMPS or to enforce contracts for the sale of the AMPS, or (iii) if trading
in the shares of common stock of the Fund has been suspended or materially
limited by the Commission or the NYSE, or if trading generally on the NYSE or
the American Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7, 8 and 13 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time to
purchase the AMPS which it or they are obligated to purchase under this
Agreement (the "Defaulted AMPS"), the Representative shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted AMPS in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Representative shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted AMPS does not exceed 10% of the number
of AMPS to be purchased on such date, each of the non-defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted AMPS exceeds 10% of the number of AMPS
to be purchased on such date, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representative or the Fund shall have the right to
postpone Closing Time, for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representative, c/o Merrill ▇▇▇▇▇ & Co., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, attention of Equity Capital Markets; notices to the Fund or the
Investment Adviser shall be directed, as appropriate, to the office of First
Trust Advisors L.P. at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: W. ▇▇▇▇▇ ▇▇▇▇▇▇▇; and notices to the Investment Sub-Adviser shall be
directed to the office of Four Corners Capital Management, LLC at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President.
19
SECTION 12. Parties.
This Agreement shall each inure to the benefit of and be binding upon
the Underwriters, the Fund, the Advisers and each of their respective partners
and successors and controlling persons referred to herein. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters, the Fund, the Advisers
and their respective successors and the controlling persons and officers,
trustees and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Fund, the Advisers and each of their
respective partners and successors, and said controlling persons and officers,
trustees and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of AMPS from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
SECTION 15. Massachusetts Business Trust
A copy of the Declaration of Trust of the Fund is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby given that
this Agreement is executed on behalf of the Fund by an officer or trustee of the
Fund in his or her capacity as an officer or trustee of the Fund and not
individually and that the obligations of or arising out of this instrument are
not binding upon any of the trustees, officers or shareholders individually but
are binding only upon the assets and property of the Fund.
SECTION 16. Australian Regulatory Disclaimer
THE UNDERWRITERS ACKNOWLEDGE THAT INVESTMENTS IN THE FUND ARE NOT
DEPOSITS WITH OR OTHER LIABILITIES OF MACQUARIE BANK LIMITED ACN ▇▇▇ ▇▇▇ ▇▇▇, OR
OF ANY ENTITY IN THE MACQUARIE BANK GROUP, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING POSSIBLE DELAYS IN REPAYMENT AND LOSS OF INCOME AND CAPITAL INVESTED.
NONE OF MACQUARIE BANK LIMITED, FOUR CORNERS, AND ANY MEMBER COMPANY OF THE
MACQUARIE BANK GROUP GUARANTEES ANY PARTICULAR RATE OF RETURN OR THE PERFORMANCE
OF THE FUND, NOR DO THEY GUARANTEE THE REPAYMENT OF CAPITAL FROM THE FUND.
[Signatures on Following Pages]
20
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Fund and each of Advisers in accordance with its terms.
Very truly yours,
FIRST TRUST/FOUR CORNERS SENIOR FLOATING
RATE INCOME FUND II
By:
------------------------------------
Name:
Title:
FIRST TRUST ADVISORS L.P.
By:
------------------------------------
Name:
Title:
FOUR CORNERS CAPITAL MANAGEMENT, LLC
By:
------------------------------------
Name:
Title:
21
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇▇▇▇▇ & CO. INC.
By: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
By:
------------------------------------------------
Authorized Signatory
For itself and as
Representative of the
other Underwriters named
in Schedule A hereto.
22
SCHEDULE A
Number of
Underwriter AMPS
----------- ----
Series A Series B
-------- --------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ............................
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. ..............................
Total ................................
Sch A-1
SCHEDULE B
First Trust/Four Corners Senior Floating Rate Income Fund II
2,000 Auction Market Preferred Shares
2,000 Auction Market Preferred Shares
Liquidation Preference $25,000 per Share
1. The initial public offering price per share for the AMPS, determined
as provided in said Section 2, shall be $25,000.
2. The purchase price per share for the AMPS to be paid by the several
Underwriters shall be $24,750, such discount from the initial public offering
price representing the commission to be paid to the Underwriters for their
commitment hereunder of $250.
3. The initial dividend rate of the AMPS, Series A shall be [___]% per
annum.
The initial dividend rate of the AMPS, Series B shall be [___]% per
annum.
Sch B-1
Exhibit A
FORM OF OPINION OF FUND'S AND INVESTMENT ADVISER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Fund has been duly organized and is validly existing as
a business trust in good standing under the laws of The Commonwealth of
Massachusetts.
(ii) The Fund has business trust power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus and to enter
into and perform its obligations under the Purchase Agreement.
(iii) The Fund is duly qualified as a foreign business trust to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(iv) To the best of our knowledge, the Fund does not have any
subsidiaries.
(v) The authorized, issued and outstanding shares of beneficial
interest of the Fund are as set forth in the Prospectus under the
caption "Description of Shares--Common Stock"; all issued and
outstanding shares of beneficial interest of the Fund have been duly
authorized and validly issued and are fully paid and non-assessable,
and have been offered and sold or exchanged by the Fund in compliance
with all applicable laws (including, without limitation, federal and
state securities laws); the AMPS conform as to legal matters to all
statements relating thereto contained in the Prospectus and such
description conforms to the rights set forth in the instruments
defining the same; and none of the AMPS of the Fund was issued in
violation of the preemptive or other similar rights of any
securityholder of the Fund.
(vi) The AMPS to be purchased by the Underwriters from the Fund
have been duly authorized for issuance and sale to the Underwriters
pursuant to the Purchase Agreement and, when issued and delivered by
the Fund pursuant to the Purchase Agreement against payment of the
consideration set forth in the Purchase Agreement, will be validly
issued and fully paid and non-assessable, and no holder of the AMPS is
or will be subject to personal liability by reason of being such a
holder.
(vii) The issuance of the AMPS is not subject to preemptive or
other similar rights of any securityholder of the Fund.
(viii) The Purchase Agreement has been duly authorized,
executed and delivered by the Fund.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 497(c) or Rule
497(h) has been made in the manner and within the time period required
by Rule 497; and, to the best of our knowledge, no stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act, and,
to the best of our knowledge, no order of suspension or revocation of
registration pursuant to Section 8(e) of the 1940 Act has been issued,
and no proceedings for any such purpose have been instituted or are
pending or threatened by the Commission.
A-1
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus and each amendment or
supplement to the Registration Statement and Prospectus as of their
respective effective or issue dates (except for financial statements,
supporting schedules and other financial data included therein or
omitted therefrom, as to which we need express no opinion), and the
notification on Form N-8A, complied as to form in all material respects
with the requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus was not
"materially different" as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective.
(xii) The form of certificate used to evidence the AMPS
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the declaration of
trust and by-laws of the Fund and the requirements of the New York
Stock Exchange.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Fund is a party, or to which the property of the Fund is
subject, before or brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of the Fund or
the consummation of the transactions contemplated in the Purchase
Agreement or the performance by the Fund of its obligations thereunder.
(xiv) The information in the Prospectus under "Description of
AMPS" and "Tax Matters" and in the Registration Statement under Item 29
(Indemnification), to the extent that it constitutes matters of law,
summaries of legal matters, the Fund's declaration of trust and by-laws
or legal proceedings, or legal conclusions is correct in all material
respects.
(xv) Each of the Management Agreement, the Sub-Advisory
Agreement, the Administration Agreement, the Custodian Agreement, the
Transfer Agency Agreement and the Auction Agency Agreement and the
Purchase Agreement comply in all material respects with all applicable
provisions of the 1940 Act, the Advisers Act, the Rules and Regulations
and the Advisers Act Rules and Regulations.
(xvi) The Fund is duly registered with the Commission under the
1940 Act as a closed-end diversified management investment company;
and, to the best of our knowledge, no order of suspension or revocation
of such registration has been issued or proceedings therefor initiated
or threatened by the Commission.
(xvii) To the best of our knowledge, no person is serving as an
officer, trustee or investment adviser of the Fund except in accordance
with the 1940 Act and the Rules and Regulations and the Investment
Advisers Act and the Advisers Act Rules and Regulations. Except as
disclosed in the Registration Statement and Prospectus (or any
amendment or supplement to either of them), to the best of our
knowledge, no trustee of the Fund is an "interested person" (as defined
in the ▇▇▇▇ ▇▇▇) of the Fund or an "affiliated person" (as defined in
the ▇▇▇▇ ▇▇▇) of an Underwriter.
(xviii) There are no statutes or regulations that are required
to be described in the Prospectus that are not described as required.
(xix) All descriptions in the Registration Statement of
contracts and other documents to which the Fund is a party are accurate
in all material respects. To the best of our knowledge, there are no
A-2
franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(xx) To the best of our knowledge, the Fund is not in violation
of its declaration of trust or by-laws and no default by the Fund
exists in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xxi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency (other than under the 1933 Act, the
1934 Act, the 1940 Act and the Rules and Regulations, which have been
obtained, or as may be required under the securities or blue sky laws
of the various states, as to which we need express no opinion) is
necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or for the offering,
issuance or sale of the Securities or the consummation of the
transactions contemplated by this Agreement.
(xxii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement (including the
issuance and sale of the AMPS and the use of the proceeds from the sale
of the AMPS as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Fund with its obligations under the
Purchase Agreement do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute
a breach of, or default or Repayment Event (as defined in Section
1(a)(xii) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Fund pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement
or instrument, known to us, to which the Fund is a party or by which it
or any of them may be bound, or to which any of the property or assets
of the Fund is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the Fund, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known
to us, of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Fund or any of its properties,
assets or operations.
(xxiii) The Purchase Agreement, the Management Agreement, the
Sub-Advisory Agreement, the Administration Agreement, the Custodian
Agreement, the Transfer Agency Agreement and the Auction Agency
Agreement have each been duly authorized by all requisite action on the
part of the Fund, executed and delivered by the Fund, as of the dates
noted therein. Assuming due authorization, execution and delivery by
the other parties thereto, each such agreement constitutes a valid and
binding agreement of the Fund, enforceable in accordance with its
terms, except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws and public policy and
except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
In addition, we have participated in the preparation of the
Registration Statement and the Prospectus and participated in discussions with
certain officers, trustees and employees of the Fund, representatives of
Deloitte & Touche LLP, the independent accountants who examined the statement of
A-3
assets and liabilities of the Fund included or incorporated by reference in the
Registration Statement and the Prospectus, and you and your representatives and
we have reviewed certain Fund records and documents. While 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
contained in the Registration Statement and the Prospectus, except to the extent
necessary to enable us to give the opinions with respect to the Fund in
paragraphs (v), (xiv) and (xix), on the basis of such participation and review,
nothing has come to our attention that would lead us to believe that the
Registration Statement (except for financial statements, supporting schedules
and other financial data included therein or omitted therefrom, as to which we
do not express any belief), 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, supporting schedules and other financial data included therein or
omitted therefrom, as to which we do not express any belief), at the time the
Prospectus was issued, or at the Closing Time, included or includes 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.
1
Exhibit B
FORM OF OPINION OF INVESTMENT ADVISER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Investment Adviser has been duly organized and is
validly existing as a limited liability company in good standing under
the laws of the State of Illinois.
(ii) The Investment Adviser has full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under the Purchase Agreement.
(iii) The Investment Adviser is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not result in a Material
Adverse Effect.
(iv) The Investment Adviser is duly registered with the
Commission as an investment adviser under the Advisers Act and is not
prohibited by the Advisers Act, the Advisers Act Rules and Regulations,
the 1940 Act or the Rules and Regulations from acting under the
Management Agreement for the Fund as contemplated by the Prospectus.
(v) The Purchase Agreement, the Management Agreement and the
Sub-Advisory Agreement have been duly authorized, executed and
delivered by the Investment Adviser, and each of the Management
Agreement and Sub-Advisory Agreements constitutes a valid and binding
obligation of the Investment Adviser, enforceable in accordance with
its terms, except as rights to indemnity and contribution hereunder may
be limited by federal or state securities laws and public policy and
except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles
(whether considered in a proceeding in equity or at law).
(vi) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Investment Adviser is a party, or to which the property of
the Investment Adviser is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might
reasonably be expected to result in any material adverse change in the
financial condition, earnings or business affairs of the Investment
Adviser, materially and adversely affect the properties or assets of
the Investment Adviser or materially impair or adversely affect the
ability of the Investment Adviser to function as an investment adviser
or perform its obligations under the Management Agreement and
Sub-Advisory Agreement, or which is required to be disclosed in the
Registration Statement or the Prospectus.
(vii) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(viii) To the best of our knowledge, the Investment Adviser is
not in violation of its certificate of incorporation, by-laws or other
organizational documents and no default by the Investment Adviser
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exists in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(ix) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under
the 1933 Act, the 1940 Act and the Rules and Regulations, which have
been obtained, or as may be required under the securities or blue sky
laws of the various states, as to which we need express no opinion) is
necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement.
(x) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement and compliance by
the Investment Adviser with its obligations under the Purchase
Agreement do not and will not, whether with or without the giving of
notice or lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section 1(a)(xii) of
the Purchase Agreement) under or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Investment Adviser pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement
or instrument, known to us, to which the Investment Adviser is a party
or by which it may be bound, or to which any of the property or assets
of the Investment Adviser is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
have a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Investment
Adviser, or any applicable law, statute, rule, regulation, judgment,
order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Investment Adviser or any of its properties, assets or operations
(except for such violations that would not have a material adverse
effect).
In addition, we have participated in the preparation of the portions of
the Registration Statement and Prospectus describing the Investment Adviser and
participated in discussions with certain officers, trustees and employees of the
Fund and representatives of the Investment Adviser. While 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
contained in such portions of the Registration Statement and the Prospectus, on
the basis of such participation and review, nothing has come to our attention
that would lead us to believe that such portions of the Registration Statement
(except for financial statements, supporting schedules and other financial data
included therein or omitted therefrom, as to which we do not express any
belief), 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 such portions of the Prospectus (except for financial statements,
supporting schedules and other financial data included therein or omitted
therefrom, as to which we do not express any belief), at the time the Prospectus
was issued, or at the Closing Time, included or include an untrue statement of a
material fact or omitted or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
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Exhibit C
FORM OF OPINION OF SUB-ADVISER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Sub-Adviser has been duly formed and is validly
existing as a limited liability company in good standing under the laws
of the State of Delaware with full power and authority under such law
to own, lease and operate its properties and to conduct its business as
described in the Prospectus.
(ii) The Sub-Adviser has (a) the limited liability company
power to execute, deliver and perform the Purchase Agreement and the
Sub-Advisory Agreement and (b) has taken all limited liability company
action necessary to authorize the execution, delivery and performance
of the Purchase Agreement and the Sub-Advisory Agreement.
(iii) The Sub-Adviser is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not result in a material
adverse effect on the Sub-Adviser's ability to enter into and perform
its obligations under the Purchase Agreement and the Sub-Advisory
Agreement as contemplated by the Prospectus.
(iv) The Sub-Adviser is duly registered with the Commission as
an investment adviser under the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), and, to our knowledge, is not prohibited
by the Advisers Act, the rules and regulations of the Commission
promulgated under the Advisers Act, the Investment Company Act of 1940,
as amended (the "1940 Act"), or the rules and regulations of the
Commission under the Securities Act and the 1940 Act (the "Rules and
Regulations") from acting under the Sub-Advisory Agreement.
(v) Each of the Purchase Agreement and the Sub-Advisory
Agreement has been duly authorized, executed and delivered by Four
Corners, and, assuming the due authority, execution and delivery of
each other party thereto, the Purchase Agreement and Sub-Advisory
Agreement constitute valid and binding obligations of the Sub-Adviser,
enforceable against the Sub-Adviser in accordance with their terms,
subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally (including, without limitation, all laws relating to
fraudulent transfers) and to the effect of general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
(vi) To our knowledge, there are no legal or governmental
proceedings pending or threatened to which Four Corners is a party that
are required under the Securities Act to be disclosed in the
Registration Statement and the Prospectus or that would reasonably be
expected to have a material adverse effect on the ability of Four
Corners to function as an investment adviser or perform its obligations
under the Sub-Advisory Agreement, or which is required to be disclosed
in the Registration Statement and the Prospectus.
(vii) To our knowledge, Four Corners is not in violation of
the Organizational Documents or in default under the Organizational
Documents, the agreement set out on Schedule I hereto, or any agreement
to which it is a party described in the Registration Statement or
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement, other than such violation or default that would
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not reasonably be expected to have a material adverse effect on the
ability of Four Corners to enter into and perform its obligations under
the Sub-Advisory Agreement.
(viii) No approval, authorization, consent or license of any
State of California, New York State, Delaware State or U.S. federal
governmental or regulatory commission, board, body or authority or
agency, is necessary or required for the performance by Four Corners of
its obligations under the Purchase Agreement and the Sub-Advisory
Agreement, except such as may be required by the Securities Act, the
1940 Act and the Rules and Regulations or as may be required under the
securities or blue sky laws of the various states, as to which no
opinion need be expressed.
(ix) Neither the execution and delivery of the Purchase
Agreement or the Sub-Advisory Agreement nor the performance by the
Sub-Adviser of its obligations thereunder or under the Registration
Statement will conflict with, or result in a breach or violation of,
any of the terms and provisions of, or constitute, with or without the
giving of notice or lapse of time or both, a default under (a) the
Organizational Documents, (b) the agreement set out on Schedule I
hereto or any agreement to which it is a party described in the
Registration Statement or Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement, or (c) to our
knowledge, any State of California, New York State, Delaware State or
U.S. federal law, order, decree, rule or regulation applicable to the
Sub-Adviser or its properties or operations, in each case with respect
to clause (b) and (c) only, other than such conflict, breach or default
that would not reasonably be expected to have a material adverse effect
on the ability of Four Corners to enter into and perform its
obligations under the Purchase Agreement, Sub-Advisory Agreement and
the Registration Statement. We note that the Sub-Advisory Agreement is
governed by Illinois law and that the Fund is organized under
Massachusetts law. For purposes of rendering this opinion, we have
assumed that such laws are identical to the laws of the State of New
York in all respects material to the conclusions expressed in this
opinion.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement or the
Prospectus and take no responsibility therefor. Subject to the statements set
forth above in this paragraph, we advise you that, based upon our investigations
made in connection with the Registration Statement and the Prospectus and such
knowledge as we have obtained in the course of our general representation of
Four Corners, no facts came to our attention which gave us reason to believe
that (i) the disclosure relating to Four Corners set out in "Prospectus Summary
- Investment Adviser and Sub-Adviser," "Management of the Fund - Sub-Adviser"
and "Sub-Adviser" in the Registration Statement (other than the financial
statements and other financial data contained therein or omitted therefrom, as
to which we have not been requested to comment), at the time it became
effective, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) the disclosure
relating to Four Corners set out in "Prospectus Summary - Investment Adviser and
Sub-Adviser" and "Management of the Fund - Sub-Adviser" in the Prospectus (other
than the financial statements and other financial data contained therein or
omitted therefrom, as to which we have not been requested to comment), as of its
date or the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
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