First Trust/Fiduciary Asset Management Covered Call Fund
(a Massachusetts business trust)
Common Shares of Beneficial Interest
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
August 26, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
Wachovia Capital Markets, LLC
Advest, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Incorporated
J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc.
KeyBanc Capital Markets, a division of McDonald Investments Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
RBC Capital Markets Corporation
▇▇▇▇ ▇▇▇▇ & Co., Inc.
Wedbush ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇ Fargo Securities, LLC
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Each of First Trust/Fiduciary Asset Management Covered Call Fund, a
Massachusetts business trust (the "Fund"), its investment adviser, First Trust
Advisors L.P., an Illinois limited partnership (the "Investment Adviser" or
"First Trust") and its investment sub-adviser, Fiduciary Asset Management, LLC,
a Missouri limited liability company (the "Sub-Adviser" or "Fiduciary Asset
Management") (each, an "Adviser" and together, the "Advisers"), confirms its
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Associates, Inc., Wachovia Capital Markets, LLC, Advest, Inc., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ &
Co. Incorporated, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Incorporated, J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇, Inc., KeyBanc Capital Markets, a division of McDonald Investments Inc.,
Page 1
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated, ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc., RBC Capital
Markets Corporation, ▇▇▇▇ ▇▇▇▇ & Co., Inc., Wedbush ▇▇▇▇▇▇ Securities Inc.,
▇▇▇▇▇ Fargo Securities, LLC 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
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.,
Wachovia Capital Markets, LLC, Advest, Inc., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Incorporated, J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc., KeyBanc
Capital Markets, a division of McDonald Investments Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, Incorporated, ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc., RBC Capital Markets Corporation,
▇▇▇▇ ▇▇▇▇ & Co., Inc., Wedbush ▇▇▇▇▇▇ Securities Inc. and ▇▇▇▇▇ Fargo
Securities, LLC are acting as representatives (in such capacity, the
"Representatives"), 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 common shares of beneficial interest, par value $.01 per
share, of the Fund ("Common Shares") set forth in said Schedule A, and with
respect to the grant by the Fund to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of [______] additional Common Shares for the sole purpose of covering
overallotments, if any. The aforesaid [______] Common Shares (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the
[______] Common Shares subject to the option described in Section 2(b) hereof
(the "Option Securities") are hereinafter called, collectively, the
"Securities."
The Fund understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem 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. 333-116023 and No.
811-21586) covering the registration of the Securities 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 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 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 and 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 Securities, 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 July 27, 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
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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, will jointly and severally represent and warrant to each Underwriter as
of each Date of Delivery (if any) referred to in Section 2(b) 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 on 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 supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date of
Delivery), 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 delivered to the Underwriters for use in
connection with this offering 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 Securities, the Fund has complied or will
comply with the requirements of Rule 111 under the 1933 Act 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
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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 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 diversified management
investment company, and no order of suspension or revocation of such
registration has been issued or proceedings therefor 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
Page 4
defined in the ▇▇▇▇ ▇▇▇) of any Underwriter. For purposes of this Section
1(a)(ix), the Advisers shall be entitled to rely on written representations
from such officers and trustees.
(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 common 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 common 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 Securities. The Securities 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 when paid for
by the Underwriters, will be validly issued and fully paid and
non-assessable. In all material respects, the Common Shares 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, to
the extent such rights are set forth; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to 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 and the
Transfer Agency Services Agreement referred to in the Registration
Statement (as used herein, the "Management Agreement," the "Sub-Advisory
Agreement," the "Administration Agreement," the "Custodian Agreement" and
the "Transfer Agency Agreement," respectively) and the consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities 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.
Page 5
(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 Securities 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.
(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 Securities (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,
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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 Common Shares, will not distribute any offering
material in connection with the offering and sale of the Common Shares
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).
(xxiii) Material Agreements. This Agreement, the Management Agreement,
the Sub-Advisory Agreement, the Administration Agreement, the Custodian
Agreement and the Transfer 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 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) New York Stock Exchange Listing. The Securities have been duly
authorized for listing, upon notice of issuance, on the New York Stock
Exchange ("NYSE") and the Fund's registration statement on Form 8-A under
the 1934 Act has become effective.
Page 7
(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 represents to the Fund, as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) 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) Descriptions of the Investment Adviser. The descriptions 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, execution and delivery by the
other parties thereto, each agreement constitutes a valid and binding
obligation of the Investment Adviser, enforceable in accordance with its
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 or state securities laws.
Page 8
(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 as of the date hereof and as of the
Closing Time referred to in Section 2(c) hereof, and will represent and warrant
to each Underwriter as of each Date of Delivery (if any) referred to in Section
2(b) 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 Missouri, with full
limited liability company power and authority to own, lease and 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 to the extent the failure to register or so qualify would
not have a material adverse effect on the condition (financial or
otherwise), general affairs, business, properties, net assets or the
results of operations of the Sub-Adviser or the Fund.
(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) Descriptions of the Sub-Adviser. The descriptions 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.
Page 9
(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, each
agreement constitutes a valid and binding obligation of the Sub-Adviser,
enforceable against the Sub-Adviser in accordance with its 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'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 Sub-Adviser or its
respective properties or operations; and no material 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 to which it is
a party, except as have been obtained or may be required under the 1933
Act, the 1940 Act, the 1934 Act 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.
(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
might reasonably be expected to result in any material adverse change in
the condition, financial or otherwise, or earnings, business affairs or
business prospects of the Sub-Adviser, to materially and adversely affect
the properties or assets of the Sub-Adviser or to materially impair or
adversely affect the ability of the Sub-Adviser 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.
(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.
Page 10
(d) Officers' Certificates. Any certificate signed by any officer of the
Fund or an Adviser delivered to the Representatives 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) Initial Securities. 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 Initial Securities set
forth in Schedule A opposite the name of such Underwriter, plus any additional
number of Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Fund hereby grants an option to the Underwriters, severally and not
jointly, to purchase up to an additional [______] Common Shares in the aggregate
at the price per share set forth in Schedule B, less an amount per share equal
to any dividends or distributions declared by the Fund and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 45 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering overallotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Fund setting forth
the number of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Representatives, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as
▇▇▇▇▇▇▇ ▇▇▇▇▇ in its discretion shall make to eliminate any sales or purchases
of a fractional number of Option Securities plus any additional number of Option
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
(c) Payment. Payment of the purchase price for, and delivery of
certificates, if any, for, the Initial Securities shall be made at the offices
of ▇▇▇▇▇▇▇▇ Chance US LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such
other place as shall be agreed upon by the Representatives 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 Representatives and the Fund (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Fund, on each Date of Delivery as specified in the notice from the
Representatives to the Fund.
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 Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
Page 11
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which 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 Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in the City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
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 Representatives
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 Securities 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 Representatives
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 Representatives 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
Representatives or counsel for the Underwriters shall reasonably object in
writing.
(iii) Delivery of Registration Statements. The Fund has furnished or
will deliver to the Representatives 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 Representatives,
Page 12
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 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 Securities, 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 Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States
as the Representatives 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 Securities 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 Securities substantially in the manner specified in
the Prospectus under "Use of Proceeds".
Page 13
(ix) Listing. The Fund will use its reasonable best efforts to effect
the listing of the Securities on the NYSE, subject to notice of issuance,
concurrently with the effectiveness of the Registration Statement.
(x) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectus, the Fund will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (A) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option, rights or warrant to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of Common Shares or
any securities convertible into or exercisable or exchangeable for Common
Shares or file any registration statement under the 1933 Act with respect
to any of the foregoing or (B) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Shares,
whether any such swap or transaction described in clause (A) or (B) above
is to be settled by delivery of Common Shares or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (1) the
Securities to be sold hereunder or (2) Common Shares issued or, for
avoidance of doubt, purchased in the open market pursuant to any dividend
reinvestment plan.
(xi) 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.
(xii) 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.
(xiii) No Manipulation of Market for Securities. 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 Securities in violation of federal or state
securities laws, and (b) except for share repurchases permitted in
accordance with applicable laws and purchases of Securities in the open
market pursuant to the Fund's dividend reinvestment plan, until the Closing
Date, or the Date of Delivery, if any, (i) sell, bid for or purchase the
Securities or pay any person any compensation for soliciting purchases of
the Securities or (ii) pay or agree to pay to any person any compensation
for soliciting another to purchase any other securities of the Fund .
(xiv) 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 P.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.
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
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
Page 14
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the Fund's
counsel, accountants and other advisors, (v) the qualification of the Securities
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 Securities, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities in an
amount up to $7,500 (which will not exceed [___]% of the total price to the
public of the Common Shares sold in this offering), (x) the fees and expenses
incurred in connection with the listing of the Securities on the NYSE and (xi)
the printing of any sales material. In addition, the Fund shall pay to the
Underwriters $.00667 per Common Share as partial reimbursement of expenses
incurred in connection with the offering. The amount paid by the Fund as this
partial reimbursement to the Underwriters will not exceed .03335% of the total
price to the public of the Common Shares sold in this offering. The Investment
Adviser has agreed to pay (i) all organizational expenses of the Fund, and (ii)
offering costs (other than sales load, but including the partial reimbursement
of expenses described above) of the Fund that exceed $.04 per Common Share. The
Sub-Adviser has agreed to reimburse the Investment Adviser for one-half of such
organizational expenses and offering costs of the Fund that exceed $.04 per
Common Share. To the extent that aggregate offering expenses are less than $.04
per Common Share, up to .10% of the public offering price of the Common Shares
sold in this offering will be paid to First Trust Portfolios, L.P., an affiliate
of the Investment Adviser, as reimbursement for the distribution services it
provides to the Fund. The sum total of all compensation received by the
Underwriters and First Trust Portfolios, L.P. in connection with this offering,
including sales load and all forms of compensation to and reimbursement of
Underwriters and First Trust Portfolios, L.P., will not exceed 9.0% of the total
price to the public of the Common Shares sold in this offering.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives 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 either 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:
(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
Page 15
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) Opinions of Counsel for Fund and Advisers. At Closing Time, the
Representatives 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 First Trust, and of Jenner & Block LLP, counsel for
Fiduciary Asset Management, 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 Representatives. 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
Representatives 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 by-laws of the Fund), (viii) through (x), inclusive, (xii), (xiv)
(solely as to the information in the Prospectus under "Description of Shares")
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 Representatives. 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 Representatives 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) such Fund or Adviser, as applicable, 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 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 Representatives shall have received from Deloitte & Touche LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, 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 Representatives 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
Page 16
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) Approval of Listing. At Closing Time, the Securities shall have been
approved for listing on the NYSE, subject only to official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Fund contained herein and the statements in any certificates furnished by
the Fund hereunder shall be true and correct as of each Date of Delivery and, at
the relevant Date of Delivery, the Representatives shall have received:
(i) Officers' Certificates. Certificates, dated such Date of Delivery,
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 confirming that the
information contained in the certificate delivered by each of them at the
Closing Time pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.
(ii) Opinions of Counsel for the Fund and the Advisers. The favorable
opinions of counsel for the Fund and the Advisers, substantially in the
form set forth in Exhibit A, Exhibit B and Exhibit C hereto, dated such
Date of Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion required
by Section 5(b) hereof.
(iii) Opinion of Counsel for the Underwriters. The favorable opinion
of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from Deloitte & Touche LLP,
in form and substance satisfactory to the Representatives and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the Representatives pursuant to Section 5(f) hereof,
except that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than three business days prior to such
Date of Delivery.
(j) Additional Documents. At Closing Time and at each Date of Delivery,
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 Securities 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 Securities as herein contemplated shall be satisfactory in form
and substance to the Representatives and counsel for the Underwriters.
(k) 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, or, in the case of any condition to the
purchase of Option Securities, on a Date of Delivery which is after the Closing
Time, the obligations of the several Underwriters to purchase the relevant
Option Securities, may be terminated by the Representatives by notice to the
Fund and each Adviser at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without liability of
Page 17
any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7, 8 and 12 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 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 each Adviser; 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
Page 18
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.
(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,
Page 19
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 Securities 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
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Fund and the total 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 Securities 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 Securities 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 Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
Page 20
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
Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives 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 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 Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in the Common Shares 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 12 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 or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives 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 Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the number
of Securities 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 Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Fund to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
Page 21
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 or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Fund to sell the relevant Option Securities, as
the case may be, either the Representatives or the Fund shall have the right to
postpone Closing Time or the relevant Date of Delivery, as the case may be, 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
Representatives, c/o Merrill ▇▇▇▇▇ & Co., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of Equity Capital Markets; notices to the Fund or the
First Trust shall be directed, as appropriate, to the office of First Trust
Advisors L.P. at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: W. ▇▇▇▇▇ ▇▇▇▇▇▇▇; and notices to Fiduciary Asset Management shall be
directed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
SECTION 12. Parties.
This Agreement shall inure to the benefit of and be binding upon each of
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 Securities 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 and the Table of Contents 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
Page 22
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.
[Signatures on Following Pages]
Page 23
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 the Advisers in accordance with its
terms.
Very truly yours,
First Trust/Fiduciary Asset Management
Covered Call Fund
By:
---------------------------------------
Name:
Title:
First Trust Advisors L.P.
By:
---------------------------------------
Name:
Title:
Fiduciary Asset Management, LLC
By:
---------------------------------------
Name:
Title:
Page 24
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
WACHOVIA CAPITAL MARKETS, LLC
ADVEST, INC.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, INCORPORATED
J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, INC.
KEYBANC CAPITAL MARKETS, A DIVISION OF MCDONALD INVESTMENTS INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
▇▇▇▇▇▇▇▇▇▇▇ & CO. INC.
RBC CAPITAL MARKETS CORPORATION
▇▇▇▇ ▇▇▇▇ & CO., INC.
WEDBUSH ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇ FARGO SECURITIES, LLC
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By:
--------------------------------
Authorized Signatory
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
Page 25
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ........................................... [______]
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. ........................................... [______]
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. .................................... [______]
Wachovia Capital Markets, LLC. ...................................... [______]
Advest, Inc. ........................................................ [______]
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, & Co. Incorporated ................................. [______]
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Incorporated ................................... [______]
J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc. ................................... [______]
KeyBanc Capital Markets, a division of McDonald Investments Inc. .... [______]
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated ................................ [______]
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. .............................................. [______]
RBC Capital Markets Corporation ..................................... [______]
▇▇▇▇ ▇▇▇▇ & Co., Inc. ............................................... [______]
Wedbush ▇▇▇▇▇▇ Securities Inc. ...................................... [______]
▇▇▇▇▇ Fargo Securities, LLC ......................................... [______]
[other Underwriters] ................................................ [______]
Total ...................................................... [______]
Sch A-1
SCHEDULE B
First Trust/Fiduciary Asset Management Covered Call Fund
Common Shares of Beneficial Interest
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $20.00.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $19.10, being an amount equal to the initial
public offering price set forth above less $.90 per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the overallotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Fund
and payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
Exhibit A
FORM OF OPINION OF FUND'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 Shares"; 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 Common Shares
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 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.
(vi) The Securities 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 Securities is or
will be subject to personal liability by reason of being such a holder.
(vii) The issuance of the Securities 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.
(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
Page A-1
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 Common Shares
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 Shares"
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 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 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
Page A-2
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 Securities and the use of the proceeds from the
sale of the Securities 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
Administration Agreement, the Sub-Advisory Agreement, the Custodian
Agreement and the Transfer 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 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
Page A-3
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 (A)(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.
Page A-4
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 partnership in good standing under the laws of the
State of Illinois.
(ii) The Investment Adviser has full limited partnership 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 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 and each
of the Sub-Advisory Agreements.
(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 the
Sub-Advisory Agreement 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 the 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 limited partnership agreement, by-laws or other
organizational documents and no default by the Investment Adviser exists in
the due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
Page B-1
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 or any of them 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.
Page B-2
Exhibit C
FORM OF OPINION OF INVESTMENT SUB-ADVISER'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Sub-Adviser has been duly organized and is validly existing as
a limited liability company in good standing under the laws of the State of
Missouri.
(ii) The Sub-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 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 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 Sub-Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or the
Rules and Regulations from acting under the Sub-Advisory Agreement.
(v) The Purchase Agreement and the Sub-Advisory Agreement have been
duly authorized, executed and delivered by the Sub-Adviser, and each of the
Purchase Agreement and the Sub-Advisory Agreement constitutes a valid and
binding obligation of the Sub-Adviser, enforceable against it in accordance
with its terms, 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
Sub-Adviser is a party, or to which the property of the Sub-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 condition, financial or otherwise, in the
earnings, business affairs or business prospects of the Sub-Adviser,
materially and adversely affect the properties or assets of the Sub-Adviser
or materially impair or adversely affect the ability of the Sub-Adviser 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 or the Prospectus.
(vii) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments to which the Sub-Adviser is a party 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 Sub-Adviser is not in
violation of its certificate of incorporation, by-laws or other
organizational documents and no default by the Sub-Adviser 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.
Page C-1
(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 Sub-Advisory Agreement and the consummation of the transactions
contemplated in the Purchase Agreement and the Sub-Advisory Agreement and
in the Registration Statement and compliance by the Sub-Adviser with its
obligations under the Purchase Agreement and the Sub-Advisory 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 Sub-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
Sub-Adviser 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 Sub-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
Sub-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
Sub-Adviser or any of its properties, assets or operations.
In addition, we have participated in the preparation of the portions of the
Registration Statement and Prospectus describing the Sub-Adviser and
participated in discussions with certain officers, trustees and employees of the
Fund and representatives of the Sub-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.
Page C-2