0001445546-12-004972.txt : 20121121
0001445546-12-004972.hdr.sgml : 20121121
20121121161258
ACCESSION NUMBER: 0001445546-12-004972
CONFORMED SUBMISSION TYPE: POS EX
PUBLIC DOCUMENT COUNT: 8
FILED AS OF DATE: 20121121
DATE AS OF CHANGE: 20121121
EFFECTIVENESS DATE: 20121121
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: FIRST TRUST SENIOR FLOATING RATE INCOME FUND II
CENTRAL INDEX KEY: 0001282850
IRS NUMBER: 113716541
FILING VALUES:
FORM TYPE: POS EX
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-184182
FILM NUMBER: 121221361
BUSINESS ADDRESS:
STREET 1: 120 EAST LIBERTY DRIVE
STREET 2: SUITE 400
CITY: WHEATON
STATE: IL
ZIP: 60187
BUSINESS PHONE: 630-765-8000
MAIL ADDRESS:
STREET 1: 120 EAST LIBERTY DRIVE
STREET 2: SUITE 400
CITY: WHEATON
STATE: IL
ZIP: 60187
FORMER COMPANY:
FORMER CONFORMED NAME: FIRST TRUST FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
DATE OF NAME CHANGE: 20040305
POS EX
1
wraps.txt
As filed with the Securities and Exchange Commission on November 21, 2012
================================================================================
1933 Act File No. 333-184182
1940 Act File No. 811-21539
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-2
(Check appropriate box or boxes)
[ ] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. __
[X] Post-Effective Amendment No. 1
and
[ ] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X] Amendment No. 8
First Trust Senior Floating Rate Income Fund II
Exact Name of Registrant as Specified in Declaration of Trust
120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187
Address of Principal Executive Offices (Number, Street, City, State, Zip Code)
(630) 765-8000
Registrant's Telephone Number, including Area Code
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
Name and Address (Number, Street, City, State, Zip Code) of Agent for Service
Copies of Communications to:
Eric F. Fess, Esq.
Chapman and Cutler LLP
111 West Monroe Street
Chicago, Illinois 60603
Approximate Date of Proposed Public Offering: From time to time after the
effective date of this Registration Statement
---------------
If any of the securities being registered on this form are offered on a delayed
or continuous basis in reliance on Rule 415 under the Securities Act of 1933,
other than securities offered in connection with a dividend reinvestment plan,
check the following box. [X]
This Post-Effective Amendment No. 1 will become effective immediately upon
filing pursuant to Rule 462(d) under the Securities Act of 1933.
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to the Registration Statement of a Form
N-2 (File No. 333-184182) of First Trust Senior Floating Rate Income Fund II
(the "Registration Statement") is being filed pursuant to Rule 462(d) under the
Securities Act of 1933, as amended (the "Securities Act"), solely for the
purpose of filing exhibits to the Registration Statement. Accordingly, this
Post-Effective Amendment No. 1 consists only of a facing page, this explanatory
note and Part C of the Registration Statement on Form N-2 setting forth the
exhibits to the Registration Statement. This Post-Effective Amendment No. 1 does
not modify any other part of the Registration Statement. Pursuant to Rule 462(d)
under the Securities Act, this Post-Effective Amendment No. 1 shall become
effective immediately upon filing with the Securities and Exchange Commission.
The contents of the Registration Statement are hereby incorporated by reference.
PART C - OTHER INFORMATION
Item 25: Financial Statements and Exhibits
1. Financial Statements:
The Registrant's audited financial statements, notes to the financial
statements and the report of independent public accounting firm thereon have
been incorporated into Part B of the Registration Statement by reference to
Registrant's Annual Report for the fiscal year ended May 31, 2012 contained in
its Form N-CSR, as described in the statement of additional information.
2. Exhibits:
a.1 Declaration of Trust dated March 25, 2004.(1)
a.2 Amendment to Declaration of Trust dated October 27, 2008.(6)
a.3 Amendment to Declaration of Trust dated September 20, 2010.(6)
b. By-Laws of Fund.(2)
c. None.
d. Form of Global Certificate.(3)
e. Terms and Conditions of the Dividend Reinvestment Plan.(4)
f. None.
g. Investment Management Agreement between Registrant and First Trust Advisors
L.P. dated December 20, 2010.(5)
h.1 Form of Underwriting Agreement.*
h.2 Form of Sales Agreement.**
i. None.
j. Custodian Services Agreement dated May 18, 2009.**
k.1 Transfer Agency Services Agreement dated May 18, 2009.**
k.2 Administration and Accounting Services Agreement dated May 18, 2009.**
k.3 Revolving Credit and Security Agreement.(6)
l.1 Opinion and consent of Chapman and Cutler LLP.**
l.2 Opinion and consent of Bingham McCutchen LLP.**
m. None.
n. Consent of Independent Registered Public Accounting Firm.**
o. None.
p. Subscription Agreement dated May 18, 2004.(4)
q. None.
r.1 Code of Ethics of Registrant.(4)
r.2 Code of Ethics of First Trust Portfolios L.P.(4)
r.3 Code of Ethics of First Trust Advisors L.P.(4)
s. Powers of Attorney.(6)
--------------------------------------------------------------------------------
* To be filed by amendment.
** Filed herewith.
(1) Filed on April 29, 2004 as an Exhibit to Registrant's Amended Registration
Statement on Form N-2/A (File No. 333-113978) and incorporated herein by
reference.
(2) Filed on July 30, 2010 as an Exhibit to Registrant's Annual Report for
Management Companies on Form N-SAR (File No. 811-21539) and incorporated
herein by reference.
(3) Filed on August 23, 2004 as an Exhibit to Registrant's Amended Registration
Statement on Form N-2/A (File No. 333-115414) and incorporated herein by
reference.
(4) Filed on May 25, 2004 as an Exhibit to Registrant's Amended Registration
Statement on Form N-2/A (File No. 333-113978) and incorporated herein by
reference.
(5) Filed on July 28, 2011 as an Exhibit to Registrant's Annual Report for
Management Companies on Form N-SAR and incorporated herein by reference.
(6) Filed on September 28, 2012 as an Exhibit to Registrant's Registration
Statement on Form N-2 (File No. 333-184182) and incorporated herein by
reference.
Item 26: Marketing Arrangements
Reference is made to the sales agreement for the Registrant's common shares
filed with this post-effective amendment to the Registrant's Registration
Statement, to the section entitled "Plan of Distribution" contained in
Registrant's Prospectus, filed herewith as Part A of Registrant's Registration
Statement, and to information contained under the section entitled "Plan of
Distribution" in any Prospectus Supplement to the Prospectus.
Item 27: Other Expenses of Issuance and Distribution
------------------------------------------------------- ------------------------
Securities and Exchange Commission Fees $ 21,900
------------------------------------------------------- ------------------------
Financial Industry Regulatory Authority, Inc. Fees $ 10,000
------------------------------------------------------- ------------------------
Printing and Engraving Expenses $ 5,000
------------------------------------------------------- ------------------------
Legal Fees $ 125,000
------------------------------------------------------- ------------------------
Listing Fees $ -
------------------------------------------------------- ------------------------
Accounting Expenses $ 25,000
------------------------------------------------------- ------------------------
Blue Sky Filing Fees and Expenses $ -
------------------------------------------------------- ------------------------
Miscellaneous Expenses $ -
------------------------------------------------------- ------------------------
Total $ 186,900
------------------------------------------------------- ------------------------
Item 28: Persons Controlled by or under Common Control with Registrant
Not applicable.
Item 29: Number of Holders of Securities
At May 31, 2012
------------------------------------------------------- ------------------------
Title of Class Number of Record Holders
------------------------------------------------------- ------------------------
Common Shares, $0.01 par value 13,012
------------------------------------------------------- ------------------------
Item 30: Indemnification
Section 5.3 of the Registrant's Declaration of Trust provides as follows:
Section 5.3. Mandatory Indemnification. (a) Subject to the exceptions and
limitations contained in paragraph (b) below:
(i) every person who is or has been a Trustee or officer of the
Trust (hereinafter referred to as a "Covered Person") shall be indemnified
by the Trust against all liability and against all expenses reasonably
incurred or paid by him or her in connection with any claim, action, suit
or proceeding in which that individual becomes involved as a party or
otherwise by virtue of being or having been a Trustee or officer and
against amounts paid or incurred by that individual in the settlement
thereof;
(ii) the words "claim," "action," "suit" or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal,
administrative or other, including appeals), actual or threatened; and the
words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement or
compromise, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) against any liability to the Trust or the Shareholders by reason
of a final adjudication by the court or other body before which the
proceeding was brought that the Covered Person engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of that individual's office;
(ii) with respect to any matter as to which the Covered Person shall
have been finally adjudicated not to have acted in good faith in the
reasonable belief that that individual's action was in the best interest
of the Trust; or
(iii) in the event of a settlement involving a payment by a Trustee
or officer or other disposition not involving a final adjudication as
provided in paragraph (b)(i) or (b)(ii) above resulting in a payment by a
Covered Person, unless there has been either a determination that such
Covered Person did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
that individual's office by the court or other body approving the
settlement or other disposition or by a reasonable determination, based
upon a review of readily available facts (as opposed to a full trial-type
inquiry) that that individual did not engage in such conduct:
(A) by vote of a majority of the Disinterested Trustees (as
defined below) acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter); or
(B) by written opinion of (i) the then-current legal counsel
to the Trustees who are not Interested Persons of the Trust or (ii)
other legal counsel chosen by a majority of the Disinterested
Trustees (or if there are no Disinterested Trustees with respect to
the matter in question, by a majority of the Trustees who are not
Interested Persons of the Trust) and determined by them in their
reasonable judgment to be independent.
(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Covered Person may now or hereafter be entitled, shall
continue as to a person who has ceased to be a Covered Person and shall inure to
the benefit of the heirs, executors and administrators of such person. Nothing
contained herein shall limit the Trust from entering into other insurance
arrangements or affect any rights to indemnification to which Trust personnel,
including Covered Persons, may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit, or proceeding of the character described in paragraph (a) of this
Section 5.3 shall be advanced by the Trust prior to final disposition thereof
upon receipt of an undertaking by or on behalf of the Covered Person to repay
such amount if it is ultimately determined that the Covered Person is not
entitled to indemnification under this Section 5.3, provided that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses arising
out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office act
on the matter) or legal counsel meeting the requirement in Section
5.3(b)(iii)(B) above in a written opinion, shall determine, based upon a
review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the Covered Person
ultimately will be found entitled to indemnification.
As used in this Section 5.3 a "Disinterested Trustee" is one (i) who is
not an "Interested Person" of the Trust (including anyone who has been exempted
from being an "Interested Person" by any rule, regulation or order of the
Commission), and (ii) against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or similar
grounds is then or had been pending.
(e) With respect to any such determination or opinion referred to in
clause (b)(iii) above or clause (d)(ii) above, a rebuttable presumption shall be
afforded that the Covered Person has not engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office in accordance with pronouncements of the
Commission.
Item 31: Business and Other Connections of Investment Advisers
The information in the Statement of Additional Information under the caption
"Management of the Fund--Trustees and Officers" is hereby incorporated by
reference.
Item 32: Location of Accounts and Records.
First Trust Advisors L.P. maintains the Declaration of Trust, By-Laws, minutes
of trustees and shareholders meetings and contracts of the Registrant, all
advisory material of the investment adviser, all general and subsidiary ledgers,
journals, trial balances, records of all portfolio purchases and sales, and all
other required records.
Item 33: Management Services
Not applicable.
Item 34: Undertakings
1. Registrant undertakes to suspend the offering of its shares until it
amends its prospectus if (1) subsequent to the effective date of its
Registration Statement, the net asset value declines more than 10 percent
from its net asset value as of the effective date of the Registration
Statement, or (2) the net asset value increases to an amount greater than
its net proceeds as stated in the prospectus.
2. Not applicable.
3. Not applicable.
4. The Registrant undertakes (a) to file, during any period in which offers
or sales are being made, a post-effective amendment to this Registration
Statement:
(1) to include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(2) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
(3) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(b) that, for the purpose of determining liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of those securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(c) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering;
(d) that, for the purpose of determining liability under the Securities Act of
1933 to any purchaser, if the Registrant is subject to Rule 430C; each
prospectus filed pursuant to Rule 497(b), (c), (d) or (e) under the
Securities Act of 1933, shall be deemed to be part of and included in this
Registration Statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in this
Registration Statement or prospectus that is part of this registration
statement or made in a document incorporated or deemed incorporated by
reference into this registration statement or prospectus that is part of
this registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supercede or modify any
statement that was made in this registration statement or prospectus that
was part of this registration statement or made in any such document
immediately prior to such date of first use;
(e) that for the purpose of determining liability of the Registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of
securities:
The undersigned Registrant undertakes that in a primary offering of
securities of the undersigned Registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
Registrant will be a seller to the purchaser and will be considered to
offer or sell such securities to the purchaser:
(1) any preliminary prospectus or prospectus of the undersigned Registrant
relating to the offering required to be filed pursuant to Rule 497 under
the Securities Act of 1933;
(2) the portion of any advertisement pursuant to Rule 482 under the Securities
Act of 1933 relating to the offering containing material information about
the undersigned Registrant or its securities provided by or on behalf of
the undersigned Registrant; and
(3) any other communication that is an offer in the offering made by the
undersigned Registrant to the purchaser.
5. The Registrant undertakes that:
a. For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
a registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the Registrant under Rule 497(h) under the
Securities Act of 1933 shall be deemed to be part of the Registration
Statement as of the time it was declared effective; and
b. For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of the securities at that
time shall be deemed to be the initial bona fide offering thereof.
6. The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery, within two business days of
receipt of a written or oral request, any Statement of Additional
Information.
7. Upon each issuance of securities pursuant to this Registration Statement,
the Registrant undertakes to file a form of prospectus and/or prospectus
supplement pursuant to Rule 497 and a post-effective amendment to the
extent required by the Securities Act of 1933 and the rules and
regulations thereunder, including, but not limited to a post-effective
amendment pursuant to Rule 462(c) or Rule 462(d) under the Securities Act
of 1933.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Wheaton, and State of Illinois, on the 21st day of
November, 2012.
FIRST TRUST SENIOR FLOATING RATE INCOME FUND II
By: /s/ Mark R. Bradley
----------------------------------------------
Mark R. Bradley
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
--------------------------- ------------------------------------- ------------------------------------
Signature Title Date
--------------------------- ------------------------------------- ------------------------------------
By: /s/ Mark R. Bradley President and Chief Executive November 21, 2012
----------------------- Officer (Principal Executive
Mark R. Bradley Officer)
--------------------------- ------------------------------------- ------------------------------------
By: /s/ James M. Dykas Chief Financial Officer, Chief November 21, 2012
----------------------- Accounting Officer and Treasurer
James M. Dykas (Principal Financial and Accounting
Officer)
--------------------------- ------------------------------------- ------------------------------------
James A. Bowen(1) Chairman of the Board and Trustee )
)
Richard E. Erickson(1) Trustee )
) By: /s/ W. Scott Jardine
Thomas R. Kadlec(1) Trustee ) ---------------------------
) W. Scott Jardine
Robert F. Keith(1) Trustee ) Attorney-In-Fact
) November 21, 2012
Niel B. Nielson(1) Trustee )
--------------------------- ------------------------------------- ------------------------------------
---------------
(1) Original powers of attorney authorizing James A. Bowen, Mark R. Bradley, W.
Scott Jardine, Kristi A. Maher and Eric F. Fess to execute Registrant's
Registration Statement, and Amendments thereto, for each of the trustees of the
Registrant on whose behalf this Registration Statement is filed, were previously
executed and filed on September 28, 2012 as an Exhibit to the Registrant's
Registration Statement on Form N-2 (File No. 333-184182).
INDEX TO EXHIBITS
h.2. Sales Agreement
j. Custodian Services Agreement dated May 18, 2009.
k.1 Transfer Agency Services Agreement dated May 18, 2009.
k.2 Administration and Accounting Services Agreement dated May 18, 2009.
l.1 Opinion and Consent of Chapman and Cutler LLP.
l.2 Opinion and Consent of Bingham McCutchen LLP.
n. Consent of Independent Registered Accounting Firm.
EX-99.2H DISTR CONTR
2
exhibit_h2.txt
SALES AGREEMENT
FIRST TRUST SENIOR FLOATING RATE INCOME FUND II
UP TO 3,000,000 COMMON SHARES OF BENEFICIAL INTEREST
CAPITAL ON DEMAND(TM)
SALES AGREEMENT
November 21, 2012
JONESTRADING INSTITUTIONAL SERVICES LLC
780 Third Avenue, 3rd Floor
New York, NY 10017
Ladies and Gentlemen:
First Trust Senior Floating Rate Income Fund II, a Massachusetts business
trust (the "FUND"), First Trust Advisors L.P., an Illinois limited partnership
(the "ADVISER"), confirm their agreement (this "AGREEMENT") with JonesTrading
Institutional Services LLC ("JONES"), as follows:
1. Issuance and Sale of Shares. The Fund agrees that, from time to time
during the term of this Agreement, on the terms and subject to the conditions
set forth herein, it may issue and sell through Jones, acting as agent and/or
principal, up to three million (3,000,000) of the Fund's common shares of
beneficial interest, $0.01 par value per share (the "SHARES"). Notwithstanding
anything to the contrary contained herein, the parties hereto agree that
compliance with the limitations set forth in this Section 1 on the number of
Shares issued and sold under this Agreement shall be the sole responsibility of
the Fund, and Jones shall have no obligation in connection with such compliance.
The issuance and sale of Shares through Jones will be effected pursuant to the
Registration Statement (as defined below) filed by the Fund and declared
effective by the Securities and Exchange Commission (the "COMMISSION").
The Fund has entered into an Investment Management Agreement with the
Adviser dated December 20, 2010 (the "ADVISORY AGREEMENT"), a Custodian Services
Agreement with The Bank of New York Mellon (as successor to PFPC Trust Company)
(the "CUSTODIAN") dated May 18, 2009 (the "CUSTODIAN CONTRACT"), a Transfer
Agency Services Agreement with BNY Mellon Investment Servicing (US) Inc. (as
successor to PNC Global Investment Servicing (U.S.) Inc.) dated May 18, 2009
(the "TRANSFER AGENCY AGREEMENT") and an Administration and Accounting Services
Agreement with BNY Mellon Investment Servicing (US) Inc. (as successor to PNC
Global Investment Servicing (U.S.) Inc.) dated May 18, 2009 (the "ADMINISTRATION
AGREEMENT"). Collectively, the Advisory Agreement, the Custodian Contract, the
Transfer Agency Agreement and the Administration Agreement are herein referred
to as the "FUND AGREEMENTS." In addition, the Fund has adopted a dividend
reinvestment plan (the "DIVIDEND REINVESTMENT PLAN") pursuant to which the
holders of Shares shall have their dividends automatically reinvested in
additional Shares unless they elect to receive such dividends in cash.
The Fund has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the "SECURITIES ACT") and the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder (collectively, the "INVESTMENT COMPANY
ACT"), with the Commission a registration statement on Form N-2 (File Nos.
333-184182 and 811-21539) (the "ORIGINAL REGISTRATION STATEMENT"), including a
base prospectus ("BASIC PROSPECTUS"), with respect to the Shares. The Fund shall
prepare one or more supplements relating to the Shares (collectively, the
"PROSPECTUS SUPPLEMENT") to the Basic Prospectus, to be filed with the
Commission pursuant to Rule 497 under the Securities Act. The Fund shall furnish
to Jones, for use by Jones, copies of the Basic Prospectus, as supplemented by
the Prospectus Supplement, relating to the Shares. Except where the context
otherwise requires, the Original Registration Statement, as amended when it
became effective, including all documents filed as part thereof, including the
Fund's Statement of Additional Information, and including any information
contained in a Prospectus Supplement subsequently filed with the Commission
pursuant to Rule 497 under the Securities Act is herein called the "REGISTRATION
STATEMENT." The Basic Prospectus, as it may be supplemented by the Prospectus
Supplement, in the form in which such prospectus and/or Prospectus Supplement
have most recently been filed by the Fund with the Commission pursuant to Rule
497 under the Securities Act, is herein called the "PROSPECTUS." For purposes of
this Agreement, all references to the Registration Statement, the Prospectus, or
to any amendment or supplement thereto shall be deemed to include any copy filed
with the Commission pursuant to its Interactive Data Electronic Application
database. For purposes of this Agreement, all references to the Registration
Statement, unless otherwise noted and except as the context otherwise requires,
shall be deemed to include any and all amendments thereto.
2. Placements. Each time that the Fund wishes to issue and sell Shares
hereunder (each, a "PLACEMENT"), it will notify Jones by e-mail notice (or other
method mutually agreed to in writing by the parties) containing the parameters
in accordance with which it desires the Shares to be sold, which shall, at a
minimum, include the number of Shares to be issued (the "PLACEMENT SHARES"), the
time period during which sales are requested to be made, any limitation on the
number of Placement Shares that may be sold in any one day, any minimum price
below which sales may not be made and the discount, commission or other
compensation to be paid by the Fund to Jones, (excluding the Reimbursable
Amounts (as defined in Section 7(e) herein) (a "PLACEMENT NOTICE"), a form of
which, containing such minimum sales parameters necessary, is attached hereto as
Schedule 1. The Placement Notice shall originate from any of the individuals
from the Fund set forth on Schedule 3 (with a copy to each of the other
individuals from the Fund listed on such schedule), and shall be addressed to
each of the individuals from Jones set forth on Schedule 3, as such Schedule 3
may be amended from time to time. The Placement Notice shall be effective upon
receipt by Jones unless and until (i) in accordance with the notice requirement
set forth in Section 4, Jones declines to accept the terms contained therein for
any reason, in its sole discretion, (ii) the entire amount of the Placement
Shares have been sold, (iii) in accordance with the notice requirements set
forth in Section 4, the Fund or Jones suspends or terminates the Placement
Notice, (iv) the Fund issues a subsequent Placement Notice with parameters
superseding those on the earlier dated Placement Notice, or (v) the Agreement
2
has been terminated under the provisions of Section 11. The amount of any
discount, commission or other compensation to be paid by the Fund to Jones in
connection with the sale of the Placement Shares shall be calculated in
accordance with the terms set forth in Schedule 2, unless superseded by the
terms and conditions as set forth in the applicable Placement Notice. It is
expressly acknowledged and agreed that neither the Fund nor Jones will have any
obligation whatsoever with respect to a Placement or any Placement Shares unless
and until the Fund delivers a Placement Notice to Jones and Jones does not
decline, within the time period specified in Section 4, such Placement Notice
pursuant to the terms set forth above, and then only upon the terms specified
therein and herein. In the event of a conflict between the terms of this
Agreement and the terms of a Placement Notice, the terms of the Placement Notice
will control.
3. Sale of Placement Shares by Jones. Subject to the terms and conditions
herein set forth, upon the Fund's issuance of a Placement Notice, and unless the
sale of the Placement Shares described therein has been declined, suspended or
otherwise terminated in accordance with the terms of this Agreement, Jones, for
the period specified in the Placement Notice, will use its commercially
reasonable efforts consistent with its normal trading and sales practices to
sell such Placement Shares up to the amount specified, and otherwise in
accordance with the terms of such Placement Notice. Jones will provide written
confirmation to the Fund no later than the opening of the Trading Day (as
defined below) immediately following the Trading Day on which it has made sales
of Placement Shares hereunder setting forth the number of Placement Shares sold
on such day, the compensation payable by the Fund with respect to such sales,
with an itemization of deductions made by Jones (as set forth in Section 5(a))
from the gross proceeds that it receives from such sales, and the Net Proceeds
(as defined below) payable to the Fund. The Fund and the Adviser each
acknowledge that Jones intends to sell the Placement Shares in privately
negotiated transactions and/or any other method permitted by law, including
sales made directly on the New York Stock Exchange (the "NYSE"), the
then-existing trading market for the Shares or sales made to or through a market
maker or through an electronic communications network, or in any other manner
that may be deemed to be an "at-the-market" offering as defined in Rule 415 of
the Securities Act, in each case, at or above the then-current net asset value
of the Fund's common shares of beneficial interest (exclusive of any
distribution, commission or discount) in accordance with Section 23(b) of the
Investment Company Act. As the Fund's agent with respect to any such sale, Jones
covenants that it will comply with all prospectus delivery requirements imposed
under applicable federal and state securities laws. The Fund and the Adviser
acknowledge and agree that (i) there can be no assurance that Jones will be
successful in selling Placement Shares, and (ii) Jones will not incur any
liability or obligation to the Fund, the Adviser or any other person or entity
if it does not sell Placement Shares for any reason other than a failure by
Jones to use its commercially reasonable efforts consistent with its normal
trading and sales practices to sell such Placement Shares as required under this
Section 3. For the purposes hereof, "TRADING DAY" means any day on which Shares
are purchased and sold on the principal exchange or market on which the Shares
are listed or quoted.
4. Suspension of Sales. The Fund or Jones may, upon notice to the other
party in writing (including by e-mail correspondence to all of the individuals
of the other party set forth on Schedule 3 or by telephone (confirmed
immediately by verifiable facsimile transmission or e-mail correspondence to all
of the individuals of the other party set forth on Schedule 3)), suspend or
refuse to undertake any sale of Placement Shares; provided, however, that such
3
suspension or refusal shall not affect or impair either party's obligations with
respect to any Placement Shares sold hereunder prior to the receipt of such
notice. Each of the parties hereto agrees that no such notice shall be effective
against the other unless it is made to the individuals named on Schedule 3
hereto in accordance with this Section 4, as such Schedule may be amended from
time to time.
5. Settlement.
(a) Settlement of Placement Shares. Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the third (3rd) Business Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each, a
"SETTLEMENT DATE"). The amount of proceeds to be delivered to the Fund on a
Settlement Date against the receipt of the Placement Shares sold (the "NET
PROCEEDS") will be equal to the aggregate sales price at which such Placement
Shares were sold, after deduction for (i) Jones's commission, discount or other
compensation for such sales payable by the Fund pursuant to Section 2 hereof (or
as otherwise agreed to in writing as set forth in the Placement Notice), (ii)
Reimbursable Amounts, due and payable by the Fund to Jones hereunder pursuant to
Section 7(e) hereof, and (iii) any transaction fees imposed by any governmental
or self-regulatory organization in respect of such sales.
(b) Delivery of Shares. On or before each Settlement Date, the Fund will,
or will cause its transfer agent to, electronically transfer the Placement
Shares being sold by crediting Jones's or its designee's account at The
Depository Trust Company through its Deposit and Withdrawal at Custodian
("DWAC") System or by such other means of delivery as may be mutually agreed
upon by the parties hereto and, upon receipt of such Placement Shares, which in
all cases shall be freely tradable, transferable, registered shares in good
deliverable form, Jones will deliver the related Net Proceeds in same day funds
to an account designated by the Fund prior to the Settlement Date. The Fund
agrees that if the Fund defaults on its obligation to deliver Placement Shares
on a Settlement Date, the Fund and the Adviser each agree that, in addition to
and in no way limiting the rights and obligations set forth in Section 9(a)
hereto, it will (i) hold Jones harmless against any loss, claim, damage, or
expense (including reasonable legal fees and expenses), as incurred, arising out
of or in connection with such default by the Fund and (ii) pay to Jones any
commission, discount, or other compensation to which it would otherwise have
been entitled absent such default.
6. Representations and Warranties of the Fund and the Adviser.
(a) Representations and Warranties by the Fund and the Adviser. The Fund
and the Adviser, jointly and severally, represent and warrant to and agree with
Jones as of the date hereof and as of each Representation Date (as defined in
Section 7(j) below) as follows:
(i) The Registration Statement has been declared effective by the
Commission under the Securities Act. Each Prospectus included as part of
the Registration Statement as originally filed or as part of any amendment
or supplement thereto or filed pursuant to Rule 497 of the Securities Act
complied when so filed in all material respects with the provisions of the
Securities Act and the Investment Company Act. The Commission has not
4
issued any order preventing or suspending the use of the Prospectus or the
effectiveness of the Registration Statement and no proceedings for such
purpose have been instituted or, to the knowledge of the Fund, are
contemplated by the Commission.
(ii) (A) The Registration Statement in the form in which it became
effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and as of the date hereof, as of
the time of each sale of Placement Shares pursuant to this Agreement (the
"APPLICABLE TIME") and as of each Settlement Date, and (B) the Prospectus
and any amendment or supplement thereto when filed with the Commission
under Rule 497 of the Securities Act and any amendment or supplement
thereto when filed with the Commission and as of the date hereof, as of
each Applicable Time and as of each Settlement Date, complied or will
comply in all material respects with the provisions of the Securities Act
and the Investment Company Act, and each of the Registration Statement and
the Prospectus did not or will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein (in the case
of the Prospectus, in light of the circumstances under which they were
made) not misleading; except that this representation and warranty does
not apply to statements in or omissions from the Registration Statement
and the Prospectus made in reliance upon and in conformity with
information relating to Jones furnished to the Fund in writing by or on
behalf of Jones expressly for use therein.
(iii) All the outstanding shares of capital stock of the Fund have
been duly authorized and validly issued, are fully paid and (except as
described in the Prospectus under "Certain Provisions in the Declaration
of Trust") nonassessable and are free of any preemptive or similar rights
and have been offered and sold by the Fund in compliance with all
applicable federal and state securities laws. No shares of capital stock,
other than common shares of beneficial interest of the Fund, are issued or
outstanding and the capitalization of the Fund conforms in all material
respects to the description thereof in the Registration Statement and the
Prospectus. The Placement Shares have been duly authorized for issuance
and sale pursuant to this Agreement and, when issued, delivered against
payment therefore in accordance with this Agreement, will be validly
issued and fully paid and nonassessable obligations of the Fund; and the
Placement Shares will conform in all material respects to the description
thereof in the Registration Statement and the Prospectus.
(iv) The Fund has been duly formed and is validly existing in good
standing as a business trust under the laws of The Commonwealth of
Massachusetts, with full power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus and to enter into and perform its obligations
under this Agreement and the Fund Agreements. The Fund is duly registered
and qualified to conduct business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or to qualify, either alone or in the aggregate,
does not have or would not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), general affairs,
5
business, properties, business prospects, net assets or results of
operations of the Fund, whether or not occurring in the ordinary course of
business (a "FUND MATERIAL ADVERSE EFFECT"). The Fund has no subsidiaries.
(v) There are no legal or governmental proceedings pending or, to
the knowledge of the Fund, threatened against the Fund or to which the
Fund or any of its properties is subject, that are required to be
described in the Registration Statement or the Prospectus but are not
described as required or that could reasonably be expected to result in a
Fund Material Adverse Effect, or that may have a material, adverse effect
on the ability of the Fund to perform its obligations under this Agreement
or any of the Fund Agreements. All descriptions in the Registration
Statement and the Prospectus of any Fund documents are accurate in all
material respects. There are no agreements, contracts, indentures, leases
or other instruments that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the
Securities Act or Investment Company Act.
(vi) The Fund is not in violation of its Declaration of Trust
("DECLARATION OF TRUST"), bylaws or other organizational documents or any
law, ordinance, administrative or governmental rule or regulation
applicable to the Fund or of any decree of the Commission, the Financial
Industry Regulatory Authority ("FINRA"), any state securities commission,
any national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or any
other agency or any body or official having jurisdiction over the Fund or
in breach or default in the performance of any of the Fund Agreements or
any other obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which the Fund is a party or by
which it or any of its properties may be bound, except for such violation
or such breach or default that, either alone or in the aggregate, does not
have or would not reasonably be expected to have a Fund Material Adverse
Effect.
(vii) Neither the issuance and sale of the Placement Shares, the
execution, delivery or performance of this Agreement or any of the Fund
Agreements by the Fund, nor the consummation by the Fund of the
transactions contemplated hereby or thereby (A) requires any consent,
approval, authorization or order of or registration or filing with the
Commission, FINRA, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official
having jurisdiction over the Fund (except such as have been already
obtained under the Securities Act, the Investment Company Act, the rules
and regulations of FINRA and the NYSE or compliance with the securities or
Blue Sky laws of various jurisdictions which have been or will be effected
in accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of the Declaration of Trust,
bylaws, or other organizational documents of the Fund or (B) (1) conflicts
or will conflict with or constitutes or will constitute a breach of or a
default under any of the Fund Agreements or any other agreement,
indenture, lease or other instrument to which the Fund is a party or by
which it or any of its properties may be bound or (2) violates or will
6
violate any statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Fund or any of its properties or will
result in the creation or imposition of any lien, charge or encumbrance
upon (collectively, a "LIEN") any property or assets of the Fund pursuant
to the terms of any agreement or instrument to which it is a party or by
which it may be bound or to which any of the property or assets of the
Fund is subject, except for such conflict, breach, default, violation or
lien that, either alone or in the aggregate, does not have or would not
reasonably be expected to have a Fund Material Adverse Effect or a
material adverse effect on the ability of the Fund to perform its
obligations under this Agreement or any of the Fund Agreements. The Fund
is not subject to any order of any court or of any arbitrator,
governmental authority or administrative agency.
(viii) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition
(financial or other), business, properties, net assets or results of
operations of the Fund or business prospects (other than as a result of a
change in the financial markets generally) of the Fund, whether or not
arising in the ordinary course of business, (B) there have been no
transactions entered into by the Fund other than those in the ordinary
course of its business as described in the Prospectus and (C) there has
been no dividend or distribution of any kind declared, paid or made by the
Fund on any class of its common stock, except for regular dividends
consistent with past practice.
(ix) The accountants, Deloitte & Touche LLP, who have audited the
financial statements included in, and whose report appears in, the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), are an independent public accounting firm as required
by the Securities Act and Investment Company Act.
(x) The financial statements of the Fund, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement or the Prospectus present fairly the financial
position of the Fund on the basis stated in the Registration Statement at
the respective dates or for the respective periods to which they apply;
such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved except as disclosed therein and
comply with all applicable accounting requirements under the Securities
Act and the Investment Company Act; and the other financial and
statistical information and data included in the Registration Statement or
the Prospectus are accurately derived from such financial statements and
the books and records of the Fund.
(xi) The Fund, subject to the filing of the Prospectus under Rule
497 under the Securities Act, has taken all required action under the
Securities Act and the Investment Company Act to make the public offering
and consummate the sale of the Placement Shares as contemplated by this
Agreement.
(xii) The execution and delivery of and the performance by the Fund
of its obligations under this Agreement and the Fund Agreements have been
7
duly and validly authorized by the Fund and this Agreement and each of the
Fund Agreements have been duly executed and delivered by the Fund and each
constitutes the valid and legally binding agreement of the Fund,
enforceable against the Fund in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and subject to the qualification that the
enforceability of the Fund's obligations hereunder and thereunder may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles.
(xiii) Except as disclosed in or contemplated by the Registration
Statement or the Prospectus, subsequent to the respective dates as of
which such information is given in the Registration Statement and the
Prospectus, the Fund has not incurred any material liability or
obligation, direct or contingent, or entered into any transaction, not in
the ordinary course of business, and there has not been any change in the
capital stock (other than in connection with the transactions contemplated
hereunder or pursuant to the Fund's dividend reinvestment plan) or any
change or any development involving or which should reasonably be expected
to involve a Fund Material Adverse Effect or its capitalization, or the
incurrence of any debt by, the Fund.
(xiv) The Fund has not distributed and, prior to the later to occur
of (A) the applicable Settlement Date and (B) completion of the
distribution of the Placement Shares contemplated by the applicable
Placement Notice, will not distribute any offering material in connection
with the offering and sale of the Placement Shares other than the
Registration Statement, the Prospectus, the "sales material" (as defined
in Section 6(a)(xx) below) or other materials permitted by the Securities
Act or the Investment Company Act.
(xv) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("PERMITS") as are necessary to own
its property and to conduct its business in the manner described in the
Prospectus; the Fund has fulfilled and performed all its material
obligations with respect to such permits and no event has occurred which
allows or, after notice or lapse of time, would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the Fund under any such permit, subject in each case to such
qualification as may be set forth in the Prospectus (and any amendment or
supplement thereto); and, except as described in the Prospectus (and any
amendment or supplement thereto), none of such permits contains any
restriction that is materially burdensome to the Fund.
(xvi) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with the Fund's Board of Trustees'
general or specific authorization and with the investment policies and
restrictions of the Fund and the applicable requirements of the Securities
Act, the Investment Company Act and the Internal Revenue Code of 1986, as
amended, (the "CODE"); (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles, to calculate net asset value and fee
8
accruals, to maintain accountability for assets and to maintain compliance
with the books and records requirements under the Investment Company Act;
(C) access to assets is permitted only in accordance with the Board of
Trustees' general or specific authorization; and (D) the recorded amount
of assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Fund
maintains "disclosure controls and procedures" (as such term is defined in
Rule 30a-3 under the Investment Company Act).
(xvii) The conduct by the Fund of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of
any patents, patent licenses, trademarks, service marks or trade names
which it does not own, possess or license or sub-license.
(xviii) Except as stated in this Agreement and in the Prospectus,
the Fund has not taken and will not take, directly or indirectly, any
action designed to or which could cause or result in or which will
constitute stabilization or manipulation of the price of the Placement
Shares, or of any securities issued by the Fund, to facilitate the sale or
resale of the Placement Shares in violation of federal securities laws and
no such action has been, or will be, taken by any affiliates of the Fund.
(xix) The Fund is duly registered under the Investment Company Act
as a closed-end, non-diversified management investment company and the
notification of registration of the Fund as an investment company under
the Investment Company Act on Form N-8A has been duly filed with the
Commission, is effective, and, at the time of filing thereof and at all
times through the date hereof conformed in all material respects with all
applicable provisions of the Investment Company Act; no order of
suspension or revocation of such registration under the Investment Company
Act has been issued or proceedings therefor initiated or threatened by the
Commission. The provisions of the Declaration of Trust and the investment
policies and restrictions described in each of the Registration Statement
and the Prospectus, comply in all material respects with the requirements
of the Investment Company Act.
(xx) All advertising, sales literature or other promotional material
(including "prospectus wrappers", "broker kits", "road show slides" and
"road show scripts"), if any, whether in printed or electronic form,
authorized in writing by or prepared by or at the direction of the Fund or
the Adviser for use in connection with the offering and sale of the
Placement Shares (collectively, "SALES MATERIAL") complied and comply in
all material respects with the applicable requirements of the Securities
Act and the rules and interpretations of FINRA. No sales material
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(xxi) This Agreement and each of the Fund Agreements complies in all
material respects with all applicable provisions of the Securities Act,
the Investment Company Act and the Advisers Act.
9
(xxii) No holder of any security of the Fund has any right to
require registration of any Shares, capital stock or any other security of
the Fund because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement.
(xxiii) Except as disclosed in the Registration Statement and the
Prospectus, no trustee of the Fund is an "interested person" (as defined
in the Investment Company Act) of the Fund or an "affiliated person" (as
defined in the Investment Company Act) of Jones.
(xxiv) The Placement Shares are duly listed and admitted and
authorized for trading, subject to official notice of issuance, on the
NYSE.
(xxv) All of the information provided to Jones or to counsel for
Jones by the Fund, its officers and Trustees in connection with letters,
filings or other supplemental information provided to FINRA pursuant to
FINRA's conduct rules is true, complete and correct in all material
respects.
(xxvi) There is and has been no failure on the part of the Fund or
any of the Fund's trustees or officers, in their capacities as such, to
comply in any material respect with any provision of the Sarbanes-Oxley
Act of 2002 and the rules and regulations promulgated in connection
therewith (the "SARBANES OXLEY ACT"), including Sections 302 and 906
related to certifications.
(xxvii) The Fund has filed all tax returns that are required to be
filed and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such tax, assessment,
fine or penalty that is currently being contested in good faith by
appropriate actions and except for such taxes, assessments, fines or
penalties the nonpayment of which would not, individually or in the
aggregate, have a Fund Material Adverse Effect.
(xxviii) The Fund has adopted and implemented written policies and
procedures reasonably designed to prevent violation of the Federal
Securities Laws (as that term is defined in Rule 38a-1 under the
Investment Company Act) by the Fund, including policies and procedures
that provide oversight of compliance for each investment adviser,
administrator and transfer agent of the Fund.
(xxix) The Fund carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its business and
value of its properties.
(xxx) The operations of the Fund are and have been conducted at all
times in material compliance with applicable financial recordkeeping and
reporting requirements and the money laundering statutes and the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the "MONEY LAUNDERING LAWS") and no action, suit or
proceeding by or before any court or governmental agency, authority or
10
body or any arbitrator involving the Fund with respect to the Money
Laundering Laws is pending or, to the knowledge of the Fund, threatened.
(xxxi) Neither the Fund nor, to the knowledge of the Fund, any
director, officer, agent, employee or affiliate of the Fund is aware of or
has taken any action in connection with the Fund, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt
Practice Act of 1977, as amended and the rules and regulations thereunder
(the "FCPA") including, without limitation, making use of the mails or any
means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of
any money, or other property, gift, promise to give, or authorization of
the giving of anything of value to any "foreign official" (as such term is
defined in the FCPA) or any foreign political party or official thereof or
any candidate for foreign political office, in contravention of the FCPA
and the Fund, and to the knowledge of the Fund, its affiliates have
conducted their businesses in compliance with the FCPA and have instituted
and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.
(xxxii) Neither the Fund nor, to the knowledge of the Fund, any
director, officer, agent, employee or affiliate of the Fund is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department ("OFAC"); and the Fund will not
directly or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
(b) Representations and Warranties with Respect to the Adviser. The
Adviser represents and warrants to and agrees with Jones as of the date hereof
and as of each Representation Date (as defined in Section 7(j) below) as
follows:
(i) The Adviser is a limited partnership duly organized and validly
existing in good standing under the laws of the State of Illinois, with
full power and authority to own, lease and operate its properties and to
conduct its business as described in each of the Registration Statement
and the Prospectus and is duly registered and qualified to conduct
business and is in good standing in each jurisdiction or place where the
nature of its properties or conduct of its business requires such
registration or qualification, except where the failure so to register or
to qualify, either alone or in the aggregate, does not have or would not
reasonably be expected to have (A) a material adverse effect on the
condition (financial or other), general affairs, business, properties,
business prospects, net assets or results of operations, whether or not
occurring in the ordinary course of business, of the Adviser (an "ADVISER
MATERIAL ADVERSE EFFECT") or (B) a Fund Material Adverse Effect.
(ii) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act or the Investment Company Act from acting under the Advisory
Agreement for the Fund as contemplated by the Registration Statement or
11
the Prospectus. There does not exist any proceeding which could reasonably
be expected to have an Adviser Material Adverse Effect with respect to the
registration of the Adviser with the Commission.
(iii) There are no legal or governmental proceedings pending or, to
the knowledge of the Adviser, threatened against the Adviser that are
required to be described in the Registration Statement or the Prospectus
but are not described as required or that could reasonably be expected to
result in any Adviser Material Adverse Effect or that may have a material,
adverse effect on the ability of the Adviser to perform its obligations
under this Agreement or the Advisory Agreement.
(iv) Neither the execution, delivery or performance of this
Agreement or the Advisory Agreement by the Adviser, nor the consummation
by the Adviser of the transactions contemplated hereby or thereby (A)
requires the Adviser to obtain any consent, approval, authorization or
other order of, or registration or filing with, the Commission, FINRA, any
state securities commission, any national securities exchange, any
arbitrator, any court, regulatory body, administrative agency or other
governmental body, agency or official having jurisdiction over the
Adviser, or conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, the partnership agreement or
bylaws or other organizational documents of the Adviser or (B) conflicts
or will conflict with or constitutes or will constitute a breach of or a
default under, the Advisory Agreement or any other agreement, indenture,
lease or other instrument to which the Adviser is a party or by which the
Adviser or any of its properties may be bound, or violates or will violate
any statute, law, regulation or judgment, injunction, order or decree
applicable to the Adviser or any of its properties or will result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Adviser pursuant to the terms of any agreement
or instrument to which it is a party or by which it may be bound or to
which any of the property or assets of the Adviser is subject, except in
any case under clause (B) for such conflict, breach, default, violation or
lien that, either alone or in the aggregate, does not have or would not
reasonably be expected to have an Adviser Material Adverse Effect or a
material adverse effect on the ability of the Adviser to perform its
obligations under this Agreement or the Advisory Agreement. The Adviser is
not subject to any order of any court or of any arbitrator, regulatory
body, administrative agency or other governmental body, agency or
official.
(v) The Adviser has full power and authority to enter into this
Agreement and the Advisory Agreement; the execution and delivery of, and
the performance by the Adviser of its obligations under, this Agreement
and the Advisory Agreement have been duly and validly authorized by the
Adviser; and this Agreement and the Advisory Agreement have been duly
executed and delivered by the Adviser and constitute the valid and legally
binding agreements of the Adviser, enforceable against the Adviser in
accordance with their terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws
and subject to the qualification that the enforceability of the Adviser's
obligations hereunder and thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles whether enforcement is considered in a proceeding in
equity or at law.
12
(vi) The Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in the
Registration Statement and the Prospectus or under this Agreement and the
Advisory Agreement.
(vii) The description of the Adviser in the Registration Statement
or the Prospectus complied as of any effective date of the Registration
Statement and as of the date of the Prospectus, as applicable, and
complies and will comply, as of the date hereof, each Applicable Time and
each Settlement Date, in all material respects with the provisions of the
Securities Act, the Investment Company Act and the Advisers Act and did
not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(viii) Since the date as of which information is given in the
Registration Statement or the Prospectus, except as otherwise stated
therein, there has not occurred any event which would reasonably be
expected to have a material adverse effect on the ability of the Adviser
to perform its obligations under this Agreement and the Advisory
Agreement.
(ix) The Adviser has such permits as are necessary to own its
property and to conduct its business in the manner described in the
Prospectus; and the Adviser has fulfilled and performed all its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other impairment of the rights of
the Adviser under any such permit.
(x) Neither this Agreement nor the Advisory Agreement violates any
applicable provisions of the Investment Company Act and Advisers Act.
(xi) Except as stated in this Agreement, the Registration Statement
or the Prospectus, the Adviser has not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in or which will constitute stabilization or
manipulation of the price of the Placement Shares or any securities issued
by the Fund to facilitate the sale or resale of the Placement Shares in
violation of federal securities laws and the Adviser is not aware of any
such action taken or to be taken by any affiliates of the Adviser
(xii) The Adviser has adopted and implemented written policies and
procedures under Rule 206(4)-7 of the Advisers Act reasonably designed to
prevent violation of the Advisers Act by the Adviser and its supervised
persons.
(c) Certificates. Any certificate signed by any authorized officer of the
Fund, or the Adviser identified on Schedule 3 attached hereto, as such Schedule
may be updated from time to time pursuant to notice properly delivered to Jones
pursuant to Section 12 of this Agreement and delivered to the representatives or
13
to counsel for Jones shall be deemed a representation and warranty by the Fund
or the Adviser, as the case may be, to Jones as to the matters covered thereby.
7. Covenants of the Fund and the Adviser. The Fund and the Adviser,
jointly and severally, covenant and agree with Jones that:
(a) The Fund will promptly advise Jones (i) when, during any period that a
prospectus relating to the offer or sale of Placement Shares is required to be
delivered under the Securities Act, any amendment to the Registration Statement
affecting the Placement Shares shall have become effective, (ii) of any request
by the Commission for any amendment or supplement to the Registration Statement
or the Prospectus, or for any additional information, affecting or in respect of
the Placement Shares, (iii) of the issuance by the Commission of any order
suspending the effectiveness of the Registration Statement affecting the
Placement Shares or the institution or threatening of any proceeding for that
purpose, and (iv) the receipt by the Fund of any notification with respect to
the suspension of the qualification of the Placement Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Fund will not file any amendment to the Registration Statement
affecting the Placement Shares or any supplement to the Prospectus affecting the
Placement Shares unless the Fund has furnished Jones with a copy for its review
prior to filing, and will not file any such proposed amendment or supplement
affecting the Placement Shares to which Jones reasonably objects, in any event
until after the end of the period during which a prospectus is required to be
delivered to purchasers of the Placement Shares under the Securities Act.
Subject to the foregoing sentence, the Fund will cause the Prospectus Supplement
to be transmitted to the Commission for filing pursuant to Rule 497 under the
Securities Act. The Fund will use its best efforts to prevent the issuance of
any order suspending the effectiveness of the Registration Statement affecting
the Placement Shares and, if issued, to obtain as soon as possible the
withdrawal thereof. The Fund will timely file the requisite copies of the
Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h) under the
Securities Act, whichever is applicable or, if applicable, will timely file the
certification permitted by Rule 497(j) under the Securities Act and will advise
Jones of the time and manner of such filing.
(b) During any period in which a Prospectus relating to the Placement
Shares is required to be delivered by Jones under the Securities Act with
respect to a pending sale of the Placement Shares, the Fund will comply so far
as it is able with all requirements imposed upon it by the Securities Act and
the Investment Company Act, as from time to time in force, so far as necessary
to permit the continuance of sales of the Placement Shares during such period in
accordance with the provisions hereof and the Prospectus, and will file with the
Commission and the NYSE all documents pursuant to the Securities Act and the
Investment Company Act in the manner and within the time periods required by the
Securities Act and the Investment Company Act. If during such period any event
occurs as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Fund will promptly notify Jones to suspend the offering of
Placement Shares during such period and the Fund will promptly amend or
supplement the Registration Statement or Prospectus so as to correct such
statement or omission or effect such compliance.
14
(c) During any period in which the Prospectus relating to the Placement
Shares is required to be delivered by Jones under the Securities Act with
respect to a pending sale of the Placement Shares, the Fund will use its best
efforts to cause the Placement Shares to be listed on the NYSE and to qualify,
if necessary, the Placement Shares for sale under the securities laws of such
United States jurisdictions as Jones reasonably designates and to continue such
qualifications in effect so long as required for the distribution of the
Placement Shares; provided, however, that the Fund shall not be required in
connection therewith to qualify as a foreign corporation or dealer in
securities, file a general consent to service of process in any jurisdiction, or
meet any other requirement in connection with this Section 7(c) deemed by the
Fund to be unduly burdensome.
(d) As soon as practicable, but in no event later than the last day of the
18th full calendar month following the calendar quarter in which the effective
date of the Registration Statement falls, the Fund will make generally available
to its security holders an earnings statement, which need not be audited, which
earnings statement shall satisfy the provisions of Section 11(a) and Rule 158 of
the Securities Act.
(e) The Fund agrees to pay all costs, fees and expenses incurred in
connection with performance of its obligations hereunder and in connection with
the transactions contemplated under this Agreement, including, without
limitation, (i) all expenses incident to the issuance and delivery of the
Placement Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Shares, (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Placement Shares, (iv) all reasonable fees and expenses of the Fund's
counsel and the Fund's independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts) and the Prospectus, and all amendments and supplements
thereto and this Agreement, (vi) all filing fees, distribution fees, attorneys'
fees and expenses incurred by the Fund or Jones in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Placement Shares for offer and sale under the state
securities or blue sky laws, including, if requested by Jones, the preparation
by counsel for Jones and printing of a "Blue Sky Survey" or other memorandum,
and any supplements thereto, advising Jones of such qualifications,
registrations and exemptions, (vii) the fees and expenses associated with
listing the Placement Shares on the NYSE, (viii) the filing fees incident to,
and the reasonable fees and disbursements of counsel to Jones in connection
with, the review by FINRA of the terms of the sale of the Placement Shares, (ix)
the reasonable fees and expenses of counsel for Jones (provided such fees and
expenses shall not exceed $25,000 in connection with the preparation and
execution of this Agreement and the preparation and filing of the initial
Prospectus Supplement dated as of the date hereof relating to the Placement
Shares and providing the services described in clauses (vi) and (viii) above),
and (x) all other fees, costs and expenses incident to the performance by the
Fund of its obligations hereunder. Except as provided in Section 7(e)(ix) above
with respect to Jones (collectively, the "REIMBURSABLE AMOUNTS"), the aggregate
amount of any discount, commission or other compensation to be paid by the Fund
to Jones in connection with Jones' performance of its obligations under this
Agreement shall be as set forth on Schedule 2 attached hereto (or as otherwise
agreed to in writing as set forth in the Placement Notice). The Fund shall pay
15
to Jones the Reimbursable Amounts in addition to such discount, commissions and
other compensation payable to Jones as contemplated by Schedule 2 (or as
otherwise agreed to in writing as set forth in the Placement Notice). The
Adviser agrees to pay all costs, fees and expenses of its counsel.
(f) The Fund will use the Net Proceeds as described in the Prospectus.
(g) The Fund will, at any time during the term of this Agreement, as
supplemented from time to time, advise Jones immediately after it shall have
received notice or obtained knowledge thereof, of any information or fact that
would alter or affect in any material respect any opinion, certificate, letter
or other document required to be provided to Jones pursuant to this Agreement.
(h) The Fund will cooperate with any due diligence review conducted by
Jones or its agents, including, without limitation, providing information and
making available documents and senior corporate officers, as Jones may
reasonably request; provided, however, that the Fund shall be required to make
available documents and senior corporate officers only (i) at the Fund's
principal offices and (ii) during the Fund's ordinary business hours. The
parties acknowledge that the due diligence review contemplated by this Section
7(h) will include during the term of this Agreement (x) a bring-down diligence
conference among Jones and certain officers of the Fund's operations or legal
departments upon the issuance by the Fund of a Placement Notice and (y) a
quarterly diligence conference to occur within three business days following the
Fund's filing of each of its annual and semi-annual reports on Form N-CSR and
N-CSRS, respectively (the "REPORTS"), and quarterly schedule of investments
whereby the Fund and the Adviser will make their senior corporate officers,
including portfolio managers, available to address certain diligence inquiries
of Jones and will provide such additional information and documents as Jones may
reasonably request; provided, however that, notwithstanding anything to the
contrary in this Section 7(h), the Fund's portfolio managers shall not be
required to participate with respect to quarterly diligence conferences to be
held in connection with the filing of the Fund's quarterly schedule of
investments.
(i) The Fund agrees that on such dates as the Securities Act shall
require, the Fund will (i) file a Prospectus Supplement with the Commission
under Rule 497 under the Securities Act, which Prospectus Supplement will set
forth, within the relevant period, the amount of Placement Shares sold through
Jones, the Net Proceeds to the Fund and the compensation payable by the Fund to
Jones with respect to such Placement Shares, and (ii) deliver such number of
copies of each such Prospectus Supplement to each exchange or market on which
such sales were effected as may be required by the rules or regulations of such
exchange or market.
(j) During the term of this Agreement, each time the Fund (i) files the
Prospectus relating to the Placement Shares (ii) amends or supplements the
Registration Statement or the Prospectus relating to the Placement Shares by
means of a post-effective amendment, sticker, or supplement (other than a
Prospectus Supplement filed in accordance with Section 7(i) of this Agreement),
or (iii) files a Report (to the extent not already covered by subsection (i) or
(ii) of this Section 7(j)), the Fund and the Adviser shall furnish Jones with a
certificate, in the form attached hereto as Exhibit 7(j). (Each date
contemplated in subsections (i), (ii) and (iii) of this Section 7(j) is referred
to herein as a "REPRESENTATION DATE"). With respect to post-effective amendments
16
to the Registration Statement contemplated by this Section 7(j), if the Fund is
not otherwise permitted to rely on Rule 486(b) regarding the effective date of a
post-effective amendment, the Representation Date shall be the date the
Commission declares such amendment effective and all Representation Date
deliveries relating thereto which are required by Section 7 shall be delivered
on or as promptly as practicable following the date of effectiveness of such
amendment. If the Fund is permitted to rely on Rule 486(b) in connection with
the filing of a post-effective amendment, then the Representation Date shall be
the date such post-effective amendment is filed with the Commission.
(k) Except as otherwise provided in the last sentence of this Section
7(k), on the date hereof and thereafter as of each Representation Date, the Fund
shall cause to be furnished to Jones with a written opinion of Chapman and
Cutler LLP (the "FUND COUNSEL"), dated the Representation Date, in substantially
the form attached hereto as Exhibit 7(k)(1), but modified, as necessary, to
relate to the Registration Statement and the Prospectus as then amended or
supplemented; provided, however, that in lieu of such opinion, counsel may
furnish Jones with a letter to the effect that Jones may rely on a prior opinion
delivered under this Section 7(k) to the same extent as if it were dated the
date of such letter (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended or
supplemented at such Representation Date). Insofar as any opinion of Fund
Counsel relates to or is dependent upon matters governed by Massachusetts law,
Fund Counsel will be permitted to rely on the opinion of Bingham McCutchen LLP.
In the event that a Representation Date is triggered by the filing of a Report,
only the opinion identified in Exhibit 7(k)(2) shall be required.
(l) Except as otherwise provided in the last sentence of this Section
7(l), on the date hereof and thereafter as of each Representation Date, the
Adviser shall cause to be furnished to Jones with a written opinion of Chapman
and Cutler LLP (the "ADVISER COUNSEL"), dated the Representation Date, in
substantially the form attached hereto as Exhibit 7(l), but modified, as
necessary, to relate to the Registration Statement and the Prospectus as then
amended or supplemented; provided, however, that in lieu of such opinion,
counsel may furnish Jones with a letter to the effect that Jones may rely on a
prior opinion delivered under this Section 7(l) to the same extent as if it were
dated the date of such letter (except that statements in such prior opinion
shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented at such Representation Date). In the event that a
Representation Date is triggered by the filing of the Fund's semi-annual report,
no opinion identified in this Section 7(l) shall be required.
(m) On the date hereof and each date on which a Report is filed, or during
any period in which the Prospectus relating to the Placement Shares is required
to be delivered by Jones, each time that the Registration Statement is amended
or the Prospectus supplemented to include additional financial statements, the
Fund shall cause its independent accountants to furnish Jones letters (the
"COMFORT LETTERS"), dated the date of each such date, in form and substance
satisfactory to Jones, (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of such date,
the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
17
letters" to underwriters in connection with registered public offerings (the
first such letter, the "INITIAL COMFORT LETTER") and (iii) updating the Initial
Comfort Letter with any information that would have been included in the Initial
Comfort Letter had it been given on such date and modified as necessary to
relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter. Notwithstanding the foregoing, in the
event that a Representation Date is triggered by the filing of the Fund's
semi-annual report and to the extent the Fund's independent accountants have not
been engaged by the Fund to perform a review of the Fund's unaudited semi-annual
financial statements in connection with such filing, then no Comfort Letter
contemplated by this Section 7(m) shall be required; provided, however, that in
such case the Fund shall deliver to Jones on the applicable Representation Date
a certificate of the Fund's chief financial officer substantially in the form
attached hereto as Exhibit 7(m) (the "CFO CERTIFICATE").
(n) On the date hereof and thereafter as of each Representation Date, the
Fund and the Adviser shall furnish Jones with a certificate of its respective
Secretary, in form and substance reasonably satisfactory to Jones.
(o) Each Placement Notice issued by the Fund to Jones shall be deemed to
be an affirmation that the representations and warranties made by it in this
Agreement are true and correct in all material respects at the time such
Placement Notice is issued, and that the Fund has complied in all material
respects with all of the agreements to be performed by it hereunder at or prior
to such time.
(p) The Fund (including its agents and representatives, other than Jones
in its capacity as such) will not make, use, prepare, authorize, approve or
refer to any written communication (as defined in Rule 405 under the Act),
required to be filed with the Commission, that constitutes an offer to sell or
solicitation of an offer to buy Placement Shares hereunder, except by means of
the Prospectus.
(q) The Fund will comply with all requirements imposed upon it by the
Securities Act, the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder (collectively, the "EXCHANGE ACT") and the Investment
Company Act as from time to time in force, so far as necessary to permit the
continuance of sales of, or dealings in, the Placement Shares as contemplated by
the provisions hereof and the Prospectus.
(r) Without the written consent of Jones, the Fund will not, directly or
indirectly, offer to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of any Shares (other than the Placement Shares offered
pursuant to the provisions of this Agreement) or securities convertible into or
exchangeable for Shares, warrants or any rights to purchase or acquire, Shares
during the period beginning on the fifth (5th) Trading Day immediately prior to
the date on which any Placement Notice is delivered to Jones hereunder and
ending on the fifth (5th) Trading Day immediately following the final Settlement
Date with respect to Placement Shares sold pursuant to such Placement Notice;
PROVIDED, HOWEVER, that such restrictions will not be required in connection
with the Fund's issuance or sale of Shares pursuant to (i) the Dividend
Reinvestment Plan, and (ii) conversion of securities or the exercise of
warrants, options or other rights in effect or outstanding as of the date of
this Agreement.
18
(s) The Fund will furnish to Jones and its counsel (at the expense of the
Fund) copies of the Registration Statement, the Prospectus and all amendments
and supplements to the Registration Statement or Prospectus relating to the
registration and issuance of the Placement Shares pursuant to this Agreement
that are filed with the Commission during the period in which a prospectus
relating to the Placement Shares is required to be delivered under the
Securities Act, in each case as soon as reasonably practicable and in such
quantities as Jones may from time to time reasonably request.
(t) The Fund and the Adviser acknowledge and agree that Jones has informed
the Fund that Jones may, to the extent permitted under the Securities Act,
Exchange Act and the Investment Company Act, purchase and sell Placement Shares
for its own account at the same time as Placement Shares are being sold by the
Fund pursuant to this Agreement, provided that (i) the Fund shall not be deemed
to have authorized or consented to any such purchases or sales by Jones and (ii)
no such purchases or sales shall take place while a Placement Notice is in
effect (except to the extent Jones may engage in sales of Placement Shares (A)
purchased or deemed purchased from the Fund as a "riskless principal" or in a
similar capacity or (B) with respect to errors that cause Jones to take
unplanned principal positions, in each case to the extent such sales are
permitted under the Securities Act, the Exchange Act and the Investment Company
Act).
(u) The Fund will not, directly or indirectly, (i) take any action
designed to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Fund to facilitate the sale or resale of the Placement Shares or
(ii) sell, bid for, or purchase the Placement Shares, or pay anyone any
compensation for soliciting purchases of the Placement Shares other than Jones;
PROVIDED, HOWEVER, the Fund may issue and sell Shares pursuant to the Dividend
Reinvestment Plan.
(v) During the term of this Agreement, each of the Fund and the Adviser
will furnish to Jones such information regarding itself as reasonably requested
by Jones.
8. Conditions to Jones's Obligations. The obligations of Jones hereunder
with respect to a Placement will be subject to the continuing accuracy and
completeness of the representations and warranties made by the Fund and the
Adviser herein, to the due performance by the Fund and the Adviser of their
respective obligations hereunder, and to the continuing satisfaction (or waiver
by Jones in its sole discretion) of the following additional conditions:
(a) The Registration Statement shall have become effective and shall be
available for the sale of (i) all Placement Shares issued pursuant to all prior
Placements and not yet sold by Jones and (ii) all Placement Shares contemplated
to be issued by the Placement Notice relating to such Placement.
(b) None of the following events shall have occurred and be continuing:
(i) receipt by the Fund of any request for additional information from the
Commission or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement, the response to which
would require any amendments or supplements to the Registration Statement or the
Prospectus relating to or affecting the Placement Shares; (ii) the issuance by
the Commission or any other federal or state governmental authority of any stop
19
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, including any notice objecting
to the use of the Registration Statement or order pursuant to Section 8(e) of
the Investment Company Act having been issued and proceedings therefor
initiated, or to the knowledge of the Fund, threatened by the Commission; (iii)
receipt by the Fund of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Placement Shares for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; (iv) the occurrence of any event that makes any statement made in
the Registration Statement or the Prospectus untrue in any material respect or
that requires the making of any changes in the Registration Statement or
Prospectus so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and, that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and (v) the
Fund's reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate.
(c) Jones shall not have advised the Fund that the Registration Statement
or Prospectus, or any amendment or supplement thereto, contains an untrue
statement of a material fact regarding Jones that in Jones' opinion is material,
or omits to state a fact regarding Jones that in Jones' opinion is material and
is required to be stated therein or is necessary to make the statements therein,
in light of the circumstances under which it was made, not misleading.
(d) Except as contemplated or disclosed in the Prospectus, there shall not
have been any material change, on a consolidated basis, in the authorized
capital stock of the Fund or any Fund Material Adverse Effect or Adviser
Material Adverse Effect, or any development that may reasonably be expected to
cause a Fund Material Adverse Effect, Adviser Material Adverse Effect, or a
downgrading in or withdrawal of the rating assigned to any of the Fund's debt or
preferred securities by any rating organization or a public announcement by any
rating organization that it has under surveillance or review its rating of any
of the Fund's debt or preferred securities, the effect of which, in the sole
judgment of Jones (without relieving the Fund of any obligation or liability it
may otherwise have), is so material as to make it impracticable or inadvisable
to proceed with the offering of the Placement Shares on the terms and in the
manner contemplated in the Prospectus.
(e) Jones shall have received the opinion of Fund Counsel required to be
delivered pursuant Section 7(k) on or before the date on which such delivery of
such opinion is required pursuant to Section 7(k).
(f) Jones shall have received the opinion of Adviser Counsel required to
be delivered pursuant Section 7(l) on or before the date on which such delivery
of such opinion is required pursuant to Section 7(l).
(g) Jones shall have received the Comfort Letter, and to the extent
applicable, the CFO Certificate, required to be delivered pursuant Section 7(m)
on or before the date on which such delivery of such letter and CFO Certificate
is required pursuant to Section 7(m).
20
(h) Jones shall have received the certificates required to be delivered
pursuant to Section 7(j) and Section 7(n) on or before the date on which
delivery of such certificate is required pursuant to Section 7(j) and Section
7(n), respectively.
(i) Trading in the Shares shall not have been suspended on the NYSE.
(j) On each date on which the Fund is required to deliver a certificate
pursuant to Section 7(j), the Fund shall have furnished to Jones such
appropriate further information, certificates and documents as Jones may
reasonably request. All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof. The Fund will furnish Jones
with such conformed copies of such opinions, certificates, letters and other
documents as Jones shall reasonably request.
(k) All filings with the Commission required by Rule 497 under the
Securities Act to have been filed prior to the giving of any Placement Notice
hereunder shall have been made within the applicable time period prescribed for
such filing by Rule 497.
(l) The Placement Shares shall have been approved for listing on the NYSE,
subject only to notice of issuance.
(m) There shall not have occurred any event that would permit Jones to
terminate this Agreement pursuant to Section 11(a).
(n) Prior to the date hereof, FINRA shall have confirmed that it has no
objection with respect to the fairness and reasonableness of the placement terms
and arrangements set forth herein.
9. Indemnification and Contribution.
(a) Indemnification by the Fund and the Adviser. The Fund and the Adviser,
jointly and severally, agree to indemnify and hold harmless Jones, its
directors, members, officers and each person, if any, who controls Jones within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) including any information deemed to
be a part thereof pursuant to Rule 430A or Rule 497 under the Securities
Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or arising out of any untrue statement or alleged untrue
statement of a material fact included in any sales material, any
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
21
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
9(e) below) any such settlement is effected with the written consent of
the Fund and the Adviser; and
(3) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Jones), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (1) or (2)
above,
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the Fund
or the Adviser by Jones expressly for use in the Registration Statement (or any
amendment thereto), any sales material, or in any Prospectus (or any amendment
or supplement thereto).
(b) Indemnification by Jones. Jones agrees to indemnify and hold harmless
each of the Fund and the Adviser, each of their directors, trustees, members,
each of their officers who signed the Registration Statement, and each person,
if any, who controls the Fund or the Adviser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section 9, as incurred, but only with respect to (i) any
failure by Jones to comply with the prospectus delivery requirements applicable
to the Placement Shares; and (ii) untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), any sales material, or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Fund and the Adviser by Jones expressly for use in the
Registration Statement (or any amendment thereto), any sales material, or any
Prospectus (or any amendment or supplement thereto). The Fund and the Adviser
acknowledge that Jones has not furnished any information to the Fund for
inclusion in the Prospectus.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. Counsel to the indemnified parties shall be selected as follows:
counsel to Jones, its directors, members, officers, and each person, if any, who
controls Jones within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act shall be selected by Jones; counsel to the Fund, its
directors, trustees, members, each of its officers who signed the Registration
Statement and each person, if any, who controls the Fund within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall be
selected by the Fund; and counsel to the Adviser and each person, if any, who
22
controls the Adviser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall be selected by the Adviser. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for the fees and expenses
of more than one counsel (in addition to any local counsel) separate from their
own counsel for Jones and each person, if any, who controls Jones within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
the fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for the Fund, each of their directors,
trustees, members, each of its officers who signed the Registration Statement
and each person, if any, who controls the Fund within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, the fees and expenses
of more than one counsel (in addition to any local counsel) separate from their
own counsel for the Adviser, and the fees and expenses of more than one counsel,
in each case in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 9 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 9(a)(2) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Other Agreements with Respect to Indemnification and Contribution. The
provisions of this Section 9 hereof shall not affect any agreements among the
Fund and the Adviser with respect to indemnification of each other or
contribution between themselves.
(f) Contribution.
(1) If the indemnification provided for in this Section 9 hereof is
for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages
or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i)
in such proportion as is appropriate to reflect the relative benefits
23
received by the Fund and the Adviser, as applicable, on the one hand and
Jones on the other hand from the offering of the Placement Shares pursuant
to this Agreement or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Fund and the Adviser, as applicable, on the
one hand and of Jones on the other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages
or expenses, as well as any other relevant equitable considerations.
(2) The relative benefits received by the Fund and the Adviser, as
applicable, on the one hand and Jones on the other hand in connection with
the offering of the Placement Shares pursuant to this Agreement shall be
deemed to be in the same respective proportions as the Net Proceeds from
the offering of the Placement Shares pursuant to this Agreement (before
deducting expenses) received by the Fund and the Adviser, as applicable,
and the total discounts and commissions received by Jones as calculated in
accordance with the terms set forth in Schedule 2, bear to the aggregate
gross proceeds from the sale of Placement Shares pursuant to this
Agreement.
(3) The relative fault of the Fund and the Adviser, as applicable,
on the one hand and Jones on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Fund, by the
Adviser or by Jones and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(4) The Fund, the Adviser and Jones agree that it would not be just
and equitable if contribution pursuant to this Section 9(f) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this Section 9(f). The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred
to above in this Section 9(f) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue or
alleged untrue statement or omission or alleged omission.
(5) Notwithstanding the provisions of this Section 9(f), Jones shall
not be required to contribute any amount in excess of the amount by which
the total price of the Placement Shares actually distributed by Jones
exceeds the amount of any damages that Jones has otherwise been required
to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
(6) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(7) For purposes of this Section 9(f), each person, if any, who
controls Jones within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
24
as Jones, and each person who controls the Fund, any Adviser within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, each officer of the Fund, the Adviser and each trustee, director or
member of the Fund and the Adviser shall have the same rights to
contribution as the Fund and the Adviser.
(g) The indemnity and contribution agreements contained in this Section 9
and the representation and warranties of the Fund and the Adviser set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of Jones, its partners, officers
or employees, or any person controlling Jones, within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, and or by or on behalf
of the Fund and/or any Adviser, its directors and officers or any person who
controls the Fund, and/or any Adviser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) delivery and acceptance
of the Placement Shares and payment therefor, or (iii) any termination of this
Agreement. A successor to Jones or to the Fund or any Adviser, its respective
directors or officers, or any person controlling the Fund, or any Adviser, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 9.
10. Representations and Agreements to Survive Delivery. All
representations and warranties of the Fund and the Adviser herein or in
certificates delivered pursuant hereto shall survive, as of their respective
dates, regardless of (i) any investigation made by or on behalf of Jones, any
controlling persons, or the Fund and/or any Adviser (or any of their respective
officers, directors or controlling persons), (ii) delivery and acceptance of the
Placement Shares and payment therefor or (iii) any termination of this
Agreement.
11. Termination.
(a) Jones shall have the right by giving notice as hereinafter specified
at any time to terminate this Agreement if (i) any Fund Material Adverse Effect
or Adviser Material Adverse Effect, has occurred which, in the reasonable
judgment of Jones, may materially impair the investment quality of the Placement
Shares, (ii) the Fund or the Adviser shall have failed, refused or been unable
to perform any agreement on its part to be performed hereunder; provided,
however, in the case of any failure of the Fund or the Adviser to deliver (or
cause another person to deliver) any certification, opinion, or letter required
under Sections 7(j), 7(k), 7(l) or 7(m) Jones' right to terminate shall not
arise unless such failure to deliver (or cause to be delivered) continues for
more than thirty (30) days from the date of such Representation Date pursuant to
which such delivery was required; provided, further, that, Jones shall have the
right to suspend its obligations hereunder, regardless of whether a Placement
Notice is pending, beginning on the sixth (6th) day after the date of any
Representation Date if any certification, opinion, or letter referenced in the
foregoing proviso has not yet been (or caused to be) delivered; (iii) any other
condition of Jones's obligations hereunder is not fulfilled, or (iv) any
suspension or limitation of trading in the Placement Shares or in securities
generally on the NYSE shall have occurred. Any such termination shall be without
liability of any party to any other party except that the provisions of Section
7(e), Section 9, Section 10, Section 15, Section 17 and Section 19 hereof shall
remain in full force and effect notwithstanding such termination. If Jones
25
elects to terminate this Agreement as provided in this Section 11, Jones shall
provide the required notice as specified herein.
(b) The Fund shall have the right, by giving notice as hereinafter
specified to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 7(e), Section 9, Section 10, Section 15,
Section 17 and Section 19 hereof shall remain in full force and effect
notwithstanding such termination.
(c) Jones shall have the right, by giving notice as hereinafter specified
to terminate this Agreement in its sole discretion at any time following the
period of twelve (12) months after the date of this Agreement. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 7(e), Section 9, Section 10, Section 15, Section
17 and Section 19 hereof shall remain in full force and effect notwithstanding
such termination.
(d) This Agreement shall remain in full force and effect unless terminated
pursuant to Sections 11(a), (b) or (c) above or otherwise by mutual agreement of
the parties; provided, however, that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 7(e), Section 9, Section
10, Section 15, Section 17 and Section 19 shall remain in full force and effect.
(e) Except as otherwise provided in Sections 11(b) and 11(c), any
termination of this Agreement shall be effective on the date specified in such
notice of termination; provided, however, that such termination shall not be
effective until the close of business on the date of receipt of such notice by
Jones or the Fund or Adviser, as the case may be. If such termination shall
occur prior to the Settlement Date for any sale of Placement Shares, such
Placement Shares shall settle in accordance with the provisions of this
Agreement.
(f) Any Reimbursable Amounts owed to Jones upon a termination in
accordance with this Section 11 shall be payable by the Fund to Jones only to
the extent such Reimbursable Amounts are actually incurred by Jones as
contemplated by FINRA Rule 5110(f)(2)(D).
12. Notices. All notices or other communications required or permitted to
be given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and if sent to Jones, shall be delivered to Jones at
JonesTrading Institutional Services LLC, 32133 Lindero Canyon Road, Suite 208,
Westlake Village, California 91361, fax no. (781) 416-2899, Attention: General
Counsel, and Troutman Sanders LLP, 1001 Haxall Point, Richmond, Virginia 23218,
fax no. (804) 698-5196, Attention: David M. Carter; if sent to the Fund or, the
Adviser, shall be delivered to First Trust Advisors L.P., Attention: General
Counsel, fax no.: (630) 517-7437), with a copy to Chapman and Cutler LLP,
Attention: Eric F. Fess, telephone (312) 845-3781 fax: (312) 701-2361. Each
party to this Agreement may change such address for notices by sending to the
parties to this Agreement written notice of a new address for such purpose. Each
such notice or other communication shall be deemed given (i) when delivered
personally or by verifiable facsimile transmission (with an original to follow)
on or before 4:30 p.m., New York City time, on a Business Day or, if such day is
not a Business Day, on the next succeeding Business Day, (ii) on the next
26
Business Day after timely delivery to a nationally-recognized overnight courier
and (iii) on the Business Day actually received if deposited in the U.S. mail
(certified or registered mail, return receipt requested, postage prepaid). For
purposes of this Agreement, "BUSINESS DAY" shall mean any day on which the NYSE
and commercial banks in the City of New York are open for business.
13. Successors. This Agreement shall inure to the benefit of and be
binding upon Jones, the Fund and the Adviser and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than Jones, the Fund
and the Adviser and their respective successors and the controlling persons and
directors, officers, members and trustees referred to in Section 9 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of Jones, the Fund and the Adviser and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Placement Shares from Jones shall
be deemed to be a successor by reason merely of such purchase.
14. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed in such state.
16. General Provisions. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in
writing by each party whom the condition is meant to benefit. The Section
headings, titled and captions herein are for the convenience of the parties only
and shall not affect the construction or interpretation of this Agreement.
17. Waiver of Jury Trial. The Fund, the Adviser and Jones each hereby
irrevocably waives any right it may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or any transaction
contemplated hereby.
18. Adjustments for Stock Splits. The parties acknowledge and agree that
all share related numbers contained in this Agreement shall be adjusted to take
into account any stock split, stock dividend or similar event effected with
respect to the Shares.
27
19. Absence of Fiduciary Relationship. The Fund and the Adviser
acknowledge that in connection with the offering of the Placement Shares: (a)
Jones has acted at arm's length and owes no fiduciary duties to, the Fund, the
Adviser or any other person; (b) Jones owes the Fund and the Adviser only those
duties and obligations set forth in this Agreement and prior written agreements
(to the extent not superseded by this Agreement), if any, and (iii) Jones may
have interests that differ from those of the Funds and the Adviser. The Fund and
the Adviser waive to the full extent permitted by applicable law any claims any
of them may have against Jones arising from an alleged breach of fiduciary duty
in connection with the offering of the Placement Shares as contemplated by this
Agreement
20. Limitation of Liability. The Declaration of Trust is on file with the
Secretary of The Commonwealth of Massachusetts. This Agreement is executed on
behalf of the Fund by the Fund's officers as officers and not individually and
the obligations imposed upon the Fund by this Agreement are not binding upon any
of the Fund's shareholders individually but are binding only upon the assets and
property of the Fund.
If the foregoing correctly sets forth the understanding between the Fund,
the Adviser and Jones, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Fund, the Adviser and Jones.
Very truly yours,
FIRST TRUST SENIOR FLOATING RATE INCOME FUND II
By: /s/ Mark R. Bradley
------------------------------------
Name: Mark R. Bradley
Title: President
FIRST TRUST ADVISORS L.P.
By: /s/ Mark R. Bradley
------------------------------------
Name: Mark R. Bradley
Title: Chief Operating Officer
ACCEPTED AS OF THE DATE
FIRST-ABOVE WRITTEN:
JONESTRADING INSTITUTIONAL SERVICES LLC
By: /s/ Alan Hill
------------------------------------
Name: Alan Hill
Title: Chief Financial Officer
SCHEDULE 1
FORM OF PLACEMENT NOTICE
------------------------
From: [ ]
Cc: [ ]
To: [ ]
Subject: Capital On Demand - Placement Notice
Date:
Gentlemen:
Pursuant to the terms and subject to the conditions contained in the Capital On
Demand(TM) Sales Agreement between First Trust Senior Floating Rate Income Fund
II (the "FUND"), First Trust Advisors L.P. and JonesTrading Institutional
Services LLC ("JONES") dated November 21, 2012, I hereby request on behalf of
the Fund that Jones sell up to [ ] shares of the Fund's common shares of
beneficial interest, no par value per share, at a minimum market price of
$_______ per share.
The time period during which sales are requested to be made shall be
________________.
[No more than __________ shares may be sold in any one trading day.]
Discount/Commission: ______________________
ADDITIONAL SALES PARAMETERS MAY BE ADDED, SUCH AS SPECIFIC DATES THE SHARES MAY
NOT BE SOLD ON, THE MANNER IN WHICH SALES ARE TO BE MADE BY JONES, AND/OR THE
CAPACITY IN WHICH JONES MAY ACT IN SELLING SHARES (AS PRINCIPAL, AGENT, OR
BOTH).
ANY AND ALL SALES PARAMETERS TO BE SET FORTH IN A PLACEMENT NOTICE MAY BE
CONVEYED TO JONES IN AN E-MAIL NOTICE OR OTHER METHOD MUTUALLY AGREED TO IN
WRITING BY THE PARTIES, AS CONTEMPLATED BY SECTION 2 OF THE AGREEMENT.
S-1
SCHEDULE 2
COMPENSATION
The amount of any discount, commission or other compensation (other than the
Reimbursable Amounts), to be paid by the Fund to Jones shall be between 100 and
300 basis points of the gross proceeds with respect to sales actually effected
by Jones, with the exact amount of such discount, commission or other
compensation to be mutually agreed upon by the parties from time to time, as set
forth in the Placement Notice.
S-2
SCHEDULE 3
JONESTRADING INSTITUTIONAL SERVICES LLC
Shlomo "Moe" Cohen Steven A. Chmielewski
Managing Director Chief Operating Officer & General Counsel
JonesTrading Institutional Services LLC JonesTrading Institutional Services LLC
780 Third Avenue, 3rd Floor 265 Franklin Street, 18th Floor
New York, NY 10017 Boston, MA 02110
(212) 907-5332 (781) 416-2896
moec@jonestrading.com steve@jonestrading.com
Alan F. Hill Andrew F. Tuthill
Chief Financial Officer Managing Director, Head of Capital Markets
JonesTrading Institutional Services LLC JonesTrading Institutional Services LLC
32133 Lindero Canyon Road Suite 208 655 Redwood Highway, Suite 101
Westlake Village, CA 91361 Mill Valley, CA 94941
(818) 991-5500 (415) 384-3513
alanh@jonestrading.com andrewt@jonestrading.com
FIRST TRUST SENIOR FLOATING RATE INCOME FUND II
Mark R. Bradley W. Scott Jardine
120 East Liberty Drive 120 East Liberty Drive
Suite 400 Suite 400
Wheaton, IL 60187 Wheaton, IL 60187
(630) 765-8770 (630) 765-8798
mbradley@ftportfolios.com sjardine@ftportfolios.com
James M. Dykas Daniel J. Lindquist
120 East Liberty Drive 120 East Liberty Drive
Suite 400 Suite 400
Wheaton, IL 60187 Wheaton, IL 60187
(630) 517-7665 (630) 765-8692
jdykas@ftadvisors.com dlindquist@ftadvisors.com
Christopher R. Fallow Coleen D. Lynch
120 East Liberty Drive 120 East Liberty Drive
Suite 400 Suite 400
Wheaton, IL 60187 Wheaton, IL 60187
(630) 517-7628 (630) 517-7660
cfallow@ftadvisors.com clynch@ftadvisors.com
Kristi A. Maher
120 East Liberty Drive
Suite 400
Wheaton, IL 60187
(630) 517-7506
kmaher@ftportfolios.com
S-3
EXHIBIT 7(J)
FUND OFFICER CERTIFICATE
The undersigned, the duly qualified and elected _______________________ of
First Trust Senior Floating Rate Income Fund II (the "FUND"), does hereby
certify in such capacity and on behalf of the Fund, pursuant to Section 7(j) of
the Sales Agreement dated November 21, 2012 (the "SALES AGREEMENT") between the
Fund, First Trust Advisors L.P. and JonesTrading Institutional Services LLC,
that to the best of the knowledge of the undersigned:
(i) Except for non-material exceptions as may be set forth on Annex A
hereto, the representations and warranties of the Fund in Section 6(a) of the
Sales Agreement are true and correct on and as of the date hereof, with the same
force and effect as if expressly made on and as of the date hereof; and
(ii) The Fund has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.
By:
-------------------------
Name:
Title:
Date:
EXHIBIT 7(J) (CONT'D)
ADVISER OFFICER CERTIFICATE
The undersigned, the duly qualified and elected _______________________ of
First Trust Advisors L.P. (the "ADVISER"), an Illinois limited partnership, does
hereby certify in such capacity and on behalf of the Adviser, pursuant to
Section 7(j) of the Sales Agreement dated November 21, 2012 (the "SALES
AGREEMENT") between the Adviser, First Trust Senior Floating Rate Income Fund II
and JonesTrading Institutional Services LLC, that to the best of the knowledge
of the undersigned:
(i) Except for non-material exceptions as may be set forth on Annex A
hereto, the representations and warranties of the Adviser in Section 6(b) of the
Sales Agreement are true and correct on and as of the date hereof, with the same
force and effect as if expressly made on and as of the date hereof; and
(ii) The Adviser has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.
By:
-------------------------
Name:
Title:
Date:
EXHIBIT 7(K)(1)
FORM OF OPINION OF FUND COUNSEL
i. The Registration Statement and all post-effective amendments thereto,
if any, are effective under the Act and no stop order with respect thereto has
been issued and no proceeding for that purpose has been instituted or, to the
best of our knowledge, is threatened by the Commission. Any filing of the
Prospectus or any supplements thereto required under Rule 497 under the Act
prior to the date hereof have been made in the manner and within the time
required by such rule.
ii. The Fund is duly licensed and qualified to do business and in good
standing in each jurisdiction in which its ownership or leasing of property or
its conducting of business as described in the Registration Statement and
Prospectus (and any amendment or supplement thereto) requires such
qualification; and the Fund owns, possesses or has obtained and currently
maintains all governmental licenses, permits, consents, orders, approvals and
other authorizations necessary to carry on its business as described in the
Prospectus, except where the failure to obtain such licenses, permits, consents,
orders, approvals and other authorizations, either alone or in the aggregate,
would not have a Fund Material Adverse Effect. The Fund has no subsidiaries.
iii. The Shares conform in all material respects to the description of
them in the Prospectus under the caption "Description of Shares - Common Shares"
in the Prospectus. All of the outstanding Shares have been duly authorized and
are validly issued, fully paid and (except as described in the Prospectus under
the caption "Certain Provisions in the Declaration of Trust") nonassessable. The
Placement Shares have been duly authorized for issuance and sale pursuant to
this Agreement and when issued and delivered against payment therefore in
accordance with the Agreement will have been validly issued and will be fully
paid and nonassessable (except as described in the Prospectus under the caption
"Certain Provisions in the Declaration of Trust"). No person is entitled to any
preemptive or other similar rights with respect to the Placement Shares under
the Declaration of Trust or Bylaws of the Fund or Massachusetts law or, to
counsel's knowledge, otherwise.
iv. The Fund is duly registered with the Commission under the Investment
Company Act as a non-diversified, closed-end management investment company and
all action under the Act and the Investment Company Act, as the case may be,
necessary to make the public offering and consummate the sale of the Placement
Shares as provided in the Agreement has or will have been taken by the Fund. To
such counsel's knowledge, the Fund has not received any notice from the
Commission pursuant to Section 8(e) of the Investment Company Act with respect
to the registration of the Fund with the Commission under the Investment Company
Act.
v. The Fund has full power and authority to enter into this Agreement and
each of the Fund Agreements and to perform all of the terms and provisions
thereof to be carried out by it and (A) each Fund Agreement and the Agreement
has been duly and validly authorized, executed and delivered by the Fund, (B)
each Fund Agreement and the Agreement complies in all material respects with all
applicable provisions of the Act, the Investment Company Act and the Advisers
Act, as the case may be, and (C) assuming due authorization, execution and
delivery by the other parties thereto, each Fund Agreement constitutes the
legal, valid and binding obligation of the Fund enforceable against the Fund in
accordance with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
vi. None of (A) the execution and delivery by the Fund of the Agreement or
the Fund Agreements, (B) the issue, sale and delivery by the Fund of the
Placement Shares as contemplated by the Agreement and (C) the performance by the
Fund of its obligations under the Agreement and the Fund Agreements or
consummation by the Fund of the other transactions contemplated by the Agreement
or the Fund Agreements result in (i) the creation or imposition of any lien,
charge or encumbrance upon the assets of the Fund pursuant to any agreement or
instrument to which the Fund is a party or by which the Fund is bound that is
described in the Registration Statement or the Prospectus or filed as an exhibit
to the Registration Statement, or (ii) conflicts with or will conflict with, or
results or will result in a breach or violation of (a) the Declaration of Trust
or the By-laws of the Fund or (b) any agreement or instrument to which the Fund
is a party or by which the Fund is bound that is described in the Registration
Statement or the Prospectus or filed as an exhibit to the Registration Statement
or (c) any federal or State of Illinois statute, law or regulation (except we
express no opinion as to applicable state securities and blue sky laws, and
except that the indemnification provisions in the Agreement and the Fund
Agreements, insofar as they relate to indemnification for liabilities arising
under the Act, may be against public policy as expressed in the Act and
therefore unenforceable) or (d) order of any court, governmental
instrumentality, securities exchange or association or arbitrator, whether
foreign or domestic, specifically naming the Fund and known to us (provided that
we express no opinion with respect to any financial test or cross-default
provision in any such agreement).
vii. No consent, approval, authorization or order of any court (to our
knowledge) or governmental agency or body or securities exchange or association
is required by the Fund for the consummation by the Fund of the transactions to
be performed by the Fund or the performance by the Fund of all the terms and
provisions to be performed by or on behalf of it in each case as contemplated in
the Agreement and the Fund Agreements, except such as (A) have been obtained
under the Act and the Investment Company Act and (B) may be required under state
securities or "blue sky" or the NYSE in connection with the issuance and sale of
the Placement Shares pursuant to the Agreement.
viii. To our knowledge, there are no contracts or other documents which
are required to be described in the Registration Statement and the Prospectus or
filed as exhibits to the Registration Statement by the Act or the Investment
Company Act which have not been described in the Registration Statement and the
Prospectus or filed as exhibits to the Registration Statement.
ix. The sections in the Prospectus entitled "Certain Provisions in the
Declaration of Trust and By-laws" and "Certain Federal Income Tax Matters" and
the section in the Statement of Additional Information entitled "Certain Federal
Income Tax Matters" is a fair and accurate summary of the principal United
States federal income tax rules currently in effect applicable to the Fund and
to the purchase, ownership and disposition of the Placement Shares, subject to
the qualifications therein.
x. To our knowledge, there is no legal or governmental proceeding pending
against the Fund that is either (i) required to be described in the Registration
Statement or Prospectus that is not already described or (ii) asserts the
invalidity of any of the Fund Agreements.
xi. The Registration Statement, the Prospectus and each amendment or
supplement to the Registration Statement and/or the Prospectus, as of their
respective effective or issue dates (other than the financial statements, the
notes thereto, and supporting schedules included therein or omitted therefrom,
as to which we express no view) and the Fund Agreements complied or comply in
all material respects to the requirements of the Act and the Investment Company
Act.
In addition, we have participated in conferences with officers and other
representatives of the Fund, representatives of the independent registered
public accountants for the Fund, and representatives of Jones and their counsel,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed. We have not independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the information included in the Registration Statement and the
Prospectus. Based solely on the participation and discussion described above,
however, nothing has come to our attention that would lead us to believe that
the Registration Statement (except for financial statements and schedules and
other financial or accounting data included therein, as to which we need make no
statement) at the time such Registration Statement became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus (except for financial statements and
schedules and other financial or accounting data included therein, as to which
we need make no statement), at the time filed pursuant to Rule 497 and on the
date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
EXHIBIT 7(K)(2)
MATTERS TO BE COVERED BY
FUND COUNSEL OPINION UPON SEMI-ANNUAL REPORT FILING
We have participated in conferences with officers and other
representatives of the Fund, representatives of the independent registered
public accountants for the Fund, and representatives of Jones and their counsel,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed. We have not independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the information included in the Registration Statement and the
Prospectus. Based solely on the participation and discussion described above,
however, nothing has come to our attention that would lead us to believe that
the Registration Statement (except for financial statements and schedules and
other financial or accounting data included therein, as to which we need make no
statement) at the time such Registration Statement became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus (except for financial statements and
schedules and other financial or accounting data included therein, as to which
we need make no statement), at the time filed pursuant to Rule 497 and on the
date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
EXHIBIT 7(L)
FORM OF OPINION OF ADVISER COUNSEL
i. The Adviser has been duly formed and is validly existing as a limited
partnership under the laws of the State of Illinois with full power and
authority to own or lease all of the assets owned or leased by it and to conduct
its business as described in the Registration Statement and Prospectus and to
enter into and perform its obligations under the Agreement, the Advisory
Agreement (the "Advisory Agreement").
ii. The Adviser is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment adviser for the Fund as contemplated by the
Advisory Agreement, the Registration Statement and the Prospectus. To such
counsel's knowledge, there does not exist any pending or threatened proceeding
which could reasonably be expected to adversely affect the registration of the
Adviser with the Commission.
iii. The Adviser has full power and authority to enter into the Advisory
Agreement and to carry out all the terms and provisions thereof to be carried
out by it, and the Advisory Agreement has been duly and validly authorized,
executed and delivered by the Adviser; the Advisory Agreement complies in all
material respects with all provisions of the Securities Act, Investment Company
Act and the Advisers Act; and assuming due authorization, execution and delivery
by the other parties thereto, the Advisory Agreement constitutes a legal, valid
and binding obligation of the Adviser, enforceable against the Adviser in
accordance with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
iv. Neither (A) the execution and delivery by the Adviser of any Advisory
Agreement nor (B) the consummation by the Adviser of the transactions
contemplated by, or the performance of its obligations under the Advisory
Agreement conflicts or will conflict with, or results or will result in a breach
of, the organizational documents of the Adviser or any agreement or instrument
known to us to which the Adviser is a party or by which the Adviser is bound, or
any federal or Illinois law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association or arbitrator,
whether foreign or domestic, specifically naming the Adviser and known to us,
except in each case for such conflicts or breaches which would not reasonably be
expected, either alone or in the aggregate, to have a material adverse effect on
the Adviser's ability to perform its obligations under the Advisory Agreement,
provided, that we express no opinion with respect to any financial test or
cross-default provision in any such Advisory Agreement.
v. No consent, approval, authorization or order of any court (to our
knowledge), of any governmental agency or body or securities exchange or
association, whether foreign or domestic, is required for the consummation by
the Adviser of the transactions contemplated in, or the performance by the
Adviser of its obligations under, any Adviser Agreement, except (i) such as have
been obtained under the federal securities laws and (ii) may be required by the
NYSE or under state securities or "blue sky" laws, in connection with the
issuance and sale of the Placement Shares pursuant to the Agreement.
vi. To our knowledge, there is no legal or governmental proceeding pending
against the Adviser that is either (i) required to be described in the
Registration Statement or Prospectus that is not already described, (ii) which
would, under Section 9 of the Investment Company Act, make the Adviser
ineligible to act as the Fund's investment adviser or (iii) asserts the
invalidity of any of the Advisory Agreement.
vii. There are no contracts or other documents which are required to be
described in the Registration Statement and the Prospectus or filed as exhibits
to the Registration Statement by the Securities Act or the Investment Company
Act which relate to the Adviser and have not been described in the Registration
Statement and the Prospectus or filed as exhibits to the Registration Statement.
viii. The description in the Prospectus of the Adviser and its business
complies in all material respects with all applicable requirements of the
Securities Act and the Investment Company Act.
In addition, we have participated in conferences with officers and other
representatives of the Adviser, representatives of the independent registered
public accountants for the Fund, and representatives of Jones and their counsel,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed. We have not independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the information included in the Registration Statement and the
Prospectus. Based solely on the participation and discussions described above,
however, nothing has come to our attention that would lead us to believe that
solely with respect to the description of the Adviser, the Registration
Statement (except for financial statements and schedules and other financial or
accounting data included therein, as to which we need make no statement) at the
time such Registration Statement became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; or that the
Prospectus (except for financial statements and schedules and other financial or
accounting data included therein, as to which we need make no statement), at the
time filed pursuant to Rule 497 and on the date hereof, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
EXHIBIT 7(M)
_________ ___, 20__
JonesTrading Institutional Services LLC
780 Third Avenue, 3rd Floor
New York, New York 10017
Ladies and Gentlemen:
This certificate of First Trust Senior Floating Rate Income Fund II, a
Massachusetts business trust (the "Fund"), is being delivered on behalf of the
Fund by ________, in connection with the Sales Agreement, dated November 21,
2012, among the Fund, First Trust Advisors L.P. and JonesTrading Institutional
Services LLC (the "Agent") in relation to the issuance and sale from time to
time of shares of up to __________ of the Fund's common shares of beneficial
interest through the Agent.
I hereby certify that I am the duly elected Chief Financial Officer of the
Fund.
I have reviewed the Fund's unaudited semi-annual financial statements and
financial highlights as of and for the semi-annual period ended May 31,
20__ attached hereto as Exhibit A and included in the Fund's semi-annual
report on Form N-CSRS (the "Semi-Annual Financial Statements") and for
purposes of this certification, have inquired of other officials of the
Fund, as necessary, who have responsibility for certain financial and
accounting matters.
Nothing has come to my attention based on my review of the Semi-Annual
Financial Statements and my inquiries of other Fund officials as stated
above, that causes me to believe that:
(a) any material modifications should be made to the Semi-Annual
Financial Statements for them to be in conformity with
accounting principles generally accepted in the United States
of America; and
(b) the Semi-Annual Financial Statements do not comply as to form
in all material respects with the applicable accounting
requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, and the rules
and regulations adopted thereunder by the Securities and
Exchange Commission.
[Remainder of page intentionally blank]
Signed by me this _____ day of __________, 20__.
----------------------
Name: Jim Dykas
Title: Chief Financial Officer
EX-99.2J CUST CONTR
3
exhibit_j.txt
CUSTODIAN SERVICES AGREEMENT
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of May 18, 2009 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
(the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as a closed-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other
person authorized by the Fund to give Oral or Written Instructions
on behalf of the Fund. An Authorized Person's scope of authority may
be limited by setting forth such limitation in a written document
signed by both parties hereto.
(d) "Book-Entry System" means the Federal Reserve Treasury book-entry
system for United States and federal agency securities, its
1
successor or successors, and its nominee or nominees and any
book-entry system registered with the SEC under the 1934 Act.
(e) "Oral Instructions" mean oral instructions received by PFPC Trust
from an Authorized Person or from a person reasonably believed by
PFPC Trust to be an Authorized Person. PFPC Trust may, in its sole
discretion in each separate instance, consider and rely upon
instructions it receives from an Authorized Person via electronic
mail as Oral Instructions.
(f) "SEC" means the Securities and Exchange Commission.
(g) "Securities Laws" mean the 1933 Act, the 1934 Act and the 1940 Act.
(h) "Shares" mean the shares of beneficial interest of any series or
class of the Fund.
(i) "Property" means:
(i) any and all securities and other investment items which the
Fund may from time to time deposit, or cause to be deposited,
with PFPC Trust or which PFPC Trust may from time to time hold
for the Fund;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by PFPC Trust from time to time, from or on
behalf of the Fund.
(j) "Written Instructions" mean (i) written instructions signed by two
Authorized Persons (or persons reasonably believed by PFPC Trust to
be Authorized Persons) and received by PFPC Trust or (ii) trade
instructions transmitted by means of an electronic transaction
reporting system which requires the use of a password or other
authorized identifier in order to gain access. The instructions may
be delivered electronically (with respect to sub-item (ii) above) or
by hand, mail or facsimile sending device.
2
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund and PFPC Trust accepts such appointment and agrees to
furnish such services. PFPC Trust shall be under no duty to take any
action hereunder on behalf of the Fund except as specifically set forth
herein or as may be specifically agreed to by PFPC Trust and the Fund in a
written amendment hereto. PFPC Trust shall not bear, or otherwise be
responsible for, any fees, cost or expenses charged by any third party
service providers engaged by the Fund or by any other third party service
provider to the Fund.
3. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with material applicable requirements of
the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to
be performed by PFPC Trust hereunder. Except as specifically set forth
herein, PFPC Trust assumes no responsibility for such compliance by the
Fund or any other entity.
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction or
Written Instruction it receives pursuant to this Agreement. PFPC
Trust may assume that any Oral Instructions or Written Instructions
received hereunder are not in any way inconsistent with the
provisions of organizational documents of the Fund or of any vote,
resolution or proceeding of the Fund's board of directors or of the
Fund's shareholders, unless and until PFPC Trust receives Written
Instructions to the contrary.
3
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral Instructions
are given by PFPC Trust or its affiliates) so that PFPC Trust
receives the Written Instructions by the close of business on the
same day that such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by PFPC Trust
or differ from the Oral Instructions shall in no way invalidate the
transactions or enforceability of the transactions authorized by the
Oral Instructions or PFPC Trust's ability to rely upon such Oral
Instructions.
5. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
should or should not take, PFPC Trust may request directions or
advice, including Oral Instructions or Written Instructions, from
the Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should not
take, PFPC Trust may request advice from counsel of its own choosing
(who may be counsel for the Fund, the Fund's investment adviser or
PFPC Trust, at the option of PFPC Trust). The Fund shall pay the
reasonable cost of any counsel retained by PFPC Trust with prior
notice to the Fund.
(c) Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Fund, and the advice it receives from counsel,
PFPC Trust shall be entitled to rely upon and follow the advice of
counsel.
4
(d) Protection of PFPC Trust. PFPC Trust shall be indemnified by the
Fund and without liability for any action PFPC Trust takes or does
not take in reliance upon directions or advice or Oral Instructions
or Written Instructions PFPC Trust receives from or on behalf of the
Fund, or from counsel and which PFPC Trust believes, in good faith,
to be consistent with those directions or advice or Oral
Instructions or Written Instructions. Nothing in this section shall
be construed so as to impose an obligation upon PFPC Trust (i) to
seek such directions or advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such directions or
advice or Oral Instructions or Written Instructions.
6. RECORDS; VISITS.
(a) The books and records pertaining to the Fund, which are in the
possession or under the control of PFPC Trust, shall be the property
of the Fund. Such books and records shall be prepared and maintained
as required by the 1940 Act and other applicable securities laws,
rules and regulations provided the Fund provides PFPC Trust with
written notice of such laws, rules and regulations, other than the
1940 Act and The Internal Revenue Code Of 1986, as amended, that are
applicable. The Fund and Authorized Persons shall have access to
such books and records at all times during PFPC Trust's normal
business hours upon reasonable advance notice; provided, however,
the Fund's independent public accountants shall have access to such
books and records without prior notice to PFPC Trust in order to
comply with the requirements of Rule 17f-2 under the 1940 Act. Upon
the reasonable request of the Fund, copies of any such books and
records shall be provided by PFPC Trust to the Fund or to an
authorized representative of the Fund, at the Fund's expense.
5
(b) PFPC Trust shall keep the following records:
(i) all books and records as are customarily maintained by the
custodian for a registered investment company.
7. CONFIDENTIALITY. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that is
competitively sensitive material, and not generally known to the public,
including, but not limited to, information about product plans, marketing
strategies, finances, operations, customer relationships, customer
profiles, customer lists, sales estimates, business plans, and internal
performance results relating to the past, present or future business
activities of the Fund or PFPC Trust and their respective subsidiaries and
affiliated companies; (b) any scientific or technical information, design,
process, procedure, formula, or improvement that is commercially valuable
and secret in the sense that its confidentiality affords the Fund or PFPC
Trust a competitive advantage over its competitors; (c) all confidential
or proprietary concepts, documentation, reports, data, specifications,
computer software, source code, object code, flow charts, databases,
inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as confidential.
Notwithstanding the foregoing, information shall not be Confidential
Information and shall not be subject to such confidentiality obligations
if: (a) it is necessary for PFPC Trust to release such information in
connection with the provision of services under this Agreement; (b) it is
already known to the receiving party at the time it is obtained; (c) it is
or becomes publicly known or available through no wrongful act of the
receiving party; (d) it is rightfully received from a third party who, to
6
the best of the receiving party's knowledge, is not under a duty of
confidentiality; (e) it is released by the protected party to a third
party without restriction; (f) it is requested or required to be disclosed
by the receiving party pursuant to a court order, subpoena, governmental
or regulatory agency request or law (provided the receiving party will
provide the other party written notice of the same, to the extent such
notice is permitted); (g) it is Fund information provided by PFPC Trust in
connection with an independent third party compliance or other review; (h)
it is relevant to the defense of any claim or cause of action asserted
against the receiving party; or (i) it has been or is independently
developed or obtained by the receiving party. PFPC Trust acknowledges and
agrees that in connection with its services under this Agreement it
receives non-public confidential portfolio holdings information
("Portfolio Information") with respect to the Fund. PFPC Trust agrees
that, subject to the foregoing provisions of and the exceptions set forth
in this Section 7 (other than the exception set forth above in this
Section as Sub-item (a), which exception set forth in sub-item (a) shall
not be applicable to the Fund's Portfolio Information), PFPC Trust will
keep confidential the Fund's Portfolio Information and will not disclose
the Fund's Portfolio Information other than pursuant to a Written
Instruction (such Written Instruction may be a standing Written
Instruction).
8. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the Fund's
independent public accountants and shall take all reasonable action to
make any requested information available to such accountants as reasonably
requested by the Fund.
9. PFPC TRUST SYSTEM. PFPC Trust shall retain title to and ownership of any
and all data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions, discoveries,
7
patentable or copyrightable matters, concepts, expertise, patents,
copyrights, trade secrets, and other related legal rights utilized by PFPC
Trust in connection with the services provided by PFPC Trust to the Fund.
10. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to
the extent appropriate equipment is available. In the event of equipment
failures, PFPC Trust shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions. PFPC Trust shall have
no liability with respect to the loss of data or service interruptions
caused by equipment failure provided such loss or interruption is not
caused by PFPC Trust's own willful misfeasance, bad faith, negligence or
reckless disregard of its duties or obligations under this Agreement.
11. COMPENSATION.
(a) As compensation for custody services rendered by PFPC Trust during
the term of this Agreement, the Fund will pay to PFPC Trust a fee or
fees as may be agreed to in writing from time to time by the Fund
and PFPC Trust. The Fund acknowledges that PFPC Trust may receive
float benefits in connection with maintaining certain accounts
required to provide services under this Agreement.
(b) The undersigned hereby represents and warrants to PFPC Trust that
(i) the terms of this Agreement, (ii) the fees and expenses
associated with this Agreement, and (iii) any benefits accruing to
PFPC Trust or to the adviser or sponsor to the Fund in connection
with this Agreement, including but not limited to any fee waivers,
conversion cost reimbursements, up front payments, signing payments
8
or periodic payments made or to be made by PFPC Trust to such
adviser or sponsor or any affiliate of the Fund relating to this
Agreement have been fully disclosed to the board of directors of the
Fund and that, if required by applicable law, such board of
directors has approved or will approve the terms of this Agreement,
any such fees and expenses, and any such benefits.
(c) Notwithstanding the limitation of liability provisions of this
Agreement or the termination of this Agreement, the Fund shall
remain responsible for paying PFPC Trust the fees and other amounts
set forth in this Agreement and in the applicable fee letter.
12. INDEMNIFICATION.
The Fund agrees to indemnify, defend and hold harmless PFPC Trust and its
affiliates providing services under this Agreement, including their
respective officers, directors, agents and employees from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, reasonable attorneys' fees and disbursements and liabilities
arising under the Securities Laws and any state and foreign securities and
blue sky laws) ("Claims") arising directly or indirectly from any action
or omission to act which PFPC Trust takes in connection with the provision
of services to the Fund. Neither PFPC Trust, nor any of its affiliates,
shall be indemnified against any liability (or any expenses incident to
such liability) caused by PFPC Trust's or its affiliates' own willful
misfeasance, bad faith, negligence or reckless disregard in the
performance of PFPC Trust's or its affiliates' activities under this
Agreement. The provisions of this Section 12 shall survive termination of
this Agreement.
9
PFPC Trust agrees to defend, indemnify and hold the Fund and its
officers, directors and employees harmless from any and all Claims arising
directly or indirectly from the negligence, bad faith, reckless disregard
or willful misfeasance of PFPC Trust and its affiliates in the performance
of its duties hereunder. Notwithstanding the foregoing, the Fund shall not
be indemnified against any Claim caused by the Fund's or the Fund's other
service providers' willful misfeasance, bad faith or negligence.
Indemnification Procedure.
(i) Notice of the Action. A party that seeks indemnification under
this Agreement must promptly give the other party notice of
any legal action; provided, however, that a delay in notice
does not relieve an indemnifying party of any liability to an
indemnified party, except to the extent the indemnifying party
shows that the delay prejudiced the defense of the action.
(ii) Participating in or Assuming the Defense. The indemnifying
party may participate in the defense at any time or it may
assume the defense by giving notice to the other party. After
assuming the defense, the indemnifying party:
(1) must select an attorney that is satisfactory to the
other party;
(2) is not liable to the other party for any later
attorney's fees or for any other later expenses that the
other party incurs, except for reasonable investigation
costs;
(3) must not compromise or settle the action without the
other party's consent (but the other party must not
unreasonably withhold its consent); and
(4) is not liable for any compromise or settlement made
without its consent.
10
(iii) Failing to Assume the Defense. If the indemnifying party fails
to participate in or assume the defense within 15 days after
receiving notice of the action, the indemnifying party is
bound by any determination made in the action or by any
compromise or settlement made by the other party.
13. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action hereunder on
behalf of the Fund except as specifically set forth herein or as may
be specifically agreed to by PFPC Trust and the Fund in a written
amendment hereto. PFPC Trust shall be obligated to exercise
commercially reasonable care and diligence in the performance of its
duties hereunder and to act in good faith in performing services
provided for under this Agreement. As set forth herein, and as may
be agreed to in writing from time to time by PFPC Trust and the Fund
with regard to such matters of liability, PFPC Trust shall be liable
only for any damages arising out of PFPC Trust's failure to perform
its duties under this Agreement to the extent such damages arise out
of PFPC Trust's willful misfeasance, bad faith, negligence or
reckless disregard of its duties under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, (i) PFPC
Trust shall not be liable for losses, delays, failure, errors,
interruption or loss of data occurring directly or indirectly by
reason of circumstances beyond its reasonable control, including
without limitation acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire; flood;
sabotage; epidemics; labor disputes; civil commotion; interruption,
11
loss or malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of nature; or
non-performance by a third party; failure of the mails; or functions
or malfunctions of the internet, firewalls, encryption systems or
security devices caused by any of the above; (ii) PFPC Trust shall
not be under any duty or obligation to inquire into and shall not be
liable for the validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other information which PFPC Trust
reasonably believes to be genuine; and (iii) PFPC Trust shall not be
liable for any damages arising out of any action or omission to act
by any prior service provider of the Fund or for any failure to
discover any such errors or omissions.
(c) Notwithstanding anything in this Agreement to the contrary, neither
party to this Agreement nor their respective affiliates shall be
liable for any consequential, incidental, exemplary, punitive,
special or indirect losses or damages, whether or not the likelihood
of such losses or damages was known by such party.
(d) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(e) Notwithstanding anything in this Agreement to the contrary (other
than as specifically provided in Section 14(h)(ii)(B)(4) and Section
14(h)(iii)(A) of this Agreement), the Fund shall be responsible for
all filings, tax returns and reports on any transactions undertaken
pursuant to this Agreement, or in respect of the Property or any
collections undertaken pursuant to this Agreement, which may be
requested by any relevant authority. In addition, the Fund shall be
responsible for the payment of all taxes and similar items
(including without limitation penalties and interest related
thereto).
12
(f) The provisions of this Section 13 shall survive termination of this
Agreement.
14. DESCRIPTION OF SERVICES.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Fund,
including cash received as a result of the distribution of Shares,
during the term of this Agreement. PFPC Trust will not be
responsible for any assets until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon Written
Instructions, shall open and maintain separate accounts for the Fund
(the "Account"). PFPC Trust shall maintain in the Account all cash
and other assets received from or for the account of the Fund,
subject to the terms of this Agreement. PFPC Trust shall make cash
payments from or for the Account of the Fund only for:
(i) purchases of securities in the name of the Fund, PFPC Trust,
PFPC Trust's nominee or a sub-custodian or nominee thereof as
provided in sub-section (j) and for which PFPC Trust has
received a copy of the broker's or dealer's confirmation or
payee's invoice, as appropriate;
(ii) redemption of Shares of the Fund upon receipt of Written
Instructions;
(iii) payment of, subject to Written Instructions, interest, taxes
(provided that tax which PFPC Trust considers is required to
be deducted or withheld "at source" will be governed by
Section 14(h)(iii)(B) of this Agreement), administration,
accounting, distribution, advisory, license and management
fees which are to be borne by the Fund;
(iv) payment to, subject to receipt of Written Instructions, the
Fund's transfer agent, as agent for the shareholders, of an
amount equal to the amount of dividends and distributions
stated in the Written Instructions to be distributed in cash
by the transfer agent to shareholders, or, in lieu of paying
the Fund's transfer agent, PFPC Trust may arrange for the
13
direct payment of cash dividends and distributions to
shareholders in accordance with procedures mutually agreed
upon from time to time by and among the Fund, PFPC Trust and
the Fund's transfer agent;
(v) payments, upon receipt of Written Instructions, in connection
with the conversion, exchange or surrender of securities owned
or subscribed to by the Fund and held by or delivered to PFPC
Trust;
(vi) payments of the amounts of dividends received with respect to
securities sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks, drafts
or other orders for the payment of money received as custodian for the
Account.
(c) Receipt of Securities; Subcustodians.
PFPC Trust shall hold all securities received by it for the
Account in a separate account that physically segregates such
securities from those of any other persons, firms or
corporations, except for securities held in a Book-Entry
System or through a sub-custodian or depository. All such
securities shall be held or disposed of only upon Written
Instructions or otherwise pursuant to the terms of this
Agreement. PFPC Trust shall have no power or authority to
assign, hypothecate, pledge or otherwise dispose of any such
securities or investment, except upon the express terms of
this Agreement or upon Written Instructions authorizing the
transaction. In no case may any member of the Fund's board of
directors, or any officer, employee or agent of the Fund
withdraw any securities upon their mere receipt.
At PFPC Trust's own expense and for its own convenience, PFPC
Trust may enter into sub-custodian agreements with other banks
or trust companies to perform duties described in this
Agreement with respect to domestic assets. Such bank or trust
company shall have an aggregate capital, surplus and undivided
profits, according to its last published report, of at least
one million dollars ($1,000,000), if it is a subsidiary or
affiliate of PFPC Trust, or at least twenty million dollars
($20,000,000) if such bank or trust company is not a
subsidiary or affiliate of PFPC Trust. In addition, such bank
14
or trust company must be qualified to act as custodian and
agree to comply with the relevant provisions of applicable
rules and regulations. Any such arrangement will not be
entered into without prior written notice to the Fund (or as
otherwise provided in the 1940 Act).
In addition, PFPC Trust may enter into arrangements with
sub-custodians with respect to services regarding foreign
assets. Any such arrangement will not be entered into without
prior written notice to the Fund (or as otherwise provided in
the 1940 Act).
Sub-custodians utilized by PFPC Trust may be subsidiaries or
affiliates of PFPC Trust, and such entities will be
compensated for their services at such rates as are agreed
between the entity and PFPC Trust. PFPC Trust shall remain
responsible for the acts and omissions of any sub-custodian
chosen by PFPC Trust under the terms of this sub-section (c)
to the same extent that PFPC Trust is responsible for its own
acts and omissions under this Agreement.
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC Trust
shall:
(i) deliver any securities held for the Fund against the receipt
of payment for the sale of such securities or otherwise in
accordance with standard market practice;
(ii) execute and deliver to such persons as may be designated in
such Oral Instructions or Written Instructions, proxies,
consents, authorizations, and any other instruments received
by PFPC Trust as custodian whereby the authority of the Fund
as owner of any securities may be exercised;
(iii) deliver any securities to the issuer thereof, or its agent,
when such securities are called, redeemed, retired or
otherwise become payable at the option of the holder; provided
that, in any such case, the cash or other consideration is to
be delivered to PFPC Trust;
(iv) deliver any securities held for the Fund against receipt of
other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, tender offer,
merger, consolidation or recapitalization of any corporation
or other entity, or the exercise of any conversion privilege;
(v) deliver any securities held for the Fund to any protective
committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any
15
corporation or other entity, and receive and hold under the
terms of this Agreement such certificates of deposit, interim
receipts or other instruments or documents as may be issued to
it to evidence such delivery;
(vi) make such transfer or exchanges of the assets of the Fund and
take such other steps as shall be stated in said Oral
Instructions or Written Instructions to be for the purpose of
effectuating a duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Fund;
(vii) release securities belonging to the Fund to any bank or trust
company for the purpose of a pledge or hypothecation to secure
any loan incurred by the Fund; provided, however, that
securities shall be released only upon payment to PFPC Trust
of the monies borrowed, except that in cases where additional
collateral is required to secure a borrowing already made
subject to proper prior authorization, further securities may
be released for that purpose; and repay such loan upon
redelivery to it of the securities pledged or hypothecated
therefor and upon surrender of the note or notes evidencing
the loan;
(viii) release and deliver securities owned by the Fund in
connection with any repurchase agreement entered into by the
Fund, but only on receipt of payment therefor; and pay out
monies of the Fund in connection with such repurchase
agreements, but only upon the delivery of the securities;
(ix) release and deliver or exchange securities owned by the Fund
in connection with any conversion of such securities, pursuant
to their terms, into other securities;
(x) release and deliver securities to a broker in connection with
the broker's custody of margin collateral relating to futures
and options transactions;
(xi) release and deliver securities owned by the Fund for the
purpose of redeeming in kind shares of the Fund upon delivery
thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by the Fund
for other purposes.
(e) Use of Book-Entry System or Other Depository. PFPC Trust is
authorized and instructed, on a continuous basis, to deposit in
Book-Entry Systems and other depositories all securities belonging
to the Fund eligible for deposit therein and to utilize Book-Entry
16
Systems and other depositories to the extent possible in connection
with settlements of purchases and sales of securities by the Fund,
and deliveries and returns of securities loaned, subject to
repurchase agreements or used as collateral in connection with
borrowings. PFPC Trust shall continue to perform such duties until
it receives Written Instructions or Oral Instructions authorizing
contrary actions. Notwithstanding anything in this Agreement to the
contrary, PFPC Trust's use of a Book-Entry System shall comply with
the requirements of Rule 17f-4 under the 1940 Act.
PFPC Trust shall administer a Book-Entry System or other depository as
follows:
(i) With respect to securities of the Fund which are maintained in
a Book-Entry System or another depository, the records of PFPC
Trust shall identify by book-entry or otherwise those
securities belonging to the Fund.
(ii) Assets of the Fund deposited in a Book-Entry System or another
depository will (to the extent consistent with applicable law
and standard practice) at all times be segregated from any
assets and cash controlled by PFPC Trust in other than a
fiduciary or custodian capacity but may be commingled with
other assets held in such capacities.
PFPC Trust will provide the Fund with such reports on its own system
of internal control as the Fund may reasonably request from time to
time.
(f) Registration of Securities. All securities held for the Fund which
are issued or issuable only in bearer form, except such securities
held in the Book-Entry System or in another depository, shall be
held by PFPC Trust in bearer form; all other securities held for the
Fund may be registered in the name of the Fund, PFPC Trust, a
Book-Entry System, another depository, a sub-custodian, or any duly
appointed nominee of the Fund, PFPC Trust, Book-Entry System,
depository or sub-custodian. The Fund agrees to furnish to PFPC
17
Trust appropriate instruments to enable PFPC Trust to hold or
deliver in proper form for transfer, or to register in the name of
its nominee or in the name of the Book-Entry System or in the name
of another appropriate entity, any securities which it may hold
pursuant to this Agreement. With respect to uncertificated
securities which are registered in the name of the Fund (or a
nominee thereof), PFPC Trust will reflect such securities on its
records based upon the holdings information provided to it by the
issuer of such securities, but notwithstanding anything in this
Agreement to the contrary PFPC Trust shall not be obligated to
safekeep such securities or to perform other duties with respect to
such securities other than to make payment for the purchase of such
securities upon receipt of Oral or Written Instructions, accept in
sale proceeds received by PFPC Trust upon the sale of such
securities of which PFPC Trust is informed pursuant to Oral or
Written Instructions, and accept in other distributions received by
PFPC Trust with respect to such securities or reflect on its records
any reinvested distributions with respect to such securities of
which it is informed by the issuer of the securities
(g) Voting and Other Action. Neither PFPC Trust nor its nominee shall
vote any of the securities held pursuant to this Agreement by or for
the account of the Fund, except in accordance with Written
Instructions. PFPC Trust, directly or through the use of another
entity, shall execute in blank and promptly deliver all notices,
proxies and proxy soliciting materials received by PFPC Trust as
custodian of the Property to the registered holder of such
securities. If the registered holder is not the Fund, then Written
Instructions or Oral Instructions must designate the person who owns
such securities.
18
(h) Transactions Not Requiring Instructions. Notwithstanding anything in
this Agreement requiring instructions in order to take a particular
action, in the absence of a contrary Written Instruction PFPC Trust
is authorized to take the following actions without the need for
instructions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of the Fund, all
income, dividends, distributions, coupons, option
premiums, other payments and similar items, included or
to be included in the Property, and, in addition,
promptly advise the Fund of such receipt and credit such
income to the Fund's custodian account;
(B) endorse and deposit for collection, in the name of the
Fund, checks, drafts, or other orders for the payment of
money;
(C) receive and hold for the account of the Fund all
securities received as a distribution on the Fund's
securities as a result of a stock dividend, share
split-up or reorganization, recapitalization,
readjustment or other rearrangement or distribution of
rights or similar securities issued with respect to any
securities belonging to the Fund and held by PFPC Trust
hereunder;
(D) present for payment and collect the amount payable upon
all securities which may mature or be called, redeemed,
retired or otherwise become payable (on a mandatory
basis) on the date such securities become payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of the
aforementioned income and other payments and the
endorsement for collection of checks, drafts, and other
negotiable instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(1) for examination by a broker or dealer selling for
the account of the Fund in accordance with street
delivery custom;
19
(2) for the exchange of interim receipts or temporary
securities for definitive securities; and
(3) for transfer of securities into the name of the
Fund or PFPC Trust or a sub-custodian or a nominee
of one of the foregoing, or for exchange of
securities for a different number of bonds,
certificates, or other evidence, representing the
same aggregate face amount or number of units
bearing the same interest rate, maturity date and
call provisions, if any; provided that, in any
such case, the new securities are to be delivered
to PFPC Trust.
(B) PFPC Trust shall:
(1) pay all income items held by it which call for
payment upon presentation and hold the cash
received by it upon such payment for the account
of the Fund;
(2) collect interest and cash dividends received, with
notice to the Fund, to the account of the Fund;
(3) hold for the account of the Fund all stock
dividends, rights and similar securities issued
with respect to any securities held by PFPC Trust;
and
(4) subject to receipt of such documentation and
information as PFPC Trust may request, execute as
agent on behalf of the Fund all necessary
ownership certificates required by a national
governmental taxing authority or under the laws of
any U.S. state now or hereafter in effect,
inserting the Fund's name on such certificate as
the owner of the securities covered thereby, to
the extent it may lawfully do so.
(iii) Other Matters.
(A) Subject to receipt of such documentation and information
as PFPC Trust may request, PFPC Trust will, in such
jurisdictions as PFPC Trust may agree from time to time,
seek to reclaim or obtain a reduction with respect to
any withholdings or other taxes relating to assets
maintained hereunder (provided that PFPC Trust will not
be liable for failure to obtain any particular relief in
a particular jurisdiction); and
20
(B) PFPC Trust is authorized to deduct or withhold any sum
in respect of tax which PFPC Trust considers is required
to be deducted or withheld "at source" by any relevant
law or practice.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions or Oral
Instructions establish and maintain segregated accounts on its
records for and on behalf of the Fund. Such accounts may be
used to transfer cash and securities, including securities in
a Book-Entry System or other depository:
(A) for the purposes of compliance by the Fund with the
procedures required by a securities or option exchange,
providing such procedures comply with the 1940 Act and
any releases of the SEC relating to the maintenance of
segregated accounts by registered investment companies;
and
(B) upon receipt of Written Instructions, for other
purposes.
(ii) PFPC Trust shall arrange for the establishment of IRA
custodian accounts for such shareholders holding Shares
through IRA accounts, in accordance with the Fund's offering
document, the Internal Revenue Code of 1986, as amended
(including regulations promulgated thereunder), and with such
other procedures as are mutually agreed upon from time to time
by and among the Fund, PFPC Trust and the Fund's transfer
agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written Instructions
that specify:
(i) the name of the issuer and the title of the securities,
including CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased and
accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase; and
(vi) the name of the person from whom or the broker through whom
the purchase was made. PFPC Trust shall upon receipt of
21
securities purchased by or for the Fund (or otherwise in
accordance with standard market practice) pay out of the
monies held for the account of the Fund the total amount
payable to the person from whom or the broker through whom the
purchase was made, provided that the same conforms to the
total amount payable as set forth in such Oral Instructions or
Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities upon
receipt of Oral Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom the
sale was made; and
(vii) the location to which the security must be delivered and
delivery deadline, if any.
PFPC Trust shall deliver the securities upon receipt of the total amount
payable to the Fund upon such sale, provided that the total amount payable
is the same as was set forth in the Oral Instructions or Written
Instructions. Notwithstanding anything to the contrary in this Agreement,
PFPC Trust may accept payment in such form as is consistent with standard
industry practice and may deliver assets and arrange for payment in
accordance with standard industry practice.
(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Fund the following reports:
(A) such periodic and special reports as the Fund may
reasonably request;
22
(B) a monthly statement summarizing all transactions and
entries for the account of the Fund, listing each
portfolio security belonging to the Fund (with the
corresponding security identification number) held at
the end of such month and stating the cash balance of
the Fund at the end of such month.
(C) the reports required to be furnished to the Fund
pursuant to Rule 17f-4 of the 1940 Act; and
(D) such other information as may be agreed upon from time
to time between the Fund and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any proxy
statement, proxy material, notice of a call or conversion or
similar communication received by it as custodian of the
Property. PFPC Trust shall be under no other obligation to
inform the Fund as to such actions or events. For
clarification, upon termination of this Agreement PFPC Trust
shall have no responsibility to transmit such material or to
inform the Funds or any other person of such actions or
events.
(m) Crediting of Accounts. PFPC Trust may in its sole discretion credit
an Account with respect to income, dividends, distributions,
coupons, option premiums, other payments or similar items prior to
PFPC Trust's actual receipt thereof, and in addition PFPC Trust may
in its sole discretion credit or debit the assets in an Account on a
contractual settlement date with respect to any sale, exchange or
purchase applicable to the Account; provided that nothing herein or
otherwise shall require PFPC Trust to make any advances or to credit
any amounts until PFPC Trust's actual receipt thereof. If PFPC Trust
in its sole discretion credits an Account with respect to (a)
income, dividends, distributions, coupons, option premiums, other
23
payments or similar items on a contractual payment date or otherwise
in advance of PFPC Trust's actual receipt of the amount due, (b) the
proceeds of any sale or other disposition of assets on the
contractual settlement date or otherwise in advance of PFPC Trust's
actual receipt of the amount due or (c) provisional crediting of any
amounts due, and (i) PFPC Trust is subsequently unable to collect
full and final payment for the amounts so credited within a
reasonable time period using reasonable efforts or (ii) pursuant to
standard industry practice, law or regulation PFPC Trust is required
to repay to a third party such amounts so credited, or if any
Property has been incorrectly credited, PFPC Trust shall have the
absolute right in its sole discretion without demand to reverse any
such credit or payment, to debit or deduct the amount of such credit
or payment from the Account, and to otherwise pursue recovery of any
such amounts so credited from the Fund. The Fund hereby grants to
PFPC Trust and to each sub-custodian utilized by PFPC Trust in
connection with providing services to the Fund a first priority
contractual possessory security interest in and a right of setoff
against the assets maintained in an Account hereunder in the amount
necessary to secure the return and payment to PFPC Trust and to each
such sub-custodian of any advance or credit made by PFPC Trust
and/or by such sub-custodian (including charges related thereto) to
such Account. Notwithstanding anything in this Agreement to the
contrary, PFPC Trust shall be entitled to assign any rights it has
under this sub-section (m) to any sub-custodian utilized by PFPC
Trust in connection with providing services to the Fund which
sub-custodian makes any credits or advances with respect to the
Fund.
24
(n) Collections. All collections of monies or other property in respect,
or which are to become part, of the Property (but not the
safekeeping thereof upon receipt by PFPC Trust) shall be at the sole
risk of the Fund. If payment is not received by PFPC Trust within a
reasonable time after proper demands have been made, PFPC Trust
shall notify the Fund in writing, including copies of all demand
letters, any written responses and memoranda of all oral responses
and shall await instructions from the Fund. PFPC Trust shall not be
obliged to take legal action for collection unless and until
reasonably indemnified to its satisfaction. PFPC Trust shall also
notify the Fund as soon as reasonably practicable whenever income
due on securities is not collected in due course and shall provide
the Fund with periodic status reports of such income collected after
a reasonable time.
(o) Excess Cash Sweep. PFPC Trust will sweep any net excess cash
balances daily into an investment vehicle or other instrument
designated in writing by the Fund, so long as the investment vehicle
or instrument is acceptable to PFPC Trust, subject to a fee, paid to
PFPC Trust for such service, to be agreed between the parties. Such
investment vehicle or instrument may be offered by an affiliate of
PFPC Trust or by a PFPC Trust client and PFPC Trust may receive
compensation therefrom.
(p) Foreign Exchange. PFPC Trust, its sub-custodians and the respective
affiliates of such entities (together, "Affiliated Entities")
jointly or separately may act as principal and/or agent for foreign
exchange ("FX") transactions for the Fund, and any of the Affiliated
Entities may arrange FX transactions for the Fund with third parties
25
that act as principal or agent. Affiliated Entities and third
parties may receive fees and other compensation in connection with
FX transactions for the Fund, and PFPC Trust may receive from such
entities a portion of their fees or other compensation. Unless PFPC
Trust itself is the principal for a FX transaction, PFPC Trust will
not be responsible and shall have no liability for the actions or
omissions of any principal (including any other Affiliated Entity)
to any FX transaction for the Fund nor any responsibility to monitor
the commercial terms of any such FX transactions.
15. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the date first written above
and unless terminated pursuant to its terms shall continue until
June 12, 2010 (the "Initial Term").
(b) Upon the expiration of the Initial Term, this Agreement shall
automatically renew for succesive terms of one (1) year ("Renewal
Terms") each, unless the Fund or PFPC Trust provides written notice
to the other of its intent not to renew. Such notice must be
received not less than ninety (90) days prior to the expiration of
the Initial Term or the then current Renewal Term.
(c) If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other
party (the "Non-Defaulting Party") may give written notice thereof
to the Defaulting Party, and if such material breach shall not have
been remedied within thirty (30) days after such written notice is
given, then the Non-Defaulting Party may terminate this Agreement by
giving thirty (30) days written notice of such termination to the
Defaulting Party. In all cases, termination by the Non-Defaulting
26
Party shall not constitute a waiver by the Non-Defaulting Party of
any other rights it might have under this Agreement or otherwise
against the Defaulting Party. In the event this Agreement is
terminated (pending appointment of a successor to PFPC Trust or vote
of the shareholders of the Fund to dissolve or to function without a
custodian of its cash, securities or other property), PFPC Trust
shall not deliver cash, securities or other property of the Fund to
the Fund. It may deliver them to a bank or trust company of PFPC
Trust's choice, having an aggregate capital, surplus and undivided
profits, as shown by its last published report, of not less than
twenty million dollars ($20,000,000), as a custodian for the Fund to
be held under terms similar to those of this Agreement. PFPC Trust
shall not be required to make any delivery or payment of assets upon
termination until full payment shall have been made to PFPC Trust of
all of its fees, compensation, costs and expenses known at such time
(such expenses include, without limitation, all expenses associated
with movement (or duplication) of records and materials and
conversion thereof to a successor service provider, or to a bank or
trust company pending appointment of such successor, and all
trailing expenses incurred by PFPC Trust). PFPC Trust shall have a
first priority contractual possessory security interest in and shall
have a right of setoff against the Property as security for the
payment of such fees, compensation, costs and expenses.
16. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 8800 Tinicum
Boulevard, Philadelphia, Pennsylvania 19153, Attention: Edward A. Smith,
II (or such other address as PFPC Trust may inform the Fund in writing);
(b) if to the Fund, at 120 East Liberty Drive, Wheaton, IL 60187,
27
Attention: W. Scott Jardine fax (630) 517-7437 (or such other address as
the Funds may inform PFPC Trust in writing); or (c) if to neither of the
foregoing, at such other address as shall have been given by like notice
to the sender of any such notice or other communication by the receiving
party. If notice is sent by confirming electronic delivery, hand or
facsimile sending device, it shall be deemed to have been given
immediately. If notice is sent by first-class mail, it shall be deemed to
have been given five days after it has been mailed. If notice is sent by
messenger, it shall be deemed to have been given on the day it is
delivered.
17. AMENDMENTS. This Agreement, or any term hereof, may be changed or waived
only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. ASSIGNMENT. PFPC Trust may assign this Agreement to any affiliate of PFPC
Trust or of The PNC Financial Services Group, Inc., provided that PFPC
Trust gives the Fund thirty (30) days' prior written notice of such
assignment.
19. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
20. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof,
provided that the parties may embody in one or more separate
documents their agreement, if any, with respect to delegated duties.
28
(b) Non-Solicitation. During the term of this Agreement and for one year
thereafter, the Fund shall not (with the exceptions noted in the
immediately succeeding sentence) knowingly solicit or recruit for
employment or hire any of PFPC Trust's employees, and the Fund shall
cause the Fund's sponsor and the Fund's affiliates to not (with the
exceptions noted in the immediately succeeding sentence) knowingly
solicit or recruit for employment or hire any of PFPC Trust's
employees. To "knowingly" solicit, recruit or hire within the
meaning of this provision does not include, and therefore does not
prohibit, solicitation, recruitment or hiring of a PFPC Trust
employee by the Fund, the Fund's sponsor or an affiliate of the Fund
if the PFPC Trust employee was identified by such entity solely as a
result of the PFPC Trust employee's response to a general
advertisement by such entity in a publication of trade or industry
interest or other similar general solicitation by such entity.
(c) No Representations or Warranties. Except as expressly provided in
this Agreement, PFPC Trust hereby disclaims all representations and
warranties, express or implied, made to the Fund or any other
person, including, without limitation, any warranties regarding
quality, suitability, merchantability, fitness for a particular
purpose or otherwise (irrespective of any course of dealing, custom
or usage of trade), of any services or any goods provided incidental
to services provided under this Agreement. PFPC Trust disclaims any
warranty of title or non-infringement except as otherwise set forth
in this Agreement.
(d) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees not to
make any modifications to its registration statement or adopt any
29
policies which would affect materially the obligations or
responsibilities of PFPC Trust hereunder without the prior written
approval of PFPC Trust, which approval shall not be unreasonably
withheld or delayed. The scope of services to be provided by PFPC
Trust under this Agreement shall not be increased as a result of new
or revised regulatory or other requirements that may become
applicable with respect to the Fund, unless the parties hereto
expressly agree in writing to any such increase.
(e) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect.
(f) Information. The Fund will provide such information and
documentation as PFPC Trust may reasonably request in connection
with services provided by PFPC Trust to the Fund.
(g) Governing Law. This Agreement shall be deemed to be a contract made
in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(h) Partial Invalidity. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(i) Parties in Interest. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Except as may be explicitly stated
in this Agreement, (i) this Agreement is not for the benefit of any
other person or entity and (ii) there shall be no third party
beneficiaries hereof.
30
(j) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.
(k) The Fund and PFPC Trust agree that the obligations of the Fund under
the Agreement shall not be binding upon any of the directors,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Fund individually, but are binding only
upon the assets and property of the Fund. The execution and delivery
of this Agreement have been authorized by the directors of the Fund,
and signed by an authorized officer of the Fund, acting as such, and
neither such authorization by such directors nor such execution and
delivery by such officer shall be deemed to have been made by any of
them or any shareholder of the Fund individually or to impose any
liability on any of them or any shareholder of the Fund personally,
but shall bind only the assets and property of the Fund.
(l) Customer Identification Program Notice. To help the U.S. government
fight the funding of terrorism and money laundering activities, U.S.
Federal law requires each financial institution to obtain, verify,
and record certain information that identifies each person who
initially opens an account with that financial institution on or
after October 1, 2003. Consistent with this requirement, PFPC Trust
may request (or may have already requested) the Fund's name, address
and taxpayer identification number or other government-issued
identification number, and, if such party is a natural person, that
party's date of birth. PFPC Trust may also ask (and may have already
asked) for additional identifying information, and PFPC Trust may
take steps (and may have already taken steps) to verify the
authenticity and accuracy of these data elements.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By: /s/ Edward A. Smith, III
----------------------------------------
Name: Edward A. Smith, III
Title: Senior Vice President
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE
INCOME FUND II
By: /s/ W. Scott Jardine
----------------------------------------
Name: W. Scott Jardine
Title: Secretary
32
EX-99.2K OTH CONTRCT
4
exhibit_k1.txt
TRANSFER AGENCY SERVICES AGREEMENT
TRANSFER AGENCY SERVICES AGREEMENT
THIS AGREEMENT is made as of May 18, 2009 by and between PNC GLOBAL
INVESTMENT SERVICING (U.S.) INC., a Massachusetts corporation ("PNC"), and FIRST
TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II, a Massachusetts business
trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as a closed-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PNC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent, and PNC
wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree to the following statements made in the preceding paragraphs and as
follows:
1. DEFINITIONS. As used in this Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other
person duly authorized by the Fund to give Oral Instructions and
Written Instructions on behalf of the Fund. An Authorized Person's
scope of authority may be limited by setting forth such limitation
in a written document signed by both parties hereto.
(d) "Oral Instructions" mean oral instructions received by PNC from an
Authorized Person or from a person reasonably believed by PNC to be
an Authorized Person. PNC may, in its sole discretion in each
separate instance, consider and rely upon instructions it receives
from an Authorized Person via electronic mail as Oral Instructions.
(e) "SEC" means the Securities and Exchange Commission.
(f) "Securities Laws" mean the 1933 Act, the 1934 Act and the 1940 Act.
(g) "Shares" mean the shares of beneficial interest of any series or
class of the Fund.
(h) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by PNC or (ii) trade instructions
transmitted (and received by PNC) by means of an electronic
transaction reporting system access to which requires use of a
password or other authorized identifier. The instructions may be
delivered electronically (with respect to sub-item (ii) above ) or
by hand, mail, tested telegram, cable, telex or facsimile sending
device.
2. APPOINTMENT. The Fund hereby appoints PNC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to
the Fund in accordance with the terms set forth in this Agreement. PNC
accepts such appointment and agrees to furnish such services. PNC shall be
under no duty to take any action hereunder on behalf of the Fund except as
specifically set forth herein or as may be specifically agreed to by PNC
and the Fund in a written amendment hereto. PNC shall not bear, or
otherwise be responsible for, any fees, costs or expenses charged by any
third party service providers engaged by the Fund or by any other third
party service provider to the Fund.
3. COMPLIANCE WITH RULES AND REGULATIONS. PNC undertakes to comply with all
applicable requirements of the Securities Laws and any laws, rules and
regulations of governmental authorities having jurisdiction with respect
to the duties to be performed by PNC hereunder. Except as specifically set
forth herein, PNC assumes no responsibility for such compliance by the
Fund or any other entity.
2
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PNC shall act only upon
Oral Instructions or Written Instructions.
(b) PNC shall be entitled to rely upon any Oral Instruction or Written
Instruction it receives from an Authorized Person (or from a person
reasonably believed by PNC to be an Authorized Person) pursuant to
this Agreement. PNC may assume that any Oral Instruction or Written
Instruction received hereunder is not in any way inconsistent with
the provisions of organizational documents or this Agreement or of
any vote, resolution or proceeding of the Fund's board of directors
or of the Fund's shareholders, unless and until PNC receives Written
Instructions to the contrary.
(c) The Fund agrees to forward to PNC Written Instructions confirming
Oral Instructions so that PNC receives the Written Instructions by
the close of business on the same day that such Oral Instructions
are received. The fact that such confirming Written Instructions are
not received by PNC or differ from the Oral Instructions shall in no
way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions or PNC's ability to
rely upon such Oral Instructions.
5. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PNC is in doubt as to any action it should or
should not take, PNC may request directions or advice, including
Oral Instructions or Written Instructions, from the Fund.
3
(b) Advice of Counsel. If PNC shall be in doubt as to any question of
law pertaining to any action it should or should not take, PNC may
request advice from counsel of its own choosing (who may be counsel
for the Fund, the Fund's investment adviser or PNC, at the option of
PNC). The Fund shall pay the reasonable cost of any counsel retained
by PNC with prior notice to the Fund.
(c) Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PNC receives
from the Fund, and the advice it receives from counsel, PNC may rely
upon and follow the advice of counsel.
(d) Protection of PNC. PNC shall be indemnified by the Fund and without
liability for any action PNC takes or does not take in reliance upon
directions or advice or Oral Instructions or Written Instructions
PNC receives from or on behalf of the Fund or from counsel and which
PNC believes, in good faith, to be consistent with those directions
or advice or Oral Instructions or Written Instructions. Nothing in
this section shall be construed so as to impose an obligation upon
PNC (i) to seek such directions or advice or Oral Instructions or
Written Instructions, or (ii) to act in accordance with such
directions or advice or Oral Instructions or Written Instructions.
6. RECORDS; VISITS.
(a) The books and records pertaining to the Fund, which are in the
possession or under the control of PNC, shall be the property of the
Fund. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws, rules
and regulations provided the Fund provides PNC with written notice
of such laws, rules and regulations, other than the 1940 Act and the
4
Internal Revenue Code of 1986, as amended, that are applicable. The
Fund and Authorized Persons shall have access to such books and
records at all times during PNC's normal business hours upon
reasonable advance notice. Upon the reasonable request of the Fund,
copies of any such books and records shall be provided by PNC to the
Fund or to an Authorized Person, at the Fund's expense.
(b) PNC shall keep the following records:
(i) all books and records as are customarily maintained by the
transfer agent for a registered investment company.
7. CONFIDENTIALITY.
(a) Each party shall keep confidential any information relating to the
other party's business ("Confidential Information"). Confidential
Information shall include (i) any data or information that is
competitively sensitive material, and not generally known to the
public, including, but not limited to, information about product
plans, marketing strategies, finances, operations, customer
relationships, customer profiles, customer lists, sales estimates,
business plans, and internal performance results relating to the
past, present or future business activities of the Fund or PNC and
their respective subsidiaries and affiliated companies; (ii) any
scientific or technical information, design, process, procedure,
formula, or improvement that is commercially valuable and secret in
the sense that its confidentiality affords the Fund or PNC a
competitive advantage over its competitors; (iii) all confidential
or proprietary concepts, documentation, reports, data,
specifications, computer software, source code, object code, flow
charts, databases, inventions, know-how, and trade secrets, whether
or not patentable or copyrightable; and (iv) anything designated as
confidential.
5
(b) Notwithstanding the foregoing, information shall not be Confidential
Information and shall not be subject to such confidentiality
obligations if: (i) it is necessary or desirable for PNC to release
such information in connection with the provision of services under
this Agreement; (ii) it is already known to the receiving party at
the time it is obtained; (iii) it is or becomes publicly known or
available through no wrongful act of the receiving party; (iv) it is
rightfully received from a third party who, to the best of the
receiving party's knowledge, is not under a duty of confidentiality;
(v) it is released by the protected party to a third party without
restriction; (vi) it is requested or required to be disclosed by the
receiving party pursuant to a court order, subpoena, governmental or
regulatory agency request or law (provided the receiving party will
provide the other party written notice of the same, to the extent
such notice is permitted); (vii) it is Fund information provided by
PNC in connection with an independent third party compliance or
other review; (viii) it is relevant to the defense of any claim or
cause of action asserted against the receiving party; or (ix) it has
been or is independently developed or obtained by the receiving
party.
(c) PNC acknowledges and agrees that in connection with its services
under this Agreement it receives non-public confidential portfolio
holdings information ("Portfolio Information") with respect to the
Fund. PNC agrees that, subject to the foregoing provisions of and
the exceptions set forth in this Section 7 (other than the exception
set forth above in this Section 7 as sub-item (a), which exception
set forth in sub-item (a) shall not be applicable to the Fund's
Portfolio Information), PNC will keep confidential the Fund's
Portfolio Information and will not disclose the Fund's Portfolio
6
Information other than pursuant to a Written Instruction (which
Written Instruction may be a standing Written Instruction); provided
that without the need for such a Written Instruction and
notwithstanding any other provision of this Section 7 to the
contrary, the Fund's Portfolio Information may be disclosed to third
party pricing services which are engaged by PNC in connection with
the provision of services under this Agreement and which shall be
subject to a duty of confidentiality with respect to such Portfolio
Information.
8. COOPERATION WITH ACCOUNTANTS. PNC shall cooperate with the Fund's
independent public accountants and shall take all reasonable actions in
the performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the
expression of their opinion, as required by the Fund.
9. PNC SYSTEM. PNC shall retain title to and ownership of any and all data
bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable
or copyrightable matters, concepts, expertise, patents, copyrights, trade
secrets, and other related legal rights utilized by PNC in connection with
the services provided by PNC to the Fund.
10. DISASTER RECOVERY. PNC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions
for emergency use of electronic data processing equipment to the extent
appropriate equipment is available. In the event of equipment failures,
PNC shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PNC shall have no liability with respect
to the loss of data or service interruptions caused by equipment failure,
7
provided such loss or interruption is not caused by PNC's own willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
obligations under this Agreement.
11. COMPENSATION.
(a) As compensation for services rendered by PNC during the term of this
Agreement, the Fund will pay to PNC a fee or fees as may be agreed
to from time to time in writing by the Fund and PNC. In addition,
the Fund agrees to pay, and will be billed separately in arrears
for, reasonable expenses incurred by PNC in the performance of its
duties hereunder.
(b) PNC shall establish certain cash management accounts ("Service
Accounts") required to provide services under this Agreement. The
Fund acknowledges (i) PNC may receive investment earnings from
sweeping the funds in such Service Accounts into investment accounts
including, but not limited, investment accounts maintained at an
affiliate or client of PNC; (ii) balance credits earned with respect
to the amounts in such Service Accounts ("Balance Credits") will be
used to offset the banking service fees imposed by the cash
management service provider (the "Banking Service Fees"); (iii) PNC
shall retain any excess Balance Credits for its own use; and (iv)
Balance Credits will be calculated and applied toward the Fund's
Banking Service Fees regardless of the Service Account balance sweep
described in Sub-Section (i); and (v) PNC may use the services of
third-party vendors in connection with the issuance of redemption
and distribution checks and shall retain any benefits obtained from
any arrangements with such vendors, including any commission or
return on float paid to it by any such vendors.
8
(c) The undersigned hereby represents and warrants to PNC that (i) the
terms of this Agreement, (ii) the fees and expenses associated with
this Agreement, and (iii) any benefits accruing to PNC or to the
adviser or sponsor to the Fund in connection with this Agreement,
including but not limited to any fee waivers, conversion cost
reimbursements, up front payments, signing payments or periodic
payments made or to be made by PNC to such adviser or sponsor or any
affiliate of the Fund relating to the Agreement have been fully
disclosed to the board of directors of the Fund and that, if
required by applicable law, such board of directors has approved or
will approve the terms of this Agreement, any such fees and
expenses, and any such benefits.
12. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold harmless PNC and its
affiliates providing services under this Agreement, including their
respective officers, directors, agents and employees, from all
taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, reasonable attorneys' fees and
disbursements and liabilities arising under the Securities Laws and
any state and foreign securities and blue sky laws) ("Claims")
arising directly or indirectly from any action or omission to act
which PNC takes in connection with the provision of services to the
Fund. Neither PNC, nor any of its affiliates, shall be indemnified
against any liability (or any expenses incident to such liability)
caused by PNC's or its affiliates' own willful misfeasance, bad
faith, negligence or reckless disregard in the performance of PNC's
or its affiliates' activities under this Agreement, provided that in
the absence of a finding to the contrary the acceptance, processing
9
and/or negotiation of a fraudulent payment for the purchase of
Shares shall be presumed not to have been the result of PNC's or its
affiliates own willful misfeasance, bad faith, negligence or
reckless disregard of such duties and obligations. The provisions of
this Section 12 shall survive termination of this Agreement.
(b) Indemnification of the Fund. PNC agrees to defend, indemnify and
hold the Fund and its officers, directors and employees harmless
from any and all Claims arising directly or indirectly from the
negligence, bad faith, reckless disregard or willful misfeasance of
PNC and its affiliates in the performance of its duties hereunder.
Notwithstanding the foregoing, the Fund shall not be indemnified
against any Claim caused by the Fund's or the Fund's other service
providers' willful misfeasance, bad faith or negligence.
(c) Indemnification Procedure.
(i) Notice of the Action. A party that seeks indemnification under
this Agreement must promptly give the other party notice of
any legal action; provided, however, that a delay in notice
does not relieve an indemnifying party of any liability to an
indemnified party, except to the extent the indemnifying party
shows that the delay prejudiced the defense of the action.
(ii) Participating in or Assuming the Defense. The indemnifying
party may participate in the defense at any time or it may
assume the defense by giving notice to the other party. After
assuming the defense, the indemnifying party:
(1) must select an attorney that is satisfactory to the
other party;
10
(2) is not liable to the other party for any later
attorney's fees or for any other later expenses that the
other party incurs, except for reasonable investigation
costs;
(3) must not compromise or settle the action without the
other party's consent (but the other party must not
unreasonably withhold its consent); and
(4) is not liable for any compromise or settlement made
without its consent.
(iii) Failing to Assume the Defense. If the indemnifying party fails
to participate in or assume the defense within 15 days after
receiving notice of the action, the indemnifying party is
bound by any determination made in the action or by any
compromise or settlement made by the other party.
13. RESPONSIBILITY OF PNC.
(a) PNC shall be under no duty to take any action hereunder on behalf of
the Fund except as specifically set forth herein or as may be
specifically agreed to by PNC and the Fund in a written amendment
hereto. PNC shall be obligated to exercise commercially reasonable
care and diligence in the performance of its duties hereunder and to
act in good faith in performing services provided for under this
Agreement. As set forth herein, and as may be agreed to in writing
from time to time by PNC and the Fund with regard to such matters of
liability, PNC shall be liable only for any damages arising out of
PNC's failure to perform its duties under this Agreement to the
extent such damages arise out of PNC's willful misfeasance, bad
faith, negligence or reckless disregard of such duties.
(b) Notwithstanding anything in this Agreement to the contrary, (i) PNC
shall not be liable for losses, delays, failure, errors,
interruption or loss of data occurring directly or indirectly by
11
reason of circumstances beyond its reasonable control, including
without limitation acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire; flood;
sabotage; epidemics; labor disputes; civil commotion; interruption,
loss or malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of nature; or
non-performance by a third party; failure of the mails; or functions
or malfunctions of the internet, firewalls, encryption systems or
security devices caused by any of the above; and (ii) PNC shall not
be under any duty or obligation to inquire into and shall not be
liable for the validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other information which PNC
reasonably believes to be genuine. PNC shall not be liable for any
damages arising out of any action or omission to act by any prior
service provider of the Fund or for any failure to discover any such
error or omission.
(c) Notwithstanding anything in this Agreement to the contrary, neither
party to this Agreement nor their respective affiliates shall be
liable for any consequential, incidental, exemplary, punitive,
special or indirect losses or damages, whether or not the likelihood
of such losses or damages was known by such party.
(d) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(e) The provisions of this Section 13 shall survive termination of this
Agreement.
14. DESCRIPTION OF SERVICES.
(a) Services Provided on an Ongoing Basis, If Applicable.
(i) Maintain shareholder registrations;
12
(ii) Provide toll-free lines for shareholders relating to
shareholder accounts;
(iii) Provide periodic shareholder lists and statistics;
(iv) Mailing of year-end tax information; and
(v) Periodic mailing of shareholder dividend reinvestment plan
account information and Fund financial reports.
(b) Dividends and Distributions. PNC must receive a resolution of the
Fund's board of directors authorizing the declaration and payment of
dividends and distributions. Upon receipt of the resolution, PNC
shall issue the dividends and distributions in cash, or, if the
resolution so provides, pay such dividends and distributions in
Shares. Such issuance or payment shall be made after deduction and
payment of the required amount of funds to be withheld in accordance
with any applicable tax laws or other laws, rules or regulations.
PNC shall timely send to the Fund's shareholders tax forms and other
information, or permissible substitute notice, relating to dividends
and distributions, paid by the Fund as are required to be filed and
mailed by applicable law, rule or regulation. PNC shall maintain and
file with the United States Internal Revenue Service and other
appropriate taxing authorities reports relating to all dividends
above a stipulated amount (currently $10.00 accumulated yearly
dividends) paid by the Fund to its shareholders as required by tax
or other law, rule or regulation. In accordance with the Prospectus
and such procedures and controls as are mutually agreed upon from
time to time by and among the Fund, PNC and the Fund's Custodian,
PNC shall process applications from Shareholders relating to the
Fund's Dividend Reinvestment Plan ("Dividend Reinvestment Plan") and
13
will effect purchases of Shares in connection with the Dividend
Reinvestment Plan. As the dividend disbursing agent, PNC shall, on
or before the payment date of any such dividend or distribution,
notify the fund accounting agent of the estimated amount required to
pay any portion of said dividend or distribution which is payable in
cash, and on or before the payment date of such distribution, the
Fund shall instruct the custodian to make available to the dividend
disbursing agent sufficient funds for the cash amount to be paid
out. If a shareholder is entitled to receive additional Shares, by
virtue of any distribution or dividend, appropriate credits will be
made to his or her account and/or certificates delivered where
requested, all in accordance with the Dividend Reinvestment Plan.
(c) Communications to Shareholders. Upon timely written instructions,
PNC shall mail all communications by the Fund to its shareholders,
including:
(i) Reports to shareholders;
(ii) Monthly or quarterly dividend reinvestment plan statements;
(iii) Dividend and distribution notices;
(iv) Proxy material; and
(v) Tax form information.
PNC will receive and tabulate the proxy cards for the meetings of
the Fund's shareholders.
(d) Records. PNC shall maintain records of the accounts for each
shareholder showing the following information:
(i) Name, address and United States Tax Identification or Social
Security number;
(ii) Number and class of shares held and number and class of shares
for which certificates, if any, have been issued, including
certificate numbers and denominations;
14
(iii) Historical information regarding the account of each
shareholder, including dividends and distributions paid and
the date and price for all transactions on a shareholder's
account;
(iv) Any stop or restraining order placed against a shareholder's
account;
(v) Any correspondence relating to the current maintenance of a
shareholder's account;
(vi) Information with respect to withholdings; and
(vii) Any information required in order for the transfer agent to
perform any calculations contemplated or required by this
Agreement.
(e) Shareholder Inspection of Stock Records. Upon requests from Fund
shareholders to inspect stock records, PNC will notify the Fund and
require instructions granting or denying each such request. Unless
PNC has acted contrary to the Fund's instructions, the Fund agrees
to release PNC from any liability for refusal of permission for a
particular shareholder to inspect the Fund's shareholder records.
15. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the date first written above
and unless terminated pursuant to its terms shall continue until
June 12, 2010 (the "Initial Term").
(b) Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year ("Renewal
Terms") each, unless the Fund or PNC provides written notice to the
other of its intent not to renew. Such notice must be received not
less than ninety (90) days prior to the expiration of the Initial
Term or the then current Renewal Term.
15
(c) In the event a termination notice is given by the Fund, all expenses
associated with movement of records and materials and conversion
thereof to a successor transfer agent(s) (and any other service
provider(s)), and all trailing expenses incurred by PNC, will be
borne by the Fund and paid to PNC if known at such time prior to any
such conversion.
(d) If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other
party (the "Non-Defaulting Party") may give written notice thereof
to the Defaulting Party, and if such material breach shall not have
been remedied within thirty (30) days after such written notice is
given, then the Non-Defaulting Party may terminate this Agreement by
giving thirty (30) days written notice of such termination to the
Defaulting Party. In all cases, termination by the Non-Defaulting
Party shall not constitute a waiver by the Non-Defaulting Party of
any other rights it might have under this Agreement or otherwise
against the Defaulting Party.
16. NOTICES. Notices shall be addressed (a) if to PNC, at 301 Bellevue
Parkway, Wilmington, Delaware 19809, Attention: President (or such other
address as the PNC may inform the fund in writing); (b) if to the Fund, at
120 East Liberty Drive, Wheaton, IL 60187, Attention: W. Scott Jardine fax
(630) 517-7437 (or such other address as the Fund may inform PNC in
writing); or (c) if to neither of the foregoing, at such other address as
shall have been given by like notice to the sender of any such notice or
other communication by the other party. If notice is sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed to
have been given immediately. If notice is sent by first-class mail, it
shall be deemed to have been given three days after it has been mailed.
16
If notice is sent by messenger, it shall be deemed to have been given on
the day it is delivered.
17. AMENDMENTS. This Agreement, or any term thereof, may be changed or waived
only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. DELEGATION; ASSIGNMENT. PNC may assign its rights and delegate its duties
hereunder to any majority-owned direct or indirect subsidiary of PNC or of
The PNC Financial Services Group, Inc., provided that PNC gives the Fund
30 days prior written notice of such assignment or delegation. To the
extent required by the rules and regulations of the NSCC and in order for
PNC to perform the NSCC related services, the Fund agrees that PNC may
delegate its duties to any affiliate of PNC that is a member of the NSCC.
In addition, PNC may, in its sole discretion, engage subcontractors to
perform any of the obligations contained in this Agreement to be performed
by PNC, provided, however, PNC shall remain responsible for the acts or
omissions of any such sub-contractors.
19. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
20. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof,
17
provided that the parties may embody in one or more separate
documents their agreement, if any, with respect to delegated duties.
(b) Non-Solicitation. During the term of this Agreement and for one year
thereafter, the Fund shall not (with the exceptions noted in the
immediately succeeding sentence) knowingly solicit or recruit for
employment or hire any of PNC's employees, and the Fund shall cause
the Fund's sponsor and the Fund's affiliates to not (with the
exceptions noted in the immediately succeeding sentence) knowingly
solicit or recruit for employment or hire any of PNC's employees. To
"knowingly" solicit, recruit or hire within the meaning of this
provision does not include, and therefore does not prohibit,
solicitation, recruitment or hiring of a PNC employee by the Fund,
the Fund's sponsor or an affiliate of the Fund if the PNC employee
was identified by such entity solely as a result of the PNC
employee's response to a general advertisement by such entity in a
publication of trade or industry interest or other similar general
solicitation by such entity.
(c) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees not to
make any modifications to its registration statement or adopt any
policies which would affect materially the obligations or
responsibilities of PNC hereunder without the prior written approval
of PNC, which approval shall not be unreasonably withheld or
delayed. The scope of services to be provided by PNC under this
Agreement shall not be increased as a result of new or revised
regulatory or other requirements that may become applicable with
respect to the fund, unless the parties hereto expressly agree in
writing to any such increase.
18
(d) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect.
(e) Information. The Fund will provide such information and
documentation as PNC may reasonably request in connection with
services provided by PNC to the Fund.
(f) Governing Law. This Agreement shall be deemed to be a contract made
in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(g) Partial Invalidity. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(h) Parties in Interest. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Except as may be explicitly stated
in this Agreement, (i) this Agreement is not for the benefit of any
other person or entity and (ii) there shall be no third party
beneficiaries hereof.
(i) No Representations or Warranties. Except as expressly provided in
this Agreement, PNC hereby disclaims all representations and
warranties, express or implied, made to the Fund or any other
person, including, without limitation, any warranties regarding
quality, suitability, merchantability, fitness for a particular
purpose or otherwise (irrespective of any course of dealing, custom
or usage of trade), of any services or any goods provided incidental
to services provided under this Agreement. PNC disclaims any
19
warranty of title or non-infringement except as otherwise set forth
in this Agreement.
(j) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.
(k) The Fund and PNC agree that the obligations of the Fund under the
Agreement shall not be binding upon any of the directors,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Fund individually, but are binding only
upon the assets and property of the Fund (or applicable series
thereof), as provided in the Declaration of Trust. The execution and
delivery of this Agreement have been authorized by the directors of
the Fund, and signed by an authorized officer of the Fund, acting as
such, and neither such authorization by such directors nor such
execution and delivery by such officer shall be deemed to have been
made by any of them or any shareholder of the Fund individually or
to impose any liability on any of them or any shareholder of the
Fund personally, but shall bind only the assets and property of the
Fund (or applicable series thereof), as provided in the Articles of
Incorporation or Declaration of Trust.
(l) Customer Identification Program Notice. To help the U.S. government
fight the funding of terrorism and money laundering activities, U.S.
Federal law requires each financial institution to obtain, verify,
and record certain information that identifies each person who
initially opens an account with that financial institution on or
after October 1, 2003. Certain of PNC's affiliates are financial
institutions, and PNC may, as a matter of policy, request (or may
have already requested) the Fund's name, address and taxpayer
identification number or other government-issued identification
number, and, if such party is a natural person, that party's date of
20
birth. PNC may also ask (and may have already asked) for additional
identifying information, and PNC may take steps (and may have
already taken steps) to verify the authenticity and accuracy of
these data elements.
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PNC GLOBAL INVESTMENT SERVICING
(U.S.) INC.
By: /s/ Michael DeNofrio
------------------------------------
Name: Michael DeNofrio
Title: Executive Vice President
Senior Managing Director
FIRST TRUST/FOUR CORNERS SENIOR FLOATING
RATE INCOME FUND II
By: /s/ W. Scott Jardine
-----------------------------------
Name: W. Scott Jardine
Title: Secretary
22
EX-99.2K OTH CONTRCT
5
exhibit_k2.txt
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of May 18, 2009 by and between PNC GLOBAL
INVESTMENT SERVICING (U.S.) INC., a Massachusetts corporation ("PNC"), and FIRST
TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II, a Massachusetts business
trust (the "Fund").
W I T N E S S E T H :
WHEREAS, the Fund is registered as a closed-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PNC to provide administration and
accounting services, and PNC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and intending to be legally bound hereby the parties hereto
agree as follows:
1. DEFINITIONS. As used in this Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other
person duly authorized by the Fund to give Oral Instructions and
Written Instructions on behalf of the Fund. An Authorized Person's
scope of authority may be limited by setting forth such limitation
in a written document signed by both parties hereto.
(d) "Oral Instructions" mean oral instructions received by PNC from an
Authorized Person or from a person reasonably believed by PNC to be
an Authorized Person. PNC may, in its sole discretion in each
separate instance, consider and rely upon instructions it receives
from an Authorized Person via electronic mail as Oral Instructions.
1
(e) "SEC" means the Securities and Exchange Commission.
(f) "Securities Laws" means the 1933 Act, the 1934 Act and the 1940 Act.
(g) "Shares" mean the shares of beneficial interest of the Fund.
(h) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by PNC or (ii) trade instructions
transmitted (and received by PNC) by means of an electronic
transaction reporting system access to which requires use of a
password or other authorized identifier. The instructions may be
delivered electronically (with respect to sub-item (ii) above) or by
hand, mail, tested telegram, cable, telex or facsimile sending
device.
2. APPOINTMENT. The Fund hereby appoints PNC to provide administration and
accounting services to the Fund, in accordance with the terms set forth in
this Agreement. PNC accepts such appointment and agrees to furnish such
services. PNC shall be under no duty to take any action hereunder on
behalf of the Fund except as specifically set forth herein or as may be
specifically agreed to by PNC and the Fund in a written amendment hereto.
PNC shall not bear, or otherwise be responsible for, any fees, costs or
expenses charged by any third party service providers engaged by the Fund
or by any other third party service provider to the Fund.
3. COMPLIANCE WITH RULES AND REGULATIONS.
PNC undertakes to comply with all applicable requirements of the
Securities Laws, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be performed
by PNC hereunder. Except as specifically set forth herein, PNC assumes no
responsibility for such compliance by the Fund or other entity.
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PNC shall act only upon
Oral Instructions or Written Instructions.
2
(b) PNC shall be entitled to rely upon any Oral Instruction or Written
Instruction it receives from an Authorized Person (or from a person
reasonably believed by PNC to be an Authorized Person) pursuant to
this Agreement. PNC may assume that any Oral Instruction or Written
Instruction received hereunder is not in any way inconsistent with
the provisions of organizational documents or this Agreement or of
any vote, resolution or proceeding of the Fund's board of directors
or of the Fund's shareholders, unless and until PNC receives Written
Instructions to the contrary.
(c) The Fund agrees to forward to PNC Written Instructions confirming
Oral Instructions (except where such Oral Instructions are given by
PNC or its affiliates) so that PNC receives the Written Instructions
by the close of business on the same day that such Oral Instructions
are received. The fact that such confirming Written Instructions are
not received by PNC or differ from the Oral Instructions shall in no
way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions or PNC's ability to
rely upon such Oral Instructions.
5. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PNC is in doubt as to any action it should or
should not take, PNC may request directions or advice, including
Oral Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PNC shall be in doubt as to any question of
law pertaining to any action it should or should not take, PNC may
request advice from counsel of its own choosing (who may be counsel
for the Fund, the Fund's investment adviser or PNC, at the option of
PNC). The Fund shall pay the reasonable cost of any counsel retained
by PNC with prior notice to the Fund.
(c) Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PNC receives
3
from the Fund and the advice PNC receives from counsel, PNC may rely
upon and follow the advice of counsel.
(d) Protection of PNC. PNC shall be indemnified by the Fund and without
liability for any action PNC takes or does not take in reliance upon
directions or advice or Oral Instructions or Written Instructions
PNC receives from or on behalf of the Fund or from counsel and which
PNC believes, in good faith, to be consistent with those directions
or advice and Oral Instructions or Written Instructions. Nothing in
this section shall be construed so as to impose an obligation upon
PNC (i) to seek such directions or advice or Oral Instructions or
Written Instructions, or (ii) to act in accordance with such
directions or advice or Oral Instructions or Written Instructions.
6. RECORDS; VISITS.
(a) The books and records pertaining to the Fund which are in the
possession or under the control of PNC shall be the property of the
Fund. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws, rules
and regulations provided the Fund provides PNC with written notice
of such laws, rules and regulations, other than the 1940 Act and the
Internal Revenue Code of 1986, as amended, that are applicable. The
Fund and Authorized Persons shall have access to such books and
records at all times during PNC's normal business hours upon
reasonable advance notice. Upon the reasonable request of the Fund,
copies of any such books and records shall be provided by PNC to the
Fund or to an Authorized Person, at the Fund's expense.
(b) PNC shall keep the following records:
(i) all books and records with respect to the Fund's books of
account;
(ii) records of the Fund's securities transactions; and
4
(iii) all other books and records as PNC is required to maintain
pursuant to Rule 31a-1 of the 1940 Act in connection with the
services provided hereunder.
7. CONFIDENTIALITY. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that is
competitively sensitive material, and not generally known to the public,
including, but not limited to, information about product plans, marketing
strategies, finances, operations, customer relationships, customer
profiles, customer lists, sales estimates, business plans, and internal
performance results relating to the past, present or future business
activities of the Fund or PNC and their respective subsidiaries and
affiliated companies; (b) any scientific or technical information, design,
process, procedure, formula, or improvement that is commercially valuable
and secret in the sense that its confidentiality affords the Fund or PNC a
competitive advantage over its competitors; (c) all confidential or
proprietary concepts, documentation, reports, data, specifications,
computer software, source code, object code, flow charts, databases,
inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as confidential.
Notwithstanding the foregoing, information shall not be Confidential
Information and shall not be subject to such confidentiality obligations
if: (a) it is necessary for PNC to release such information in connection
with the provision of services under this Agreement; (b) it is already
known to the receiving party at the time it is obtained; (c) it is or
becomes publicly known or available through no wrongful act of the
receiving party; (d) it is rightfully received from a third party who, to
the best of the receiving party's knowledge, is not under a duty of
confidentiality; (e) it is released by the protected party to a third
party without restriction; (f) it is requested or required to be disclosed
by the receiving party pursuant to a court order, subpoena, governmental
or regulatory agency request or law (provided the receiving party will
5
provide the other party written notice of the same, to the extent such
notice is permitted); (g) it is Fund information provided by PNC in
connection with an independent third party compliance or other review; (h)
it is relevant to the defense of any claim or cause of action asserted
against the receiving party; or (i) it has been or is independently
developed or obtained by the receiving party. PNC acknowledges and agrees
that in connection with its services under this Agreement it receives
non-public confidential portfolio holdings information ("Portfolio
Information") with respect to the Fund. PNC agrees that, subject to the
foregoing provisions of and the exceptions set forth in this Section 7
(other than the exception set forth above in this Section 7 as sub-item
(a), which exception set forth in sub-item (a) shall not be applicable to
the Fund's Portfolio Information), PNC will keep confidential the Fund's
Portfolio Information and will not disclose the Fund's Portfolio
Information other than pursuant to a Written Instruction (which Written
Instruction may be a standing Written Instruction); provided that without
the need for such a Written Instruction and notwithstanding any other
provision of this Section 7 to the contrary, the Fund's Portfolio
Information may be disclosed to third party pricing services which are
engaged by PNC in connection with the provision of services under this
Agreement and which shall be subject to a duty of confidentiality with
respect to such Portfolio Information.
8. LIAISON WITH ACCOUNTANTS. PNC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses, fiscal
year summaries, and other audit-related schedules with respect to the
Fund. PNC shall take all reasonable action in the performance of its
duties under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their opinion, as
required by the Fund.
9. PNC SYSTEM. PNC shall retain title to and ownership of any and all data
bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable
6
or copyrightable matters, concepts, expertise, patents, copyrights, trade
secrets, and other related legal rights utilized by PNC in connection with
the services provided by PNC to the Fund.
10. DISASTER RECOVERY. PNC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions
for emergency use of electronic data processing equipment to the extent
appropriate equipment is available. In the event of equipment failures,
PNC shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PNC shall have no liability with respect
to the loss of data or service interruptions caused by equipment failure,
provided such loss or interruption is not caused by PNC's own willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
obligations under this Agreement.
11. COMPENSATION.
(a) As compensation for services rendered by PNC during the term of this
Agreement, the Fund will pay to PNC a fee or fees as may be agreed
to in writing by the Fund and PNC.
(b) The undersigned hereby represents and warrants to PNC that (i) the
terms of this Agreement, (ii) the fees and expenses associated with
this Agreement, and (iii) any benefits accruing to PNC or to the
adviser or sponsor to the Fund in connection with this Agreement,
including but not limited to any fee waivers, conversion cost
reimbursements, up front payments, signing payments or periodic
payments made or to be made by PNC to such adviser or sponsor or any
affiliate of the Fund relating to this Agreement have been fully
disclosed to the board of directors of the Fund and that, if
required by applicable law, such board of directors has approved or
will approve the terms of this Agreement, any such fees and
expenses, and any such benefits.
7
12. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold harmless PNC and its
affiliates providing services under this Agreement, including their
respective officers, directors, agents and employees, from all
taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, reasonable attorneys' fees and
disbursements and liabilities arising under the Securities Laws and
any state and foreign securities and blue sky laws) ("Claims")
arising directly or indirectly from any action or omission to act
which PNC takes in connection with the provision of services to the
Fund. Neither PNC, nor any of its affiliates, shall be indemnified
against any liability (or any expenses incident to such liability)
caused by PNC's or its affiliates' own willful misfeasance, bad
faith, negligence or reckless disregard in the performance of PNC's
or its affiliates' activities under this Agreement. The provisions
of this Section 12 shall survive termination of this Agreement.
(b) Indemnification of the Fund. PNC agrees to defend, indemnify and
hold the Fund and its officers, directors and employees harmless
from any and all Claims arising directly or indirectly from the
negligence, bad faith, reckless disregard or willful misfeasance of
PNC and its affiliates in the performance of its duties hereunder.
Notwithstanding the foregoing, the Fund shall not be indemnified
against any Claim caused by the Fund's or the Fund's other service
providers' willful misfeasance, bad faith or negligence.
(c) Indemnification Procedure.
(i) Notice of the Action. A party that seeks indemnification under
this Agreement must promptly give the other party notice of
any legal action; provided, however, that a delay in notice
does not relieve an indemnifying party of any liability to an
indemnified party, except to the extent the indemnifying party
shows that the delay prejudiced the defense of the action.
8
(ii) Participating in or Assuming the Defense. The indemnifying
party may participate in the defense at any time or it may
assume the defense by giving notice to the other party. After
assuming the defense, the indemnifying party:
(1) must select an attorney that is satisfactory to the
other party;
(2) is not liable to the other party for any later
attorney's fees or for any other later expenses that the
other party incurs, except for reasonable investigation
costs;
(3) must not compromise or settle the action without the
other party's consent (but the other party must not
unreasonably withhold its consent); and
(4) is not liable for any compromise or settlement made
without its consent.
(iii) Failing to Assume the Defense. If the indemnifying party fails
to participate in or assume the defense within 15 days after
receiving notice of the action, the indemnifying party is
bound by any determination made in the action or by any
compromise or settlement made by the other party.
13. RESPONSIBILITY OF PNC.
(a) PNC shall be under no duty to take any action hereunder on behalf of
the Fund except as specifically set forth herein or as may be
specifically agreed to by PNC and the Fund in a written amendment
hereto. PNC shall be obligated to exercise commercially reasonable
care and diligence in the performance of its duties hereunder and to
act in good faith in performing services provided for under this
Agreement. As set forth herein, and as may be agreed to in writing
from time to time by PNC and the Fund with regard to such matters of
liability, PNC shall be liable only for any damages arising out of
PNC's failure to perform its duties under this Agreement to the
extent such damages arise out of PNC's willful misfeasance, bad
faith, negligence or reckless disregard of such duties.
9
(b) Notwithstanding anything in this Agreement to the contrary, PNC
shall not be liable for losses, delays, failure, errors,
interruption or loss of data occurring directly or indirectly by
reason of circumstances beyond its reasonable control, including
without limitation acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire; flood;
sabotage; epidemics; labor disputes; civil commotion; interruption,
loss or malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of nature; or
non-performance by a third party; failure of the mails; or functions
or malfunctions of the internet, firewalls, encryption systems or
security devices caused by any of the above; and (ii) PNC shall not
be under any duty or obligation to inquire into and shall not be
liable for the validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other information which PNC
reasonably believes to be genuine. PNC shall not be liable for any
damages arising out of any action or omission to act by any prior
service provider of the Fund or for any failure to discover any such
error or omission.
(c) Notwithstanding anything in this Agreement to the contrary, neither
party to this Agreement nor their respective affiliates shall be
liable for any consequential, incidental, exemplary, punitive,
special or indirect losses or damages, whether or not the likelihood
of such losses or damages was known by such party.
(d) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(e) The provisions of this Section 13 shall survive termination of this
Agreement.
14. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS.
PNC will perform the following accounting services with respect to the
Fund:
10
(i) Journalize investment, capital share and income and expense
activities;
(ii) Verify investment buy/sell trade tickets when received from the
investment adviser for the Fund (the "Adviser") and transmit trades
to the Fund's custodian (the "Custodian") for proper settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of the Fund with the
Custodian, and provide the Adviser with the beginning cash balance
available for investment purposes;
(vi) Update the cash availability throughout the day as required by the
Adviser;
(vii) Post to and prepare the Statement of Assets and Liabilities and the
Statement of Operations;
(viii) Calculate various contractual expenses (e.g., advisory and custody
fees);
(ix) Monitor the expense accruals and notify an officer of the Fund of
any proposed adjustments;
(x) Control all disbursements and authorize such disbursements upon
Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Obtain security market quotes from independent pricing services
approved by the Adviser, or if such quotes are unavailable, then
obtain such prices from the Adviser, and in either case calculate
the market value of the Fund's Investments;
(xiv) Transmit or mail a copy of the daily portfolio valuation to the
Adviser;
(xv) Compute net asset value; and
(xvi) As appropriate, compute yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average
dollar-weighted maturity.
15. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUOUS BASIS.
PNC will perform the following administration services with respect to the
Fund:
(i) Prepare quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
11
(iii) Supply various normal and customary Fund statistical data as
requested on an ongoing basis;
(iv) Prepare for execution and file the Fund's Federal and state tax
returns;
(v) Monitor the Fund's status as a regulated investment company under
Sub-chapter M of the Internal Revenue Code of 1986, as amended;
(vi) Prepare the Fund's annual and semi-annual shareholder reports;
(vii) Prepare and coordinate with the Fund's counsel post-effective
amendments to the Fund's registration statement on Form N-2, as
needed, and coordinate with the Fund's financial printer to file
such amendments; and prepare and file semi-annual reports on Form
N-SAR, subject to the review of Fund management;
(viii) Assist in the preparation of notices of annual or special meetings
of shareholders and proxy materials relating to such meetings;
(ix) Assist in obtaining the fidelity bond and directors' and
officers'/errors and omissions insurance policies for the Fund in
accordance with the requirements of Rule 17g-1 and 17d-1(d)(7) under
the 1940 Act as such bond and policies are approved by the Fund's
board of directors;
(x) Monitor the Fund's assets to assure adequate fidelity bond coverage
is maintained;
(xi) Draft agendas, resolutions and materials for quarterly and special
board meetings and draft written consents of the board;
(xii) Coordinate the preparation, assembly and mailing of board materials;
(xiii) Attend board meetings and draft minutes thereof;
(xiv) Maintain a calendar that identifies the required SEC filing and
board approval deadlines;
(xv) Assist the Fund in the handling of SEC examinations and responses
thereto;
(xvi) If the chief executive officer or chief financial officer of the
Fund is required to provide a certification as part of the Fund's
Form N-Q or Form N-CSR filing pursuant to regulations promulgated by
the Securities and Exchange Commission under Section 302 of the
Sarbanes-Oxley Act of 2002, PNC will provide (to such person or
entity as agreed between the Fund and PNC) a sub-certification in
support of certain matters set forth in the aforementioned
certification, such sub-certification to be in such form and
relating to such matters as agreed between the Fund and PNC from
time to time. PNC shall be required to provide the sub-certification
only during the term of the Agreement and only if it receives such
cooperation as it may request to perform its investigations with
12
respect to the sub-certification. For clarity, the sub-certification
is not itself a certification under the Sarbanes-Oxley Act of 2002
or under any other regulatory requirement; and
(xvii) Coordinate contractual relationships and communications between the
Fund and its contractual service providers; and
(xviii) Such other regulatory services as the parties hereto may from time
to time agree upon in writing.
All regulatory services are subject to the review and approval of Fund
counsel.
16. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the date first written above
and unless terminated pursuant to its terms shall continue until
June 12, 2010 (the "Initial Term").
(b) Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year ("Renewal
Terms") each, unless the Fund or PNC provides written notice to the
other of its intent not to renew. Such notice must be received not
less than ninety (90) days prior to the expiration of the Initial
Term or the then current Renewal Term.
(c) In the event a termination notice is given by the Fund, all expenses
associated with movement of records and materials and conversion
thereof to a successor accounting and administration services
agent(s) (and any other service provider(s)), and all trailing
expenses incurred by PNC, will be borne by the Fund and paid to PNC
if known at such time prior to any such conversion.
(d) If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other
party (the "Non-Defaulting Party") may give written notice thereof
to the Defaulting Party, and if such material breach shall not have
been remedied within thirty (30) days after such written notice is
given, then the Non-Defaulting Party may terminate this Agreement by
13
giving thirty (30) days written notice of such termination to the
Defaulting Party. In all cases, termination by the Non-Defaulting
Party shall not constitute a waiver by the Non-Defaulting Party of
any other rights it might have under this Agreement or otherwise
against the Defaulting Party.
17. NOTICES. Notices shall be addressed (a) if to PNC, at 301 Bellevue
Parkway, Wilmington, Delaware 19809, Attention: President (or such other
address as PNC may inform the Fund in writing); (b) if to the Fund, at 120
East Liberty Drive, Wheaton, IL 60187, Attention: W. Scott Jardine fax
(630) 517-7437 (or such other address as the Fund may inform PNC in
writing); or (c) if to neither of the foregoing, at such other address as
shall have been given by like notice to the sender of any such notice or
other communication by the other party. If notice is sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed to
have been given immediately. If notice is sent by first-class mail, it
shall be deemed to have been given three days after it has been mailed. If
notice is sent by messenger, it shall be deemed to have been given on the
day it is delivered.
18. AMENDMENTS. This Agreement, or any term thereof, may be changed or waived
only by written amendment, signed by the party against whom enforcement of
such change or waiver is sought
19. ASSIGNMENT. PNC may assign its rights hereunder to any majority-owned
direct or indirect subsidiary of PNC or of The PNC Financial Services
Group, Inc., provided that PNC gives the Fund thirty (30) days prior
written notice of such assignment.
20. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
21. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
14
22. MISCELLANEOUS.
(a) Notwithstanding anything in this Agreement to the contrary, the Fund
agrees not to make any modifications to its registration statement
or adopt any policies which would affect materially the obligations
or responsibilities of PNC hereunder without the prior written
approval of PNC, which approval shall not be unreasonably withheld
or delayed. The scope of services to be provided by PNC under this
Agreement shall not be increased as a result of new or revised
regulatory or other requirements that may become applicable with
respect to the Fund, unless the parties hereto expressly agree in
writing to any such increase.
(b) During the term of this Agreement and for one year thereafter, the
Fund shall not (with the exceptions noted in the immediately
succeeding sentence) knowingly solicit or recruit for employment or
hire any of PNC's employees, and the Fund shall cause the Fund's
sponsor and the Fund's affiliates to not (with the exceptions noted
in the immediately succeeding sentence) knowingly solicit or recruit
for employment or hire any of PNC's employees. To "knowingly"
solicit, recruit or hire within the meaning of this provision does
not include, and therefore does not prohibit, solicitation,
recruitment or hiring of a PNC employee by the Fund, the Fund's
sponsor or an affiliate of the Fund if the PNC employee was
identified by such entity solely as a result of the PNC employee's
response to a general advertisement by such entity in a publication
of trade or industry interest or other similar general solicitation
by such entity
(c) Except as expressly provided in this Agreement, PNC hereby disclaims
all representations and warranties, express or implied, made to the
Fund or any other person, including, without limitation, any
15
warranties regarding quality, suitability, merchantability, fitness
for a particular purpose or otherwise (irrespective of any course of
dealing, custom or usage of trade), of any services or any goods
provided incidental to services provided under this Agreement. PNC
disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
(d) This Agreement embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that
the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties.
(e) The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(f) Notwithstanding any provision hereof, the services of PNC are not,
nor shall they be, construed as constituting legal advice or the
provision of legal services for or on behalf of the Fund or any
other person. Neither this Agreement nor the provision of services
under this Agreement establishes or is intended to establish an
attorney-client relationship between the Fund and PNC.
(g) The Fund will provide such information and documentation as PNC may
reasonably request in connection with services provided by PNC to
the Fund.
(h) This Agreement shall be deemed to be a contract made in Delaware and
governed by Delaware law, without regard to principles of conflicts
of law.
(i) If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
(j) This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted
assigns. Except as may be explicitly stated in this Agreement, (i)
16
this Agreement is not for the benefit of any other person or entity
and (ii) there shall be no third party beneficiaries hereof.
(k) The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such party.
(l) The Fund and PNC agree that the obligations of the Fund under the
Agreement shall not be binding upon any of the directors,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Fund individually, but are binding only
upon the assets and property of the Fund (or applicable series
thereof), as provided in the Declaration of Trust. The execution and
delivery of this Agreement have been authorized by the directors of
the Fund, and signed by an authorized officer of the Fund, acting as
such, and neither such authorization by such directors nor such
execution and delivery by such officer shall be deemed to have been
made by any of them or any shareholder of the Fund individually or
to impose any liability on any of them or any shareholder of the
Fund personally, but shall bind only the assets and property of the
Fund (or applicable series thereof), as provided in the Articles of
Incorporation or Declaration of Trust.
(m) To help the U.S. government fight the funding of terrorism and money
laundering activities, U.S. Federal law requires each financial
institution to obtain, verify, and record certain information that
identifies each person who initially opens an account with that
financial institution on or after October 1, 2003. Certain of PNC's
affiliates are financial institutions, and PNC may, as a matter of
policy, request (or may have already requested) the Fund's name,
address and taxpayer identification number or other
government-issued identification number, and, if such party is a
natural person, that party's date of birth. PNC may also ask (and
may have already asked) for additional identifying information, and
PNC may take steps (and may have already taken steps) to verify the
authenticity and accuracy of these data elements.
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PNC GLOBAL INVESTMENT SERVICING (U.S.) INC.
By: /s/ Richard H. Rose
---------------------------------------
Name: Richard H. Rose
Title: Vice President
FIRST TRUST/FOUR CORNERS SENIOR FLOATING
RATE INCOME FUND II
By: /s/ W. Scott Jardine
Name: W. Scott Jardine
Title: Secretary
18
EX-99.2L OPIN COUNSL
6
exhibit_l1.txt
OPINION AND CONSENT OF CHAPMAN AND CUTLER LLP
CHAPMAN AND CUTLER LLP 111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
November 21, 2012
First Trust Senior Floating Rate Income Fund II
120 E. Liberty Drive, Suite 400
Wheaton, Illinois 60187
Ladies and Gentlemen:
As counsel to First Trust Senior Floating Rate Income Fund II (the
"Fund"), we delivered to you an opinion letter dated November 7, 2012 in
connection with a Registration Statement filed by the Fund with the Securities
and Exchange Commission (the "SEC") on Form N-2, File No. 333-184182 (as
amended, the "Registration Statement"). The Registration Statement was filed for
the purpose of registering with the SEC common shares of beneficial interest of
the Fund, par value $.01 per share (the "Shares"). This opinion relates to the
offer and sale of up to 3,000,000 Shares under the Registration Statement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents and
proceedings as we have considered necessary for the purposes of this opinion. We
have also examined and are familiar with the proceedings taken by the Fund to
authorize the issuance and sale of up to 3,000,000 Shares. In addition, we have
examined a copy of the Registration Statement, including the exhibits thereto,
and a copy of the Prospectus dated November 16, 2012 (the "Prospectus") included
in the Registration Statement and a copy of a Prospectus Supplement to the
Prospectus dated November 21, 2012 (the "Prospectus Supplement").
In this connection we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate and other
records, certificates and other papers as we deemed it necessary to examine for
the purpose of this opinion, including the declaration of trust and by-laws of
the Fund, actions of the board of trustees of the Fund authorizing the issuance
of shares of the Fund and the Registration Statement.
We assume that, upon sale of the Shares, the Fund will receive the
authorized consideration therefor, which will at least equal the net asset value
of the Shares.
First Trust Senior Floating Rate Income Fund II
November 21, 2012
Page 2
Based upon the foregoing, we are of the opinion that when the Shares are
issued and sold after authorized consideration therefor is received by the Fund
in accordance with the Prospectus and Prospectus Supplement, they will be
validly issued, fully paid and nonassessable by the Fund, except that, as set
forth in the Registration Statement, shareholders of the Fund may under certain
circumstances be held personally liable for obligations of the Fund.
In rendering the foregoing opinion, we have relied upon the opinion of
Bingham McCutchen LLP expressed in their letter to us dated November 21, 2012.
We consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not admit that we are in the category
of persons whose consent is required under section 7 of the Act.
Very truly yours,
/s/ Chapman and Cutler LLP
EX-99.2L OPIN COUNSL
7
exhibit_l2.txt
OPINION AND CONSENT OF BINGHAM MCCUTCHEON LLP
November 21, 2012
Chapman and Cutler LLP
111 West Monroe Street
Chicago, Illinois 60603
First Trust Senior Floating Rate Income Fund II
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
RE: First Trust Senior Floating Rate Income Fund II
-----------------------------------------------------
Ladies and Gentlemen:
We have acted as special Massachusetts counsel to First Trust Senior
Floating Rate Income Fund II, a Massachusetts business trust (the "Fund"), in
connection with the Fund's Post-Effective Amendment No. 1 to its Registration
Statement on Form N-2 to be filed with the Securities and Exchange Commission
(the "Commission") on or about November 21, 2012 (the "Amendment") and the
supplement, dated November 21, 2012 (the "Supplement") to the base prospectus
dated November 7, 2012 (the "Base Prospectus"), each to be filed with the
Commission under Rule 497 under the Securities Act of 1933, as amended (the
"1933 Act") on or about November 21, 2012, with respect to up to 3,000,000 of
its common shares of beneficial interest, $.01 par value per share (the
"Shares"). You have requested that we deliver this opinion to you, as special
counsel to the Fund, for use by you in connection with your opinion to the Fund
with respect to the Shares, to be filed as an exhibit to the Amendment.
In connection with the furnishing of this opinion, we have examined the
following documents:
(a) a certificate dated as of November 5, 2012 of the Secretary of the
Commonwealth of Massachusetts as to the existence of the Fund;
(b) (b) a copy, as filed with the Secretary of the Commonwealth of
Massachusetts on March 26, 2004, of the Fund's Declaration of Trust and the
amendments thereto dated as of October 27, 2008 and September 20, 2010, each as
filed with the Secretary of the Commonwealth of Massachusetts (as so amended,
the "Declaration");
(c) a certificate of the Secretary of the Fund, certifying as to, and
attaching copies of, the Fund's Declaration, the Fund's By-laws as currently in
effect (the "By-laws) and resolutions adopted by the Fund's Board of Trustees at
Chapman and Cutler LLP
First Trust Senior Floating Rate Income Fund II
November 21, 2012
Page 2
a meeting held on June 13, 2011 and the minutes of the meeting of the Fund's
Board of Trustees on September 17, 2012 (the "Resolutions");
(d) a printer's proof of the Base Prospectus received on November 7, 2012;
(e) a printer's proof of the Supplement received on November 18, 2012; and
(f) a printer's proof of the Amendment received on November 20, 2012.
In such examination, we have assumed the genuineness of all signatures,
the conformity to the originals of all of the documents reviewed by us as
copies, the authenticity and completeness of all original documents reviewed by
us in original or copy form and the legal competence of each individual
executing any document. We have also assumed that the Supplement, the Base
Prospectus and the Amendment, when filed with the Commission, will be in
substantially the form of the printer's proofs referenced in subparagraphs (d),
(e) and (f) above. We have further assumed that the Fund's Declaration and the
Resolutions will not have been amended, modified or withdrawn with respect to
matters relating to the Shares and will be in full force and effect on the date
of issuance of such Shares. We note that the Board of Trustees of the Fund has
approved offerings of the Shares in any method permitted by law including in any
manner deemed to be "at-the-market," as such term is defined in Rule 415 under
the 1933 Act, and we have assumed that all offers and sales of the Shares will
be made in accordance with such resolutions and at a price per share that is not
less than the then current net asset value per share, exclusive of any
distributing commission or discount, which net asset value shall be determined
in accordance with Section 23(b) of the Investment Company Act of 1940, as
amended.
This opinion is based entirely on our review of the documents listed above
and such investigation of law as we have deemed necessary or appropriate. We
have made no other review or investigation of any kind whatsoever, and we have
assumed, without independent inquiry, the accuracy of the information set forth
in such documents. We have further assumed that there are no other documents
that are contrary to or inconsistent with the opinions expressed herein. As to
our opinion below relating to the valid existence of the Fund, our opinion
relies entirely upon and is limited by the certificate referenced in paragraph
(a) above. We note that the minutes of the meeting of the Fund's Trustees on
Chapman and Cutler LLP
First Trust Senior Floating Rate Income Fund II
November 21, 2012
Page 3
September 17, 2012, as attached to the certificate referenced in subparagraph
(c) above and reviewed by us in connection with rendering this opinion, are in
draft form, and we have assumed for the purposes of this opinion that such
minutes as they relate to the Fund, when finalized and approved by the Trustees,
will be in substantially the form attached to such certificate.
This opinion is limited solely to the laws of the Commonwealth of
Massachusetts as applied by courts located in such Commonwealth, except that we
express no opinion as to any Massachusetts securities law. No opinion is given
herein as to the choice of law which any tribunal may apply. In addition, to the
extent that the Fund's Declaration, By-laws or the Resolutions refer to,
incorporate or require compliance with the Investment Company Act of 1940, as
amended, or any other law or regulation applicable to the Fund, except for the
internal substantive laws of the Commonwealth of Massachusetts, as aforesaid, we
have assumed compliance by the Fund with such Act and such other laws and
regulations. Further, we express no opinion with respect to, and we assume no
responsibility for, any offering documentation relating to the Fund, including
the Registration Statement, the Amendment thereto, and the Supplement.
We understand that all of the foregoing assumptions and limitations are
acceptable to you.
Based upon and subject to the foregoing, please be advised that it is our
opinion that:
1. The Fund has been formed and is validly existing under the Fund's
Declaration and the laws of the Commonwealth of Massachusetts as a voluntary
association with transferable shares of beneficial interest commonly referred to
as a "Massachusetts business trust."
2. The Shares, when issued and sold in accordance with terms of the
Declaration and the Resolutions, will be validly issued, fully paid and
nonassessable, except that, as set forth in the Base Prospectus, shareholders of
the Fund may under certain circumstances be held personally liable for its
obligations.
This opinion is given as of the date hereof and we assume no obligation to
update this opinion to reflect any changes in law or any other facts or
circumstances which may hereafter come to our attention. We hereby consent to
your reliance on this opinion in connection with your opinion to the Fund with
respect to the Shares, to the reliance by the Fund on this opinion, to the
Chapman and Cutler LLP
First Trust Senior Floating Rate Income Fund II
November 21, 2012
Page 4
reference to our name in the Supplement under the heading "Legal Matters" and
the Base Prospectus under the heading "Legal Opinions" and to the filing of this
opinion as an exhibit to the Amendment.
Very truly yours,
/s/ Bingham McCutchen LLP
-----------------------------
Bingham McCutchen LLP
EX-99.2N OTH CONSENT
8
exhibit_n.txt
CONSENT OF DELOITTE & TOUCHE LLP
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 to Registration Statement No. 333-184182 on Form N-2 of our report dated
July 24, 2012, relating to the financial statements and financial highlights of
First Trust Senior Floating Rate Income Fund II appearing in the Annual Report
on Form N-CSR for First Trust Senior Floating Rate Income Fund II for the year
ended May 31, 2012.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
November 21, 2012