As filed with the Securities and Exchange Commission on November 18, 2021
1933 Act File No. 333-260203
1940 Act File No. 811-23166
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-2
| [X] | REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |
| [ ] | Pre-Effective Amendment No. |
| [X] | Post-Effective Amendment No. 1 |
and
| [X] | REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |
| [X] | Amendment No. 20 |
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc.
Exact Name of Registrant as Specified in Charter
433 W. Van Buren Street, 1150-E, Chicago, Illinois 60607
Address of Principal Executive Offices
(312) 832-1440
Registrant's Telephone Number, including Area Code
Marcus L. Collins, Esq.
RiverNorth Capital Management, LLC
433 W. Van Buren Street, 1150-E
Chicago, Illinois 60607
Name and Address of Agent for Service
Copies of Communications to:
Joshua B. Deringer
Faegre Drinker Biddle & Reath LLP
One Logan Square, Ste. 2000
Philadelphia, PA 19103-6996
(215) 988-2700
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: This post-effective amendment is being filed pursuant to Rule 462(d) under the Securities Act and will be effective upon filing.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, check the following box [ ]
If any securities being registered on this Form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933 (the “Securities Act”), other than securities offered in connection with dividend or interest reinvestment plans, check the following box [X]
If this Form is a registration statement pursuant to General Instruction A.2 or a post-effective amendment thereto, check the following box [ ]
If this Form is a registration statement pursuant to General Instruction B or a post-effective amendment thereto that will become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box [ ]
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction B to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box [ ]
It is proposed that this filing will become effective (check appropriate box):
[ ] when declared effective pursuant to section 8(c)
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a previously filed post-effective amendment.
[ ] This Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: ________.
[ ] This Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: _______.
[X] This Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: 333-260203
Check each box that appropriately characterizes the Registrant:
[X] Registered Closed-End Fund (closed-end company that is registered under the Investment Company Act of 1940 (the “Investment Company Act”)).
[ ] Business Development Company (closed-end company that intends or has elected to be regulated as a business development company under the Investment Company Act).
[ ] Interval Fund (Registered Closed-End Fund or a Business Development Company that makes periodic repurchase offers under Rule 23c-3 under the Investment Company Act).
[X] A.2 Qualified (qualified to register securities pursuant to General Instruction A.2 of this Form).
[ ] Well-Known Seasoned Issuer (as defined by Rule 405 under the Securities Act).
[ ] Emerging Growth Company (as defined by Rule 12b-2 under the Securities and Exchange Act of 1934).
[ ] If an Emerging Growth Company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
[ ] New Registrant (registered or regulated under the Investment Company Act for less than 12 calendar months preceding this filing).
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File Nos. 333-260203 and 811-23166) of the RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (as amended, 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. 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 report of independent registered 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 June 30, 2021 contained in its Form N-CSR, as described in the statement of additional information.
|
| 2. | Exhibits: |
| a.1 | Articles of Incorporation. Filed on July 1, 2016 as Exhibit a to Registrant's Registration Statement on Form N-2 (File No. 333-212400) and incorporated herein by reference. |
| a.2 | Articles of Amendment and Restatement. Filed on August 29, 2016 as Exhibit a to Registrant's Registration Statement on Form N-2 (File No. 333-212400) and incorporated herein by reference. |
| c. | None. |
| f. | None. |
| o. | None. |
| q. | None. |
| r. l | Code of Ethics of Registrant and RiverNorth Capital Management, LLC.* |
| s. | Powers of Attorney. Filed on November 3, 2021 in Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-2 (File No. 333-260203) and incorporated herein by reference. |
| * | Filed herewith. |
Item 26: Marketing Arrangements
The information contained under the heading “Plan of Distribution” on page 52 of the Prospectus is incorporated by reference, and any information concerning any underwriters will be contained in the accompanying Prospectus Supplement, if any.
Please also see the Underwriting Agreement filed as exhibit (h)(1) hereto.
Item 27: Other Expenses of Issuance and Distribution
| Securities and Exchange Commission Fees | $5,600 |
| Financial Industry Regulatory Authority, Inc. Fees | - |
| NYSE Listing Fee | $17,800 |
| Legal Fees | $300,000 |
| Accounting Expenses | $5,000 |
| Rating Fee | $187,500 |
| Printing and Other Expenses | $32,500 |
| Total | $548,400 |
Item 28: Persons Controlled by or under Common Control with Registrant
Not applicable.
Item 29: Number of Holders of Securities
At September 29, 2021
| Title of Class | Number of Record Holders |
| Common Shares, $0.0001 par value | 1 |
| Preferred Shares, $0.0001 par value | 0 |
Item 30: Indemnification
Section 7.2 of the Articles of Amendment and Restatement of the Registrant provides as follows:
Any person who is made a party or is threatened to be made a party in any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that such person is a current or former director or officer of the Corporation, or is or was serving while a director or officer of the Corporation as a director, officer, partner, trustee, employee, agent, or fiduciary of another corporation, partnership, joint venture, trust, enterprise, or employee benefit plan, shall be indemnified by the Corporation against judgments, penalties, fines, excise taxes, settlements, and reasonable expenses (including attorneys’ fees) actually incurred by such person in connection with such action, suit, or proceeding to the fullest extent permissible under Maryland law, the Securities Act, and the 1940 Act, as such statutes are now or hereinafter in force. In addition, the Corporation shall advance expenses to its current and former directors and officers who are made, or are threatened to be made, parties to any action, suit, or proceeding described above to the fullest extent that advancement of expenses is permitted by Maryland law, the Securities Act and the 1940 Act. The Board of Directors, by Bylaw, resolution, or agreement, may make further provision for indemnification of directors, officers, employees, and agents to the fullest extent permitted by Maryland law. No provision of this Article VII shall be effective to protect or purport to protect any director or officer of the Corporation against any liability to the Corporation or its security holders to which she or he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of her or his office. Upon the direction of the Board of Directors, an advancement-of-costs agreement may be required in order to require the repayment of reimbursed expenses in the event that the foregoing exclusion was later determined to apply.
Reference is made to section 6 of the Underwriting Agreement for the 4.75% Series B Cumulative Preferred Stock, which is filed as Exhibit (h)(1) to this Registration Statement.
Item 31: Business and Other Connections of Investment Advisers
RiverNorth Capital Management, LLC
The information in the Statement of Additional Information under the captions “Board Members and Officers” is hereby incorporated by reference.
The principal occupation of the directors and officers of the Adviser are their services as directors and officers of the Adviser. The address of the Adviser is 433 W. Van Buren Street, 1150-E, Chicago, Illinois 60607.
Set forth below is information as to any other business, profession, vocation and employment of a substantial nature in which each officer of the Adviser is, or at any during the last two fiscal years has been, engaged for their own account or in the capacity of director, officer, employee partner or trustee:
| Name* | Positions with RiverNorth Capital Management, LLC | Other Business Connections | Type of Business |
| Patrick W. Galley | Chief Executive Officer, Chief Investment Officer and Board of Managers | President and Trustee/Director, RiverNorth Funds and RiverNorth advised closed-end funds; Director, RiverNorth Opportunities Fund, Inc., Board of Directors, RiverNorth Holdings, Co.; Board of Managers, RiverNorth Financial Holdings, LLC. | Investments |
| Jonathan M. Mohrhardt | President, Chief Operating Officer and Board of Managers | Treasurer, RiverNorth Funds and RiverNorth advised Closed-End Funds; Board of Directors, RiverNorth Holdings, Co.; Board of Managers, RiverNorth Financial Holdings, LLC | Investments |
| Marcus L. Collins | Secretary, General Counsel and Chief Compliance Officer | Chief Compliance Officer, Secretary, RiverNorth Funds and RiverNorth advised Closed-End Funds | Investments |
| Stephen A. O’Neill | Portfolio Manager | Portfolio Manager, RiverNorth Funds and RiverNorth advised Closed-End Funds, RiverNorth Opportunities Fund, Inc. | Investments |
| * | The address for each of the named is 433 W. Van Buren Street, 1150-E, Chicago, Illinois 60607. |
DoubleLine Capital LP
The Registrant’s sub-adviser, DoubleLine Capital LP (the “Subadviser”), is a Delaware limited partnership. The list required by this Item 31 of officers and trustees of the Subadviser, together with information as to any other business, profession, vocation or employment of a substantial nature engaged in by the Subadviser and such officers and trustees during the past two years, is incorporated by reference to Form ADV (SEC File No. 801-70942) filed by the Subadviser pursuant to the Investment Advisers Act of 1940, as amended.
Item 32: Location of Accounts and Records.
RiverNorth Capital Management, LLC maintains the Charter, By-Laws, minutes of directors 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 documents required to be maintained by Section 31(a) of the 1940 Act and the Rules thereunder.
Item 33: Management Services
Not applicable.
Item 34: Undertakings
| 1. | The Registrant undertakes to suspend the offering of shares until the prospectus is amended if (1) subsequent to the effective date of its registration statement, the net asset value declines more than ten 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. | The Registrant hereby undertakes: |
| (a) | to file, during any period in which offers or sales are being made, a post-effective amendment to the registration statement: |
| (1) | to include any prospectus required by Section 10(a)(3) of the Securities Act. |
| (2) | to reflect in the prospectus any facts or events 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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. |
| (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. |
Provided, however, that paragraphs (a)(1), (2), and (3) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act of 1934 that are incorporated by reference into the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
| (b) | that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of those securities at that time shall be deemed to be the initial bona fide offering thereof; |
| (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 to any purchaser: |
| (1) | if the Registrant is relying on Rule 430B: |
| (A) | Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| (B) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (x), or (xi) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or |
| (2) | if the Registrant is subject to Rule 430C: each prospectus filed pursuant to Rule 424(b) under the Securities Act as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the 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 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 424 under the Securities Act; |
| (2) | any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant; |
| (3) | the portion of any other free writing prospectus or advertisement pursuant to Rule 482 under the Securities Act relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and |
| (4) | any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser. |
| 4. | The Registrant undertakes that: |
| (a) | for the purpose of determining any liability under the Securities Act, the information omitted from the form prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant under Rule 424(b)(1) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and |
| (b) | for the purpose of determining any liability under the Securities Act, 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. |
| 5. | The undersigned Registrant hereby undertakes that, for purposes of determining any liabilities under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 934 that is incorporated by reference into the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| 6. | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
| 7. | The Registrant hereby 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 prospectus or Statement of Additional Information. |
| 8. | The Registrant undertakes to only offer rights to purchase common and preferred shares together after a post-effective amendment to the Registration Statement relating to such rights has been declared effective. |
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 Chicago, and State of Illinois, on the 18th day of November, 2021.
| RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. | |||
| By: | /s/ Patrick W. Galley | ||
| Patrick W. Galley, President | |||
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/ Patrick W. Galley | President (Principal Executive Officer) | November 18, 2021 | ||
| Patrick W. Galley | |||||
| By: | /s/ Jonathan M. Mohrhardt | Chief Financial Officer and Treasurer (Principal Financial Officer/Principal Accounting Officer) | November 18, 2021 | ||
| Jonathan M. Mohrhardt | |||||
| By: | /s/ Patrick W. Galley | Chairman of the Board and Director | November 18, 2021 | ||
| Patrick W. Galley | |||||
| John K. Carter(1) | Director | By: | /s/ Patrick W. Galley | ||
| Patrick W. Galley | |||||
| J. Wayne Hutchens(1) | Director | Attorney-In-Fact | |||
| November 18, 2021 | |||||
| John S. Oakes(1) | Director | ||||
| David M. Swanson(1) | Director | ||||
| Jerry R. Raio(1) | Director | ||||
| (1) | Original powers of attorney authorizing Joshua B. Deringer, David L. Williams and Patrick W. Galley to execute Registrant's Registration Statement, and Amendments thereto, for the directors of the Registrant on whose behalf this Registration Statement is filed, were previously executed and are filed as Exhibit s. to Pre-Effective Amendment No. 1 to the Registrant's Registration Statement on Form N-2 (File No. 333-260203). |
Exhibit Index
RIVERNORTH/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC.
ARTICLES SUPPLEMENTARY
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: Under a power contained in Article IV of the charter of the Corporation (the “Charter”) and Sections 2-105 and 2-208 of the Maryland General Corporation Law, the Board of Directors of the Corporation (the “Board” which term as used herein shall include any duly authorized committee of the Board of Directors), by duly adopted resolutions, reclassified 2,400,000 shares of authorized but unissued Common Stock, par value $0.0001 per share (the “Common Stock”), of the Corporation as additional shares (the “Additional Perpetual Preferred Shares”) of Perpetual Preferred Stock, par value $0.0001 per share (the “Perpetual Preferred Stock”), having the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption set forth in the Charter.
SECOND: The Additional Perpetual Preferred Shares have been classified by the Board under authority contained in the Charter. After giving effect to the classification of the Additional Perpetual Preferred Shares set forth herein, the total number of shares of Common Stock that the Corporation has authority to issue is 45,070,000. After giving effect to the classification of the Additional Perpetual Preferred Shares set forth herein, the total number of shares of Perpetual Preferred Stock that the Corporation has authority to issue is 4,930,000.
THIRD: These Articles Supplementary have been approved by the Board in the manner and by the vote required by law.
FOURTH: The undersigned Chairman and President of the Corporation acknowledges these Articles Supplementary to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties of perjury.
[Signatures page follows.]
IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be executed in its name and on its behalf by its Chairman and President and attested to by its Secretary on this 17th day of November, 2021.
| ATTEST: | RIVERNORTH/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC. | ||||
| /s/ Marcus L. Collins | By: | /s/ Patrick W. Galley | (SEAL) | ||
| Name: | Marcus L. Collins | Name: | Patrick W. Galley | ||
| Title: | Secretary | Title: | Chairman and President | ||
APPENDIX B
RiverNorth/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC.
ARTICLES SUPPLEMENTARY
CUMULATIVE PERPETUAL PREFERRED SHARES, 4.75% SERIES B PERPETUAL Preferred Shares
These Articles Supplementary, or “Articles Supplementary,” establish a Series of Perpetual Preferred Shares of RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (the “Corporation”). These Articles Supplementary constitute an appendix to the “Articles Supplementary Establishing and Fixing the Rights and Preferences of Perpetual Preferred Shares” dated October 19, 2020 (the “PP Articles Supplementary”), and except as set forth below, these Articles Supplementary incorporate by reference the terms set forth with respect to all Series of such Perpetual Preferred Shares in the PP Articles Supplementary. These Articles Supplementary have been adopted by resolution of the Board of Directors of the Corporation. Capitalized terms used herein but not defined herein have the respective meanings set forth in the PP Articles Supplementary.
Section 1. Designation as to Series.
Perpetual Preferred Shares, 4.75% Series B Perpetual Preferred Shares: A series of 2,400,000 shares of Capital Stock classified as Perpetual Preferred Shares is hereby designated as the “Series B Perpetual Preferred Shares.” Each share of such Series shall have such preferences, voting powers, restrictions, limitations as to dividends and distributions, qualifications and terms and conditions of redemption, in addition to those required by applicable law and those that are expressly set forth in the Charter and the PP Articles Supplementary (except as the PP Articles Supplementary may be expressly modified by this Appendix), as are set forth in this Appendix B. The Series B Perpetual Preferred Shares shall constitute a separate series of Capital Stock and of the Perpetual Preferred Shares and each Series B Perpetual Preferred Share shall be identical. The following terms and conditions shall apply solely to the Series B Perpetual Preferred Shares:
Section 2. Number of Authorized Shares of Series.
The number of authorized shares is 2,400,000.
Section 3. Date of Original Issue with respect to Series.
The Date of Original Issue shall be the date upon which any such shares of Series B Perpetual Preferred Shares are initially issued from time to time by the Corporation.
Section 4. Fixed Dividend Rate Applicable to Series.
The Fixed Dividend Rate is 4.75%.
Section 5. Liquidation Preference Applicable to Series.
The Liquidation Preference is $25.00 per share.
Section 6. Dividend Payment Dates Applicable to Series.
The Dividend Payment Dates are February 15, May 15, August 15, and November 15 of each year (each a “Dividend Payment Date”), commencing on February 15, 2022, or, if any such day is not a Business Day, the next Business Day.
Section 7. Dividend Period
The Dividend Period is each period from and including a Dividend Payment Date (or the Date of Original Issue in the case of the first Dividend Period) to but excluding the following Dividend Payment Date.
Section 8. Non-Call Period Applicable to Series.
The Non-Call Period is the period beginning on the Date of Original of Issue and ending at the close of business on February 15, 2027.
Section 9. Exceptions to Certain Definitions Applicable to the Series.
The following definitions contained under the heading “Definitions” in the PP Articles Supplementary are hereby amended as follows:
Not applicable.
Section 10. Additional Definitions Applicable to the Series.
The following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the context otherwise requires:
Not applicable.
Section 11. Amendments to Terms of Perpetual Preferred Shares Applicable to the Series.
The following provisions contained under the heading “Terms of the Perpetual Preferred Shares” in the PP Articles Supplementary are hereby amended as follows:
Not applicable.
Section 12. Additional Terms and Provisions Applicable to the Series.
The following provisions shall be incorporated into and be deemed part of the PP Articles Supplementary:
Not applicable.
[Signatures page follows.]
- 2 -
IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be executed in its name and on its behalf by its Chairman and President and attested to by its Secretary on this 17th day of November, 2021.
| ATTEST: | RIVERNORTH/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC. | ||||
| /s/ Marcus L. Collins | By: | /s/ Patrick W. Galley | (SEAL) | ||
| Name: | Marcus L. Collins | Name: | Patrick W. Galley | ||
| Title: | Secretary | Title: | Chairman and President | ||
The undersigned duly authorized officer of RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., who executed on behalf of the Corporation the foregoing Articles Supplementary, hereby acknowledges in the name and on behalf of said Corporation the foregoing Articles Supplementary to be the corporate act of the Corporation, and states under penalties of perjury that to the best of his knowledge, information and belief the matters and facts set forth therein with respect to the authorization and approval thereof are true in all material respects.
| /s/ Patrick W. Galley | |||
| Name: | Patrick W. Galley | ||
| Title: | Chairman and President | ||
[Signature Page to the Articles Supplementary Establishing and Fixing the Rights and
Preferences of Series B Perpetual Preferred Shares]
- 3 -
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc.
2,400,000 Shares of 4.75% Series B Cumulative Preferred Stock
UNDERWRITING AGREEMENT
Dated: November 15, 2021
Table of Contents
| Page | ||
| SECTION 1. | Representations and Warranties | 2 |
| SECTION 2. | Sale and Delivery to Underwriters; Closing | 19 |
| SECTION 3. | Covenants of the Fund and the Advisers | 20 |
| SECTION 4. | Payment of Expenses | 23 |
| SECTION 5. | Conditions of Underwriters’ Obligations | 24 |
| SECTION 6. | Indemnification | 28 |
| SECTION 7. | Contribution | 31 |
| SECTION 8. | Representations, Warranties and Agreements to Survive Delivery | 32 |
| SECTION 9. | Termination of Agreement | 32 |
| SECTION 10. | Default by One or More of the Underwriters | 33 |
| SECTION 11. | Notices | 33 |
| SECTION 12. | Parties | 33 |
| SECTION 13. | Governing Law | 34 |
| SECTION 14. | Effect of Headings | 34 |
| SECTION 15. | Definitions | 34 |
| SECTION 16. | Absence of Fiduciary Relationship | 36 |
| SECTION 17. | Submission to Jurisdiction/Jury Trial Waiver | 37 |
| SECTION 18. | Integration | 37 |
| SECTION 19. | Time | 37 |
| SECTION 20. | Counterparts | 37 |
| SECTION 21. | Recognition of the U.S. Special Resolution Regimes | 37 |
i
EXHIBITS
| Exhibit A | – Securities to be Sold |
| Exhibit B | – Purchase Price of Securities |
| Exhibit C | – Issuer Free Writing Prospectus |
| Exhibit D | – Form of Opinion of Fund Counsel |
| Exhibit E | – Form of Opinion of Adviser Counsel |
| Exhibit F | – Form of Opinion of Subadviser Counsel |
| Exhibit G | – Form of Opinion of Maryland Counsel |
| Exhibit H | – Form of Treasurer’s Certificate |
ii
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc.
2,400,000 Shares of 4.75% Series B Cumulative Preferred Stock
UNDERWRITING AGREEMENT
November 15, 2021
UBS Securities LLC
RBC Capital Markets, LLC
As Representatives of the several Underwriters Listed on Exhibit A hereto, if applicable
c/o UBS Securities LLC
1285 Avenue of the Americas
New York, NY 10019
Ladies and Gentlemen:
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., a Maryland corporation (the “Fund”), RiverNorth Capital Management, LLC, a Delaware limited liability company (the “Adviser”) and DoubleLine Capital LP, a Delaware limited partnership (the “Subadviser” and together with the Adviser, the “Advisers”) confirm their respective agreements with UBS Securities LLC (“UBS”), RBC Capital Markets, LLC (“RBC”) and each of the other Underwriters named in Exhibit A hereto, if any (collectively, the “Underwriters,” which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom UBS and RBC are acting as representatives (in such capacity, the “Representatives”), with respect to the issue and sale by the Fund of a total of 2,400,000 shares of the Fund’s 4.75% Series B Cumulative Preferred Stock (the “Securities”), and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of Securities set forth in said Exhibit A hereto. The Securities will be authorized by, and subject to the terms and conditions of, the Fund’s Organizational Documents and the Articles Supplementary Establishing and Fixing the Rights and Preferences of Perpetual Preferred Shares dated November 17, 2021 (the “Articles Supplementary”). Certain capitalized terms used in this Agreement are defined in Section 15 hereof.
The Fund understands that the Underwriters propose to make a public offering of the Securities as soon as the Representatives deem advisable after this Underwriting Agreement (the “Agreement”) has been executed and delivered.
The Fund has entered into (i) a Management Agreement with the Adviser dated as of August 17, 2016, (ii) a Subadvisory Agreement with the Adviser and Subadviser dated as of September 23, 2016, (iii) a Master Custodian Agreement with State Street Bank and Trust Company dated as of December 6, 2019, (iv) an Administration, Bookkeeping and Pricing Services Agreement with ALPS Fund Services, Inc. dated as of December 2, 2019, (v) an Agency Agreement dated as of October 24, 2018, as amended by the Adoption Agreement dated as of December 2, 2019, with DST Systems, Inc. and (vi) a License Agreement with the Subadviser dated as of September 23, 2016, and such agreements are herein referred to as the “Investment Management Agreement,” the “Sub-advisory Agreement,” the “Custody Agreement,” the “Administration Agreement,” the “Agency Agreement” and the “License Agreement” respectively. Collectively, the Investment Management Agreement, the Sub-Advisory Agreement, the Custody Agreement, the Administration Agreement, the Agency Agreement and the License Agreement are herein referred to as the “Fund Agreements.”
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The Adviser has entered into the Sub-advisory Agreement and an Amended Distribution Agreement with TSC Distributors, LLC dated as of September 23, 2016 (the “Distribution Agreement”, and together with the Investment Management Agreement and the Sub-advisory Agreement, the “Adviser Agreements”). The Subadviser has entered into the Sub-advisory Agreement and the License Agreement (together, the “Sub-advisory Agreements”). Furthermore, the Fund has adopted a dividend reinvestment plan pursuant to which holders of common stock shall have their dividends automatically reinvested in additional common stock of the Fund unless they elect to receive such dividends in cash, and such plan is herein referred to as the “Dividend Reinvestment Plan.”
The Fund has prepared and filed with the Commission a shelf registration statement (File Nos. 333-260203 and 811-23166) on Form N-2 covering the registration of the Securities under the 1933 Act and a 1940 Act Notification under the Rules and Regulations. Pre-effective amendment No. 2 to the Registration Statement, filed on November 8, 2021 is effective. Promptly after execution and delivery of this Agreement, the Fund will prepare and file a prospectus supplement in accordance with the provisions of Rule 430B and Rule 424. For purposes of this Agreement, all references to the Registration Statement, the Original Registration Statement, any Preliminary Prospectus or the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to EDGAR.
All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Registration Statement, any Preliminary Prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in or otherwise deemed by the 1933 Act Rules and Regulations to be a part of or included in the Registration Statement, any Preliminary Prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated by reference in or otherwise deemed by 1933 Act Rules and Regulations to be a part of or included in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Adviser. The Fund and the Adviser, jointly and severally, represent and warrant to each Underwriter as of the date hereof, as of the Applicable Time, and as of the Closing Date referred to in Section 2(b) hereof, and agree with each Underwriter, as follows:
(1) Compliance with Registration Requirements. The Original Registration Statement became effective under the 1933 Act on November 10, 2021 and has been filed under the 1940 Act, and no stop order suspending the effectiveness of the Original Registration Statement has been issued under the 1933 Act or the 1940 Act, or order of suspension or revocation of registration pursuant to Section 8(e) of the 1940 Act, and no proceedings for any such purpose have been instituted or are pending or, to the knowledge of the Fund or the Adviser, have been threatened by the Commission, and any request on the part of the Commission for additional information has been complied with or otherwise resolved or satisfied.
At the respective times the Original Registration Statement and any amendment thereto (filed before the Closing Date) became effective, at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Rules and Regulations and at the Closing Date, the Original Registration Statement and the 1940 Act Notification and any amendments and supplements thereto did or will comply in all material respects with the requirements of the 1933 Act, the 1940 Act and the Rules and Regulations applicable thereto and did not and will not contain an untrue statement of a material fact or, except for the information included in the prospectus supplement relating to the Securities contained in the Prospectus, omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Neither the Prospectus nor any amendments or supplements thereto, as of its date, at the Closing Date, and at any time when a prospectus is required by applicable law to be delivered in connection with sales of Securities, included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Fund makes no representations or warranties as to the information contained in or omitted from the Registration Statement, the Original Registration Statement, any Preliminary Prospectus or the Prospectus in reliance upon and in conformity with information furnished in writing to the Fund by or on behalf of any Underwriter specifically for inclusion therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 6(b) hereof.
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As of the Applicable Time, the Preliminary Prospectus and the Issuer Free Writing Prospectus, considered together (together, the “General Disclosure Package”) did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Each Preliminary Prospectus complied as to form when so filed in all material respects with the Rules and Regulations and each Preliminary Prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(2) Incorporation of Documents by Reference. The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the Original Registration Statement, any Preliminary Prospectus and the Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Rules and Regulations or the 1934 Act and 1934 Act Rules and Regulations or the 1940 Act and the 1940 Act Regulations, as applicable, and, when read together with the other information in the Prospectus, (A) at the time the Original Registration Statement became effective, (B) at the earlier of the time the Prospectus was first used and the date and time of the first contract of sale of Securities in this offering and (C) at the Closing Date, 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 not misleading.
(3) Independent Accountants. Cohen & Company, Ltd. (formerly Cohen Fund Audit Services, Ltd.) who certified and audited the financial statements and supporting schedules included in the Original Registration Statement, the Preliminary Prospectus and the Prospectus, is an independent public accountant as required by the 1933 Act, the 1940 Act and the Rules and Regulations.
(4) Financial Statements. The financial statements of the Fund included in the Original Registration Statement, the Preliminary Prospectus and the Prospectus, together with the related schedules (if any) and notes, present fairly the financial position of the Fund at the dates indicated and the results of operations and cash flows of the Fund for the periods specified; and all such financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved and comply in all material respects with all applicable accounting requirements under the 1933 Act, the 1940 Act and the Rules and Regulations. The supporting schedules, if any, included in the Registration Statement present fairly, in accordance with GAAP, the information required to be stated therein, and the other financial and statistical information and data included in the Original Registration Statement, the Preliminary Prospectus and the Prospectus are accurately derived from such financial statements and the books and records of the Fund.
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(5) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Original Registration Statement, the Preliminary Prospectus and the Prospectus, except as otherwise stated therein, (A) there has been no Fund Material Adverse Effect, (B) there have been no transactions entered into by the Fund which are material with respect to the Fund other than those in the ordinary course of its business as described in the Preliminary Prospectus and the Prospectus or incident to its organization 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.
(6) Good Standing of the Fund. The Fund has been duly formed and is validly existing in good standing as a corporation under the laws of Maryland and has the full power and authority to own, lease and operate its properties (as relevant) and to conduct its business as described in the Original Registration Statement, the Preliminary Prospectus and the Prospectus and to enter into and perform its obligations under this Agreement and the Fund Agreements; and the Fund is duly qualified to transact business and is in good standing under the laws of each jurisdiction which requires qualification, except where that failure to be so qualified or be in good standing could not reasonably be expected to have a Fund Material Adverse Effect.
(7) No Subsidiaries. The Fund has no subsidiaries.
(8) Investment Company Status. The Fund is duly registered as a closed-end, diversified management investment company under the 1940 Act, the 1940 Act Rules and Regulations, and the 1940 Act Notification has been duly filed with the Commission. The Fund has not received any notice from the Commission pursuant to Section 8(e) of the 1940 Act with respect to the 1940 Act Notification or the Registration Statement.
(9) Officers and Directors. No person is serving or acting as an officer, director or investment adviser of the Fund except in accordance with the provisions of the 1940 Act and the Rules and Regulations and the Advisers Act. Except as disclosed in the Original Registration Statement, the Preliminary Prospectus and the Prospectus, no directors of the Fund is (A) an “interested person” (as defined in the 1940 Act) of the Fund or (B) an “affiliated person” (as defined in the 1940 Act) of any Underwriter. For purposes of this Section 1(a)(9), the Fund and the Adviser shall be entitled to rely on representations from such officers and directors.
(10) Capitalization. The authorized, issued and outstanding shares of stock of the Fund are as set forth in the Preliminary Prospectus and in the Prospectus. All issued and outstanding shares of common stock of the Fund have been duly authorized and validly issued and are fully paid and nonassessable and have been offered and sold or exchanged by the Fund in compliance with all applicable laws (including, without limitation, federal and state securities laws); none of the outstanding shares of common stock of the Fund was issued in violation of the preemptive or other similar rights of any securityholder of the Fund; the Securities have been duly and validly authorized and, when issued and delivered to and paid for by the Underwriters pursuant to this Agreement, will be fully paid and nonassessable; and the certificates for the Securities, if any, are in valid and sufficient form.
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(11) Authorization and Description of Shares. The Securities to be purchased by the Underwriters from the Fund have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Fund pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued, fully paid and non-assessable. The Securities conform to all statements relating thereto contained in the Basic Prospectus, Preliminary Prospectus and the Prospectus and such description conforms in all material respects to the rights set forth in the instruments defining the same; and the issuance of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Fund.
(12) Power and Authority. The Fund has full power and authority to enter into this Agreement and the Fund Agreements; the execution and delivery of, and the performance by the Fund of its obligations under this Agreement and the Fund Agreements have been duly and validly authorized by the Fund; and this Agreement and the Fund Agreements have been duly executed and delivered by the Fund and, assuming due authorization, execution and delivery by the other parties hereto and thereto (as applicable), constitute the valid and legally binding agreements of the Fund, enforceable against the Fund in accordance with their terms, except as rights to indemnity and contribution may be limited by federal or state securities laws, or other applicable laws, or principles of public policy, and subject to the qualification that the enforceability of the Fund’s obligations hereunder and thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws relating to or affecting creditors’ rights generally and by general equitable principles and except that neither the Fund nor the Adviser makes any representation or warranty as to the effect of the representations and warranties expressed herein of (i) the compliance or noncompliance of any other party (other than the Fund, the Adviser and the Subadviser) to any of the foregoing Fund Agreements with any state, federal or other laws or regulations applicable to it or them or (ii) the legal or regulatory status or the nature of the business of such other party.
(13) Approval of the Investment Management Agreement and the Sub-advisory Agreement. The Fund’s Board of Directors and the Fund’s sole shareholder has approved the Investment Management Agreement and the Sub-advisory Agreement in accordance with Section 15 of the 1940 Act.
(14) Agreements’ Compliance with Law. This Agreement, each of the Fund Agreements and the Sub-advisory Agreement comply in all material respects with all applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and Regulations.
(15) Absence of Defaults and Conflicts. The Fund is not (i) in violation of its Organizational Documents, (ii) in breach or default in the performance of the terms of any indenture, contract, lease, mortgage, declaration of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject (collectively, “Agreements or Instruments”) or (iii) in violation of any law, ordinance, administrative or governmental rule or regulation applicable to the Fund or of any decree of the Commission, FINRA, any state securities commission, any foreign securities commission, any national securities exchange, any arbitrator, any court or any other governmental, regulatory, self-regulatory or administrative agency or any official having jurisdiction over the Fund, except in the case of (iii) for such violations that individually or in the aggregate could not (a) reasonably be expected to result in a Fund Material Adverse Effect or (b) materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Fund of its obligations under this Agreement or the Fund Agreements.
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(16) Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Fund, threatened, against or affecting the Fund which is required to be disclosed in the Registration Statement, the Original Registration Statement, the Preliminary Prospectus and the Prospectus (other than as disclosed therein), or that could reasonably be expected to result in a Fund Material Adverse Effect, or that could reasonably be expected to materially and adversely affect the properties or assets of the Fund or the consummation of the transactions contemplated in this Agreement or the performance by the Fund of its obligations under this Agreement or the Fund Agreements; the aggregate of all pending legal or governmental proceedings to which the Fund is a party or of which any of its property or assets is the subject which are not described in the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or Prospectus, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Fund Material Adverse Effect.
(17) Accuracy of Descriptions and Exhibits. The statements set forth under the headings “Prospectus Supplement – Description of the Series B Preferred Shares”, “Prospectus Supplement – Asset Coverage Ratio”, “Prospectus Supplement – Special Characteristics and Risks of the Series B Preferred Shares”, “Use of Leverage”, “Description Of The Fund’s Securities”, “Certain Provisions Of The Fund’s Charter And Bylaws And Of Maryland Law” and “U.S. Federal Income Tax Matters” in the Preliminary Prospectus and the Prospectus and “U.S. Federal Income Tax Matters” in the statement of additional information, insofar as such statements purport to summarize certain provisions of the 1940 Act, Maryland law, the Fund’s Organizational Documents, U.S. federal income tax law and regulations or legal conclusions with respect thereto, fairly and accurately summarize such provisions in all material respects; all descriptions in the Registration Statement, the Original Registration Statement, the Preliminary Prospectus and the Prospectus of any Fund documents are accurate in all material respects; and there are no franchises, contracts, indentures, mortgages, deeds of trust, loan or credit agreements, bonds, notes, debentures, evidences of indebtedness, leases or other instruments or agreements required to be described or referred to in the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Prospectus or to be filed as exhibits to the Registration Statement by the 1933 Act, the 1940 Act or the Rules and Regulations which have not been so described and filed as required.
(18) Possession of Intellectual Property; Fund Name. The Fund owns or possesses, or can acquire on reasonable terms, adequate licenses, copyrights, know-how (including trade secrets or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by the Fund, except where failure to do so would not have a Fund Material Adverse Effect, and the Fund has not received any notice or is not otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Fund therein.
(19) Absence of Further Requirements. (A) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, and (B) no authorization, approval, vote or other consent of any other person or entity, is necessary or required for the performance by the Fund of its obligations under this Agreement or the Fund Agreements, for the offering, issuance, sale or delivery of the Securities hereunder, or for the consummation of any of the other transactions contemplated by this Agreement or the Fund Agreements, in each case on the terms contemplated by the Registration Statement, the Original Registration Statement, the Preliminary Prospectus and the Prospectus, except (i) such as have been already obtained and under the 1933 Act, the 1940 Act, the 1934 Act, the Rules and Regulations, the rules and regulations of FINRA and the NYSE and such as may be required under state securities laws and (ii) in respect of failures to do or obtain any or all of the above that individually or in the aggregate could not reasonably expected to result in a Fund Material Adverse Effect.
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(20) Non-Contravention. Neither the execution, delivery or performance of this Agreement, the Fund Agreements nor the consummation by the Fund of the transactions contemplated in this Agreement or the Fund Agreements or in the Registration Statement (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Preliminary Prospectus and the Prospectus under the caption “Use of Proceeds”) (i) conflicts or will conflict with, constitutes or will constitute a breach of, or violates or will violate the provisions of, the Organizational Documents of the Fund, (ii) conflicts or will conflict with or constitutes or will constitute a breach of or a default under, any Agreements or Instruments or (iii) violates or will violate any statute, law, regulation or filing or judgment, injunction, order or decree applicable to the Fund or any of its properties or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Fund pursuant to the terms of any agreement or instrument to which the Fund is a party or by which the Fund may be bound or to which any of the property or assets of the Fund is subject, except in the case of (iii) such conflicts, breaches, defaults or violations that individually or in the aggregate could not (a) reasonably be expected to result in a Fund Material Adverse Effect and (b) materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Fund of its obligations under this Agreement or the Fund Agreements.
The execution, delivery and performance of this Agreement and the Fund Agreements and the consummation of the transactions contemplated in this Agreement and the Fund Agreements and in the Registration Statement (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Preliminary Prospectus and the Prospectus under the caption “Use of Proceeds”) and compliance by the Fund with its obligations thereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, constitute a Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Fund pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or liens, charges or encumbrances that would not, individually or in the aggregate, result in a Fund Material Adverse Effect). As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Fund.
(21) Possession of Licenses and Permits. 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 Preliminary Prospectus and the Prospectus (except to the extent that the Fund’s failure to have any such Permit could not be reasonably expected to result in a Fund Material Adverse Effect); 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 Preliminary Prospectus and the Prospectus, except to the extent that such revocation, termination or impairment could not reasonably be expected to result in a Fund Material Adverse Effect; and, except as described in the Preliminary Prospectus and the Prospectus, none of such Permits contains any restriction that is materially burdensome to the Fund.
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(22) Distribution of Offering Material. The Fund has not distributed and, prior to the later to occur of (i) the Closing Date and (ii) completion of the distribution of the Securities, will not distribute any offering material in connection with the offering and sale of the Securities other than the Registration Statement, the Original Registration Statement, the Preliminary Prospectus, the Issuer Free Writing Prospectus, the Prospectus or other materials, if any, permitted by the 1933 Act, the 1940 Act or the Rules and Regulations.
(23) Absence of Registration Rights. There are no persons with registration rights or other similar rights to have any securities (debt or equity) (A) registered pursuant to the Registration Statement or included in the offering contemplated by this Agreement or (B) otherwise registered by the Fund under the 1933 Act or the 1940 Act. There are no persons with tag-along rights or other similar rights to have any securities (debt or equity) included in the offering contemplated by this Agreement or sold in connection with the sale of Securities by the Fund pursuant to this Agreement.
(24) NYSE. The Fund’s shares of common stock and the Fund’s shares of Series A Cumulative Preferred Stock are duly listed on the NYSE. The Fund has not received any notice from the NYSE that it is not in compliance with the listing or maintenance requirements of the NYSE with respect to the shares of common stock or the shares of Series A Cumulative Preferred Stock.
(25) Tax Returns. 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 could not, individually or in the aggregate, reasonably be expected to result in a Fund Material Adverse Effect. The charges, accruals and reserves on the books of the Fund in respect of any income and corporation tax liability for any years not finally determined are adequate to meet any assessments or reassessments for additional tax for any years not finally determined, except to the extent of any inadequacy that would not, individually or in the aggregate, result in a Fund Material Adverse Effect. All material taxes which the Fund is required by law to withhold or to collect for payment have been duly withheld and collected and have been paid to the appropriate governmental authority or agency or have been accrued, reserved against and entered on the books of the Fund.
(26) Subchapter M. The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”) to qualify as a regulated investment company under the Code and intends to direct the investment of the net proceeds of the offering of the Securities in such a manner as to comply with the requirements of Subchapter M of the Code.
(27) Insurance. The Fund is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged and which the Fund deems adequate; all policies of insurance insuring the Fund or its business, assets, employees, officers and directors, including its fidelity bond required by Rule 17g-1 under the 1940 Act Rules and Regulations and the Fund’s directors and officers/errors and omissions insurance policy, are in full force and effect; the Fund is in compliance with the terms of such fidelity bond and policy in all material respects; and there are no claims by the Fund under any such fidelity bond or policy as to which any insurance company is denying liability or defending under a reservation of rights clause; the Fund has not been refused any insurance coverage sought or applied for; and the Fund has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that could not reasonably be expected to result in a Fund Material Adverse Effect, except as set forth in or contemplated in the Preliminary Prospectus and Prospectus (exclusive of any supplement thereto).
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(28) Accounting Controls and Disclosure Controls. The Fund maintains a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorizations and with the investment objectives, policies and restrictions of the Fund and the applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and the Code; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, to calculate net asset value, to maintain accountability for assets and to maintain material compliance with the books and records requirements under the 1940 Act and the 1940 Act Rules and Regulations; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Fund employs “internal control over financial reporting” (as such term is defined in Rule 30a-3 under the 1940 Act) and such internal control over financial reporting is and shall be effective as required by the 1940 Act and the 1940 Act Rules and Regulations. The Fund is not aware of any material weakness in its internal control over financial reporting. The Fund employs “disclosure controls and procedures” (as such term is defined in Rule 30a-3 under the 1940 Act); and such disclosure controls and procedures are effective.
(29) Compliance with the Sarbanes-Oxley Act. There is and has been no failure on the part of the Fund or any of the Fund’s directors or officers, in their capacities as such, to comply in all material respects with any applicable provision of the Sarbanes-Oxley Act and the rules and regulations promulgated in connection therewith, including Sections 302 and 906 related to certifications.
(30) Fund Compliance with Policies and Procedures. 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 1940 Act) by the Fund, including policies and procedures that provide oversight of compliance for each investment adviser, administrator and transfer agent of the Fund.
(31) Absence of Manipulation. The Fund has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Securities in violation of any law, statute, regulation or rule applicable to the Fund or its affiliates, and the Fund is not aware of any such action taken or to be taken by any affiliates of the Fund, other than such actions as taken by the Underwriters that are affiliates of the Fund, so long as such actions are in compliance with all applicable law. It is acknowledged and agreed that for the avoidance of doubt, this representation shall not apply to the purchase of Securities in the open market pursuant to the Fund’s Dividend Reinvestment Plan described in the Preliminary Prospectus and the Prospectus.
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(32) Statistical, Demographic or Market-Related Data. Any statistical, demographic or market-related data included in the Original Registration Statement, the Preliminary Prospectus or the Prospectus is based on or derived from sources that the Fund believes to be reliable and accurate, all such data included in the Original Registration Statement, the Preliminary Prospectus or the Prospectus accurately reflects in all material respects the materials upon which it is based or from which it was derived, and the Fund has obtained, if required, written consent to the use of such data from such sources.
(33) Advertisements. All advertising, sales literature or other promotional material (including “prospectus wrappers”, “broker kits”, “press releases”, “road show slides” and “road show scripts”), whether in printed or electronic form, authorized in writing by or prepared by or at the direction of the Fund or the Advisers for use in connection with the offering and sale of the Securities, and which the Fund, the Adviser or the Subadviser, as applicable, has not instructed the Underwriters to replace or cease from using (collectively, “Sales Material”), complied and comply in all material respects with the applicable requirements of the 1933 Act, the 1940 Act, the Rules and Regulations and the applicable rules and interpretations of FINRA and if required to be filed with FINRA under FINRA’s conduct rules were so filed. 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.
(34) Tax Treatment of the Preferred Shares. For United States federal income tax purposes, the Securities will constitute equity of the Fund.
(35) Pending Proceedings and Examinations. To the knowledge of the Fund, the Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the 1933 Act, and the Fund is not the subject of a pending proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities.
(36) Absence of Undisclosed Payments. Neither the Fund nor, to the Fund’s knowledge, any employee or agent of the Fund, has made any payment of funds of the Fund or received or retained any funds, which payment, receipt or retention of funds is of a character required to be disclosed in the Original Registration Statement, the Basic Prospectus, Preliminary Prospectus or Prospectus and which payment has not been so disclosed.
(37) Investment Restrictions. There are no material restrictions, limitations or regulations with respect to the ability of the Fund to invest its assets as described in the Original Registration Statement, Preliminary Prospectus and Prospectus, other than as described therein.
(38) Anti-Bribery Laws. Neither the Fund nor, to the knowledge of the Fund, any director, officer, agent, employee, affiliate or other person acting on behalf of the Fund is aware of or has taken any action, directly or indirectly, that has resulted or would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder, or the UK Bribery Act 2010, as amended, and the rules and regulations thereunder (collectively, the “Anti-Bribery Laws”), 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 Anti-Bribery Laws) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the Anti-Bribery Laws, and the Fund and, to the knowledge of the Fund, its other affiliates have conducted their businesses in compliance with the Anti-Bribery Laws and have instituted and maintain policies and procedures reasonably designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
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(39) Money Laundering Laws. The operations of the Fund are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Fund with respect to the Money Laundering Laws is pending or, to the knowledge of the Fund, threatened.
(40) OFAC. Neither the Fund nor, to the knowledge of the Fund, any director, officer, agent, employee, affiliate or person acting on behalf 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”), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”); and the Fund will not directly or indirectly use any of the proceeds received by the Fund from the sale of Securities contemplated by this Agreement, or lend, contribute or otherwise make available any 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 Sanctions or in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.
(b) Representations and Warranties by the Adviser. The Adviser represents and warrants to each Underwriter as of the date hereof, as of the Applicable Time, and as of the Closing Date, and agrees with each Underwriter, as follows:
(1) Adviser Status. The Adviser is duly registered as an investment adviser under the Advisers Act and is not prohibited by the Advisers Act, the 1940 Act, the Advisers Act Rules and Regulations or the 1940 Act Rules and Regulations from acting under the Adviser Agreements as contemplated by the Preliminary Prospectus and the Prospectus.
(2) Capitalization. The Adviser has the financial resources available to it necessary for the performance of its services and obligations as contemplated in the Preliminary Prospectus and the Prospectus and under this Agreement and the Adviser Agreements.
(3) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Original Registration Statement, the Preliminary Prospectus and the Prospectus, except as otherwise stated therein, (A) there has been no Adviser Material Adverse Effect and (B) there have been no transactions entered into by the Adviser which are material with respect to the Adviser other than those in the ordinary course of its business as described in the Original Registration Statement, the Preliminary Prospectus and the Prospectus.
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(4) Good Standing. The Adviser has been duly formed and is validly existing in good standing as a limited liability company under the laws of the State of Delaware and has the full power and authority to own, lease and operate its properties and to conduct its business as described in the Original Registration Statement, the Preliminary Prospectus and the Prospectus and to enter into and perform its obligations under this Agreement and the Adviser Agreements; and the Adviser is duly qualified to transact business and is in good standing under the laws of each jurisdiction which requires qualification, except where the failure to be so qualified or be in good standing could not reasonably be expected to result in an Adviser Material Adverse Effect.
(5) Power and Authority. The Adviser has full power and authority to enter into this Agreement and the Adviser Agreements; the execution and delivery of, and the performance by the Adviser of its obligations under this Agreement and the Adviser Agreements have been duly and validly authorized by the Adviser; and this Agreement and the Adviser Agreements have been duly executed and delivered by the Adviser and, assuming due authorization, execution and delivery by other parties hereto and thereto (as applicable) 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 may be limited by federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Adviser’s obligations hereunder and thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws relating to or affecting creditors’ rights generally and by general equitable principles; provided that the Adviser makes no representation or warranty as to the effect of the representations and warranties expressed herein of (i) the compliance or noncompliance of any other party (other than the Fund, the Adviser and the Subadviser) to any of the foregoing agreements with any state, federal, or other laws or regulations applicable to it or them or (ii) the legal or regulatory status or the nature or business of such other party.
(6) Description of the Adviser. The description of the Adviser and its business and the statements attributable to the Adviser in the Original Registration Statement, the Preliminary Prospectus and Prospectus complied and comply in all material respects with the provisions of the 1933 Act, the 1940 Act, the Advisers Act, the 1940 Act Rules and Regulations and the Advisers Act Rules and Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
(7) Non-Contravention. Neither the execution, delivery or performance of this Agreement or the Adviser Agreements nor the consummation by the Fund or the Adviser of the transactions herein or therein contemplated (i) conflicts or will conflict with or constitutes or will constitute a breach of the Organizational Documents of the Adviser, (ii) conflicts or will conflict with or constitutes or will constitute a breach of or a default under, any agreement, indenture, lease or other instrument to which the Adviser is a party or by which it or any of its properties may be bound or (iii) violates or will violate any statute, law, regulation or filing 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 the Adviser is a party or by which the Adviser may be bound or to which any of the property or assets of the Adviser is subject, except in the case of (iii) for such violations that individually or in the aggregate could not (a) reasonably be expected to result in an Adviser Material Adverse Effect and (b) materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Adviser of its obligations under this Agreement or the Adviser Agreements.
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(8) Agreements’ Compliance with Laws. This Agreement and the Adviser Agreements comply in all material respects with all applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and Regulations.
(9) Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Adviser, threatened, against or affecting the Adviser which is required to be disclosed in the Original Registration Statement, the Basic Prospectus, the Preliminary Prospectus and Prospectus (other than as disclosed therein), or that could reasonably be expected to result in an Adviser Material Adverse Effect, or that could reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in this Agreement or the performance by the Adviser of its obligations under this Agreement or the Adviser Agreements; the aggregate of all pending legal or governmental proceedings to which the Adviser is a party or of which any of its property or assets is the subject which are not described in the Original Registration Statement, the Basic Prospectus, the Preliminary Prospectus or the Prospectus, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in an Adviser Material Adverse Effect.
(10) Absence of Further Requirements. (A) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, and (B) no authorization, approval, vote or other consent of any other person or entity, is necessary or required for the performance by the Adviser of its obligations under this Agreement or the Adviser Agreements, except such as have been already obtained under the 1933 Act, the 1940 Act, the Rules and Regulations, the rules and regulations of FINRA and the NYSE and such as may be required under state securities laws.
(11) Possession of Permits. The Adviser has such Permits as are necessary to own its property and to conduct its business in the manner described in the Preliminary Prospectus and the Prospectus (except to the extent that the Adviser’s failure to have any such permit could not be reasonably expected to result in an Adviser Material Adverse Effect); 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 material impairment of the rights of the Adviser under any such Permit.
(12) Adviser Compliance with Policies and Procedures. 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 and the Advisers Act Rules by the Adviser and its supervised persons.
(13) Absence of Manipulation. The Adviser has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Securities in violation of any law, statute, regulation or rule applicable to the Adviser or its affiliates, and the Adviser is not aware of any such action taken or to be taken by any affiliates of the Adviser, other than such actions as taken by the Underwriters that are affiliates of the Adviser, so long as such actions are in compliance with all applicable law. It is acknowledged and agreed that for the avoidance of doubt, this representation shall not apply to purchases of Securities in the open market pursuant to the Fund’s Dividend Reinvestment Plan described in the Preliminary Prospectus and the Prospectus.
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(14) Promotional Materials. In the event that the Fund or the Adviser makes available any promotional materials related to the Securities or the transactions contemplated hereby intended for use only by registered broker-dealers and registered representatives thereof by means of an Internet web site or similar electronic means, the Adviser will install and maintain, or will cause to be installed and maintained, pre-qualification and password-protection or similar procedures which are reasonably designed to effectively prohibit access to such promotional materials by persons other than registered broker-dealers and registered representatives thereof.
(15) Insurance. The Adviser is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged and which the Adviser deems adequate; all such policies of insurance are in full force and effect; and the Adviser has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that could not reasonably be expected to result in an Adviser Material Adverse Effect.
(16) Internal Controls. The Adviser maintains a system of internal controls sufficient to provide reasonable assurance that (i) transactions effectuated by it under the Investment Management Agreement or the Sub-advisory Agreement are executed in accordance with its management’s general or specific authorization; and (ii) access to the Fund’s assets is permitted only in accordance with management’s general or specific authorization.
(17) Absence of Violation or Default. The Adviser is not in violation of its Organizational Documents or in default under any agreement, indenture or instrument, except for such violations or defaults that would not reasonably be expected to result, individually or in the aggregate, in an Adviser Material Adverse Effect.
(18) Money Laundering Laws. The operations of the Adviser and its subsidiaries are and have been conducted at all times in compliance with applicable Money Laundering Laws and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Adviser or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Adviser, threatened.
(19) Anti-Bribery Laws. Neither the Adviser nor, to the knowledge of the Adviser, any trustee, officer, agent, employee or affiliate of the Adviser is aware of or has taken any action, directly or indirectly, that has resulted or would result in a violation by such persons of the Anti-Bribery Laws, 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 Anti-Bribery Laws) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the Anti-Bribery Laws, and the Adviser and, to the knowledge of the Adviser, its affiliates have conducted their businesses in compliance with the Anti-Bribery Laws and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(20) OFAC. Neither the Adviser nor, to the knowledge of the Adviser, any trustee, officer, agent, employee or affiliate of the Adviser is currently subject to any Sanctions and the Adviser will not cause the Fund, directly or indirectly, to use any of the proceeds received by the Fund from the sale of Securities contemplated by this Agreement, or lend, contribute or otherwise make available any 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 Sanctions or in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.
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(c) Representations and Warranties by the Subadviser. The Subadviser represents and warrants to each Underwriter as of the date hereof, as of the Applicable Time, and as of the Closing Date, and agrees with each Underwriter, as follows:
(1) Representations and Warranties by the Fund and the Adviser. The Subadviser has no knowledge of any facts, circumstances or events that would cause any of the representations and warranties of the Fund and the Adviser set forth in Section 1(a) herein to be untrue in any respect.
(2) Subadviser Status. The Subadviser is duly registered as an investment adviser under the Advisers Act and is not prohibited by the Advisers Act, the 1940 Act, the Advisers Act Rules and Regulations or the 1940 Act Rules and Regulations from acting under the Sub-advisory Agreements as contemplated by the Preliminary Prospectus and the Prospectus.
(3) Capitalization. The Subadviser has the financial resources available to it necessary for the performance of its services and obligations as contemplated in the Preliminary Prospectus and the Prospectus and under this Agreement and the Sub-advisory Agreements.
(4) No Material Adverse Change in Business. Except as described in the Registration Statement, the Original Registration Statement, the Preliminary Prospectus and the Prospectus, since the respective dates as of which information is given in the Registration Statement, the Original Registration Statement, the Preliminary Prospectus and the Prospectus (A) there has been no Subadviser Material Adverse Effect and (B) there have been no transactions entered into by the Subadviser which are material with respect to the Subadviser other than those in the ordinary course of its business.
(5) Good Standing. The Subadviser has been duly formed and is validly existing in good standing as a limited partnership under the laws of the State of Delaware and has the full power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Original Registration Statement, the Preliminary Prospectus and the Prospectus and to enter into and perform its obligations under this Agreement and the Sub-advisory Agreements; and the Subadviser is duly qualified to transact business and is in good standing under the laws of each jurisdiction which requires qualification, except where the failure to be so qualified or be in good standing could not reasonably be expected to have a Subadviser Material Adverse Effect.
(6) Power and Authority. The Subadviser has full power and authority to enter into this Agreement and the Sub-advisory Agreements; the execution and delivery of, and the performance by the Subadviser of its obligations under this Agreement and the Sub-advisory Agreements have been duly and validly authorized by the Subadviser; and this Agreement and the Sub-advisory Agreement have been duly executed and delivered by the Subadviser and, assuming due authorization, execution and delivery by the other parties hereto and thereto (as applicable), constitute the valid and legally binding agreements of the Subadviser, enforceable against the Subadviser in accordance with their terms, except as rights to indemnity and contribution may be limited by federal or state securities laws or principles of public policy or other applicable laws and subject to the qualification that the enforceability of the Subadviser’s obligations hereunder and thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws relating to or affecting creditors’ rights generally and by general equitable principles; provided that the Subadviser makes no representation or warranty as to the effect of the representations and warranties expressed herein of (i) the compliance or noncompliance of any other party (other than the Subadviser) to any of the foregoing agreements with any state, federal, or other laws or regulations applicable to it or them or (ii) the legal or regulatory status or the nature or business of such other party.
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(7) Description of the Subadviser. The description of the Subadviser and its business and the statements attributable to the Subadviser in the Registration Statement, the Original Registration Statement, the Preliminary Prospectus and Prospectus complied and comply in all material respects with the provisions of the 1933 Act, the 1940 Act, the Advisers Act, the 1940 Act Rules and Regulations and the Advisers Act Rules and Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
(8) Non-Contravention. Neither the execution, delivery or performance of this Agreement or the Sub-advisory Agreements nor the consummation by the Fund or the Subadviser of the transactions herein or therein contemplated (i) conflicts or will conflict with or constitutes or will constitute a breach of the Organizational Documents of the Subadviser, (ii) conflicts or will conflict with or constitutes or will constitute a breach of or a default under, any agreement, indenture, lease or other instrument to which the Subadviser is a party or by which it or any of its properties may be bound or (iii) violates or will violate any statute, law, regulation or filing or judgment, injunction, order or decree applicable to the Subadviser 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 Subadviser pursuant to the terms of any agreement or instrument to which the Subadviser is a party or by which the Subadviser may be bound or to which any of the property or assets of the Subadviser is subject, except in the case of (iii) for such conflicts, breaches, violations, creation or impositions that individually or in the aggregate would not (a) reasonably be expected to result in a Subadviser Material Adverse Effect and (b) materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Subadviser of its obligations under this Agreement or the Sub-advisory Agreement.
(9) Agreements’ Compliance with Laws. This Agreement and the Sub-advisory Agreement comply in all material respects with all applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and Regulations.
(10) Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Subadviser, threatened, against or affecting the Subadviser which is required to be disclosed in the Original Registration Statement, the Basic Prospectus, the Preliminary Prospectus and Prospectus (other than as disclosed therein), or that could reasonably be expected to result in a Subadviser Material Adverse Effect, or that could reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in this Agreement or the performance by the Subadviser of its obligations under this Agreement or the Sub-advisory Agreements; the aggregate of all pending legal or governmental proceedings to which the Subadviser is a party or of which any of its property or assets is the subject which are not described in the Original Registration Statement, the Basic Prospectus, the Preliminary Prospectus or the Prospectus, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Subadviser Material Adverse Effect.
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(11) Absence of Further Requirements. (A) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, and (B) no authorization, approval, vote or other consent of any other person or entity, is necessary or required for the performance by the Subadviser of its obligations under this Agreement or the Sub-advisory Agreements, except such as have been already obtained under the 1933 Act, the 1940 Act, the Rules and Regulations, the rules and regulations of FINRA and the NYSE and such as may be required under state securities laws.
(12) Possession of Permits. The Subadviser has such Permits as are necessary to own its property and to conduct its business in the manner described in the Preliminary Prospectus and the Prospectus (except to the extent that the Subadviser’s failure to have any such permit could not be reasonably expected to result in a Subadviser Material Adverse Effect); the Subadviser 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 Subadviser under any such Permit.
(13) Subadviser Compliance with Policies and Procedures. The Subadviser 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 and the Advisers Act Rules by the Subadviser and its supervised persons.
(14) Absence of Manipulation. The Subadviser has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Securities in violation of any law, statute, regulation or rule applicable to the Fund or its affiliates, and to the knowledge of the Subadviser, no such action has been taken or will be taken by any affiliates of the Subadviser, other than such actions as taken by the Underwriters that are affiliates of the Subadviser, so long as such actions are in compliance with all applicable law. It is acknowledged and agreed that for the avoidance of doubt, this representation shall not apply to purchases of Securities in the open market pursuant to the Fund’s Dividend Reinvestment Plan described in the Preliminary Prospectus and the Prospectus.
(15) Promotional Materials. In the event that the Subadviser makes available any promotional materials related to the Securities or the transactions contemplated hereby intended for use only by registered broker-dealers and registered representatives thereof by means of an Internet web site or similar electronic means, the Subadviser will install and maintain, or will cause to be installed and maintained, pre-qualification and password-protection or similar procedures which are reasonably designed to effectively prohibit access to such promotional materials by persons other than registered broker-dealers and registered representatives thereof.
(16) Insurance. The Subadviser is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged and which the Subadviser deems adequate; all such policies of insurance are in full force and effect; and the Subadviser has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that could not reasonably be expected to result in an Subadviser Material Adverse Effect.
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(17) Internal Controls. The Subadviser maintains a system of internal controls sufficient to provide reasonable assurance that (i) transactions effectuated by it under the Sub-advisory Agreement are executed in accordance with its management’s general or specific authorization; and (ii) access to the Fund’s assets is permitted only in accordance with management’s general or specific authorization.
(18) Absence of Violation or Default. The Subadviser is not in violation of its Organizational Documents or in default under any agreement, indenture or instrument, except for such violations or defaults that would not reasonably be expected to result, individually or in the aggregate, in an Subadviser Material Adverse Effect.
(19) Money Laundering Laws. The operations of the Subadviser and its subsidiaries are and have been conducted at all times in compliance with applicable Money Laundering Laws and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Subadviser or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Subadviser, threatened.
(20) Anti-Bribery Laws. Neither the Subadviser nor, to the knowledge of the Subadviser, any trustee, officer, agent, employee or affiliate of the Subadviser is aware of or has taken any action, directly or indirectly, that has resulted or would result in a violation by such persons of the Anti-Bribery Laws, 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 Anti-Bribery Laws) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the Anti-Bribery Laws, and the Subadviser and, to the knowledge of the Subadviser, its affiliates have conducted their businesses in compliance with the Anti-Bribery Laws and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(21) OFAC. Neither the Subadviser nor, to the knowledge of the Subadviser, any trustee, officer, agent, employee or affiliate of the Subadviser is currently subject to any Sanctions; and the Subadviser will not cause the Fund, directly or indirectly, to use any of the proceeds received by the Fund from the sale of Securities contemplated by this Agreement, or lend, contribute or otherwise make available any 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 Sanctions or in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.
(d) Certificates. Any certificate signed by any officer of the Fund or the Advisers and delivered to the Representatives or to counsel for the Underwriters shall be deemed a representation and warranty by the Fund or the Advisers, as the case may be, to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Fund agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Fund, at a purchase price per share set forth in Exhibit B hereto, the amount of the Securities set forth opposite such Underwriter’s name in Exhibit A hereto, plus any additional number of Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof.
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(b) Payment. Payment of the purchase price for the Securities, and delivery of the related closing certificates therefor, shall be made at the offices of Dechert LLP, Three Bryant Park, 1095 Avenue of the Americas, New York, New York 10036, or at such other place as shall be agreed upon by the Representatives and the Fund, at 10:00 A.M. (Eastern time) on the fifth Business Day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten Business Days after such date as shall be agreed upon by the Representatives and the Fund (such time and date of payment and delivery being herein called “Closing Date”).
Delivery of the Securities shall be made to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Fund by Federal Funds wire transfer payable in same-day funds to an account specified by the Fund. Delivery of the Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct. UBS and RBC, individually and not as Representatives of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Securities to be purchased by any Underwriter whose funds have not been received by the Closing Date, but such payment shall not relieve such Underwriter from its obligations hereunder.
SECTION 3. Covenants of the Fund and the Advisers. The Fund, the Adviser and the Subadviser covenant with each Underwriter as follows:
(a) Covenants of the Fund and the Adviser. The Fund and the Adviser, jointly and severally, covenant with each Underwriter as follows:
(1) Compliance with Securities Regulations and Commission Requests. The Fund, subject to Section 3(a)(1)(ii), will comply with the applicable requirements of Rule 430B and will notify the Representatives promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective, or any supplement to the Prospectus, the Preliminary Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information (or any document incorporated by reference therein or otherwise deemed to be a part thereof), (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any Preliminary Prospectus, or of the suspension of any required qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes, or of any examination pursuant to Section 8(e) of the 1940 Act concerning the Registration Statement and (v) if the Fund becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities. The Fund will effect the filings necessary under Rule 424 in the manner and within the time period required by Rule 424 and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424 was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Fund will file any Issuer Free Writing Prospectus to the extent required by Rule 433. The Fund will use its best efforts in connection with the offering of the Securities to prevent the issuance of any stop order or the suspension of any such qualification or revocation of registration pursuant to Section 8(e) of the 1940 Act and, if issued, to obtain as soon as possible the withdrawal thereof.
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(2) Filing of Amendments and Exchange Act Documents. The Fund will give the Representatives notice of its intention to file or prepare any amendment to the Registration Statement or any amendment, supplement or revision to either any Preliminary Prospectus (including any prospectus included in the Original Registration Statement or any amendment thereto at the time it became effective) or to the Prospectus, whether pursuant to the 1933 Act or otherwise, or will furnish the Representatives with copies of any such documents within a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object. The Fund has given the Representatives notice of any filings made pursuant to the 1934 Act or the 1934 Act Rules and Regulations within 48 hours prior to the Applicable Time; the Fund will give the Representatives notice of its intention to make any such filing from the Applicable Time to the Closing Date and will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing and will not, unless required by law, file or use any such document to which the Representatives or counsel for the Underwriters shall object; provided, however that this covenant shall not apply to any post-effective amendment required by Rule 8b-16 of the 1940 Act which is filed with the Commission after the later of (x) one year from the date of this Agreement or (y) the date on which the distribution of the Securities is completed.
(3) Delivery of Registration Statements. The Fund has furnished or will deliver to the Representatives and counsel for the Underwriters, upon request and without charge, signed copies of the Original Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver to the Representatives, without charge, a conformed copy of the Original Registration Statement and, for so long as this Agreement remains in effect, of each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Original Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(4) Delivery of Prospectuses. The Fund has delivered to each Underwriter, upon request and without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Fund hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Fund will furnish to each Underwriter, without charge, such number of copies of the Prospectus (and any amendments or supplements thereto) and each Issuer Free Writing Prospectus as such Underwriter may reasonably request. The Preliminary Prospectus and the Prospectus and any amendments or supplements thereto furnished to the Underwriters is or will be, as the case may be, identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(5) Continued Compliance with Securities Laws. The Fund will comply with the applicable provisions of the 1933 Act, the 1933 Act Rules and Regulations, the 1934 Act and the 1934 Act Rules and Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Fund, to amend the Registration Statement or amend or supplement the Prospectus in order that the Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Rules and Regulations, the Fund will promptly prepare and file with the Commission, subject to Section 3(a)(2) hereof, such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Fund will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. If at any time following issuance of a Issuer Free Writing Prospectus, there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in light of the circumstances, prevailing at that subsequent time, not misleading, the Fund will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such untrue statement or omission.
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(6) Blue Sky Qualifications. The Fund will use its best efforts, in cooperation with the Underwriters, to qualify, the Securities for offering and sale, by notice filings or otherwise and if and to the extent required, under the applicable securities laws of states of the United States, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands as the Representatives may designate and to maintain such qualifications in effect so long as required for the distribution of the Securities; provided, however, that the Fund shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
(7) Earnings Statements. To the extent required by applicable law, the Fund will timely file such reports pursuant to the 1934 Act or 1940 Act as are necessary in order to make generally available to its security holders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(8) Use of Proceeds. The Fund will use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectus under “Use of Proceeds.”
(9) Listing. The Fund will use its best efforts to effect the listing of the Securities on the NYSE, subject to notice of issuance.
(10) Reporting Requirements. The Fund, during the period when the Prospectus is required to be delivered under the 1933 Act, the 1940 Act or the Rules and Regulations, will file all documents required to be filed with the Commission pursuant to the 1933 Act, the 1940 Act or the Rules and Regulations within the time periods required by the 1934 Act, the 1940 Act or the Rules and Regulations.
(11) Subchapter M. The Fund will use its reasonable best efforts to comply with the requirements of Subchapter M of the Code to qualify as a regulated investment company under the Code.
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(12) Absence of Manipulation. The Fund and the Adviser have not taken and will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Securities, and the Fund and the Advisers are not aware of any such action taken or to be taken by any affiliates of the Fund or the Advisers, other than such actions as taken by the Underwriters that are affiliates of the Fund or the Advisers, so long as such actions are in compliance with all applicable law; provided that any action in connection with the Fund’s Dividend Reinvestment Plan disclosed in the prospectus will not be deemed to be within the terms of this Section 3(a)(12).
(13) Restriction on Sale of Securities. The Fund and the Adviser will not, without the prior written consent of UBS, offer, sell, contract to sell, pledge, or otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Fund or any affiliate of the Fund or any person in privity with the Fund, directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any preferred stock or any securities convertible into, or exercisable, or exchangeable for, preferred stock; or publicly announce an intention to effect any such transaction for a period of 90 days following the Applicable Time, provided, however, that the Fund may issue and sell Securities pursuant to the Dividend Reinvestment Plan and any other dividend reinvestment plan of the Fund in effect at the Applicable Time.
(b) Covenants of the Subadviser. The Subadviser covenants with each Underwriter, the Fund and the Adviser as follows:
(1) Use of Proceeds. The Subadviser will invest the net proceeds from the sale of the Securities allocated to it by the Adviser in accordance with the Fund’s investment objective and policies as specified in the Prospectus.
(2) Subchapter M. The Subadviser will use its reasonable best efforts to comply with the requirements of Subchapter M of the Code in order for the Fund to qualify as a regulated investment company under the Code.
(3) Absence of Manipulation. The Subadviser has not taken and will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Securities, and the Subadviser is not aware of any such action taken or to be taken by any affiliates of the Subadviser; provided that any action in connection with the Fund’s Dividend Reinvestment Plan disclosed in the prospectus will not be deemed to be within the terms of this Section 3(b)(3).
(4) Restriction on Sale of Securities. The Subadviser will not, without the prior written consent of UBS, offer, sell, contract to sell, pledge, or otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Fund or any affiliate of the Fund or any person in privity with the Fund, directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any preferred stock or any securities convertible into, or exercisable, or exchangeable for, preferred stock; or publicly announce an intention to effect any such transaction for a period of 90 days following the Applicable Time, provided, however, that the Fund may issue and sell Securities pursuant to the Dividend Reinvestment Plan and any other dividend reinvestment plan of the Fund in effect at the Applicable Time.
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SECTION 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and of each amendment thereto, (ii) the preparation, issuance and delivery of the certificates (if any) or evidence of book-entry notation for the Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters, (iii) the fees and disbursements of the counsel, accountants and other advisors to the Fund, (iv) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(a)(6) hereof, including filing fees, (v) the printing and delivery to the Underwriters of copies of each Preliminary Prospectus, any Issuer Free Writing Prospectus and of the Prospectus and any amendments or supplements thereto and any reasonable costs associated with electronic delivery of any of the foregoing by the Underwriters to investors, (vi) the fees and expenses of the custodian and the transfer agent and registrar for the Securities associated with the purchase by the Underwriters of the Securities, (vii) the expenses incurred in connection with electronic and/or virtual presentations to prospective purchasers of the Securities, (viii) the fees and expenses incurred in connection with the listing of the Securities on the NYSE, (ix) the fees and disbursements of Underwriters’ counsel, not to exceed $110,000, and (x) all other costs and expenses incident to the performance by the Fund of its obligations hereunder. It is understood that, except as provided in this Section 4, Section 5, Section 6, Section 7 and Section 9(a)(i), the Underwriters will pay all of their fees and expenses.
(b) Termination of Agreement. If this Agreement is terminated by the Representatives in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, without effect on Sections 6 and 7 hereof, the Fund and the Advisers, jointly and severally, agree that they shall reimburse the Underwriters for all of their reasonable and documented out-of-pocket expenses incurred arising out of this Agreement or any transaction contemplated hereby, including the reasonable and documented fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the Underwriters to purchase the Securities shall be subject to the accuracy of the representations and warranties on the part of the Fund and the Advisers contained herein as of the Applicable Time and the Closing Date pursuant to Section 2 hereof, to the accuracy of the statements of the Fund and the Advisers made in any certificates pursuant to the provisions hereof, to the performance by the Fund and the Advisers of their respective covenants and other obligations hereunder and to the following additional conditions:
(a) Effectiveness of Registration Statement. The Original Registration Statement has become effective and at the Closing Date no stop order suspending the effectiveness of the Original Registration Statement shall have been issued under the 1933 Act or any notice objecting to its use or order pursuant to Section 8(e) of the 1940 Act shall have been issued and proceedings therefor initiated or, to the knowledge of the Fund or the Advisers, threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with or otherwise satisfied to the reasonable satisfaction of counsel to the Underwriters. A prospectus containing the Rule 430B Information shall have been filed with the Commission in accordance with Rule 424 or a post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430B.
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(b) (i) Opinion of Counsel for Fund. At the Closing Date, the Representatives shall have received the favorable opinion, dated as of the Closing Date, of Faegre Drinker Biddle & Reath LLP, counsel for the Fund (“Fund Counsel”), in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters, to the effect set forth in Exhibit D hereto and to such further effect as counsel to the Underwriters may reasonably request. Insofar as the opinion expressed above related to or is dependent upon matters governed by Maryland law, Faegre Drinker Biddle & Reath LLP will be permitted to rely on the opinion of Shapiro Sher Guinot & Sandler, P.A. (“Maryland Counsel”).
(ii) Opinion of Maryland Counsel. At the Closing Date, the Representatives shall have received the favorable opinion, dated as of the Closing Date, of Maryland Counsel in the form and substance satisfactory to counsel for the Underwriters, to the effect set forth in Exhibit G hereto and to such further effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At the Closing Date, the Representatives shall have received the favorable opinion, dated as of the Closing Date, of Dechert LLP, counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters, in form and substance satisfactory to the Representatives. Insofar as the opinion expressed above relates to or is dependent upon matters governed by Maryland law, Dechert LLP will be permitted to rely on the opinion of Maryland Counsel set forth in Exhibit G hereto.
(d) Certificates of the Fund. At the Closing Date there shall not have been, since the date hereof or since the respective dates as of which information is given in the Original Registration Statement, the Preliminary Prospectus or the Prospectus, any Fund Material Adverse Effect, and, at the Closing Date, the Representatives shall have received a certificate of the Chairman, the President, the Chief Executive Officer or an Executive Vice President or Senior Vice President of the Fund and of the Chief Financial Officer or Chief Accounting Officer of the Fund (in each of their respective capacity as an officer of the Fund), dated as of the Closing Date, to the effect that (i) there has been no such Fund Material Adverse Effect, (ii) the representations and warranties of the Fund in this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Date, (iii) the Fund has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date under or pursuant to this Agreement, and (iv) no stop order suspending the effectiveness of the Original Registration Statement or order of suspension or revocation of registration pursuant to Section 8(e) of the 1940 Act has been issued, and no proceedings for that purpose have been instituted or are pending or, to their knowledge, have been threatened by the Commission. At the Closing Date, the Representatives shall also have received a certificate of the Fund’s Chief Financial Officer, dated as of the Closing Date, substantially in the form of Exhibit H hereto.
(e) Opinion of Counsel for the Adviser. At the Closing Date, the Representatives shall have received the favorable opinion, dated as of the Closing Date, of the General Counsel for the Adviser, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters, to the effect set forth in Exhibit E hereto and to such further effect as counsel to the Underwriters may reasonably request.
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(f) Certificate of the Adviser. At the Closing Date there shall not have been, since the date hereof or since the respective dates as of which information is given in the Original Registration Statement, the Preliminary Prospectus or the Prospectus, any Adviser Material Adverse Effect, and, at the Closing Date, the Representatives shall have received a certificate of the Chairman, the President, the Chief Executive Officer or an Executive Vice President or Senior Vice President of the Adviser and of the Chief Financial Officer or Chief Accounting Officer of the Adviser, dated as of the Closing Date, to the effect that (i) there has been no such Adviser Material Adverse Effect, (ii) the representations and warranties of the Adviser in this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Date, (iii) the Adviser has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date under or pursuant to this Agreement, and (iv) no stop order suspending the effectiveness of the Original Registration Statement or order of suspension or revocation of registration pursuant to Section 8(e) of the 1940 Act has been issued and no proceedings for that purpose have been instituted or are pending or, to their knowledge, have been threatened by the Commission.
(g) Opinion of Counsel for the Subadviser. At the Closing Date, the Representatives shall have received the favorable opinion, dated as of the Closing Date, of Morgan, Lewis & Bockius LLP, counsel for the Subadviser, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters, to the effect set forth in Exhibit F hereto and to such further effect as counsel to the Underwriters may reasonably request.
(h) Certificate of the Subadviser. At the Closing Date there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Prospectus, any Subadviser Material Adverse Effect, and, at the Closing Date, the Representatives shall have received a certificate of the Chairman, the President, the Chief Executive Officer or an Executive Vice President or Senior Vice President of the Subadviser and of the Chief Financial Officer or Chief Accounting Officer of the Subadviser, dated as of the Closing Date, to the effect that (i) there has been no such Subadviser Material Adverse Effect, (ii) the representations and warranties of the Subadviser in this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Date, (iii) the Subadviser has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date under or pursuant to this Agreement, and (iv) no stop order suspending the effectiveness of the Original Registration Statement or order of suspension or revocation of registration pursuant to Section 8(e) of the 1940 Act has been issued and no proceedings for that purpose have been instituted or are pending or, to their knowledge, have been threatened by the Commission.
(i) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the Representatives shall have received from Cohen & Company, Ltd. a letter, dated the date of this Agreement and in form and substance satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information of the Fund contained in the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Prospectus.
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(j) Bring-down Comfort Letter. At the Closing Date, the Representatives shall have received from Cohen & Company, Ltd. a letter, dated as of the Closing Date and in form and substance satisfactory to the Representatives, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (i) of this Section 5, except that the specified date referred to shall be a date not more than three Business Days prior to the Closing Date.
(k) Approval of Listing. At the Closing Date, the Securities shall have been approved for listing on the NYSE, subject only to official notice of issuance.
(l) Filing of Articles Supplementary. The Fund will have filed the Articles Supplementary with the Commission prior to the Closing Date.
(m) No Downgrade. Subsequent to the execution and delivery of this Agreement and prior to the Closing Date there shall not have occurred any downgrading, nor shall any notice have been given of (i) any downgrading, (ii) any intended or potential downgrading, or (iii) any review or possible change that does not indicate an improvement, in the rating accorded any securities of or guaranteed by the Fund by any “nationally recognized statistical rating organization”, as such term is defined in Section 3(a)(62) of the 1934 Act.
(n) Additional Documents. At the Closing Date, counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, contained in this Agreement; and all proceedings taken by the Fund and the Advisers in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Representatives and counsel for the Underwriters.
(o) Delivery of Documents. The documents required to be delivered by this Section 5 shall be delivered at the office of Dechert LLP, counsel for the Underwriters, at Three Bryant Park, 1095 Avenue of the Americas, New York, New York 10036, on the Closing Date.
(p) Termination of Agreement. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representatives by notice to the Fund at any time at or prior to the Closing Date, and such termination shall be without liability of any party to any other party except as provided in Section 4.
SECTION 6. Indemnification.
(a) Indemnification by the Fund and the Advisers. The Fund and the Advisers, jointly and severally, agree to indemnify and hold harmless the Underwriters, affiliates of each Underwriter, directors, officers, employees and agents of each Underwriter, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Original Registration Statement (or any amendment thereto), including any Rule 430B information, 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 Issuer Free Writing Prospectus, any Preliminary Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
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(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Fund and the Advisers; and
(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by UBS), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above,
provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Fund or the Advisers by any Underwriter through UBS expressly for use in the Registration Statement (or any amendment thereto), including any Rule 430B Information, or any Issuer Free Writing Prospectus, the Preliminary Prospectus or the Prospectus (or any amendment or supplement thereto).
In addition to the foregoing indemnification, the Fund and the Advisers also agree, jointly and severally, to indemnify and hold harmless each Underwriter, its affiliates, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in this Section 6(a), as limited by the proviso set forth herein, with respect to any Sales Material in the form approved in writing by the Fund, the Adviser or the Subadviser for use by the Underwriters and securities firms to whom the Fund, the Adviser or the Subadviser shall have disseminated materials in connection with the public offering of the Securities.
(b) Indemnification by the Underwriters. Each Underwriter severally agrees to indemnify and hold harmless each of the Fund and the Advisers, 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 Advisers within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section 6, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including any Rule 430B Information, or the Issuer Free Writing Prospectus, the Preliminary Prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Fund or the Advisers by such Underwriter through UBS expressly for use in the Registration Statement (or any amendment thereto), including any Rule 430B Information, or any Issuer Free Writing Prospectus, the Preliminary Prospectus or the Prospectus (or any amendment or supplement thereto). The Fund and the Advisers acknowledge that (i) the statements set forth in the last paragraph of the cover page regarding the expected delivery of the Securities and, under the heading “Underwriting”, (ii) the list of Underwriters and their respective participation in the sale of the Securities, (iii) the sentences related to concessions and reallowances and (iv) the paragraphs related to stabilization, syndicate covering transactions and penalty bids in any Preliminary Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in any Preliminary Prospectus or the Prospectus.
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(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 the Underwriters and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall be selected by UBS; 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 1933 Act or Section 20 of the 1934 Act shall be selected by the Fund; and counsel to the Adviser and each person, if any, who controls such Adviser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall be selected by the Adviser; and counsel to the Subadviser and each person, if any, who controls such Subadviser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall be selected by the Subadviser. 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 the Underwriters and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, 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 1933 Act or Section 20 of the 1934 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, separate from their own counsel for the Subadviser, 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 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(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 reasonably incurred, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 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.
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(e) Other Agreements with Respect to Indemnification and Contribution. The provisions of this Section 6 and in Section 7 hereof shall not affect any agreements among the Fund and the Advisers with respect to indemnification of each other or contribution between themselves.
(f) Section 17(i) of the 1940 Act. The parties acknowledge that the provisions of this Section 6 and Section 7 shall not protect or purport to protect any person against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence, in the performance of their duties, or by reason of their reckless disregard of their obligations and duties under this Agreement.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then in lieu of indemnifying such indemnified party, each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Fund and the Advisers on the one hand and the Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Fund and the Advisers on the one hand and of the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Fund and the Advisers on the one hand and the Underwriters on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Fund and the Advisers and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth on the cover of the Prospectus, bear to the aggregate public offering price of the Securities as set forth on such cover.
The relative fault of the Fund and the Advisers on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Fund, by the Advisers or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Fund, the Advisers and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.
29
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each trustee, officer, employee and agent of an Underwriter shall have the same rights to contributions as such Underwriters, and each person who controls the Fund or the Advisers within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, each officer of the Fund and the Advisers and each trustee, director or member of the Fund and the Advisers shall have the same rights to contribution as the Fund and the Advisers. The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Securities set forth opposite their respective names in Exhibit A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements (including, but not limited to, indemnification and contribution obligations) contained in this Agreement or in certificates of officers of the Fund or signed by or on behalf of the Adviser or Subadviser submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Fund, or by or on behalf of the Adviser or Subadviser, as applicable, and shall survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this Agreement, by notice to the Fund or the Advisers, at any time on or prior to the Closing Date (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Prospectus or the General Disclosure Package, any Fund Material Adverse Effect, Adviser Material Adverse Effect or Subadviser Material Adverse Effect, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Fund has been suspended or materially limited by the Commission or the NYSE, or if trading generally on the NYSE or in the Nasdaq National Market System has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, FINRA or any other governmental authority, or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States or (iv) if a banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section 9, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8, 13 and 17 hereof shall survive such termination and remain in full force and effect.
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SECTION 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Date to purchase the Securities which it or they are obligated to purchase under this Agreement (the “Defaulted Securities”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, if any, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then this Agreement shall terminate.
No action taken pursuant to this Section 10 shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement, the Representatives shall have the right to postpone the Closing Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representatives at UBS Securities LLC, 1285 Avenue of the Americas, New York, NY 10019, attention of “Fixed Income Syndicate”; notices to the Fund shall be directed to them at RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., 325 N. LaSalle Street, Suite 645, Chicago, Illinois 60654, Attention: Marc L. Collins; notices to the Adviser shall be directed to them at RiverNorth Capital Management, LLC, 325 N. LaSalle Street, Suite 645, Chicago, Illinois 60654, Attention: Marc L. Collins; and notices to the Subadviser shall be directed to them at DoubleLine Capital LP, 505 North Brand Boulevard, Suite 860, Glendale, California 91203, Attention: General Counsel.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Fund and the Advisers 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 the Underwriters, their affiliates, the Fund and the Advisers and their respective successors and the controlling persons and directors, officers, members and trustees referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters, their affiliates, the Fund and the Advisers and their respective successors, and said controlling persons and officers and directors and trustees and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK applicable to agreements made and to be performed in said state.
SECTION 14. Effect of Headings. The Section and Exhibit headings herein are for convenience only and shall not affect the construction hereof.
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SECTION 15. Definitions. As used in this Agreement, the following terms have the respective meanings set forth below:
“Advisers Act” means the Investment Advisers Act of 1940, as amended.
“Advisers Act Rules and Regulations” means the rules and regulations of the Commission under the Advisers Act.
“Adviser Material Adverse Effect” means a material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Adviser, whether or not arising in the ordinary course of business.
“Applicable Time” means the date and time that this Agreement is executed and delivered by the parties hereto.
“Basic Prospectus” means the prospectus (including any statement of additional information incorporated by reference therein) contained in the Original Registration Statement at the time it became effective
“Business Day” means a day (a) other than a day on which commercial banks in The City of New York, New York are required or authorized by law or executive order to close and (b) on which the NYSE is not closed.
“Commission” means the Securities and Exchange Commission.
“EDGAR” means the Commission’s Electronic Data Gathering, Analysis and Retrieval System.
“FINRA” means the Financial Industry Regulatory Authority.
“Fund Material Adverse Effect” means a material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Fund, whether or not arising in the ordinary course of business.
“GAAP” means generally accepted accounting principles.
“Issuer Free Writing Prospectus” means any “written communication” (as defined in Rule 405 under the 1933 Act) that constitutes an offer to sell or solicitation of an offer to buy the Securities, a copy of which shall be attached as Exhibit C hereto.
“NYSE” means the New York Stock Exchange.
“Organizational Documents” means (a) in the case of a corporation, its charter and by-laws; (b) in the case of a limited or general partnership, its partnership certificate, certificate of formation or similar organizational document and its partnership agreement; (c) in the case of a limited liability company, its articles of organization, certificate of formation or similar organizational documents and its operating agreement, limited liability company agreement, membership agreement or other similar agreement; (d) in the case of a trust, its declaration of trust, certificate of formation or similar organizational document and its trust agreement or other similar agreement; and (e) in the case of any other entity, the organizational and governing documents of such entity, in each case as may be amended from time to time.
32
“Original Registration Statement” means the registration statement at the time pre-effective amendment No. 2 to the Registration Statement, filed on November 8, 2021, became effective.
“Preliminary Prospectus” means the Basic Prospectus, together with any preliminary prospectus supplement (including any statement of additional information incorporated by reference therein) in the form first furnished to the Underwriters for use in connection with the offering of the Securities and used prior to the filing of the Prospectus.
“Prospectus” means the Basic Prospectus, together with the final prospectus supplement, including any statement of additional information incorporated by reference therein in the form furnished to the Underwriters for use in connection with the offering of the Securities.
“Registration Statement” means the Fund’s registration statement (File Nos. 333-260203 and 811-23166) on Form N-2 and 1940 Act Notification (including the exhibits thereto and schedules thereto and the amendments thereto).
“Rule 424,” “Rule 430B,” “Rule 433” and “Rule 462(b)” refer to such rules under the 1933 Act.
“Rule 430B Information” means the information included in the Prospectus that was omitted from the Original Registration Statement at the time it became effective but that is deemed to be a part of the Original Registration Statement at the time it became effective pursuant to Rule 430B.
“Rules and Regulations” means, collectively, the 1933 Act Rules and Regulations and the 1940 Act Rules and Regulations.
“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder or implementing the provisions thereof.
“Subadviser Material Adverse Effect” means a material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Subadviser, whether or not arising in the ordinary course of business.
“1933 Act” means the Securities Act of 1933, as amended.
“1933 Act Rules and Regulations” means the rules and regulations of the Commission under the 1933 Act.
“1934 Act” means the Securities Exchange Act of 1934, as amended.
“1934 Act Rules and Regulations” means the rules and regulations of the Commission under the 1934 Act.
“1940 Act” means the Investment Company Act of 1940, as amended.
“1940 Act Notification” means a notification of registration of the Fund as an investment company under the 1940 Act on Form N-8A, as the 1940 Act Notification may be amended from time to time.
“1940 Act Rules and Regulations” means the rules and regulations of the Commission under the 1940 Act.
33
All references in this Agreement to the Registration Statement, the Original Registration Statement, any Rule 462(b) Registration Statement, any preliminary prospectus, the Preliminary Prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to EDGAR.
SECTION 16. Absence of Fiduciary Relationship. Each of the Fund and the Advisers acknowledges and agrees that:
(a) Each of the Underwriters is acting solely as an underwriter in connection with the public offering of the Securities and no fiduciary, advisory or agency relationship between the Fund or the Advisers, on the one hand, and any of the Underwriters, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Agreement, irrespective of whether or not any of the Underwriters have advised or is advising the Fund or the Advisers on other matters and none of the Underwriters has any obligation to the Fund or the Advisers with respect to the transactions contemplated by this Agreement except the obligations expressly set forth in this Agreement;
(b) the public offering price of the Securities and the price to be paid by the Underwriters for the Securities set forth in this Agreement were established by the Fund following discussions and arms-length negotiations with the Representatives;
(c) it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement;
(d) in connection with each transaction contemplated by this Agreement and the process leading to such transactions, each Underwriter is and has been acting solely as principal and not as fiduciary, advisor or agent of the Fund or the Advisers or any of their respective affiliates;
(e) none of the Underwriters has provided any legal, accounting, regulatory or tax advice to the Fund or the Advisers with respect to the transactions contemplated by this Agreement and it has consulted its own legal, accounting, regulatory and tax advisers to the extent it has deemed appropriate;
(f) it is aware that the Underwriters and their respective affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Fund and the Advisers, and that none of the Underwriters has any obligation to disclose such interests and transactions to the Fund or the Advisers by virtue of any fiduciary, advisory or agency relationship; and
(g) in connection with the transactions contemplated by this Agreement, it waives, to the fullest extent permitted by law, any claims it may have against any of the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that none of the Underwriters shall have any liability (whether direct or indirect, in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on its behalf or on behalf of the Fund or the Advisers.
SECTION 17. Submission to Jurisdiction/Jury Trial Waiver
Except as set forth below, no suits, actions, claims, counterclaims or proceedings (each, a “Proceeding”) which relates to the terms of this Agreement or the transactions contemplated hereby (each, a “Claim”) may be commenced, prosecuted or continued in any court other than the United States District Court for the Southern District of New York, or in the event that court lacks jurisdiction to hear such Claims, in the courts of the State of New York located in the City and County of New York, which courts shall have exclusive jurisdiction over the adjudication of such claims. Each of the Fund, the Advisers and the Underwriters hereby submits to and accepts generally and unconditionally the exclusive jurisdiction of those for the purposes of the adjudication of such Claims and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such Proceeding brought in such court and any claim that any such Proceeding brought in such court has been brought in an inconvenient forum. EACH OF THE UNDERWRITERS, THE FUND (ON ITS BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS SHAREHOLDERS AND AFFILIATES) AND THE ADVISERS (ON THEIR BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF THEIR SHAREHOLDERS AND AFFILIATES) HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH OF THE FUND, THE ADVISER AND THE UNDERWRITERS AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT IN ANY SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON THE FUND, THE ADVISER OR THE UNDERWRITERS, AS THE CASE MAY BE, AND MAY BE ENFORCED IN ANY OTHER COURTS IN THE JURISDICTION OF WHICH THE FUND, THE ADVISER OR THE UNDERWRITERS, AS THE CASE MAY BE, IS OR MAY BE SUBJECT, BY SUIT UPON SUCH JUDGMENT.
34
SECTION 18. Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) among the Fund, the Adviser and the Underwriters, or any of them, with respect to the subject matter hereof.
SECTION 19. Time. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 20. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement may be executed in written form or using electronic or digital technology, whether it is a computer-generated signature, an electronic copy of the party’s true ink signature, DocuSign, facsimile or otherwise. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
SECTION 21. Recognition of the U.S. Special Resolution Regimes.
(a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Underwriting Agreement, and any interest and obligation in or under this Underwriting Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Underwriting Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
35
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
[Signature Page Follows]
36
If the foregoing is in accordance with your understanding of our agreement, please sign and return to UBS a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters, the Fund and the Advisers in accordance with its terms.
| Very truly yours, | |||
| RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. | |||
| By | /s/ Jon Morhardt | ||
| Name: | Jon Morhardt | ||
| Title: | Treasurer and Chief Financial Officer | ||
| RiverNorth Capital Management, LLC | |||
| By | /s/ Jon Morhardt | ||
| Name: | Jon Morhardt | ||
| Title: | President and Chief Operating Officer | ||
| DoubleLine Capital LP | |||
| By | /s/ Henry V. Chase | ||
| Name: | Henry V. Chase | ||
| Title: | Authorized Signer | ||
[Signature Page to Underwriting Agreement]
CONFIRMED AND ACCEPTED,
As of the date first above written:
| By: | UBS SECURITIES LLC | |
| By: | /s/ John Sciales | |
| Name: | John Sciales | |
| Title: | Associate Director | |
| By: | /s/ Saawan Pathange | |
| Name: | Saawan Pathange | |
| Title: | Managing Director | |
| By: | RBC Capital Markets, LLC | |
| By: | /s/ Peter Spinelli | |
| Name: | Peter Spinelli | |
| Title: | Managing Director |
For themselves and as Representatives of the other Underwriters named in Exhibit A hereto, if applicable.
[Signature Page to Underwriting Agreement]
EXHIBIT A
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc.
4.75% Series B Cumulative Preferred Stock
| Name of Underwriter | Number of Securities |
| UBS Securities LLC | 1,200,000 |
| RBC Capital Markets, LLC | 1,200,000 |
| TOTAL | 2,400,000 |
A-1
EXHIBIT B
The purchase price to be paid by the Underwriters for the Securities shall be $24.2125 per Security.
B-1
Exhibit C
Filed Pursuant to Rule 433
Issuer Free Writing Prospectus dated November 15, 2021
Relating to Preliminary Prospectus Supplement dated November 15, 2021 and
Prospectus dated November 10, 2021
Registration No. 333-260203
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc.
$60,000,000
4.75% Series B Cumulative Preferred Stock
Pricing Term Sheet
November 15, 2021
The following sets forth the final terms of the 4.75% Series B Cumulative Preferred Stock, par value $0.0001 per share (the “Series B Preferred Shares”) and should only be read together with the preliminary prospectus supplement dated November 15, 2021, together with the accompanying prospectus dated November 10, 2021, relating to the Series B Preferred Shares (the “Preliminary Prospectus”), and supersedes the information in the Preliminary Prospectus to the extent inconsistent with the information in the Preliminary Prospectus. In all other respects, this pricing term sheet is qualified in its entirety by reference to the Preliminary Prospectus. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Prospectus. All references to dollar amounts are references to U.S. dollars.
| Issuer: | RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (the “Fund”) |
| Securities: | Perpetual |
| Type of Security: | Fixed-rate cumulative preferred stock |
| Title of the Securities: | 4.75% Series B Cumulative Preferred Stock, par value $0.0001 per share (the “Series B Preferred Shares”) |
| Liquidation Preference: | $25.00 per share |
| Expected Rating:* | Moody’s Investors Service, Inc.: A1 (sf) |
| Initial Aggregate Principal Amount Being Offered: |
$60,000,000 |
| Number of Preferred Shares | 2,400,000 |
| Initial Public Offering Price: | 100% of aggregate principal amount ($25 per Preferred Share) |
C-1
| Listing: | The Fund has applied to list the Series B Preferred Shares on the New York Stock Exchange (“NYSE”). If the application is approved, the Series B Preferred Shares are expected to commence trading on the NYSE under the symbol “OPPPRB” within thirty days of the date of issuance. |
| Underwriting Discount: | $0.7875 per share (or $1,890,000 total) |
| Proceeds, net of commissions, before Expenses: |
$58,110,000 |
| Trade Date: | November 15, 2021 |
| Settlement Date: | November 22, 2021 |
| Dividend Rate: | 4.75% (cumulative from November 22, 2021) |
| Dividend Payment Dates: | Every February 15, May 15, August 15 and November 15 (or, in each case, if such date is not a business day, the next succeeding business day) (each, a “Dividend Payment Date”), commencing on February 15, 2022. |
| Dividend Periods: | The first period for which dividends on the Series B Preferred Shares will be calculated (each period, a “Dividend Period”) will commence upon the closing of the offering and each subsequent Dividend Period will be the period from and including a Dividend Payment Date to, but excluding, the next Dividend Payment Date |
| Optional Redemption: | On or after February 15, 2027, the Fund may redeem in whole or from time to time in part outstanding Series B Preferred Shares at a redemption price per share equal to the $25.00 per share liquidation preference plus an amount equal to all unpaid dividends and distributions accumulated through the date fixed for redemption (whether or not earned or declared by the Fund, but excluding interest thereon). |
| CUSIP / ISIN: | 76882G 404 / US76882G4047 |
| Underwriters: | UBS Securities LLC |
| RBC Capital Markets, LLC |
| * | A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. |
This pricing term sheet and the Preliminary Prospectus are not offers to sell or the solicitation of offers to buy, nor will there be any sale of the Series B Preferred Shares referred to in this pricing term sheet, in any jurisdiction where such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction.
C-2
Investors are advised to carefully consider the investment objective, risks and charges and expenses of the Fund before investing. The preliminary prospectus supplement, dated November 15, 2021, and accompanying prospectus, dated November 10, 2021, each of which has been filed with the Securities and Exchange Commission (the SEC), contain a description of these matters and other important information about the Company and should be read carefully before investing.
The Fund has filed a registration statement (including a prospectus with the SEC) and related prospectus supplement for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement, and other documents the Fund has filed with the SEC for more complete information about the Fund and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the Fund or the underwriters participating in the offering will arrange to send you the prospectus or prospectus supplement if you request it by calling UBS Securities LLC toll-free at 1-888-827-7275 or RBC Capital Markets, LLC toll free at 1-866-375-6829.
Any disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such disclaimers or other notices were automatically generated as a result of this communication being sent via Bloomberg or another email system.
C-3
EXHIBIT D
FORM OF OPINION OF FUND COUNSEL
D-1
EXHIBIT E
FORM OF OPINION OF ADVISER COUNSEL
E-1
EXHIBIT F
FORM OF OPINION OF SUBADVISER COUNSEL
F-1
EXHIBIT G
FORM OF OPINION OF MARYLAND COUNSEL
G-1
EXHIBIT H
FORM OF TREASURER’S CERTIFICATE
H-1
UBS SECURITIES LLC
MASTER AGREEMENT AMONG UNDERWRITERS
REGISTERED SEC OFFERINGS
(INCLUDING MULTIPLE SYNDICATE OFFERINGS)
AND
EXEMPT OFFERINGS
(OTHER THAN OFFERINGS OF MUNICIPAL SECURITIES)
December 2, 2020
2
This Master Agreement Among Underwriters (this “Master AAU”), dated as of December 2, 2020, is by and between UBS Securities LLC (“we”) and the party named on the signature page hereto (an “Underwriter,” as defined in Section 1.1 hereof, or “you”). From time to time we or one or more of our affiliates may invite you (and others) to participate on the terms set forth herein as an underwriter or an initial purchaser, or in a similar capacity, in connection with certain offerings of securities that are managed solely by us or with one or more other co-managers. If we invite you to participate in a specific offering and sale of securities (an “Offering”) to which this Master AAU will apply, we will send the information set forth in Section 1.1 hereof to you by one or more wires, telexes, telecopy or electronic data transmissions, or other written communications (each, a “Wire,” and collectively, an “AAU”), unless you are otherwise deemed to have accepted an AAU with respect to such Offering pursuant to Section 1.2 hereof. Each Wire will indicate that it is a Wire pursuant to this Master AAU. The Wire inviting you to participate in an Offering is referred to herein as an “Invitation Wire.” You and we hereby agree that by the terms hereof the provisions of this Master AAU automatically will be incorporated by reference in each AAU, except that any such AAU may also exclude or revise such provisions of this Master AAU in respect of the Offering to which such AAU relates, and may contain such additional provisions as may be specified in any Wire relating to such AAU. You and we further agree as follows:
I. GENERAL
1.1. Terms of AAU; Certain Definitions; Construction. Each AAU will relate to an Offering, and will identify: (i) the securities to be offered in the Offering (the “Securities”), their principal terms, the issuer or issuers (each, an “Issuer”) and any guarantor (each, a “Guarantor”) thereof, and, if different from the Issuer, the seller or sellers (each, a “Seller”) of the Securities, (ii) the underwriting agreement, purchase agreement, standby underwriting agreement, distribution agreement, or similar agreement (as identified in such AAU and as amended or supplemented, including a terms agreement or pricing agreement pursuant to any of the foregoing, collectively, the “Underwriting Agreement”) providing for the purchase, on a several and not joint basis, of the Securities by the several underwriters, initial purchasers, or others acting in a similar capacity (the “Underwriters”) on whose behalf the Manager (as defined below) executes the Underwriting Agreement, and whether such agreement provides for: (x) an option to purchase Additional Securities (as defined below) to cover over-allotments, or (y) an offering in multiple jurisdictions or markets involving two or more syndicates (an “International Offering”), each of which will offer and sell Securities subject to such restrictions as may be specified in any Intersyndicate Agreement (as defined below) referred to in such AAU, (iii) the price at which the Securities are to be purchased by the several Underwriters from any Issuer or Seller thereof (the “Purchase Price”), (iv) the offering terms, including, if applicable, the price or prices at which the Securities initially will be offered by the Underwriters (the “Offering Price”), any selling concession to dealers (the “Selling Concession”), reallowance (the “Reallowance”), management fee, global coordinators’ fee, praecipium, or other similar fees, discounts, or commissions (collectively, the “Fees and Commissions”) with respect to the Securities, and (v) other principal terms of the Offering, which may include, without limitation: (A) the proposed or actual pricing date (“Pricing Date”) and settlement date (the “Settlement Date”), (B) any contractual restrictions on the offer and sale of the Securities pursuant to the Underwriting Agreement, Intersyndicate Agreement, or otherwise, (C) any co-managers for such Offering (the “Co-Managers”), (D) your proposed participation in the Offering, and (E) any trustee, fiscal agent, or similar agent (the “Trustee”) for the indenture, trust agreement, fiscal agency agreement, or similar agreement (the “Indenture”) under which such Securities will be issued.
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“Manager” means UBS Securities LLC, except as set forth in Section 9.9 hereof. “Representative” means the Manager and any Co-Manager that signs the applicable Underwriting Agreement on behalf of the Underwriters or is identified as a Representative in the applicable Underwriting Agreement. “Underwriters” includes the Representative(s), the Manager, and the Co-Managers. “Firm Securities” means the number or amount of Securities that the several Underwriters are initially committed to purchase under the Underwriting Agreement (which may be expressed as a percentage of an aggregate number or amount of Securities to be purchased by the Underwriters, as in the case of a standby Underwriting Agreement). “Additional Securities” means the Securities, if any, that the several Underwriters have an option to purchase under the Underwriting Agreement to cover over-allotments. The number, amount, or percentage of Firm Securities set forth opposite each Underwriter’s name in the Underwriting Agreement plus any additional Firm Securities which such Underwriter has made a commitment to purchase, irrespective of whether such Underwriter actually purchases or sells such number, amount, or percentage of Securities under the Underwriting Agreement or Article XI hereof, is hereinafter referred to as the “Original Underwriting Obligation” of such Underwriter, and the ratio which such Original Underwriting Obligation bears to the total of all Firm Securities set forth in the Underwriting Agreement (or, in the case of a standby Underwriting Agreement, to 100%) is hereinafter referred to as the “Underwriting Percentage” of such Underwriter. For the avoidance of doubt, each Underwriter acknowledges and agrees that, for all purposes under this Agreement and otherwise (including, to the extent applicable, for purposes of Section 11(e) under the U.S. Securities Act of 1933 (the “1933 Act”)), each Underwriter’s Underwriting Percentage of the total number, amount, or percentage of Securities offered and sold in the Offering (including any Additional Securities), and only such number, amount, or percentage, constitutes the securities underwritten by such Underwriter and distributed to investors. 1
References herein to laws, statutory and regulatory sections, rules, regulations, forms, and interpretive materials will be deemed to include any successor provisions.
1.2. Acceptance of AAU. You will have accepted an AAU for an Offering if: (a) we receive your acceptance, prior to the time specified in the Invitation Wire for such Offering, by wire, telex, telecopy or electronic data transmission, or other written communication (any such communication being deemed “In Writing”) or orally (if promptly confirmed In Writing), in the manner specified in the Invitation Wire, of our invitation to participate in the Offering, or (b) notwithstanding that we did not send you an Invitation Wire or you have not otherwise responded In Writing to any such Wire, you: (i) agree (orally or by a Wire) to be named as an Underwriter in the relevant Underwriting Agreement executed by us as Manager, or (ii) receive and retain an economic benefit for participating in the Offering as an Underwriter. Your acceptance of the invitation to participate will cause such AAU to constitute a valid and binding contract between us. Your acceptance of the AAU as provided above or an Invitation Wire will also constitute acceptance by you of the terms of subsequent Wires to you relating to the Offering unless we receive In Writing, within the time and in the manner specified in such subsequent Wire, a notice from you to the effect that you do not accept the terms of such subsequent Wire, in which case you will be deemed to have elected not to participate in the Offering.
| 1 | Meant to clarify mechanics of underwriting for purposes of Section 11(e), and rebut footnote 8 of the WorldCom decision (See In re: Worldcom, Inc. Securities Litigation, U.S. Dist. Ct. (SDNY), slip-op 02 Civ 3288, March 14, 2005 (unpublished)). |
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1.3. Underwriters’ Questionnaire. Your acceptance of the Invitation Wire for an Offering or your participation in an Offering as an Underwriter will confirm that you have no exceptions to the Underwriters’ Questionnaire attached as Exhibit A hereto (or to any other questions addressed to you in any Wires relating to the Offering previously sent to you), other than exceptions noted by you In Writing in connection with the Offering and received from you by us before the time specified in the Invitation Wire or any subsequent Wire.
II. OFFERING MATERIALS; OFFERING AGREEMENTS
2.1. Registered Offerings. In the case of an Offering that will be registered in whole or in part (a “Registered Offering”) under the 1933 Act, you acknowledge that the Issuer has filed with the Securities and Exchange Commission (the “Commission”) a registration statement, including a prospectus relating to the Securities. “Registration Statement” means such registration statement as amended to the effective date of the Underwriting Agreement and, in the event that the Issuer files an abbreviated registration statement to register additional Securities pursuant to Rule 462(b) or 462(e) under the 1933 Act, such abbreviated registration statement. “Prospectus” means the prospectus, together with the final prospectus supplement, if any, containing the final terms of the Securities and, in the case of a Registered Offering that is an International Offering, “Prospectus” means, collectively, each prospectus or offering circular, together with each final prospectus supplement or final offering circular supplement, if any, relating to the Offering, in the respective forms containing the final terms of the Securities. “Preliminary Prospectus” means any preliminary prospectus relating to the Offering or any preliminary prospectus supplement together with a prospectus relating to the Offering and, in the case of a Registered Offering that is an International Offering, “Preliminary Prospectus” means, collectively, each preliminary prospectus or preliminary offering circular relating to the Offering or each preliminary prospectus supplement or preliminary offering circular supplement, together with a prospectus or offering circular, respectively, relating to the Offering. “Free Writing Prospectus” means, in the case of a Registered Offering, a “free writing prospectus” as defined in Rule 405 under the 1933 Act. As used herein the terms “Registration Statement,” “Prospectus,” “Preliminary Prospectus,” and “Free Writing Prospectus” will include in each case the material, if any, incorporated by reference therein, and as used herein, the term “Registration Statement” includes information deemed to be part thereof pursuant to, and as of the date and time specified in, Rules 430A, 430B, or 430C under the 1933 Act, while the terms “Prospectus” and “Preliminary Prospectus” include information deemed to be a part thereof pursuant to the rules and regulations under the 1933 Act, but only as of the actual time that information is first used or filed with the Commission pursuant to Rule 424(b) under the 1933 Act. The Manager will furnish, make available to you, or make arrangements for you to obtain copies (which may, to the extent permitted by law, be in electronic form) of each Prospectus and Preliminary Prospectus (as amended or supplemented, if applicable, but excluding, for this purpose, unless otherwise required pursuant to rules or regulations under the 1933 Act, documents incorporated therein by reference) as soon as practicable after sufficient quantities thereof have been made available by the Issuer.
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As used herein, in the case of an Offering that is an offering of asset-backed securities, the term “ABS Underwriter Derived Information” means any analytical or computational materials as described in clause (5) of footnote 271 of Commission Release No. 33-8591, issued July 19, 2005 (Securities Offering Reform) (the “Securities Offering Reform Release”).
2.2. Non-Registered Offerings. In the case of an Offering other than a Registered Offering, you acknowledge that no registration statement has been filed with the Commission. “Offering Circular” means the final offering circular or memorandum, if any, or any other final written materials authorized by the Issuer to be used in connection with an Offering that is not a Registered Offering. “Preliminary Offering Circular” means any preliminary offering circular or memorandum, if any, or any other written preliminary materials authorized by the Issuer to be used in connection with such an Offering. As used herein, the terms “Offering Circular” and “Preliminary Offering Circular” include the material, if any, incorporated by reference therein. We will either, as soon as practicable after the later of the date of the Invitation Wire or the date made available to us by the Issuer, furnish to you (or make available for your review) a copy of any Preliminary Offering Circular or any proof or draft of the Offering Circular. In any event, in any Offering involving an Offering Circular, the Manager will furnish, make available to you, or make arrangements for you to obtain, as soon as practicable after sufficient quantities thereof are made available by the Issuer, copies (which may, to the extent permitted by law, be in electronic form) of the Preliminary Offering Circular and Offering Circular, as amended or supplemented, if applicable (but excluding, for this purpose, documents incorporated therein by reference).
2.3. Authority to Execute Underwriting and Intersyndicate Agreements. You authorize the Manager, on your behalf: (a) to determine the form of the Underwriting Agreement and to execute and deliver to the Issuer, Guarantor, or Seller the Underwriting Agreement to purchase: (i) up to the number, amount, or percentage of Firm Securities set forth in the applicable AAU, and (ii) if the Manager elects on behalf of the several Underwriters to exercise any option to purchase Additional Securities, up to the number, amount, or percentage of Additional Securities set forth in the applicable AAU, subject, in each case, to reduction pursuant to Article IV; and (b) to determine the form of any agreement or agreements, including, but not limited to, underwriting agreements, between or among the syndicates participating in the Offering or International Offering, respectively (each, an “Intersyndicate Agreement”), and to execute and deliver any such Intersyndicate Agreement.
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III. MANAGER’S AUTHORITY
3.1. Terms of Offering. You authorize the Manager to act as manager of the Offering of the Securities by the Underwriters (the “Underwriters’ Securities”) or by the Issuer or Seller pursuant to delayed delivery contracts (the “Contract Securities”), if any, contemplated by the Underwriting Agreement. You authorize the Manager: (i) to purchase any or all of the Additional Securities for the accounts of the several Underwriters pursuant to the Underwriting Agreement, (ii) to agree, on your behalf and on behalf of the Co-Managers, to any addition to, change in, or waiver of any provision of, or the termination of, the Underwriting Agreement or any Intersyndicate Agreement (other than an increase in the Purchase Price or in your Original Underwriting Obligation to purchase Securities, in either case from that contemplated by the applicable AAU), (iii) to add prospective or remove existing Underwriters from the syndicate, (iv) to exercise, in the Manager’s discretion, all of the authority vested in the Manager in the Underwriting Agreement, and (v) except as described below in this Section 3.1, to take any other action as may seem advisable to the Manager in respect of the Offering (including, in the case of an Offering of asset-backed securities, the preparation and delivery of ABS Underwriter Derived Information), including actions and communications with the Commission, the Financial Industry Regulatory Authority (“FINRA”), state blue sky or securities commissions, stock exchanges, and other regulatory bodies or organizations. Furthermore, the Manager will have exclusive authority, on your behalf and on behalf of the Co-Managers, to exercise powers and pursue enforcement of the terms and conditions of the Underwriting Agreement and any Intersyndicate Agreement, whether or not actually exercised, except as otherwise specified herein or therein. If, in accordance with the terms of the applicable AAU, the Offering of the Securities is at varying prices based on prevailing market prices, or prices related to prevailing market prices, or at negotiated prices, you authorize the Manager to determine, on your behalf in the Manager’s discretion, any Offering Price and the Fees and Commissions applicable to the Offering from time to time. You authorize the Manager on your behalf to arrange for any currency transactions (including forward and hedging currency transactions) as the Manager may deem necessary to facilitate settlement of the purchase of the Securities, but you do not authorize the Manager on your behalf to engage in any other forward or hedging transactions (including interest rate hedging transactions) in connection with the Offering unless such transactions are specified in an applicable AAU or are otherwise consented to by you. You further authorize the Manager, subject to the provisions of Section 1.2 hereof: (i) to vary the offering terms of the Securities in effect at any time, including, if applicable, the Offering Price, Fees, and Commissions set forth in the applicable AAU, (ii) to determine, on your behalf, the Purchase Price, and (iii) to increase or decrease the number, amount, or percentage of Securities being offered. Notwithstanding the foregoing provisions of this Section 3.1, the Manager will notify the Underwriters, prior to the signing of the Underwriting Agreement, of any provision in the Underwriting Agreement that could result in an increase in the number, amount, or percentage of Firm Securities set forth opposite each Underwriter’s name in the Underwriting Agreement by more than 25% (or such other percentage as will have been specified in the applicable Invitation Wire or otherwise consented to by you) as a result of the failure or refusal of another Underwriter or Underwriters to perform its or their obligations thereunder. The Manager may, at its discretion, delegate to any Underwriter any and all authority vested in the applicable AAU, including, but not limited to, the powers set forth in Sections 5.1 and 5.2 hereof.
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3.2. Offering Date. The Offering is to be made on or about the time the Underwriting Agreement is entered into by the Issuer, Guarantor, or Seller and the Manager as in the Manager’s judgment is advisable, on the terms and conditions set forth in the Prospectus or the Offering Circular, as the case may be, and the applicable AAU. You will not sell any Securities prior to the time the Manager releases such Securities for sale to purchasers. The date on which such Securities are released for sale is referred to herein as the “Offering Date.”
3.3. Communications. Any public announcement or advertisement of the Offering will be made by the Manager on behalf of the Underwriters on such date as the Manager may determine. You will not announce or advertise the Offering prior to the date of the Manager’s announcement or advertisement thereof without the Manager’s consent. You will abide by any restrictions in the Underwriting Agreement relating to any general solicitation, announcement, advertising, or publicity in addition to the restrictions in this Section 3.3. Further, if the Offering is made in whole or in part in reliance on any applicable exemption from registration under the 1933 Act, you will not engage in any general solicitation, announcement, or advertising in connection with the Offering that would be inconsistent with such exemption. Any announcement or advertisement you may make of the Offering after such date will be your own responsibility, and at your own expense and risk. In addition to your compliance with restrictions on the Offering pursuant to Sections 10.10, 10.11, and 10.12 hereof, you represent that you have not, and you agree that you will not, in connection with the offering and sale of the Securities in the Offering, give, send, or otherwise convey to any prospective purchaser or any purchaser of the Securities or other person not in your employ any written communication (as defined in Rule 405 under the 1933 Act) other than:
(i) any Preliminary Prospectus, Prospectus, Preliminary Offering Circular, or Offering Circular,
(ii) (A) written confirmations and notices of allocation delivered to your customers in accordance with Rules 172 or 173 under the 1933 Act, and written communications based on the exemption provided by Rule 134 under the 1933 Act, and (B) in the case of Offerings not registered under the 1933 Act, such written communications (1) as would be permitted by Section 3.3(v)(D)(1) below were such Offering registered under the 1933 Act, or (2) that the Manager or Underwriting Agreement may permit; provided, however, that such written communication under this clause (B) would not have otherwise constituted “Issuer Information” as defined below, or would have qualified for the exemption provided by Rule 134 under the 1933 Act, in each case, if such communication had been furnished in the context of a Registered Offering (“Supplemental Materials”),
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(iii) any “issuer free writing prospectus” (as defined in Rule 433(h) under the 1933 Act, an “Issuer Free Writing Prospectus”), the issuance or use of which has been permitted or consented to by the Issuer and the Manager,
(iv) information contained in any computational materials, or in the case of an Offering of asset backed securities, the ABS Underwriter Derived Information, or any other offering materials not constituting a Free Writing Prospectus concerning the Offering, the Issuer, the Guarantor, or the Seller, in each case, prepared by or with the permission of the Manager for use by the Underwriters in connection with the Offering, and, in the case of a Registered Offering, filed (if required) with the Commission or FINRA, as applicable,
(v) a Free Writing Prospectus prepared by or on behalf of, or used or referred to by, an Underwriter in connection with the Offering, so long as: (A) such Free Writing Prospectus is not required to be filed with the Commission, (B) the proposed use of such Free Writing Prospectus is permitted by the Underwriting Agreement, (C) such Free Writing Prospectus complies with the legending condition of Rule 433 under the 1933 Act, and you comply with the record-keeping condition of Rule 433, and (D) (1) such Free Writing Prospectus contains only information describing the preliminary terms of the Securities and other pricing data2 that is not “Issuer Information” (as defined in Rule 433(h) under the 1933 Act, including footnote 271 of the Securities Offering Reform Release), or (2) the Issuer has agreed in the Underwriting Agreement to file a final term sheet under Rule 433 within the time period necessary to avoid a requirement for any Underwriter to file the Free Writing Prospectus to be used by such Underwriter, and the Free Writing Prospectus used by such Underwriter contains only information describing the terms of the Securities or their offering that is included in such final term sheet of the Issuer and other pricing data that is not Issuer Information (a Free Writing Prospectus meeting the requirements of (A) through (D) above is referred to herein as an “Underwriter Free Writing Prospectus”). Without limiting the foregoing, any Underwriter Free Writing Prospectus that you use or refer to will not be distributed by you or on your behalf in a manner reasonably designed to lead to its broad unrestricted dissemination. You will comply in all material respects with the applicable requirements of the 1933 Act and the rules and regulations thereunder in connection with your use of any Underwriter Free Writing Prospectus,
(vi) any written communication prepared by or on behalf of, or used or referred to by, the Issuer, the conveyance of which by you in reliance on either Section 5(d) of, or Rule 163B under, the 1933 Act has been permitted or consented to by the Issuer and the Manager (a “Written Testing-the-Waters Communication”), so long as (A) you convey any such Written Testing-the-Waters Communication solely to entities that are3 qualified institutional buyers within the meaning of Rule 144A under the 1933 Act (“QI B s”) or institutions that are accredited investors within the meaning of Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12) or (a)(13) under the 1933 Act (“IAIs”), and you otherwise comply with the requirements of Section 5(d) of the 1933 Act, or (B) you convey any such Written Testing-the-Waters Communication solely to entities that you reasonably believe are QIBs or IAIs, and you otherwise comply with the requirements of Rule 163B under the 1933 Act, and
| 2 | Meant to permit disclosure of non-Issuer related information, such as benchmark Treasury rate, in preliminary term sheets or price talk. |
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(vii) any written communication not otherwise permitted under clauses (i) through (vi) above, the conveyance of which by you has been permitted or consented to by the Manager (a “Manager-Approved Communication”).
3.4. Institutional and Retail Sales. You authorize the Manager to sell to institutions and retail purchasers such Securities purchased by you pursuant to the Underwriting Agreement as the Manager will determine. The Selling Concession on any such sales will be credited to the accounts of the Underwriters as the Manager will determine.
3.5. Sales to Dealers. You authorize the Manager to sell to Dealers (as defined below) such Securities purchased by you pursuant to the Underwriting Agreement as the Manager will determine. A “Dealer” will be a person who is: (a) a broker or dealer (as defined by FINRA) actually engaged in the investment banking or securities business, and (i) a member in good standing of FINRA, or (ii) a non-U.S. bank, broker, dealer, or other institution not eligible for membership in FINRA that, in the case of either clause (a)(i) or (a)(ii), makes the representations and agreements applicable to such institutions contained in Section 10.5 hereof, or (b) in the case of Offerings of Securities that are exempt securities under Section 3(a)(12) of the Securities Exchange Act of 1934 (the “1934 Act”), and such other Securities as from time to time may be sold by a “bank” (as defined in Section 3(a)(6) of the 1934 Act (a “Bank”)), a Bank that is not a member of FINRA and that makes the representations and agreements applicable to such institutions contained in Section 10.5 hereof. If the price for any such sales by the Manager to Dealers exceeds an amount equal to the Offering Price less the Selling Concession set forth in the applicable AAU, the amount of such excess, if any, will be credited to the accounts of the Underwriters as the Manager will determine.
3.6. Direct Sales. The Manager will advise you promptly, on the Offering Date, as to the Securities purchased by you pursuant to the Underwriting Agreement that you will retain for direct sale. At any time prior to the termination of the applicable AAU, any such Securities that are held by the Manager for sale but not sold may, on your request and at the Manager’s discretion, be released to you for direct sale, and Securities so released to you will no longer be deemed held for sale by the Manager. You may allow, and Dealers may reallow, a discount on sales to Dealers in an amount not in excess of the Reallowance set forth in the applicable AAU. You may not purchase Securities from, or sell Securities to, any other Underwriter or Dealer at any discount or concession other than the Reallowance, except with the prior consent of the Manager.
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3.7. Release of Unsold Securities. From time to time prior to the termination of the applicable AAU, at the request of the Manager, you will advise the Manager of the number or amount of Securities remaining unsold which were retained by or released to you for direct sale, and of the number or amount of Securities and Other Securities (as defined below) purchased for your account remaining unsold which were delivered to you pursuant to Article V hereof or pursuant to any Intersyndicate Agreement, and, on the request of the Manager, you will release to the Manager any such Securities and Other Securities remaining unsold: (a) for sale by the Manager to institutions, Dealers, or retail purchasers, (b) for sale by the Issuer or Seller pursuant to delayed delivery contracts, or (c) if, in the Manager’s opinion, such Securities or Other Securities are needed to make delivery against sales made pursuant to Article V hereof or any Intersyndicate Agreement.
3.8. International Offerings. In the case of an International Offering, you authorize the Manager: (i) to make representations on your behalf as set forth in any Intersyndicate Agreement, and (ii) to purchase or sell for your account pursuant to the Intersyndicate Agreement: (a) Securities, (b) any other securities of the same class and series, or any securities into which the Securities may be converted or for which the Securities may be exchanged or exercised, and (c) any other securities designated in the applicable AAU or applicable Intersyndicate Agreement (the securities referred to in clauses (b) and (c) above being referred to collectively as the “Other Securities”).
IV. DELAYED DELIVERY CONTRACTS
4.1. Arrangements for Sales. Arrangements for sales of Contract Securities will be made only through the Manager acting either directly or through Dealers (including Underwriters acting as Dealers), and you authorize the Manager to act on your behalf in making such arrangements. The aggregate number or amount of Securities to be purchased by the several Underwriters will be reduced by the respective number or amounts of Contract Securities attributed to such Underwriters as hereinafter provided. Subject to the provisions of Section 4.2 hereof, the aggregate number or amount of Contract Securities will be attributed to the Underwriters as nearly as practicable in proportion to their respective Underwriting Percentages, except that, as determined by the Manager in its discretion: (a) Contract Securities directed and allocated by a purchaser to specific Underwriters will be attributed to such Underwriters, and (b) Contract Securities for which arrangements have been made for sale through Dealers will be attributed to each Underwriter approximately in the proportion that Securities of such Underwriter held by the Manager for sales to Dealers bear to all Securities so held. The fee with respect to Contract Securities payable to the Manager for the accounts of the Underwriters pursuant to the Underwriting Agreement will be credited to the accounts of the respective Underwriters in proportion to the Contract Securities attributed to such Underwriters pursuant to the provisions of this Section 4.1, less, in the case of each Underwriter, the concession to Dealers on Contract Securities sold through Dealers and attributed to such Underwriter.
4.2. Excess Sales. If the number or amount of Contract Securities attributable to an Underwriter pursuant to Section 4.1 hereof would exceed such Underwriter’s Original Underwriting Obligation reduced by the number or amount of Underwriters’ Securities sold by or on behalf of such Underwriter, such excess will not be attributed to such Underwriter, and such Underwriter will be regarded as having acted only as a Dealer with respect to, and will receive only the concession to Dealers on, such excess.
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V. PURCHASE AND SALE OF SECURITIES
5.1. Facilitation of Distribution. In order to facilitate the distribution and sale of the Securities, you authorize the Manager to buy and sell Securities and any Other Securities, in addition to Securities sold pursuant to Article III hereof, in the open market or otherwise (including, without limitation, pursuant to any Intersyndicate Agreement), for long or short account, on such terms as it may deem advisable, and to over-allot in arranging sales. Such purchases and sales and over-allotments will be made for the accounts of the several Underwriters as nearly as practicable to their respective Underwriting Percentages or, in the case of an International Offering, such purchases and sales will be for such accounts as set forth in the applicable Intersyndicate Agreement. Any Securities or Other Securities which may have been purchased by the Manager for stabilizing purposes in connection with the Offering prior to the acceptance of the applicable AAU will be treated as having been purchased pursuant to this Section 5.1 for the accounts of the several Underwriters or, in the case of an International Offering, for such accounts as are set forth in the applicable Intersyndicate Agreement. Your net commitment pursuant to the foregoing authorization will not exceed at the close of business on any day an amount equal to 2 0 % of your Underwriting Percentage of the aggregate initial Offering Price of the Firm Securities, it being understood that, in calculating such net commitment, the initial Offering Price will be used with respect to the Securities so purchased or sold and, in the case of all Other Securities, will be the purchase price thereof. For purposes of determining your net commitment for short account (i.e., “naked short”), any short position that can be covered with: (a) Securities that may be purchased upon exercise of any over-allotment option then exercisable, (b) in the case of an International Offering, any Securities or Other Securities that the Manager has agreed to purchase for your account pursuant to any applicable Intersyndicate Agreement, and (c) Securities that may be purchased pursuant to a forward sale contract or similar arrangement with the Issuer or any selling security holder in the Offering, will be disregarded. On demand you will take up and pay for any Securities or Other Securities so purchased for your account and any Securities released to you pursuant to Section 3.7 hereof, and will deliver to the Manager against payment any Securities or Other Securities so sold or over-allotted for your account or released to you. The Manager will notify you if it engages in any stabilization transaction in accordance with Rule 17a-2 under the 1934 Act, and will notify you of the date of termination of stabilization. You will not stabilize or engage in any syndicate covering transaction (as defined in Rule 100 of Regulation M under the 1934 Act (“Regulation M”)) in connection with the Offering without the prior consent of the Manager. You will provide to the Manager any reports required of you pursuant to Rule 17a-2 under the 1934 Act not later than the date specified therein.
5.2. Penalty with Respect to Securities Repurchased by the Manager. If pursuant to the provisions of Section 5.1 hereof and prior to the termination of the Manager’s authority to cover any short position incurred under the applicable AAU or such other date as the Manager may specify in a Wire, either: (a) the Manager purchases or contracts to purchase for the account of any Underwriter in the open market or otherwise any Securities which were retained by, or released to, you for direct sale or any Securities sold pursuant to Section 3.4 hereof for which you received a portion of the Selling Concession set forth in the applicable AAU, or any Securities which may have been issued on transfer or in exchange for such Securities, and which Securities were therefore not effectively placed for investment, or (b) if the Manager has advised you by Wire that trading in the Securities will be reported to the Manager pursuant to the “Initial Public Offering Tracking System” of The Depository Trust Company (“DTC”) and the Manager determines, based on notices from DTC, that your customers sold a number or amount of Securities during any day that exceeds the number or amount previously notified to you by Wire, then you authorize the Manager either to charge your account with an amount equal to such portion of the Selling Concession set forth in the applicable AAU received by you with respect to such Securities or, in the case of clause (b), such Securities as exceed the number or amount specified in such Wire, or to require you to repurchase such Securities or, in the case of clause (b), such Securities as exceed the number or amount specified in such Wire, at a price equal to the total cost of such purchase, including transfer taxes, accrued interest, dividends, and commissions, if any.
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5.3. Compliance with Regulation M. You represent that, at all times since you were invited to participate in the Offering, you have complied with the provisions of Regulation M applicable to the Offering, in each case as interpreted by the Commission and after giving effect to any applicable exemptions. If you have been notified in a Wire that the Underwriters may conduct passive market making in compliance with Rule 103 of Regulation M in connection with the Offering, you represent that, at all times since your receipt of such Wire, you have complied with the provisions of such Rule applicable to such Offering, as interpreted by the Commission and after giving effect to any applicable exemptions. You will comply with any additional provisions of Regulation M if and to the extent set forth in the Invitation Wire or other Wire.
5.4. Standby Underwritings. You authorize the Manager in its discretion, at any time on, or from time to time prior to, the expiration of the conversion right of convertible securities identified in the applicable AAU in the case of securities called for redemption, or the expiration of rights to acquire securities in the case of rights offerings, for which, in either case, standby underwriting arrangements have been made: (i) to purchase convertible securities or rights to acquire Securities for your account, in the open market or otherwise, on such terms as the Manager determines, and to convert convertible securities or exercise rights so purchased; and (ii) to offer and sell the underlying common stock or depositary shares for your account, in the open market or otherwise, for long or short account (for purposes of such commitment, such common stock or depositary shares being considered the equivalent of convertible securities or rights), on such terms consistent with the terms of the Offering set forth in the Prospectus or Offering Circular as the Manager determines. On demand, you will take up and pay for any securities so purchased for your account or you will deliver to the Manager against payment any securities so sold, as the case may be. During such period, you may offer and sell the underlying common stock or depositary shares, but only at prices set by the Manager from time to time, and any such sales will be subject to the Manager’s right to sell to you the underlying common stock or depositary shares as above provided and to the Manager’s right to reserve your securities purchased, received, or to be received upon conversion. You agree not to otherwise bid for, purchase, or attempt to induce others to purchase or sell, directly or indirectly, any convertible securities or rights or underlying common stock or depositary shares, provided, however, that no Underwriter will be prohibited from: (a) selling underlying common stock owned beneficially by such Underwriter on the day the convertible securities were first called for redemption, (b) converting convertible securities owned beneficially by such Underwriter on such date or selling underlying common stock issued upon conversion of convertible securities so owned, (c) exercising rights owned beneficially by such Underwriter on the record date for a rights offering, or selling the underlying common stock or depositary shares issued upon exercise of rights so owned, or (d) purchasing or selling convertible securities or rights or underlying common stock or depositary shares as a broker pursuant to unsolicited orders.
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VI. PAYMENT AND SETTLEMENT
You will deliver to the Manager on the date and at the place and time specified in the applicable AAU (or on such later date and at such place and time as may be specified by the Manager in a subsequent Wire) the funds specified in the applicable AAU, payable to the order of UBS Securities LLC, for: (a) an amount equal to the Offering Price plus (if not included in the Offering Price) accrued interest, amortization of original issue discount or dividends, if any, specified in the Prospectus or Offering Circular, less the applicable Selling Concession in respect of the Firm Securities to be purchased by you, (b) an amount equal to the Offering Price plus (if not included in the Offering Price) accrued interest, amortization of original issue discount or dividends, if any, specified in the Prospectus or Offering Circular, less the applicable Selling Concession in respect of such of the Firm Securities to be purchased by you as will have been retained by or released to you for direct sale as contemplated by Section 3.6 hereof, or (c) the amount set forth or indicated in the applicable AAU, as the Manager will advise. You will make similar payment as the Manager may direct for Additional Securities, if any, to be purchased by you on the date specified by the Manager for such payment. The Manager will make payment to the Issuer or Seller against delivery to the Manager for your account of the Securities to be purchased by you, and the Manager will deliver to you the Securities paid for by you which will have been retained by or released to you for direct sale. If the Manager determines that transactions in the Securities are to be settled through DTC or another clearinghouse facility and payment in the settlement currency is supported by such facility, payment for and delivery of Securities purchased by you will be made through such facilities, if you are a participant, or, if you are not a participant, settlement will be made through your ordinary correspondent who is a participant.
VII. EXPENSES
7.1. Management Fee. You authorize the Manager to charge your account as compensation for the Manager’s and Co-Managers’ services in connection with the Offering, including the purchase from the Issuer or Seller of the Securities, as the case may be, and the management of the Offering, the amount, if any, set forth as the management fee, global coordinators’ fee, praecipium, or other similar fee in the applicable AAU. Such amount will be divided among the Manager and any Co-Managers named in the applicable AAU as they may determine. Each Underwriter acknowledges that such fees are being paid by the Underwriters, and are not a benefit received directly or indirectly from the Issuer of the type referred to in Section 11(e) of the 1933 Act.
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7.2. Offering Expenses. You authorize the Manager to charge your account with your Underwriting Percentage of all expenses agreed to be paid by the Underwriters in the Underwriting Agreement and all expenses of a general nature incurred by the Manager and Co-Managers under the applicable AAU in connection with the Offering, including the negotiation and preparation thereof, or in connection with the purchase, carrying, marketing, sale and distribution of any securities under the applicable AAU and any Intersyndicate Agreement, including, without limitation, legal fees and expenses, transfer taxes, costs associated with approval of the Offering by FINRA, and the costs of currency transactions (including forward and hedging currency transactions) or, if permitted pursuant to Section 3.1 hereof, any other forward or hedging transactions (including interest rate swaps) entered into to facilitate settlement of the purchase of Securities permitted hereunder.
VIII. MANAGEMENT OF SECURITIES AND FUNDS
8.1. Advances; Loans; Pledges. You authorize the Manager to advance the Manager’s own funds for your account, charging current interest rates, and to arrange loans for your account for the purpose of carrying out the provisions of the applicable AAU and any Intersyndicate Agreement, and in connection therewith, to hold or pledge as security therefor all or any securities which the Manager may be holding for your account under the applicable AAU and any Intersyndicate Agreement, to execute and deliver any notes or other instruments evidencing such advances or loans, and to give all instructions to the lenders with respect to any such loans and the proceeds thereof. The obligations of the Underwriters under loans arranged on their behalf will be several in proportion to their respective Original Underwriting Obligations, and not joint. Any lender is authorized to accept the Manager’s instructions as to the disposition of the proceeds of any such loans. In the event of any such advance or loan, repayment thereof will, in the discretion of the Manager, be effected prior to making any remittance or delivery pursuant to Section 8.2, 8.3, or 9.2 hereof.
8.2. Return of Amount Paid for Securities. Out of payment received by the Manager for Securities sold for your account which have been paid for by you, the Manager will remit to you promptly an amount equal to the price paid by you for such Securities.
8.3. Delivery and Redelivery of Securities for Carrying Purposes. The Manager may deliver to you from time to time prior to the termination of the applicable AAU pursuant to Section 9.1 hereof against payment, for carrying purposes only, any Securities or Other Securities purchased by you under the applicable AAU or any Intersyndicate Agreement which the Manager is holding for sale for your account but which are not sold and paid for. You will redeliver to the Manager against payment any Securities or Other Securities delivered to you for carrying purposes at such times as the Manager may demand.
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IX. TERMINATION; INDEMNIFICATION; CONTRIBUTION; SETTLEMENT
9.1. Termination. Each AAU will terminate at the close of business on the later of: (a) the date on which the Underwriters pay the Issuer or Seller for the Securities, and (b) 45 calendar days after the applicable Offering Date, unless sooner terminated by the Manager. The Manager may at its discretion by notice to you prior to the termination of such AAU alter any of the terms or conditions of the Offering to the extent permitted by Articles III and IV hereof, or terminate or suspend the effectiveness of Article V hereof, or any part thereof. No termination or suspension pursuant to this paragraph will affect the Manager’s authority under Section 3.1 hereof to take actions in respect of the Offering or under Article V hereof to cover any short position incurred under such AAU or in connection with covering any such short position to require you to repurchase Securities as specified in Section 5.2 hereof. For the avoidance of doubt, unless otherwise agreed in a Wire or an Intersyndicate Agreement, the Manager’s authority to purchase Securities or Other Securities, for long account, pursuant to Section 5.1 hereof, will terminate or be suspended upon the termination or suspension, as the case may be, of the applicable AAU (or any provision and/or term thereof in respect of trading, price or offering restrictions as set forth in a Wire that is sent by the Manager following the time the Securities are released for sale to purchasers) or Article V or Section 5.1 hereof pursuant to this paragraph.
9.2. Delivery or Sale of Securities; Settlement of Accounts. Upon termination of each AAU, or prior thereto at the Manager’s discretion, the Manager will deliver to you any Securities paid for by you pursuant to Article VI hereof and held by the Manager for sale pursuant to Section 3.4 or 3.5 hereof but not sold and paid for and any Securities or Other Securities that are held by the Manager for your account pursuant to the provisions of Article V hereof or any Intersyndicate Agreement. Notwithstanding the foregoing, at the termination of such AAU, if the aggregate initial Offering Price of any such Securities and the aggregate purchase price of any Other Securities so held and not sold and paid for does not exceed an amount equal to 20% of the aggregate initial Offering Price of the Securities, the Manager may, in its discretion, sell such Securities and Other Securities for the accounts of the several Underwriters, at such prices, on such terms, at such times, and in such manner as it may determine. Within the period specified by applicable FINRA Rules or, if no period is so specified, as soon as practicable after termination of such AAU, your account will be settled and paid. The Manager may reserve from distribution such amount as the Manager deems advisable to cover possible additional expenses. The determination by the Manager of the amount so to be paid to or by you will be final and conclusive. Any of your funds under the Manager’s control may be held with the Manager’s general funds without accountability for interest.
Notwithstanding any provision of this Master AAU other than Section 10.12 hereof, upon termination of each AAU, or prior thereto at the Manager’s discretion, the Manager may: (i) allocate to the accounts of the Underwriters the expenses described in Section 7.2 hereof and any losses incurred upon the sale of Securities or Other Securities pursuant to the applicable AAU or any Intersyndicate Agreement (including any losses incurred upon the sale of securities referred to in Section 5.4(ii) hereof), (ii) deliver to the Underwriters any unsold Securities or Other Securities purchased pursuant to Section 5.1 hereof or any Intersyndicate Agreement, and (iii) deliver to the Underwriters any unsold Securities purchased pursuant to the applicable Underwriting Agreement, in each case in the Manager’s discretion. The only limitations on such discretion will be as follows: (a) no Underwriter that is not the Manager or a Co-Manager will bear more than its share of such expenses, losses, or Securities (such share will not exceed such Underwriter’s Underwriting Percentage and will be determined pro rata among all such Underwriters based on their Underwriting Percentages), (b) no such Underwriter will receive Securities that, together with any Securities purchased by such Underwriter pursuant to Article VI (but excluding any Securities that such Underwriter is required to repurchase pursuant to Section 5.2 hereof) exceed such Underwriter’s Original Underwriting Obligation, and (c) no Co-Manager will bear more than its share of such expenses, losses, or Securities (such share to be determined pro rata among the Manager and all Co-Managers based on their Underwriting Percentages). If any Securities or Other Securities returned to you pursuant to clause (ii) or (iii) above were not paid for by you pursuant to Article VI hereof, you will pay to the Manager an amount per security equal to the amount set forth in clause (i) of Article VI, in the case of Securities returned to you pursuant to clause (iii) above, or the purchase price of such securities, in the case of Securities or Other Securities returned to you pursuant to clause (ii) above.
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9.3. Certain Other Expenses. You will pay your Underwriting Percentage of: all expenses incurred by the Manager in investigating, preparing to defend, and defending against any action, claim, or proceeding which is asserted, threatened, or instituted by any party, including any governmental or regulatory body (each, an “Action”), relating to: (A) the Registration Statement, any Preliminary Prospectus or Prospectus (and any amendment or supplement thereto), any Preliminary Offering Circular or Offering Circular (and any amendment or supplement thereto), any Supplemental Materials, any Issuer Free Writing Prospectus, any Written Testing-the-Waters Communication, and any ABS Underwriter Derived Information used by any Underwriter other than the Manager, (B) the violation of any applicable restrictions on the offer, sale, resale, or purchase of Securities or Other Securities imposed by U.S. Federal or state laws or non-U.S. laws and the rules and regulations of any regulatory body promulgated thereunder or pursuant to the terms of the applicable AAU, the Underwriting Agreement, or any Intersyndicate Agreement, and (C) any claim that the Underwriters constitute a partnership, an association, or an unincorporated business or other separate entity, and (ii) any Losses (as defined in Section 9.4 hereof) incurred by the Manager in respect of any such Action, whether such Loss will be the result of a judgment or arbitrator’s determination or as a result of any settlement agreed to by the Manager. Notwithstanding the foregoing, you will not be required to pay your Underwriting Percentage of any such expense or liability: (1) to the extent that such expense or liability was caused by the Manager’s gross negligence or willful misconduct as determined in a final judgment of a court of competent jurisdiction; (2) as to which, and to the extent, the Manager actually receives (a) indemnity pursuant to Section 9.4 hereof, (b) contribution pursuant to Section 9.5 hereof, (c) indemnity or contribution pursuant to the Underwriting Agreement, or (d) damages from an Underwriter for breach of its representations, warranties, agreements, or covenants contained in the applicable AAU; or (3) of the Manager (other than fees of Syndicate Counsel) that relates to a settlement entered into by the Manager on a basis that results in a settlement of such Action against it and fewer than all the Underwriters. None of the foregoing provisions of this Section 9.3 will relieve any defaulting or breaching Underwriter from liability for its defaults or breach. Failure of any party to give notice under Section 9.10 hereof will not relieve any Underwriter of an obligation to pay expenses pursuant to the provisions of this Section 9.3.
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9.4. Indemnification. Notwithstanding any settlement or the termination of the applicable AAU, you agree to indemnify and hold harmless each other Underwriter and each person, if any, who controls any such Underwriter within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act (each, an “Indemnified Party”), to the extent and upon the terms which you agree to indemnify and hold harmless any of the Issuer, the Guarantor, the Seller, any person controlling the Issuer, the Guarantor, the Seller, its directors, and, in the case of a Registered Offering, its officers who signed the Registration Statement and, in the case of an Offering other than a Registered Offering, its officers, in each case as set forth in the Underwriting Agreement. You further agree to indemnify and hold harmless each Indemnified Party from and against any and all losses, claims, damages, liabilities, and expenses not reimbursed pursuant to Section 9.3 hereof (collectively, “Losses”) related to, arising out of, or in connection with the breach or violation by you of the terms of Section 3.3 hereof, including any and all Losses under Section 5 of the 1933 Act, and any litigation, investigation, and proceeding (collectively, “Litigation”) relating to any of the foregoing. You will also reimburse each such Indemnified Party upon demand for all expenses, including fees and expenses of counsel, as they are incurred, in connection with investigating, preparing for, or defending any of the foregoing. You will indemnify and hold harmless each Indemnified Party from and against any and all Losses related to, arising out of, or in connection with, any untrue statement or alleged untrue statement of a material fact contained in any Underwriter Free Writing Prospectus, Manager-Approved Communication or Supplemental Material used by you, or any research report in the form of a written communication (as defined in Rule 405 under the 1933 Act) used by you in reliance upon the penultimate sentence of Section 2(a)(3) of the 1933 Act prior to completion of the distribution of an initial public offering (a “Written Research Report”), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and any Litigation relating to any of the foregoing, and to reimburse each such Indemnified Party upon demand for all expenses, including fees and expenses of counsel, as they are incurred, in connection with investigating, preparing for, or defending any of the foregoing. In addition, you will indemnify and hold harmless each Indemnified Party from and against any and all Losses related to, arising out of, or in connection with any untrue statement or alleged untrue statement of a material fact contained in any ABS Underwriter Derived Information used by you, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and any Litigation relating to any of the foregoing, and to reimburse each such Indemnified Party upon demand for all expenses, including fees and expenses of counsel, as they are incurred, in connection with investigating, preparing for, or defending any of the foregoing; provided, however, that any Losses, joint or several, paid or incurred by any Underwriter, arising out of or based upon any ABS Underwriter Derived Information which was used only by such Underwriter, or in connection with the preparation of which an Underwriter is found to have acted with gross negligence or willful misconduct in a final judgment of a court of competent jurisdiction, will be paid solely by such Underwriter.
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Each Underwriter will further indemnify and hold harmless any investment banking firm identified in a Wire as the qualified independent underwriter as defined in FINRA Rule 5121 or any successor rule thereto (in such capacity, a “QIU”) for an Offering and each person, if any, who controls such QIU within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all Losses related to, arising out of, or in connection with such investment banking firm’s activities as QIU for the Offering. Each Underwriter will reimburse such QIU for all expenses, including fees and expenses of counsel, as they are incurred, in connection with investigating, preparing for, and defending any Action related to, arising out of, or in connection with such QIU’s activities as a QIU for the Offering. Each Underwriter will be responsible for its Underwriting Percentage of any amount due to such QIU on account of the foregoing indemnity and reimbursement. Such QIU will have no additional liability to any Underwriter or otherwise as a result of its serving as QIU in connection with the Offering. To the extent the indemnification provided to a QIU under this Section 9.4 is unavailable to such QIU or is insufficient in respect of any Losses related thereto, whether as a matter of law or public policy or as a result of the default of any Underwriter in performing its obligations under this Section 9.4, each other Underwriter will contribute to the amount paid or payable by such QIU as a result of such Losses related thereto in proportion to its Underwriting Percentage.
For the avoidance of doubt, references to an “Underwriter” or “you” in this Section 9.4 shall include the Manager in its role as an Underwriter.
9.5. Contribution. Notwithstanding any settlement or the termination of the applicable AAU, you will pay upon request of the Manager, as contribution, your Underwriting Percentage of any Losses, joint or several, paid or incurred by any Indemnified Party to any person other than an Indemnified Party, arising out of or in connection with the breach or violation of the terms of Section 3.3 hereof, including any and all Losses under Section 5 of the 1933 Act, and any Litigation relating to the foregoing. Further, you will pay upon request of the Manager, as contribution, your Underwriting Percentage of any Losses, joint or several, paid or incurred by any Indemnified Party to any person other than an Indemnified Party, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus or Prospectus (and any amendment or supplement thereto), any Preliminary Offering Circular or Offering Circular (and any amendment or supplement thereto), any Supplemental Materials, any Issuer Free Writing Prospectus, any Written Testing-the-Waters Communication, any other materials prepared or used by an Underwriter in accordance with Section 3.3 hereof, or any Underwriter Free Writing Prospectus, Manager-Approved Communication or Written Research Report, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (other than an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information furnished to the Company In Writing by the Underwriter on whose behalf the request for contribution is being made expressly for use therein), or any act or omission to act or any alleged act or omission to act by the Manager or, if applicable, a Representative, as the Manager or a Representative, in connection with any transaction contemplated by this Agreement or undertaken in preparing for the purchase, sale, and delivery of the Securities (provided, that you will not be required to pay in any such case to the extent that any such Loss resulted from the Manager’s or such Representative’s gross negligence or willful misconduct as determined in a final judgment of a court of competent jurisdiction), and your Underwriting Percentage of any legal or other expenses, including fees and expenses of counsel, as they are incurred, reasonably incurred by the Indemnified Party (with the approval of the Manager) on whose behalf the request for contribution is being made in connection with investigating or defending any such Loss or any action in respect thereof; provided, however, that no request will be made on behalf of any Indemnified Party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) from any Indemnified Party who was not guilty of such fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act); provided, further, that any Losses, joint or several, paid or incurred by any Indemnified Party, arising out of or based upon an Underwriter’s Underwriter Free Writing Prospectus, Manager-Approved Communication, Written Research Report or Supplemental Material, will be paid by only the Underwriters that used such Underwriter Free Writing Prospectus, Manager-Approved Communication, Written Research Report or Supplemental Material, as the case may be (the “Contributing Underwriters”), and the amount to be paid by each Contributing Underwriter will be determined pro rata among the Contributing Underwriters based on their Underwriting Percentages. None of the foregoing provisions of this Section 9.5 will relieve any defaulting or breaching Underwriter from liability for its defaults or breach.
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In addition, you will pay upon request of the Manager, as contribution, your Underwriting Percentage of any Losses, joint or several, paid or incurred by any Indemnified Party to any person other than an Indemnified Party, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any ABS Underwriter Derived Information, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (other than an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information furnished to the Company In Writing by the Underwriter on whose behalf the request for contribution is being made expressly for use therein) and your Underwriting Percentage of any expenses, including fees and expenses of counsel, as they are incurred, reasonably incurred by the Indemnified Party (with the approval of the Manager) on whose behalf the request for contribution is being made in connection with investigating, preparing for, or defending any such Loss or any action in respect thereof; provided, however, that any Losses, joint or several, paid or incurred by any Underwriter, arising out of or based upon any ABS Underwriter Derived Information which was used only by such Underwriter, or in connection with the preparation of which the Underwriter is found to have acted with gross negligence or willful misconduct in a final judgment of a court of competent jurisdiction, will be paid solely by the Underwriter.
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For the avoidance of doubt, references to an “Underwriter” or “you” in this Section 9.5 shall include the Manager in its role as an Underwriter.
9.6. Separate Counsel. If any Action is asserted or commenced pursuant to which the indemnity provided in Section 9.4 hereof or the right of contribution provided in Section 9.5 hereof may apply, the Manager may take such action in connection therewith as it deems necessary or desirable, including retention of counsel for the Underwriters (“Syndicate Counsel”), and in its discretion separate counsel for any particular Underwriter or group of Underwriters, and the fees and disbursements of any counsel so retained will be allocated among the several Underwriters as determined by the Manager. Any such Syndicate Counsel retained by the Manager will be counsel to the Underwriters as a group and, in the event that: (a) the Manager settles any Action on a basis that results in the settlement of such Action against it and fewer than all the Underwriters, or (b)(i) a conflict develops between the Manager and the other Underwriters, or (ii) differing defenses are available to the other Underwriters and not available to the Manager, and as a result of either (b)(i) or (b)(ii) such Syndicate Counsel concludes that it is unable to continue to represent the Manager and the other Underwriters, then in each such case, after notification to the Manager and the other Underwriters, Syndicate Counsel will remain counsel to the other Underwriters and will withdraw as counsel to the Manager. The Manager hereby consents to such arrangement and undertakes to take steps to: (i) ensure that any engagement letters with Syndicate Counsel are consistent with such arrangement; (ii) issue a notice to all other Underwriters promptly following receipt of any advice (whether oral or written) from Syndicate Counsel regarding its inability to represent the Manager and the other Underwriters jointly; and (iii) facilitate Syndicate Counsel’s continued representation of the other Underwriters. Any Underwriter may elect to retain at its own expense its own counsel and, on advice of such counsel, may settle or consent to the settlement of any such Action, but only in compliance with Section 9.7 hereof, and in each case, only after notification to every other Underwriter. The Manager may settle or consent to the settlement of any such Action, but only in compliance with Section 9.7 hereof.
9.7. Settlement of Actions. Neither the Manager nor any other Underwriter party to this Master AAU may settle or agree to settle any Action related to or arising out of the Offering, nor may any other Underwriter settle or agree to settle any such Action without the consent of the Manager, nor may any other Underwriter seek the Manager’s consent to any such settlement agreement, nor may the Manager consent to any such settlement agreement, unless: (A) the Manager, together with such other Underwriters as constitute a majority in aggregate interest based on the Underwriting Percentage of the Underwriters as a whole (including the Manager’s interest), approve the settlement of such Action, in which case the Manager is authorized to settle for all Underwriters, provided, however, that the settlement agreement results in the settlement of the Action against all Underwriters raised by the plaintiffs party thereto; or (B) (i) such settlement agreement expressly provides that the non-settling Underwriters will be given a judgment credit (or credit in settlement) with respect to all such Actions for which the non-settling Underwriters may be found liable (or will pay in subsequent settlement), in an amount that is the greatest of: (x) the dollar amount paid in such initial settlement to settle such Actions, (y) the proportionate share of the settling Underwriter’s fault in respect of common damages arising in connection with such Actions as proven at trial, if applicable, or (z) the amount by which the settling Underwriter would have been required to make contribution had it not settled, under Sections 9.5 and 11.2 hereof in respect of the final non-appealable judgment (or settlement) subsequently entered into by the non-settling Underwriters (such greatest amount of either (x), (y), or (z), the “Judgment Credit”);3 (ii) such settlement agreement expressly provides that in the event that the applicable court does not approve the Judgment Credit as part of the settlement, the settlement agreement will automatically terminate; and (iii) the final judgment entered with respect to the settlement agreement contains the Judgment Credit.
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9.8. Survival. Except as set forth in the last sentence of Section 9.1, your agreements contained in Article V and Sections 3.1, 9.3, 9.4, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10, and 11.2 hereof will remain operative and in full force and effect regardless of any termination of an AAU and: (a) any termination of the Underwriting Agreement, (b) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Issuer, the Guarantor, the Seller, its directors or officers, or any person controlling the Issuer, the Guarantor or the Seller, and (c) acceptance of any payment for any Securities.
9.9. Replacement of Manager. If at any time after any Action is brought the Manager settles the Action on a basis that results in the settlement of such Action against it and fewer than all the Underwriters (whether or not such settlement complies with Section 9.7 hereof), the Manager will, at such time, for purposes of Sections 9.3, 9.4, 9.5, 9.6, and 9.7 hereof, cease to be the Manager. The non-settling Underwriters will, by vote of holders of a majority of the Underwriting Percentage of such non-settling Underwriters, select a new Manager, which will become the new “Manager” for all purposes of Sections 9.3, 9.4., 9.5, 9.6, and 9.7 hereof as well as this section; provided that the non-settling Underwriter(s) with the largest Underwriting Percentage will act as Manager until such vote occurs and a new Manager is selected.4
Notwithstanding such a settlement, the Manager and the other settling Underwriters will remain obligated to the non-settling Underwriters to assist and cooperate fully, in good faith, and at their own expense, in the defense of any Actions, including, without limitation, by providing, upon reasonable request of any non-settling Underwriter, and without the necessity of court process, access to or copies of all relevant records, and reasonable access to all witnesses under control of the Manager or the other settling Underwriters, for the purpose of interviews, depositions, and testimony at trial, subject in each case to the applicable legal and procedural obligations of such Manager and such other settling Underwriter.
| 3 | Seeks to ensure that there is no harm to non-settling Underwriter due to settlement. For example, assume that plaintiffs have suffered $1,000 in damages in a case in which the Underwriters are 50% at fault and other defendants, all of whom are insolvent, are 50% at fault. Further assume that there were two Underwriters, each which underwrote 50% of the offering, and they were equally at fault. If neither Underwriter settles, then each would be required to pay $500 to satisfy the $1,000 verdict for which they are jointly and severally liable (or, if one paid $1,000, Section 9.5 would obligate the other to contribute $500 towards such payment). If the first Underwriter settles for $100, then the second Underwriter will obtain a judgment credit of $500, being equal to the greater of: (a) settlement amount ($100), (b) the first Underwriter’s fault ($250), and (c) the amount which the settling Underwriters would have been required to contribute under the contribution provisions ($500). This formula ensures that the second Underwriter is not harmed by the settlement. By contrast, the judgment credit applied in WorldCom ignored clause (c), resulting in a credit of only $250 and leading the non-settling Underwriter to pay $750, or $250 more than had the first Underwriter not settled. |
| 4 | Permits new Manager to replace settling Manager and manage the litigation–related provisions of this Agreement. |
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In addition, if at any time, the Manager is unwilling or unable for any reason to assume or discharge its duties as Manager under the applicable AAU, whether resulting from its insolvency (voluntary or involuntary), resignation or otherwise, to the extent permitted by applicable law, the remaining Underwriters will, by vote of holders of a majority of the Underwriting Percentage of such Underwriters, be entitled to select a new Manager, which will become the new Manager for all purposes under this Agreement.5
Notwithstanding the foregoing, a Manager replaced pursuant to this Section 9.9 shall continue to benefit from and be subject to all other terms and conditions of this Agreement applicable to an Underwriter.
9.10. Notice. When the Manager receives notice of the assertion of any Action to which the provisions of Sections 9.4, 9.5, 9.6, or 9.7 hereof would apply, it will give prompt notice thereof to each Underwriter, and whenever an Underwriter receives notice of the assertion of any claim or commencement of any Action to which the provisions of Sections 9.4, 9.5, 9.6, or 9.7 hereof would apply, such Underwriter will give prompt notice thereof to the Manager. The Manager also will furnish each Underwriter with periodic reports, at such times as it deems appropriate, as to the status of such Action, and the actions taken by it in connection therewith. If the Manager or any other Underwriter engages in any settlement discussion that involves or contemplates settlement on any basis other than settlement of all Actions against all Underwriters on a pro rata basis according to their Underwriting Percentages, the Manager (or other Underwriter engaging in such discussions) will notify all other Underwriters promptly and provide reasonable details about such discussions.
X. REPRESENTATIONS AND COVENANTS OF UNDERWRITERS
10.1. Knowledge of Offering. You acknowledge that it is your responsibility to examine the Registration Statement, the Prospectus, or the Offering Circular, as the case may be, any amendment or supplement thereto relating to the Offering, any Preliminary Prospectus or Preliminary Offering Circular, and the material, if any, incorporated by reference therein, any Issuer Free Writing Prospectus, any Supplemental Materials, and any ABS Underwriter Derived Information, and you will familiarize yourself with the terms of the Securities, any applicable Indenture, and the other terms of the Offering thereof which are to be reflected in the Prospectus or the Offering Circular, as the case may be, and the applicable AAU and Underwriting Agreement. The Manager is authorized, with the advice of counsel for the Underwriters, to approve on your behalf any amendments or supplements to the documents described in the preceding sentence.
| 5 | Permits new Manager to replace insolvent Manager and manage all aspects of this MAAU. |
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10.2. Accuracy of Underwriters’ Information. You confirm that the information that you have given and are deemed to have given in response to the Underwriters’ Questionnaire attached as Exhibit A hereto (and to any other questions addressed to you in the Invitation Wire or other Wires), which information has been furnished to the Issuer for use in the Registration Statement, Prospectus, or Offering Circular, as the case may be, or has otherwise been relied upon in connection with the Offering, is complete and accurate. You will notify the Manager immediately of any development before the termination of the applicable AAU which makes untrue or incomplete any information that you have given or are deemed to have given in response to the Underwriters’ Questionnaire (or such other questions).
10.3. Name; Address. Unless you have promptly notified the Manager In Writing otherwise, your name as it should appear in the Registration Statement, Prospectus or Offering Circular and any advertisement, if different, and your address, are as set forth on the signature pages hereof.
10.4. Compliance with Capital Requirements. You represent that your commitment to purchase the Securities will not result in a violation of the financial responsibility requirements of Rule 15c3-1 under the 1934 Act or of any similar provision of any applicable rules of any securities exchange to which you are subject or, if you are a financial institution subject to regulation by the Board of Governors of the U.S. Federal Reserve System, the U.S. Comptroller of the Currency, or the U.S. Federal Deposit Insurance Corporation, will not place you in violation of any applicable capital requirements or restrictions of such regulator or any other regulator to which you are subject.
10.5. FINRA Requirements. (A) You represent that you are a member in good standing of FINRA, or a non-U.S. bank, broker, dealer, or institution not eligible for membership in FINRA or a Bank.
(i) If you are a member of FINRA, you will comply with all applicable rules of FINRA in respect of any Offering of Securities, including, without limitation, the requirements of FINRA Rules 5110, 5121, 5130, 5131 and 5141 (to the extent any or all such rules are applicable to the particular Offering).
(ii) If you are a non-U.S. bank, broker, dealer, or other non-U.S. institution not eligible for membership in FINRA, you represent that you are not required to be registered as a broker or dealer under the 1934 Act and you will not make any offers or sales of the Securities in, or to nationals or residents of, the United States, its territories, or its possessions, except to the extent permitted by Rule 15a-6 under the 1934 Act (or any successor rule thereto adopted by the SEC). In making any offers or sales of the Securities, to the extent that you are acting as a “conduit” for, or are receiving in connection with such offers and sales any selling commissions, discounts, allowances or other compensation from, or are otherwise being directed with respect to allocations or disposition of the Securities by, a FINRA member, you also agree to comply with the requirements of FINRA Rule 5130 and FINRA Rule 5141 as though you are a member of FINRA.
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(iii) If you are a Bank, you agree that (a) to the extent you are acting, in respect of offers or sales of the Securities, as a “conduit” for, or are receiving in connection with such offers and sales any selling commissions, discounts, allowances or other compensation from, or are otherwise being directed with respect to allocations or disposition of the Securities by, a FINRA member, you will comply with FINRA Rules 5130 and 5141 as though you are a member of FINRA, and (b) you will not accept any portion of the management fee paid by the Underwriters with respect to any Offering or, in connection with any Offering of Securities that do not constitute “exempted securities” within the meaning of Section 3(a)(12) of the 1934 Act, or purchase any Securities at a discount from the offering price from any Underwriter or Dealer or otherwise accept any Fees and Commissions from any Underwriter or Dealer, which in any such case is not permitted under FINRA rules (including, without limitation, FINRA Rule 2040) or would subject you to registration and regulation as a “broker” or “dealer” under Section 3(a)(4) or 3(a)(5) of the 1934 Act.
(B) With respect to any Offering of Securities that constitutes a “new issue” under FINRA Rule 5131, you agree that, with respect to any Securities trading at a premium to the public offering price that are returned by a purchaser (the “Returned Securities”) to you after secondary market trading commences, you will promptly consult with the Manager or Co-Manager that has been appointed to manage the syndicate short position for that Offering (the “Designated Syndicate Agent”) to determine the appropriate treatment of the Returned Securities under FINRA Rule 5131(d)(3), and agree to (i) return the Returned Securities to the Designated Syndicate Agent if directed to do so by that entity, or (ii) if no such direction has been provided by the Designated Syndicate Agent, to comply with the provisions of FINRA Rule 5131(d)(3)(B) with respect to the disposition of the Returned Securities.
10.6. FATCA Certification. If you are a Foreign Financial Institution (“FFI”) as that term is defined pursuant to FATCA (as defined below) (including a U.S. branch of a non-U.S. bank), you represent that you are not, and have not been identified by the U.S. Internal Revenue Service (“IRS”) as, a nonparticipating FFI as that term is defined pursuant to FATCA. Unless otherwise agreed, promptly following your acceptance of an AAU for an Offering, but not later than such Offering’s Pricing Date, you will provide us such documents (including an IRS Form W-8BEN-E or an IRS Form W-8BEN if the instructions to the IRS Form W-8BEN-E have not been released) as may be necessary to confirm that no tax is required to be withheld under FATCA in respect of payments to you that we make or are deemed to make for U.S. federal income tax purposes. If we are required to make any deduction or withholding pursuant to or on account of FATCA in respect of payments to you that we make or are deemed to make for U.S. federal income tax purposes, and we do not so deduct or withhold and a liability resulting from such failure to withhold or deduct is assessed directly against us, then you will indemnify us therefor (without duplication of any applicable indemnification obligation, and without triggering any contribution obligation of any other Underwriter, with respect thereto under Article IX hereof) and promptly pay us the amount of such liability (including any related liability for interest and penalties). “FATCA” means sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986 (the “Code”), any current or future regulations or official interpretations thereof, any agreement entered into thereunder, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation thereof.
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10.7. Further State Notice. The Manager will file a Further State Notice with the Department of State of New York, if required.
10.8. Compliance with Rule 15c2-8. In the case of a Registered Offering and any other Offering to which the provisions of Rule 15c2-8 under the 1934 Act are made applicable pursuant to the AAU or otherwise, you will comply with such Rule in connection with the Offering. In the case of an Offering other than a Registered Offering, you will comply with applicable Federal and state laws and the applicable rules and regulations of any regulatory body promulgated thereunder governing the use and distribution of offering circulars by underwriters.
10.9. Discretionary Accounts. In the case of a Registered Offering of Securities issued by an Issuer that was not, immediately prior to the filing of the Registration Statement, subject to the requirements of Section 13(a) or 15(d) of the 1934 Act, you will not make sales to any account over which you exercise discretionary authority in connection with such sale, except as otherwise permitted by the applicable AAU for such Offering.
10.10. Offering Restrictions. You will not make any offers or sales of Securities or any Other Securities in jurisdictions outside the United States except under circumstances that will result in compliance with (i) applicable laws, including private placement requirements, in each such jurisdiction and (ii) the restrictions on offers or sales set forth in any AAU or the Prospectus, Preliminary Prospectus, Offering Circular, or Preliminary Offering Circular, as the case may be.
It is understood that, except as specified in the Prospectus or Offering Circular or applicable AAU, no action has been taken by the Manager, the Issuer, the Guarantor, or the Seller to permit you to offer Securities in any jurisdiction other than the United States, in the case of a Registered Offering, where action would be required for such purpose.
10.11. Representations, Warranties, and Agreements. You will make to each other Underwriter participating in an Offering the same representations, warranties, and agreements, if any, made by the Underwriters to the Issuer, the Guarantor, or the Seller in the applicable Underwriting Agreement or any Intersyndicate Agreement, and you authorize the Manager to make such representations, warranties, and agreements to the Issuer, the Guarantor, or the Seller on your behalf.
10.12. Limitation on the Authority of the Manager to Purchase and Sell Securities for the Account of Certain Underwriters. Notwithstanding any provision of this AAU authorizing the Manager to purchase or sell any Securities or Other Securities (including arranging for the sale of Contract Securities) or over-allot in arranging sales of Securities for the accounts of the several Underwriters, the Manager may not, in connection with the Offering of any Securities, make any such purchases, sales, and/or over-allotments for the account of any Underwriter that, not later than its acceptance of the Invitation Wire relating to such Offering, has advised the Manager that, due to its status as, or relationship to, a bank or bank holding company such purchases, sales, and/or over-allotments are prohibited by applicable law. If any Underwriter so advises the Manager, the Manager may allocate any such purchases, sales, and over-allotments (and the related expenses) which otherwise would have been allocated to your account based on your respective Underwriting Percentage to your account based on the ratio of your Original Underwriting Obligation to the Original Underwriting Obligations of all Underwriters other than the advising Underwriter or Underwriters, or in such other manner as the Manager will determine.
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10.13. Agreement Regarding Oral Due Diligence. By participating in an Offering, each Underwriter agrees that it, each of its affiliates participating in an Offering as Underwriter or financial intermediary and each controlling person of it and each such participating affiliate are bound by the Agreement Regarding Oral Due Diligence currently in effect between UBS Securities LLC and the accounting firm or firms that participate in oral due diligence in such offering.
XI. DEFAULTING UNDERWRITERS
11.1. Effect of Termination. If the Underwriting Agreement is terminated as permitted by the terms thereof, your obligations hereunder with respect to the Offering of the Securities will immediately terminate except: (a) as set forth in Section 9.8 hereof, (b) that you will remain liable for your Underwriting Percentage (or such other percentage as may be specified pursuant to Section 9.2 hereof) of all expenses, and for any purchases or sales which may have been made for your account pursuant to the provisions of Article V hereof or any Intersyndicate Agreement, and (c) that such termination will not affect any obligations of any defaulting or breaching Underwriter.
11.2. Sharing of Liability. If any Underwriter defaults in its obligations: (a) pursuant to Section 5.1, 5.2 or 5.4 hereof, (b) to pay amounts charged to its account pursuant to Section 7.1, 7.2, or 8.1 hereof, or (c) pursuant to Section 9.2, 9.3, 9.4, 9.5, 9.6, or 11.1 hereof, you will assume your proportionate share (determined on the basis of the respective Underwriting Percentages of the non-defaulting Underwriters) of such obligations, but no such assumption will relieve any defaulting Underwriter from liability to the non-defaulting Underwriters, the Issuer, the Guarantor, or the Seller for its default.
11.3. Arrangements for Purchases. The Manager is authorized to arrange for the purchase by others (including the Manager or any other Underwriter) of any Securities not purchased by any defaulting Underwriter in accordance with the terms of the applicable Underwriting Agreement or, if the applicable Underwriting Agreement does not provide arrangements for defaulting Underwriters, in the discretion of the Manager. If such arrangements are made, the respective amounts of Securities to be purchased by the remaining Underwriters and such other person or persons, if any, will be taken as the basis for all rights and obligations hereunder, but this will not relieve any defaulting Underwriter from liability for its default.
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XII. MISCELLANEOUS
12.1. Obligations Several. Nothing contained in this Master AAU or any AAU constitutes you partners with the Manager or with the other Underwriters, and the obligations of you and each of the other Underwriters are several and not joint. Each Underwriter elects to be excluded from the application of Subchapter K, Chapter 1, Subtitle A, of the Code. Each Underwriter authorizes the Manager, on behalf of such Underwriter, to execute such evidence of such election as may be required by the IRS.
12.2. Liability of Manager. The Manager will not be liable to you for any act or omission, except for obligations expressly assumed by the Manager in the applicable AAU.
12.3. Termination of Master AAU. This Master AAU may be terminated by either party hereto upon five business days’ written notice to the other party; provided, however, that with respect to any Offering for which an AAU was sent prior to such notice, this Master AAU as it applies to such Offering will remain in full force and effect and will terminate with respect to such Offering in accordance with Section 9.1 hereof.
12.4. Recognition of the U.S. Special Resolution Regimes.
(i) In the event that any party that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such party of this Master AAU and each AAU, and any interest and obligation in or under this Master AAU and each AAU, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Master AAU and each AAU, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(ii) In the event that any party that is a Covered Entity or a BHC Act Affiliate of such party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Master AAU or any AAU that may be exercised against such party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Master AAU and such AAU were governed by the laws of the United States or a state of the United States.
For purposes of this Section 12.4, a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k). “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
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12.5. Governing Law; Waiver of Jury Trial. This Master AAU and each AAU will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State, without giving effect to principles of conflicts of law. You hereby irrevocably: (a) submit to the jurisdiction of any court of the State of New York located in the City of New York or the U.S. District Court for the Southern District of the State of New York for the purpose of any suit, action, or other proceeding arising out of this Master AAU, or any of the agreements or transactions contemplated hereby (each, a “Proceeding”), (b) agree that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waive, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agree not to commence any Proceeding other than in such courts, and (e) waive, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. Each party hereto irrevocably waives any right that it may have to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Master AAU and each AAU or the transactions contemplated thereby.
12.6. Amendments. This Master AAU may be amended from time to time by consent of the parties hereto. Your consent will be deemed to have been given to an amendment to this Master AAU, and such amendment will be effective, five business days following written notice to you of such amendment if you do not notify us In Writing prior to the close of business on such fifth business day that you do not consent to such amendment. Upon effectiveness, the provisions of this Master AAU as so amended will apply to each AAU thereafter entered into, except as otherwise specifically provided in any such AAU.
12.7. Notices. Any notice to any Underwriter will be deemed to have been duly given if mailed, sent by wire, telecopy or electronic transmission or other written communication, or delivered in person to such Underwriter at the address set forth in its Underwriters’ Questionnaire, or if no address is provided in an Underwriters’ Questionnaire, then at the address set forth in reports filed by such Underwriter with FINRA. Any such notice will take effect upon receipt thereof.
12.8. Severability. In case any provision in this Master AAU is deemed invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions will not in any way be affected or impaired thereby.
12.9. Counterparts; Electronic Signatures. This Master AAU may be executed in any number of counterparts, each of which will be deemed to be an original, and all of which taken together constitute one and the same instrument. Electronic signatures complying with the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable law will be deemed original signatures for purposes of this Master AAU. Transmission by telecopy, electronic mail or other transmission method of an executed counterpart of this Master AAU will constitute due and sufficient delivery of such counterpart.
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Please confirm your acceptance of this Master AAU by signing and returning to us the enclosed duplicate copy hereof.
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| UBS SECURITIES LLC | |||
| By: | |||
| Name: | |||
| Title: | |||
| (Authorized Officer) | |||
| By: | |||
| Name: | |||
| Title: | |||
| (Authorized Officer) | |||
Confirmed and accepted as of _____, 20__
| (Legal Name of Underwriter) | |
| (Address) |
| By: | ||
| Name: | ||
| Title: | ||
| (Authorized Officer) |
(If person signing is not an officer or a partner, please attach instrument of authorization)
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GUIDE TO DEFINED TERMS
| Term | Section Reference | |
| 1933 Act | 1.1 | |
| 1934 Act | 3.5 | |
| AAU | Foreword | |
| ABS Underwriter Derived Information | 2.1 | |
| Action | 9.3 | |
| Additional Securities | 1.1 | |
| Bank | 3.5 | |
| Code | 10.6 | |
| Co-Managers | 1.1 | |
| Commission | 2.1 | |
| Contract Securities | 3.1 | |
| Contributing Underwriters | 9.5 | |
| Dealer | 3.5 | |
| Designated Syndicate Agent | 10.5 | |
| DTC | 5.2 | |
| FATCA | 10.6 | |
| Fees and Commissions | 1.1 | |
| FFI | 10.6 | |
| FINRA | 3.1 | |
| Firm Securities | 1.1 | |
| Free Writing Prospectus | 2.1 | |
| Guarantor | 1.1 | |
| In Writing | 1.2 | |
| Indemnified Party | 9.4 | |
| Indenture | 1.1 | |
| International Offering | 1.1 | |
| Intersyndicate Agreement | 2.3 | |
| Invitation Wire | Foreword | |
| IRS | 10.6 | |
| Issuer | 1.1 | |
| Issuer Free Writing Prospectus | 3.3 | |
| Issuer Information | 3.3 | |
| Judgment Credit | 9.7 | |
| Litigation | 9.4 | |
| Losses | 9.4 | |
| Manager | 1.1 | |
| Manager-Approved Communication | 3.3 | |
| Master AAU | Foreword | |
| Offering | Foreword | |
| Offering Circular | 2.2 | |
| Offering Date | 3.2 | |
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| Offering Price | 1.1 | |
| Original Underwriting Obligation | 1.1 | |
| Preliminary Offering Circular | 2.2 | |
| Preliminary Prospectus | 2.1 | |
| Pricing Date | 1.1 | |
| Proceeding | 12.4 | |
| Prospectus | 2.1 | |
| Purchase Price | 1.1 | |
| QIU | 9.4 | |
| Reallowance | 1.1 | |
| Registered Offering | 2.1 | |
| Registration Statement | 2.1 | |
| Regulation M | 5.1 | |
| Representative | 1.1 | |
| Returned Securities | 10.5 | |
| Securities | 1.1 | |
| Securities Offering Reform Release | 2.1 | |
| Seller | 1.1 | |
| Selling Concession | 1.1 | |
| Settlement Date | 1.1 | |
| Supplemental Materials | 3.3 | |
| Syndicate Counsel | 9.6 | |
| Trustee | 1.1 | |
| Underwriter Free Writing Prospectus | 3.3 | |
| Underwriters | 1.1 | |
| Underwriters’ Securities | 3.1 | |
| Underwriting Agreement | 1.1 | |
| Underwriting Percentage | 1.1 | |
| Wire | Foreword | |
| Written Research Report | 9.4 | |
| Written Testing-the-Waters Communication | 3.3 |
EXHIBIT A
UNDERWRITERS’ QUESTIONNAIRE
In connection with each Offering governed by the UBS Securities LLC Master Agreement Among Underwriters dated December 2, 2020, except as otherwise indicated in a timely acceptance of the Invitation Wire pursuant to Section 1.2 of the Master Agreement Among Underwriters (“Master AAU”) or already expressly disclosed in the Preliminary Prospectus or Preliminary Offering Circular, as the case may be, each Underwriter participating in such Offering severally advises the Issuer and the other participating Underwriters (all capitalized terms used herein and not otherwise defined herein will have the meanings given to them in the Master AAU) as follows:
(a) neither such Underwriter nor any of its directors, officers, or partners have a material relationship, as “material” is defined in Regulation C under the 1933 Act, with the Issuer, the Guarantor, or the Seller;
(b) if the Registration Statement is on Form S-1, neither such Underwriter nor any “group” (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) of which such Underwriter is aware is the beneficial (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) owner of more than 5% of any class of voting securities of the Issuer or Guarantor, nor does such Underwriter have any knowledge that more than 5% of any class of voting securities of the Issuer or the Guarantor is held or to be held subject to any voting trust or other similar agreement, nor does such Underwriter have any knowledge that more than 5% of any class of voting securities of the Issuer or the Guarantor is held or to be held subject to any voting trust or other similar agreement;
(c) other than as may be stated in the UBS Securities LLC Master Agreement Among Underwriters dated December 4, 2019, the applicable AAU, the Intersyndicate Agreement or dealer agreement, if any, the Prospectus, the Registration Statement, or the Offering Circular, such Underwriter does not know and has no reason to believe that there is an intention to over-allot or that the price of any security may be stabilized to facilitate the offering of the Securities;
(d) other than as stated in the Invitation Wire, such Underwriter does not know of (i) any other discounts or commissions to be allowed or paid to the Underwriters or of any other items that would be deemed by the Financial Industry Regulatory Authority, Inc. (“FINRA”) to constitute underwriting compensation for purposes of FINRA Rule 5110, or (i) any discounts or commissions to be allowed or paid to dealers, including all cash, securities, contracts, or other consideration to be received by any dealer in connection with the sale of the Securities;
(e) such Underwriter has not prepared any report or memorandum for external use in connection with the Offering;
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(f) if the offer and sale of the Securities are to be registered under the 1933 Act pursuant to a Registration Statement on Form S-1 or Form F-1, such Underwriter has not within the past 12 months prepared or had prepared for such Underwriter any engineering, management, or similar report or memorandum relating to broad aspects of the business, operations, or products of the Issuer or the Guarantor. The immediately preceding sentence does not apply to reports solely comprised of recommendations to buy, sell, or hold the Issuer’s or the Guarantor’s securities, unless such recommendations have changed within the past six months, or to information already contained in documents filed with the Commission;
(g) in the case of Registered Offerings and Offerings of Securities exempt under Section 3 of the 1933 Act, such Underwriter does not have a “conflict of interest” with the Issuer or the Guarantor under FINRA Rule 5121. In that regard, such Underwriter specifically confirms that, at the time of such Underwriter's participation in the subject Offering, (A) such Underwriter is not issuing the Securities in such Offering; (B) neither the Issuer nor the Guarantor controls, is controlled by or is under common control (as the term “control” is defined in FINRA Rule 5121(f)(6)) with such Underwriter or such Underwriter's “associated persons” (as such term is defined by FINRA); (C) less than five percent of the net proceeds of the Offering, not including Fees and Commissions, are intended to be: (i) used to reduce or retire the balance of a loan or credit facility extended by such Underwriter, its “affiliates” and its “associated persons” (as such terms are defined by FINRA), in the aggregate; or (ii) otherwise directed to such Underwriter, its affiliates and associated persons, in the aggregate, and (D) as a result of such Offering and any transactions contemplated at the time of such Offering: (i) such Underwriter will not become an affiliate of the Issuer or Guarantor; (ii) such Underwriter will not become publicly owned; and (iii) the Issuer or Guarantor will not become a FINRA member or form a broker-dealer subsidiary. Furthermore, such Underwriter specifically confirms that such Underwriter does not, (a) beneficially own 10% or more of the Issuer's or Guarantor's outstanding “common equity”, “preferred equity” or “subordinated debt” (as each such term is defined in FINRA Rule 5121), including the right to receive such securities or subordinated debt within 60 days of such Underwriter's participation in the Offering; (b) in the case of an Issuer or Guarantor which is a partnership, beneficially own a general, limited or special partnership interest in 10% or more of the Issuer's or Guarantor's distributable profits or losses, or a right to receive an interest in such distributable profits or losses within 60 days of such Underwriter's participation in the Offering; or (c) have the power to direct or cause the direction of the management or policies of the Issuer or the Guarantor;
(h) other than as stated in the Invitation Wire, in the case of Registered Offerings and Offerings of Securities exempt under Section 3 of the 1933 Act, neither such Underwriter nor any of its directors, officers, partners, or “persons associated with” such Underwriter (as defined by FINRA) nor, to such Underwriter’s knowledge, any “related person” (defined by FINRA to include counsel, financial consultants and advisors, finders, members of the selling or distribution group, any FINRA member participating in the offering, and any other persons associated with or related to and members of the immediate family of any of the foregoing) or any other broker-dealer: (A) within the last six months have purchased in private transactions, or intend before, at, or within six months after the commencement of the public offering of the Securities to purchase in private transactions, any securities of the Issuer, the Guarantor, or any Issuer Related Party (as hereinafter defined), (B) within the last 6 months have had any dealings with the Issuer, the Guarantor, any Seller, or any subsidiary or controlling person thereof (other than relating to the proposed Underwriting Agreement) as to which documents or information are required to be filed with FINRA, or (C) during the 6 months immediately preceding the filing of the Registration Statement (or, if there is none, the Offering Circular), have entered into any arrangement which provided or provides for the receipt of any item of value (including, but not limited to, cash payments, expense reimbursements and rights of first refusal to participate in a future public offering, private placement or other financing transaction) and/or the transfer of any warrants, options, or other securities from the Issuer, the Guarantor, or any Issuer Related Party to you or any related person;
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(i) in the case of Registered Offerings and Offerings of Securities exempt under Section 3 of the 1933 Act, there is no association or affiliation between such Underwriter and; (A) any officer or director of the Issuer, the Guarantor or, any Issuer Related Party, or (B) any securityholder of 5% or more (or, in the case of an initial public offering of equity securities, any securityholder) of any class of securities of the Issuer, the Guarantor, or an Issuer Related Party; it being understood that for purposes of paragraph (i) above and this paragraph (j), the term “Issuer Related Party” includes any Seller, any affiliate of the Issuer, the Guarantor, or a Seller, and the officers or general partners, directors, employees, and securityholders thereof;
(j) in the case of Registered Offerings and Offerings of Securities exempt under Section 3 of the 1933 Act, and if the Securities are not issued by a real estate investment trust, no portion of the net offering proceeds from the sale of the Securities will be paid to such Underwriter or any of its affiliates or “persons associated with” such Underwriter (as defined by FINRA) or members of the immediate family of any such person; and
(k) in the case of Securities which are debt securities whose offer and sale is to be registered under the 1933 Act, such Underwriter is not an affiliate (as defined in Rule 0-2 under the Trust Indenture Act of 1939) of the Trustee for the Securities or of its parent, if any. Neither the Trustee nor its parent, if any, nor any of their directors or executive officers is a “director, officer, partner, employee, appointee, or representative” of such Underwriter (as those terms are defined in the Trust Indenture Act of 1939 or in the relevant instructions to Form T-1). Such Underwriter and its directors, partners, and executive officers, taken as a group, did not on the date specified in the Invitation, and do not, own beneficially 1% or more of the shares of any class of voting securities of the Trustee or of its parent, if any. If such Underwriter is a corporation, it does not have outstanding and has not assumed or guaranteed any securities issued otherwise than in its present corporate name.
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If an Underwriter notes an exception with respect to material of the type referred to in clauses (e) and (f), such underwriter will send three copies of each item of such material, together with a statement as to distribution, identifying classes of recipients and the number of copies distributed to each such class, and, if relevant, the number of equity securities or the face value of debt securities owned by such person, the date such securities were acquired, and the price paid for such securities to UBS Securities LLC, 1285 Avenue of the Americas, New York, New York 10019, Attention: Syndicate Department.
UBS SECURITIES LLC
MASTER SELECTED DEALERS AGREEMENT
REGISTERED SEC OFFERINGS
AND
EXEMPT OFFERINGS
(OTHER THAN OFFERINGS OF MUNICIPAL
SECURITIES)
December 4, 2019
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This Master Selected Dealers Agreement (this “Master SDA”), dated as of December 4, 2019, is by and between UBS Securities LLC (including its successors and assigns) (“we,” “our,” “us” or the “Manager”) and the party named on the signature page hereof (a “Dealer,” “you” or “your”). From time to time, in connection with an offering and sale (an “Offering”) of securities (the “Securities”), managed solely by us or with one or more other managers or co-managers, we or one or more of our affiliates may offer you (and others) the opportunity to purchase as principal a portion of such securities on the terms set forth herein as a Selected Dealer (as defined below).
References herein to laws, statutory and regulatory sections, rules, regulations, forms and interpretive materials are deemed to include successor provisions. The following provisions of this Master SDA shall apply separately to each individual Offering of Securities. You and we further agree as follows:
1. Applicability of this Master SDA. The terms and conditions of this Master SDA will be applicable to any Offering in which you accept an offer to participate as a Selected Dealer (including through the receipt by you of Securities), whether pursuant to a registration statement filed under the Securities Act of 1933, as amended (the “1933 Act”), or exempt from registration thereunder, in respect of which we (acting for our own account or for the account of any underwriting or similar group or syndicate) are responsible for managing or otherwise implementing the sale of Securities to Selected Dealers. A Dealer is a person who meets the requirements of Section 11 hereof. The parties who agree to participate (including by the receipt by such parties of Securities) or are designated a selling concession to Dealers (the “Selling Concession”), and reallowance, if any (the “Reallowance”), in such Offering as selected Dealers are hereinafter referred to as “Selected Dealers”. In the case of any Offering where we are acting for the account of the several underwriters, initial purchasers or others acting in a similar capacity (the “Underwriters”), the terms and conditions of this Master SDA will be for the benefit of such Underwriters, including, in the case of any Offering where we are acting with others as representatives of Underwriters, such other representatives.
2. Terms of the Offering. We may advise you orally or by one or more wires, telexes, telecopy or electronic data transmissions, or other written communications (each, a “Wire”) of the particular method and supplementary terms and conditions of any Offering (including the price or prices at which the Securities initially will be offered by the several Underwriters, or if the price is to be determined by a formula based on market price, the terms of the formula, (the “Offering Price”) and any Selling Concession or, if applicable, Reallowance) in which you are invited to participate. Any such Wire may also amend or modify such provisions of this Master SDA in respect of the Offering to which such Wire relates, and may contain such supplementary provisions as may be specified in any Wire relating to an Offering. To the extent such supplementary terms and conditions are inconsistent with any provision herein, such supplementary terms and conditions shall supersede any provision of this Master SDA. Unless otherwise indicated in any such Wire, acceptances and other communications by you with respect to an Offering should be sent pursuant to the terms of Section 20 hereof. Notwithstanding that we may not have sent you a Wire or other form of invitation to participate in such Offering or that you may not otherwise have responded by wire or other written communication (any such communication being deemed “In Writing”) to any such Wire or other form of invitation, you will be deemed to have accepted the terms of our offer to participate as a Selected Dealer and of this Master SDA (as amended, modified or supplemented by any Wire) by your purchase of Securities or otherwise receiving and retaining an economic benefit for participating in the Offering as a Selected Dealer. We reserve the right to reject any acceptance in whole or in part.
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Any Offering will be subject to delivery of the Securities and their acceptance by us and any other Underwriters may be subject to the approval of all legal matters by counsel and may be subject to the satisfaction of other conditions. Any application for additional Securities will be subject to rejection in whole or in part.
3. Offering Documents. Upon your request, we will furnish, make available to you or make arrangements for you to obtain copies (which may, to the extent permitted by law, be in electronic form) of each prospectus, prospectus supplement, offering memorandum, offering circular or similar offering document, and any preliminary version thereof, as soon as reasonably practicable after sufficient quantities thereof have been made available by the issuer of the Securities (each, an “Issuer”) and any guarantor (each, a “Guarantor”) thereof, and, if different from the Issuer, the seller or sellers (each, a “Seller”) of the Securities. You agree that you will comply with the applicable United States federal and state laws, and the applicable rules and regulations of any regulatory body promulgated thereunder, and the applicable laws, rules and regulations of any non-United States jurisdiction, governing the use and distribution of offering materials by brokers and dealers. You represent and warrant that you are familiar with Rule l5c2-8 under the Securities Exchange Act of 1934, as amended (the “1934 Act”), relating to the distribution of preliminary and final prospectuses and agree that your purchase of Securities shall constitute your confirmation that you have delivered and will deliver all preliminary prospectuses and final prospectuses required for compliance therewith. You agree to make a record of your distribution of each preliminary prospectus and, when furnished with copies of any revised preliminary prospectus or final prospectus, you will, upon our request, promptly forward copies thereof to each person to whom you have theretofore distributed a preliminary prospectus. You agree that, in purchasing Securities, you will rely upon no statement whatsoever, written or oral, other than the statements in the final prospectus, offering memorandum, offering circular or similar offering document delivered to you by us. You are not authorized by the Issuer or other Seller of Securities offered pursuant to a final prospectus, offering memorandum, offering circular or similar offering document or by any Underwriters to give any information or to make any representation not contained therein in connection with the sale of such Securities.
4. Offering of Securities.
(a) In respect of any Offering, we will inform you of any Selling Concession and Reallowance, if any. The Offering of Securities is made subject to the conditions referred to in the prospectus, offering memorandum, or offering circular or similar offering document related to the Offering and to the terms and conditions set forth in any Wire. After the initial Offering has commenced, we may change the Offering Price, the Selling Concession and the Reallowance (if any) to Selected Dealers. If a Reallowance is in effect, a reallowance from the Offering Price not in excess of such Reallowance may be allowed (i) in the case of Offerings of Securities that are not exempted securities (as defined in Section 3(a)(12) of the 1934 Act), as consideration for services rendered in distribution to Dealers who are either members in good standing of the Financial Industry Regulatory Authority, Inc. (“FINRA”) who agree to abide by the applicable rules of FINRA or non-U.S. banks, brokers, dealers or other non-U.S. institutions not eligible for membership in FINRA who represent to you that they will promptly reoffer such Securities at the Offering Price and will abide by the conditions with respect to non-U.S. banks, dealers and other non-U.S. institutions set forth in Section 11 hereof, or (ii) in the case of Offerings of Securities that are exempted securities (as defined in Section 3(a)(12) of the 1934 Act), as consideration for services rendered in distribution not only to Dealers identified in the immediately preceding clause but also to Dealers that are Banks (as defined in Section 11 hereof) and represent to you that they will promptly reoffer such Securities at the Offering Price and will abide by the conditions with respect to Banks set forth in Section 11 hereof.
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(b) No expenses will be charged to Selected Dealers. A single transfer tax upon the sale of the Securities by the respective Underwriters to you will be paid by such Underwriters when such Securities are delivered to you. However, you shall pay any transfer tax on sales of Securities by you and you shall pay your proportionate share of any transfer tax or other tax (other than the single transfer tax described above) in the event that any such tax shall from time to time be assessed against you and other Selected Dealers as a group or otherwise.
5. Payment and Delivery. You will deliver to us, on the date and at the place and time specified by us orally or In Writing, payment in the manner and type of currency specified by us orally or In Writing, payable to the order of UBS Securities LLC (or as we may subsequently inform you), for an amount equal to the Offering Price plus (if not included in the Offering Price) accrued interest, amortization of original issue discount or dividends, if any, specified in the prospectus or offering circular or other similar offering document furnished in connection with the Offering of the Securities. We may, in our sole discretion, retain the applicable Selling Concession in respect of the Securities to be purchased by you for release at a date specified by us. We will make payment to the Issuer or Seller against delivery to us for your account of the Securities to be purchased by you, and we will deliver to you the Securities paid for by you which will have been retained by or released to you for direct sale. If we determine that transactions in the Securities are to be settled through The Depository Trust Company (“DTC”) or another clearinghouse facility and payment in the settlement currency is supported by such facility, payment for and delivery of Securities purchased by you will be made through such facility, if you are a participant, or, if you are not a participant, settlement will be made through your ordinary correspondent who is a participant.
6. Over-allotment; Stabilization; Unsold Allotments; Penalty Bids. We may, with respect to any Offering, be authorized to over-allot in arranging sales to Selected Dealers, to purchase and sell Securities for long or short account and to stabilize or maintain the market price of the Securities. You agree that upon our request at any time and from time to time prior to the termination of the provisions of Section 4 hereof with respect to any Offering, you will report to us the amount of Securities purchased by you pursuant to such Offering which then remain unsold by you and will, upon our request at any such time, sell to us for our account or the account of one or more Underwriters such amount of such unsold Securities as we may designate at the Offering Price less an amount to be determined by us not in excess of the Selling Concession. Prior to the termination of the Manager’s authority to cover any short position in connection with the Offering or such other date as the Manager may specify by Wire, if the Manager determines pursuant to the “Initial Public Offering Tracking System” of DTC that the Manager has purchased, or any of your customers have sold, a number or amount of Securities retained by, or released to, you for direct sale or any Securities sold pursuant to Section 4 hereof for which you received a portion of the Selling Concession, or any Securities which may have been issued on transfer or in exchange for such Securities, which Securities were therefore not effectively placed for investment, then you authorize the Manager to charge your account with an amount equal to such portion of the Selling Concession received by you with respect to such Securities at a price equal to the total cost of such purchase, including transfer taxes, accrued interest, dividends, and commissions, if any.
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7. Termination.
(a) The terms and conditions set forth in (i) Section 4, (ii) the second sentence of Section 6, (iii) Section 16 and (iv) Section 17 of this Master SDA (collectively, the “offering provisions”) will terminate with respect to each Offering pursuant to this Master SDA at the close of business on the later of (a) the date on which the Underwriters pay the Issuer or Seller for the Securities, and (b) 45 calendar days after the applicable Offering date, unless in either such case the effectiveness of such offering provisions is extended or sooner terminated as hereinafter provided. We may terminate such offering provisions other than Section 6 at any time by notice to you to the effect that the offering provisions are terminated and we may terminate the provisions of Section 6 at any time at or subsequent to the termination of the other offering provisions by notice to you to the effect that the penalty bid provisions are terminated. All other provisions of the Master SDA shall remain operative and in full force and effect with respect to such Offering.
(b) This Master SDA may be terminated by either party hereto upon five business days’ written notice to the other party; provided, however, that with respect to any particular Offering, if we receive any such notice from you after we have advised you of the amount of Securities allotted to you, this Master SDA shall remain in full force and effect as to such Offering and shall terminate with respect to such Offering and all previous Offerings only in accordance with and to the extent provided in subsection (a) of this Section 7.
8. Recognition of the U.S. Special Resolution Regimes. Notwithstanding anything to the contrary in this Master SDA:
(a) In the event that any party that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such party of this Master SDA, and any interest and obligation in or under this Master SDA, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Master SDA, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that any party that is a Covered Entity or a BHC Act Affiliate of such party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Master SDA that may be exercised against such party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Master SDA were governed by the laws of the United States or a state of the United States.
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For purposes of this Section 8, a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k). “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. § § 252.81, 47.2 or 382.1, as applicable. “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
9. Amendments. This Master SDA may be amended from time to time by consent of the parties hereto. Your consent will be deemed to have been given to an amendment to this Master SDA, and such amendment will be effective, five business days following written notice to you of such amendment if you do not notify us In Writing prior to the close of business on such fifth business day that you do not consent to such amendment. Notwithstanding the foregoing, you agree that any amendment, supplement or modification of the terms of this Master SDA by Wire or otherwise In Writing will be effective immediately and your consent will be deemed to have been given to any such amendment, supplement or modification by your purchase of Securities or otherwise receiving and retaining an economic benefit for participating in the Offering as a Selected Dealer; provided that such amendment, supplement or modification of the terms of this Master SDA shall only be effective with respect to the related Offering.
10. Relationship Among Underwriters and Selected Dealers. We shall have full authority to take such actions as we deem advisable in all matters pertaining to any Offering under this Master SDA. You are not authorized to act as an agent for us, any Underwriter or the Issuer or other Seller of any Securities in offering Securities to the public or otherwise. Neither we nor any Underwriter will be under any obligation to you except for obligations assumed hereby or in any Wire from us in connection with any Offering, and no obligations on our part as the Manager will be implied hereby or inferred herefrom. Nothing contained in this Master SDA or any Wire shall constitute the Selected Dealers an association or partners with us or any Underwriter or with one another, and the obligations of you and each of the other Selected Dealers or any of the Underwriters are several and not joint. If the Selected Dealers, among themselves, with us or with the Underwriters, should be deemed to constitute a partnership for federal income tax purposes, then you elect to be excluded from the application of Subchapter K, Chapter 1, Subtitle A of the Internal Revenue Code of 1986 and agree not to take any position inconsistent with such election. You authorize the Manager, in its discretion, to execute on your behalf such evidence of such election as may be required by the U.S. Internal Revenue Service. In connection with any Offering, you will be liable for your proportionate share of the amount of any tax, claim, demand or liability that may be asserted against you alone or against one or more Selected Dealers participating in such Offering, or against us or the Underwriters, based upon the claim that the Selected Dealers, or any of them, constitute an association, an unincorporated business or other entity, including, in each case, your proportionate share of the amount of any expense (including attorneys' fees and expenses) incurred in defending against any such tax, claim, demand or liability.
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11. FINRA Compliance. You represent and warrant that you are (a) a broker or dealer (as defined in Section 3(a)(4) or 3(a)(5) of the 1934 Act) that is a member in good standing of FINRA, (b) a non-U.S. bank, broker, dealer or other non-U.S. institution that is not eligible for membership in FINRA and is not required to be registered as a broker or dealer under the 1934 Act (a “non-member non-U.S. dealer”), or (c) only in the case of Offerings of Securities that are exempted securities (as defined in Section 3(a)(12) of the 1934 Act), and such other Securities as from time to time may be sold by a “bank” (as defined in Section 3(a)(6) of the 1934 Act (a “Bank”)), that you are a Bank that is acting in connection with the Offering in accordance with an applicable exception or exemption from the definitions of broker and dealer under Sections 3(a)(4) and 3(a)(5) of the 1934 Act.
You further represent, warrant and agree that, in connection with any purchase or sale of the Securities wherein a selling concession, discount or other allowance is received or granted by or to you:
(i) if you are a member of FINRA, you will comply with all applicable rules of FINRA, including, without limitation, the requirements of FINRA Rules 5110, 5121, 5130, 5131 and 5141 (to the extent any or all such rules are applicable to the particular Offering);
(ii) if you are a non-member non-U.S. dealer, (x) you will not make any offers or sales of the Securities in, or to nationals or residents of, the United States, its territories, or its possessions, except to the extent permitted by Rule 15a-6 under the 1934 Act (or any successor rule thereto adopted by the U.S. Securities and Exchange Commission (the “SEC”)), (y) in making any offers or sales of the Securities, to the extent that you are acting as a “conduit” for, or are receiving in connection with such offers and sales any selling commissions, discounts, allowances or other compensation from, or are otherwise being directed with respect to allocations or disposition of the Securities by, a FINRA member, you will comply with the requirements of FINRA Rule 5130 and FINRA Rule 5141 as though you are a member of FINRA, and (z) you are, and will remain at all relevant times, an appropriately registered or licensed broker or dealer (to the extent required) in your home jurisdiction and in any non-U.S. jurisdiction in which you engage in activities in connection with an Offering;
(iii) if you are a Bank, (x) to the extent you are acting, in respect of offers or sales of the Securities, as a “conduit” for, or are receiving in connection with such offers and sales any selling commissions, discounts, allowances or other compensation from, or are otherwise being directed with respect to allocations or disposition of the Securities by, a FINRA member, you will comply with FINRA Rules 5130 and 5141 as though you are a member of FINRA, and (y) you will not accept any fee or other compensation, or purchase any Securities at a discount from the offering price from any Underwriter or Dealer, which would not be permitted under applicable FINRA rules (including, without limitation, FINRA Rule 2040) or would subject you to registration and regulation as a “broker” or “dealer” under Section 3(a)(4) or 3(a)(5) of the 1934 Act;
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(iv) in respect of each Offering in which you participate (as indicated by your participation therein), you have provided to us all documents and other information required to be filed with respect to you, any related person or any person associated with you or any such related person pursuant to FINRA’s requirements and related interpretations with respect to review of corporate financing transactions as such requirements and interpretations relate to such Offering; and
(v) you are fully familiar with the 1933 Act, 1934 Act and FINRA provisions referenced in this Section 11 and elsewhere in this Master SDA.
12. Blue Sky Matters. Upon application to us, we shall inform you as to any advice we have received from counsel concerning the jurisdictions in which Securities have been qualified for sale or are exempt under the securities or “Blue Sky” laws of such jurisdictions, but we do not assume any obligation or responsibility as to your right to sell Securities in any such jurisdiction, notwithstanding any information we may furnish to you in that connection.
13. Governing Law; Submission to Jurisdiction. This Master SDA (as it may be modified or supplemented by any Wire) will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State. You hereby irrevocably: (a) submit to the jurisdiction of any court of the State of New York located in the City of New York or the U.S. District Court for the Southern District of the State of New York for the purpose of any suit, action, or other proceeding arising out of this Master SDA, or any of the agreements or transactions contemplated hereby (each, a “Proceeding”), (b) agree that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waive, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agree not to commence any Proceeding other than in such courts, and (e) waive, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum.
14. Successors and Assigns. This Master SDA will be binding on, and inure to the benefit of, the parties hereto and other persons specified in Section 1 hereof, and the respective successors and assigns of each of them; provided, however, that you may not assign your rights or delegate any of your duties under this Master SDA without our prior written consent.
15. Compliance with Law. You agree that in selling Securities pursuant to any Offering (which agreement shall also be for the benefit of the Issuer or other Seller of such Securities) you will comply with all applicable rules and regulations, including the applicable provisions of the 1933 Act and the 1934 Act, the applicable rules and regulations of the SEC thereunder, the applicable rules and regulations of FINRA, the applicable rules and regulations of any securities exchange or other regulatory or self-regulatory organization having jurisdiction over the Offering and the applicable laws, rules and regulations specified in Section 17 hereof.
16. Discretionary Accounts. In the case of an Offering of Securities registered under the 1933 Act by an Issuer that was not, immediately prior to the filing of the related registration statement, subject to the requirements of Section 13(a) or 15(d) of the 1934 Act, you will not make sales to any account over which you exercise discretionary authority in connection with such sale, except as otherwise permitted by us for such Offering In Writing.
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17. Offering Restrictions. You will not make any offers or sales of Securities or any other securities in jurisdictions outside the United States except under circumstances that will result in compliance with (a) applicable laws, including private placement requirements, in each such jurisdiction and (b) the restrictions on offers or sales set forth in this Master SDA, any Wire or the prospectus, preliminary prospectus, offering memorandum, offering circular, or preliminary offering memorandum or preliminary offering circular or other similar offering document, as the case may be. It is understood that, except as specified in this Master SDA, the prospectus, offering memorandum or offering circular or other similar offering document, or applicable Wire, no action has been taken by us, the Issuer, the Guarantor, the Seller or any other party to permit you to offer Securities in any jurisdiction other than the United States, in the case of a Registered Offering, where action would be required for such purpose.
18. Prohibition on Money Laundering. The operations of your business and your subsidiaries are and, to your knowledge, have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving you or any of your subsidiaries with respect to the Money Laundering Laws is pending or, to your knowledge, threatened.
19. Liability of Manager. The Manager will not be liable to you for any act or omission, except for obligations expressly assumed by the Manager In Writing.
20. Notices. Any notice to you will be deemed to have been duly given if mailed, sent by Wire, or delivered in person to you at the address set forth on the signature page hereto (or to such other address, telephone, telecopy or telex as you will be notified by us), or if such address is no longer valid, then at the address set forth in reports filed by you with FINRA. Any such notice will take effect upon receipt thereof. Communications by Wire will be deemed to be “written” communications and made In Writing.
21. Severability. In case any provision in this Master SDA or any Wire is deemed invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions will not in any way be affected or impaired thereby.
22. Counterparts. This Master SDA may be executed in any number of counterparts, each of which will be deemed to be an original, and all of which taken together constitute one and the same instrument. Transmission by telecopy of an executed counterpart of this Master SDA will constitute due and sufficient delivery of such counterpart.
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Please confirm by signing and returning to us the enclosed copy of this Master SDA that your subscription to, or your acceptance of any reservation of, any Securities pursuant to an Offering shall constitute (a) acceptance of and agreement to the terms and conditions of this Master SDA (as supplemented and amended pursuant to Section 9 hereof) together with and subject to any supplementary terms and conditions contained in any Wire from us in connection with such Offering, all of which shall constitute a binding agreement between you and us individually or as representative of any Underwriters, (b) confirmation that your representations and warranties set forth herein are true and correct at that time, (c) confirmation that your agreements herein have been and will be fully performed by you to the extent and at the times required thereby and (d) in the case of any Offering described in Section 3 hereof, acknowledgment that you have requested and received from us sufficient copies of the final prospectus, offering memorandum or offering circular, as the case may be, with respect to such Offering in order to comply with your undertakings in Section 17 hereof.
(Remainder of page intentionally left blank)
(Signature page follows)
This Master SDA is dated as of December 4, 2019 and executed by and between UBS Securities LLC and .
| Very truly yours, | ||||
| UBS SECURITIES LLC | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Confirmed as of (date):
CONFIRMED: _____, 20__
| By: | |||
| Name: | |||
| Title: | |||
| Address: | |||
| Telephone: | |||
| Facsimile: | |||
| Email: | |||
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Master Selected Dealers Agreement
GUIDE TO DEFINED TERMS
| Term | Section Reference | |
| 1933 Act | 1 | |
| 1934 Act | 3 | |
| Bank | 11 | |
| Dealer | Foreword | |
| DTC | 5 | |
| FINRA | 4(a) | |
| Guarantor | 3 | |
| In Writing | 2 | |
| Issuer | 3 | |
| Manager | Foreword | |
| Master SDA | Foreword | |
| Money Laundering Laws | 18 | |
| non-member non-U.S. dealer | 11 | |
| Offering | Foreword | |
| Offering Price | 2 | |
| offering provisions | 7(a) | |
| Proceeding | 13 | |
| Reallowance | 1 | |
| SEC | 6 | |
| Securities | 1 | |
| Selected Dealers | 1 | |
| Seller | 3 | |
| Selling Concession | 1 | |
| Underwriters | 1 | |
| Wire | 2 | |
ADOPTION AGREEMENT
This Adoption Agreement, dated as of November 17, 2021 (this “Adoption Agreement”), by and among DST SYSTEMS, INC. a Delaware corporation with principal place of business at 1055 Broadway, Kansas City, Missouri 64105 (“DST”) , and RIVERNORTH MANAGED DURATION MUNICIPAL INCOME FUND, INC., a Maryland corporation (“RMI”), RIVERNORTH OPPORTUNISTIC MUNICIPAL INCOME FUND, INC., a Maryland corporation (“RMM”), RIVERNORTH/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC., a Maryland company (“OPP”), RIVERNORTH FLEXIBLE MUNICIPAL INCOME FUND, INC., a Maryland corporation (“RFM”), RIVERNORTH FLEXIBLE MUNICIPAL INCOME FUND II, INC., a Maryland corporation (“RFMZ”), and RIVERNORTH/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC.’s SERIES A PREFERRED SHARES (“OPP PREFERRED”) all with their principal place of business at 433 West Van Buren Street, Suite 1150-E, Chicago, Illinois 60607 (excluding RMI, RMM, OPP, RFM, and OPP PREFERRED the “Additional Product”).
RMI and DST entered into an Agency Agreement dated October 24, 2018 (“Agency Agreement”) wherein DST agreed to provide certain services to RMI in exchange for the RMI warranties, representations and agreement to pay compensation to DST in the amounts delineated in the Agency Agreement. On June 18, 2019, RMM was added to the Agency Agreement by way of a separate Adoption Agreement and Letter Agreement. On December 2, 2020, OPP was added to the Agency Agreement by way of a separate Adoption Agreement and Letter Agreement. On February 19, 2020, RFM was added to the Agency Agreement by way of a separate Adoption Agreement and Letter Agreement. On October 23, 2020, OPP PREFERRED was added to the Agency Agreement by way of a separate Adoption Agreement and Letter Agreement. It is now the intent of RiverNorth Capital Management, LLC (“RiverNorth”) to add the Additional Products to the Agency Agreement by way of this Adoption Agreement (subject to the necessary Board of Directors approvals).
The Additional Products hereby agree to (a) become a party to the Agency Agreement and (b) be bound by all terms and conditions of the Agency Agreement as a “Fund” (as such term is defined in the Agency Agreement), having such rights, entitlements and obligations as set forth in the Agency Agreement or any ancillary agreements, respectively. By their signatures below, the Additional Products confirm to DST, as of the date hereof, their representations and warranties set forth in the Agency Agreement. The Additional Products acknowledge receipt of a copy of the Agency Agreement.
Each of DST, RMI, RMM, OPP, RFM, and RFMZ hereby agree to accept the Additional Products as parties to the Agency Agreement and any ancillary agreements and that the Additional Products shall be a “Fund” or “Customer” (as such terms are defined in the Agency Agreement) under the Agency Agreement, having such rights, entitlements and obligations as set forth in the Agency Agreement.
The parties acknowledge that Schedule I attached hereto lists all active Funds under the Agency Agreement.
Except as specifically set forth herein, all other terms and conditions of the Agency Agreement shall remain unmodified and in full force and effect, the same being confirmed and republished hereby. In the event of any conflict between the terms of the Agency Agreement and the terms of this Joinder with regard to the subject matter hereof, the terms of this Joinder shall control,
1
This Joinder may be executed by the parties hereto on any number of counterparts, delivery of which may occur by facsimile or as an attachment to an electronic communication, each of which shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
(signatures follow on next page)
2
IN WITNESS WHEREOF, the Parties hereto have caused this Adoption Agreement to be executed as of the day and year first above written by their respective duly authorized officers.
| RIVERNORTH FLEXIBLE MUNICIPAL INCOME FUND II, INC. | DST SYSTEMS, INC. | ||||
| By: | By: | ||||
| Print Name: | |||||
| Title: | Title: | ||||
| RIVERNORTH FLEXIBLE MUNICIPAL INCOME FUND, INC. | RIVERNORTH OPPORTUNISTIC MUNICIPAL INCOME FUND, INC. | ||||
| By: | By: | ||||
| Print Name: | Print Name: | ||||
| Title: | Title: | ||||
| RIVERNORTH MANANGED DURATION MUNICIPAL INCOME FUND, INC. | RIVERNORTH/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC. | ||||
| By: | By: | ||||
| Print Name: | Print Name: | ||||
| Title: | Title: | ||||
| RIVERNORTH/DOUBLE LINE STRATEGIC OPPORTUNITY FUND, INC. SERIES A PREFERRED SHARES | RIVERNORTH/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC. SERIES B PREFERRED SHARES | ||||
| By: | By: | ||||
| Print Name: | Print Name: | ||||
| Title: | Title: | ||||
3
SCHEDULE I LIST OF FUNDS
Name:
RIVERNORTH OPPORTUNISTIC MUNICIPAL INCOME FUND, INC. (“RMI”)
RIVERNORTH MANAGED DURATION MUNICIPAL INCOME FUND, INC. (“RMM”)
RIVERNORTH/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC. (“OPP”)
RIVERNORTH FLEXIBLE MUNICIPAL INCOME FUND, INC. (“RFM”)
RIVERNORTH/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC.
SERIES A PREFERRED SHARES (“OPP PREFERRED”)
RIVERNORTH FLEXIBLE MUNICIPAL INCOME FUND II, INC. (“RFMZ”)
RIVERNORTH/DOUBLELINE STRATEGIC OPPORTUNITY FUND, INC.
SERIES B PREFERRED SHARES (“OPP PREFERRED B”)
4
November 18, 2021
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc.
433 W. Van Buren Street
1150-E
Chicago, Illinois 60607
Faegre Drinker Biddle & Reath LLP
One Logan Square, Ste. 2000
Philadelphia, PA 19103
| Re: | Registration Statement on Form N-2: |
1933 Act File No.: 333-260203
1940 Act File No.: 811-23166
Ladies and Gentlemen:
We have served as Maryland counsel to RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., a Maryland corporation registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a closed-end management investment company (the “Fund”), in connection with certain matters of Maryland law arising out of the registration of the following securities of the Fund having an aggregate initial offering price of up to $300,000,000 (collectively, the “Securities”): (a) shares of common stock, $0.0001 par value per share (“Common Stock”); (b) shares of preferred stock, $0.0001 par value per share (“Preferred Stock”); (c) subscription rights (“Common Stock Subscription Rights”) to purchase shares of Common Stock; (d) subscription rights (“Preferred Stock Subscription Rights”) to purchase shares of Preferred Stock; and (e) subscription rights (the “Common Stock & Preferred Stock Subscription Rights” and, together with the Common Stock Subscription Rights and the Preferred Stock Subscription Rights, the “Subscription Rights”) to purchase shares of Common Stock and Preferred Stock, in each case, covered by the above-referenced Registration Statement (the “Registration Statement”), filed by the Fund with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”), and the 1940 Act. This opinion is being furnished to you at your request.
I. Documents Reviewed and Matters Considered
In connection with our representation of the Fund, and as a basis for the opinions hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (collectively, the “Documents”):
(i) the Registration Statement and the related form of prospectus included therein, substantially in the form transmitted to the Commission under the 1933 Act and the 1940 Act;
(ii) the charter of the Fund (the “Charter”), certified by the Maryland State Department of Assessments and Taxation (the “SDAT”);
(iii) the Bylaws of the Fund (the “Bylaws”), certified as of the date hereof by an officer of the Fund;
(iv) a Certificate of Status of the SDAT to the effect that the Fund is in good standing, dated November 10, 2021;
(v) resolutions (the “Resolutions”) adopted by the Board of Directors of the Fund relating to the registration and issuance of the Securities, certified as of the date hereof by an officer of the Fund;
(vi) a certificate executed by an officer of the Fund, dated as of the date hereof, as to such matters as we deem necessary and appropriate to enable us to render this opinion letter; and
(vii) such other documents and matters as we have deemed necessary or appropriate to express the opinions set forth in this letter, subject to the assumptions, qualifications, and limitations stated herein.
II. Assumptions
In expressing the opinions set forth below, we have assumed the following:
(a) Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
(b) Each individual executing any of the Documents on behalf of a party (other than the Fund) is duly authorized to do so.
(c) Each of the parties (other than the Fund) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.
(d) All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified, photostatic, or other copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete.
(e) All representations, warranties, statements and information contained in the Documents are accurate and complete.
(f) There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any of the provisions of the Documents, by actions or omission of the parties or otherwise.
(g) Each individual executing a certificate is authorized to do so and has knowledge about all matters stated therein. The contents of each such certificate are accurate and complete and remain so as of the date of this letter.
(h) Upon the issuance of any Securities that are Common Stock (“Common Securities”), including Common Securities which may be issued upon conversion or exercise of any other Securities convertible into or exercisable for Common Securities, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Fund is then authorized to issue under the Charter.
(i) Upon the issuance of any Securities that are Preferred Stock (“Preferred Securities”), including Preferred Securities which may be issued upon conversion or exercise of any other Securities convertible into or exercisable for Preferred Securities, the total number of issued and outstanding shares of Preferred Stock, and the total number of issued and outstanding shares of the applicable class or series of Preferred Stock designated pursuant to the Charter, will not exceed the total number of shares of Preferred Stock or the number of shares of such class or series of Preferred Stock that the Fund is then authorized to issue under the Charter.
(j) The issuance, and certain terms, of the Securities to be issued by the Fund from time to time will be authorized and approved by the Board, or a duly authorized committee thereof, in accordance with the Maryland General Corporation Law (the “MGCL”), the Charter, the Bylaws, the Registration Statement and the Resolutions; and with respect to any Subscription Rights, a Subscription Rights Certificate representing such Subscription Rights (the “Subscription Rights Certificate”) will be duly authorized by all necessary corporate action of the Fund and the specific terms of such Subscription Rights will be duly established by the Board, and such Subscription Rights will be duly distributed by the Fund, in accordance with the Charter, the Bylaws, the Registration Statement and the Resolutions; and, with respect to any Preferred Securities, Articles Supplementary setting forth the number of shares and the preferences and other terms of any class or series of Preferred Stock to be issued by the Fund will be filed with and accepted for record by the SDAT prior to their issuance (such approvals and, if applicable, acceptance for record, referred to herein as the “Corporate Proceedings”).
III. Opinions
Based upon the foregoing, and subject to the assumptions, qualifications, and limitations stated herein, it is our opinion that:
1. The Fund is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.
2. Upon the completion of all Corporate Proceedings relating to the Common Securities, the issuance of the Common Securities will be duly authorized and, when and if issued and delivered against payment therefor in accordance with the Registration Statement, the Resolutions and the Corporate Proceedings, the Common Securities will be validly issued, fully paid and nonassessable.
3. Upon the completion of all Corporate Proceedings relating to the Preferred Securities, the issuance of the Preferred Securities will be duly authorized and, when and if issued and delivered against payment therefor in accordance with the Registration Statement, the Resolutions and the Corporate Proceedings, the Preferred Securities will be validly issued, fully paid and nonassessable.
4. Upon the completion of all Corporate Proceedings relating to the Subscription Rights, the issuance of the Subscription Rights will be duly authorized and when issued and paid for in accordance with the applicable Subscription Rights Certificate, the Subscription Rights will be valid and binding obligations of the Fund, enforceable against the Fund in accordance with their terms.
IV. Qualifications and Limitations
(A) In addition to the assumptions and qualifications set forth above, and without limiting the generality of such assumptions and qualifications, the opinion expressed in Paragraph III.4 above is also subject to (a) the effect of bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar laws relating to or affecting the rights and remedies of creditors, (b) the effect of general principles of equity, whether considered in a proceeding in equity or at law (including the possible unavailability of specific performance or injunctive relief), concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of the court before which a proceeding is brought and (c) the invalidity under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy.
(B) The foregoing opinions are limited to the laws of the State of Maryland and we do not express any opinions herein concerning any other law. We express no opinion as to the applicability or effect of the 1940 Act or other federal securities laws, or state securities laws, including the securities laws of the State of Maryland, or as to federal or state laws regarding fraudulent transfers. To the extent that any matter as to which our opinion is expressed herein would be governed by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter. The opinions expressed herein are subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.
(C) The opinions expressed in this letter are limited to the matters specifically set forth in this letter, and no other opinions shall be implied or inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.
(D) This opinion is being furnished to you for submission to the Commission as an exhibit to the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
| Very truly yours, | |
| SHAPIRO SHER GUINOT & SANDLER, P.A. | |
| /s/ SHAPIRO SHER GUINOT & SANDLER, P.A. |
Faegre Drinker Biddle & Reath LLP
191 N. Wacker Drive, Ste. 3700
Chicago, IL 60606-1698
(312) 569-1100 (Phone)
(312) 569-3107 (Facsimile)
www.faegredrinker.com
November 18, 2021
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc.
433 W. Van Buren Street, 1150-E
Chicago, IL 60607
| Re: | RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. |
Ladies and Gentlemen:
We have acted as counsel for RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (the “Fund”) in connection with the Registration Statement on Form N-2 (File Nos. 333-260203; 811-23166) filed by the Fund with the Securities and Exchange Commission (the “SEC”) on October 12, 2021, under the Securities Act of 1933, as amended (the “Securities Act”), as amended by pre-effective Amendment No. 2 to the Registration Statement filed by the Fund on November 8, 2021 (as amended, the “Registration Statement”). The Registration Statement relates to the issuance and sale by the Fund from time to time, pursuant to Rule 415 of the General Rules and Regulations of the SEC promulgated under the Securities Act (the “Rules and Regulations”), of up to $300,000,000 of (i) shares of its common stock, $0.0001 par value per share (“Common Shares”), (ii) shares of its preferred stock (“Preferred Shares”), and/or (iii) subscription rights to purchase Common Shares, Preferred Shares or both (“Rights” and, together with the Common Shares and Preferred Shares, “Shares”).
We have examined the originals or copies, certified or otherwise identified to our satisfaction, of the Fund’s Articles of Incorporation and By-Laws, the Registration Statement, and the resolutions adopted by its Directors (the “Resolutions”) relating to the authorization of the sale and issuance of the Shares, and have considered such other legal and factual matters as we have deemed appropriate.
In all cases, we have assumed the legal capacity of each natural person signing the Registration Statement, the genuineness of signatures, the authenticity of documents submitted to us as originals, the conformity to authentic original documents of documents submitted to us as copies and the accuracy and completeness of all corporate records and other information made available to us by the Fund. As to questions of fact material to this opinion, we have relied upon the accuracy of any certificates and other comparable documents of officers and representatives of the Fund, upon statements made to us in discussions with the Fund’s management and upon statements and certificates of public officials.
This opinion is based exclusively on the substantive laws of the State of Maryland and the federal laws of the United States of America. In rendering our opinion, we have relied on the opinion of Shapiro Sher Guinot & Sandler, P.A. expressed in a letter to us dated November 18, 2021 to the extent that any matter which is the subject of this opinion is governed by the laws of the State of Maryland. We express no opinion as to the laws of any state other than the State of Maryland or as to state securities laws, including the securities laws of the State of Maryland.
Based upon the foregoing and subject to the qualifications, limitations and assumptions stated herein and therein, we are of the opinion that the issuance of the Shares has been duly authorized and, when and if issued against payment of net asset value therefor in accordance with the Resolutions and the Registration Statement, the Shares will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion with the SEC as part of the Fund’s Registration Statement on Form N-2. The opinion set forth above is expressed solely for the benefit of the addressee hereof in connection with the matters contemplated hereby and may not be relied upon by, or filed with, any other person or entity or for any other purpose without our prior written consent.
We hereby consent to the use of our name and to the references to our Firm under the caption “Legal Matters” in the Prospectus and the caption “Legal Counsel” in the Statement of Additional Information included in the Registration Statement. In consenting to the use of our name and the references to our Firm under such caption, however, we do not admit that we are within the category of persons whose consent is required under Section 7 of the 1933 Act or the rules and regulations of the SEC thereunder.
| Very truly yours, | ||
| /s/ Faegre Drinker Biddle & Reath LLP | ||
| FAEGRE DRINKER BIDDLE & REATH LLP |
November 18, 2021
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc.
433 W. Van Buren Street
1150-E
Chicago, Illinois 60607
| Re: | Registration Statement on Form N-2 (File No. 333-260203) |
Ladies and Gentlemen:
We have acted as special “Maryland law” counsel to RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., a Maryland corporation (the “Fund”), and a closed-end investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), in connection with certain matters of Maryland law arising out of the registration of up to 2,400,000 shares (the “Shares”) of preferred stock, $0.0001 par value per share, of the Fund (the “Preferred Stock”) classified and designated as the Series B Perpetual Preferred Shares (the “Series B Preferred Stock”), covered by the above-referenced Registration Statement, and all amendments thereto (the “Registration Statement”), filed by the Fund with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”). The Shares are to be issued in an underwritten public offering (the “Offering”) pursuant to the Prospectus Supplement (as defined herein). This opinion is being furnished to you at your request.
I. Documents Reviewed and Matters Considered
In our capacity as counsel to the Fund and for purposes of this opinion, we have examined the following documents (all of which are collectively called the “Documents”):
(i) the Registration Statement and the related form of prospectus included therein in the form in which it was transmitted to the Commission under the 1933 Act;
(ii) the Prospectus Supplement, dated as of November 15, 2021 (the “Prospectus Supplement”);
(iii) the charter of the Fund (the “Charter”), certified by the Maryland State Department of Assessments and Taxation (the “SDAT”), including the Articles Supplementary filed with the SDAT on October 19, 2020 that classified certain unissued stock as Preferred Stock, the Articles Supplementary filed with the SDAT on November 17, 2021 that classified certain unissued stock as additional Preferred Stock, and the Articles Supplementary filed with the SDAT on November 17, 2021 that established and designated the Series B Preferred Stock;
Rivernorth/DoubleLine Strategic Opportunity Fund, Inc.
November 18, 2021
Page 2
(iv) the Bylaws of the Fund (the “Bylaws”), certified as of the date hereof by an officer of the Fund;
(v) a Certificate of Status of the SDAT to the effect that the Fund is in good standing, dated November 10, 2021;
(vi) the Underwriting Agreement dated as of November 15, 2021 (the “Underwriting Agreement), entered into by and among the Fund, RiverNorth Capital Management, LLC, as Adviser, DoubleLine Capital LP, as Subadviser, and UBS Securities LLC and RBC Capital Markets, LLC, as representative of the Underwriters;
(vii) resolutions adopted by the Board of Directors (the “Board”) of the Fund relating to the issuance of the Shares by the Fund, certified as of the date hereof by an officer of the Fund (the “Resolutions”);
(viii) a certificate executed by an officer of the Fund, dated as of the date hereof, as to such matters as we deem necessary and appropriate to enable us to render this opinion letter; and
(ix) such other documents and matters as we have deemed necessary and appropriate to render the opinions set forth in this letter, subject to the assumptions, qualifications, and limitations noted herein.
II. Assumptions
In reaching the opinions set forth below, we have assumed the following:
(a) Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
(b) Each individual executing any of the Documents on behalf of a party (other than the Fund) is duly authorized to do so.
(c) All Documents submitted to us as originals are authentic. All Documents submitted to us as certified, photostatic, or other copies conform to the original documents. All Documents upon which we have relied are accurate and complete. All public records reviewed or relied upon by us or on our behalf are true and complete and remain so as of the date of this letter.
Rivernorth/DoubleLine Strategic Opportunity Fund, Inc.
November 18, 2021
Page 3
(d) The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered.
(e) All representations, warranties, statements and information contained in the Registration Statement are accurate and complete.
(f) All signatures on the Documents submitted to us for examination are genuine.
(g) There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any of the provisions of the Documents, by actions or omission of the parties or otherwise.
(h) Each individual executing a certificate is authorized to do so and has knowledge about all matters stated therein. The contents of each such certificate are accurate and complete and remain so as of the date of this letter.
(i) Prior to the issuance of any of the Shares, the Board will determine certain terms of issuance of such Shares, and the Articles Supplementary will be filed with, and accepted for record by, the SDAT (the “Corporate Proceedings”);
(j) The final number of Shares to be offered and sold by the Fund pursuant to the Registration Statement and the final price to be received by the Fund for the Shares will have been determined by the Board in accordance with the Resolutions prior to the issuance of the Shares.
III. Opinions
Based on our review of the foregoing and subject to the assumptions, qualifications, and limitations set forth herein, it is our opinion, as of the date of this letter, that:
1. The Fund is a corporation duly incorporated and, based solely on the Certificate of Status issued by the SDAT dated November 10, 2021, the Fund is validly existing and in good standing under the MGCL.
2. Upon the completion of the Corporate Proceedings, the issuance of the Shares will be duly authorized and, when and if issued and delivered against payment therefor in accordance with the Registration Statement, the Prospectus Supplement, the Charter, the Bylaws, the Resolutions, and the Corporate Proceedings, the Shares will be validly issued, fully paid, and nonassessable.
IV. Qualifications and Limitations
In addition to the other matters set forth in this letter, the opinions set forth herein are also subject to the following qualifications:
Rivernorth/DoubleLine Strategic Opportunity Fund, Inc.
November 18, 2021
Page 4
(A) We express no opinion as to the laws of any jurisdiction other than the laws of the State of Maryland and as used herein “law” means such laws. We express no opinion as to the principles of conflict of laws of any jurisdiction, including the laws of the State of Maryland.
(B) We assume no obligation to supplement our opinions if any applicable law changes after the date of this letter or if we become aware of any facts that might change the opinions expressed in this letter after the date of this letter.
(C) The opinions expressed in this letter are limited to the matters set forth in this letter, and no other opinions shall be implied or inferred beyond the matters expressly stated.
(D) This opinion is being furnished to you for submission to the Commission as an exhibit to the Company’s Registration Statement relating to the Offering. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the said incorporation by reference and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
| Very truly yours, | |
| SHAPIRO SHER GUINOT & SANDLER, P.A. | |
| /s/ SHAPIRO SHER GUINOT & SANDLER, P.A. |
| 4.2 | Code of Ethics |
This Code of Ethics (the “Code”) is a joint Code for RiverNorth Capital Management, LLC (the “Adviser”) and RiverNorth Funds (the “RiverNorth Funds”). It reflects the requirements of Section 204A of the Investment Advisers Act of 1940, Rule 204A-1 under that Act, and Rule 17j-1 under the Investment Company Act of 1940. The Adviser and the RiverNorth Funds are often referred to collectively as “RiverNorth”.
| I. | Standards of Conduct and Fiduciary Duty |
The Adviser has a fiduciary duty to its investment advisory clients, including the RiverNorth Funds. That duty requires each Employee to act solely for the benefit of RiverNorth’s clients. The conduct of the Adviser and its Employees must recognize that the clients’ interests always have priority over those of the Adviser and its Employees (including with respect to any Employee’s personal trading activity) and is based upon fundamental principles of openness, integrity, honesty and trust.
Each Employee is expected to adhere, not only to the Federal securities laws, but also to the highest standard of professional and ethical conduct and should be sensitive to situations that may give rise to an actual conflict or the appearance of a conflict with RiverNorth’s clients’ interests. Such conflicts could also have the potential to cause damage to the Adviser’s reputation. Each Employee is also required to comply with all applicable Federal Securities Laws. Each Employee must exercise reasonable care and professional judgment to avoid actions that could put the image or reputation of the Adviser at risk.
This Code sets forth the policy regarding Employee conduct in those situations in which conflicts with our clients’ interests are most likely to be present or develop. The Code does not attempt to identify all possible conflicts of interest, and literal compliance with the Code will not shield the Employee from sanctions for personal trading or other conduct that violates a fiduciary duty to clients. It is expected that Employees will embrace and comply with both the letter and the spirit of the Code.
Adherence to the Code is a basic condition of employment. If an Employee has any doubt as to the appropriateness of any activity, believes that he or she has violated the Code, or becomes aware of a violation of the Code by another Employee, or the Employee has become subject to any legal action that may impact their ability to fulfill their duties as an Employees of a registered investment adviser, the Employee is obligated to bring these matters to the attention of the Chief Compliance Officer (“CCO”) or any member of the Compliance Group, as defined herein.
| II. | Definitions |
“Access Person” means any person who is either an Adviser Access Person or a Fund Access Person.
“Adviser Access Person” means any Employee or any other person identified by the CCO as an Adviser Access Person. The CCO shall designate as an Adviser Access Person any supervised person who (i) has access to non-public information regarding any purchase or sale of securities for an Adviser client, or non-public information regarding the portfolio holdings of any Reportable Fund, or (ii) is involved in making securities recommendations to Adviser clients, or who has access to such recommendations that are non-public. Since providing investment advice is the Adviser’s primary business, all of the Adviser’s members (other than passive investors), officers and employees are presumed to be Adviser Access Persons.
“Active Consideration” means the period of time during which an Adviser portfolio manager is considering the purchase or sale of a security for any client accounts.
“Adviser” means RiverNorth Capital Management, LLC.
“Advisers Act” means the Investment Advisers Act of 1940, as amended, and rules promulgated thereunder.
“Automatic Investment Plan” means a program, including a dividend reinvestment program, in which regular periodic purchases or withdrawals are made automatically in or from investment accounts in accordance with a predetermined schedule and allocation.
“Beneficial Ownership” means that a person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares a direct or indirect pecuniary interest in a security. A “pecuniary interest” in a security means the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in such security. An Employee is presumed to have beneficial ownership in the following: (i) securities owned by an Employee in his or her name; (ii) securities owned by an individual Employee indirectly through an account or investment vehicle for his or her benefit, such as an IRA, family trust, or family partnership; (iii) securities owned in which the Employee has a joint ownership interest, such as a joint brokerage account; (iv) securities in which a member of the Employee’s immediate family (currently defined as one’s spouse, domestic partner, minor children, adult children living at home, other dependent relatives and other adult relatives sharing living arrangements) has a direct, indirect or joint ownership interest if the immediate family member resides in the same household as the Employee; and (v) securities owned by a trust, private foundation or other charitable accounts in which the Employee (or a member of the Employee’s immediate family) has both a pecuniary interest and investment discretion. This definition shall be interpreted in the same manner as it would be under Rule 16a-1(a)(2) of the Securities Exchange Act of 1934, the text of which is attached as Exhibit A to the Code.
“Blackout Period” means the period during which an Adviser Access Person is prohibited from engaging in a Personal Securities Transaction in a particular security because (i) a transaction in the same security is pending or anticipated for client accounts; or (ii) a transaction for client accounts is under Active Consideration by a portfolio manager of the Adviser.
“CCO” means the Chief Compliance Officer of the Adviser. Such person may also be designated as the Chief Compliance Officer of the RiverNorth Funds.
“Compliance Group” means the Adviser’s personnel charged with overseeing the Adviser’s compliance policies and procedures. The Compliance Group is comprised of the Chief Compliance Officer, the Chief Risk Officer and such other persons as may be designated by the Chief Compliance Officer from time to time. A list of the current Compliance Group members is attached as Exhibit B to the Code.
“Control” means the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company.
“Cryptocurrency” means a decentralized digital currency which takes the form of tokens or coins, such as Bitcoin, Litecoin, Ethereum. Cryptocurrencies, own their own, are considered currency and not a security.
“Employee” means an employee of the Adviser, a member of the Adviser (other than passive investors who are not employed by the Adviser in another capacity), and any temporary employee or independent contractor of the Adviser who is contracted to work onsite in the offices of the Adviser for more than seven (7) days (unless steps are taken to prevent such person from gaining access to proprietary or trading information related to the Adviser of its clients). All Employees are deemed to be Adviser Access Persons and, by definition, Fund Access Persons.
“ETF” means an exchange traded fund, whether organized as an open-end fund or a unit investment trust.
“Exchange Act” means the Securities Exchange Act of 1934.
“Exempt Transactions” means transactions in securities that are exempt from the prior approval and/or the reporting requirements of this Code. Refer to Exhibit C for a list of security types that fall into this category.
“Federal Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Investment Company Act of 1940, the Investment Advisers Act of 1940, Title V of the Gramm-Leach-Bliley Act, any rules adopted by the SEC under any of these statutes, the Bank Secrecy Act as it applies to Funds and investment advisers, any rules adopted thereunder by the SEC or the Department of the Treasury or the Dodd-Frank Wall Street Reform and Consumer Protection Act to the extent and as it pertains to investments advisers and investment companies.
2
“Frequent Trading” means the frequent trading in shares of an open-end fund in violation of the fund’s prospectus and/or trading policies, including any trading designed to exploit perceived inefficiencies in the prices of Fund shares.
“Front Running” means engaging in a Personal Securities Transaction in advance of a transaction in the same security for a client’s account.
“Fund” means an investment company registered under the Investment Company Act of 1940.
“Fund Access Person” means any trustee or officer of the RiverNorth Funds who is not also an Adviser Access Person.
“Independent Trustee” means a trustee of the RiverNorth Funds who is not an “interested person” of the RiverNorth Funds within the meaning of Section 2(a)(19) of the Investment Company Act of 1940.
“Initial Public Offering” or “IPO” means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934.
“Initial Coin Offering” or “ICO” is the equivalent of an IPO for an offering of cryptocurrency.
“Insider Trading” is not defined in the Federal Securities Laws, but generally refers to the buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of Material, Non-Public Information about the security.
“Investment Company Act” means the Investment Company Act of 1940, as amended and the rules promulgated thereunder.
“Late Trading” means the illegal practice of pricing a purchase or redemption order for shares of an open-end Fund with the current day share price even though the order is received after the pricing time established in the Fund’s prospectus. Late trading often involves a coordinated effort by the investor and a broker or service provider for the Fund.
“Limited Offering” means an offering (e.g., limited partnership) that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) or pursuant to Rule 504, Rule 505, or Rule 506 under the Securities Act of 1933.
“Material, Non-Public Information” or “MNPI” means information for which there is substantial likelihood that a reasonable investor would consider important in making an investment decision, or is reasonably certain to have an effect on the price of the issuer’s security, but which has not been made available to the public, has not been disseminated broadly to the marketplace, or has not had sufficient time post-dissemination for the marketplace to react to the information.
“Organizations” means entities, and the individuals that work for them, that provide services, or seek to provide services, to individual clients through the Adviser’s relationship with the client. Examples include brokers, consultants, companies that the Adviser researches for possible investment, and companies in which the Adviser invests for client accounts.
“Personal Securities Transaction” means a Reportable Transaction in which an Access Person has Beneficial Ownership in the security.
“Reportable Account” means investment accounts in which Reportable Securities are held.
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“Reportable Fund” means any Fund: (i) for which the Adviser serves as the investment adviser or sub-adviser; or (ii) whose investment adviser or principal underwriter controls the Adviser, is controlled by the Adviser, or is under common control with the Adviser. For purposes of this Code, the Reportable Funds are the RiverNorth Funds.
“Reportable Security” means a Security, except that it does not include any of the following: (i) direct obligations of the government of the United States; (ii) bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements; (iii) shares issued by money market Funds; (iv) shares issued by unit investment trusts that are invested exclusively in one or more open-end Funds, none of which are Reportable Funds. The definition of “Reportable Security” also excludes securities held through certain qualified tuition programs established pursuant to Section 529 of the Internal Revenue Code of 1986 (“529 Plans”), provided the Adviser or a control affiliate does not manage, distribute, market or underwrite the 529 Plan or the investments and strategies underlying the 529 Plan. However, ETFs and mutual funds are included in the definition of “Reportable Security” whether held directly with the issuer or its transfer agent or in a brokerage account.
“Reportable Transaction” means a transaction by an Access Person in a Reportable Security.
“RiverNorth Funds” means RiverNorth Funds, an Ohio business trust and each of its series, as they may be added from time to time. Each series of the RiverNorth Funds may also be referred to individually as a “fund”. See Exhibit D for a list of the current series of the RiverNorth Funds.
“Rumor” means a statement not based on verified information. An expression of opinion is not a Rumor.
“Security” means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit sharing agreement, collateral trust certificate, reorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any, security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.
“Securities Act” means the Securities Act of 1933, as amended, and the rules promulgated thereunder.
“Schwab Compliance Technologies” means Compliance software used to facilitate requirements of the Code.
“Trading Day” means any day on which the New York Stock Exchange is open for regular, unrestricted trading.
Terms not defined above or in this Code have the meaning set forth in the Advisers Act. If terms are ambiguous to any person potentially covered by the Code, it is suggested that the Chief Compliance Officer or a member of the Compliance Group be contacted for clarification before engaging in any conduct or activity that may be covered under the Code.
| III. | Policy on Personal Securities Transactions |
Each Access Person must comply with the following policies for all of his or her Personal Securities Transactions.
| A. | Initial Offerings |
Initial Public Offerings (IPO)
An Adviser Access Person may not participate in an initial public offering, unless the IPO falls into one of the following categories:
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| 1. | An IPO of securities of a mutual insurance company as a result of the Adviser Access Person’s ownership of an insurance policy; or |
| 2. | An IPO of securities of a spinoff company as a result of the Adviser Access Person’s ownership of shares of the company that spins off the issuer of the IPO. |
An Adviser Access Person must give prompt notice to the CCO when acquiring Beneficial Ownership in securities of an IPO that are subject to either of the two exceptions set forth above. If an Adviser Access Person believes participation in an IPO may be appropriate, for example, in situations similar to the two situations identified above, but not covered by those two situations, the Adviser Access Person may submit a written request for approval, and the CCO may grant approval if the investment is deemed acceptable.
Initial Coin Offerings (ICO)
An Adviser Access Person may not participate in an initial coin offering.
| B. | Limited Offerings |
An Adviser Access Person may purchase or sell securities in a Limited Offering only with the prior written approval from a member of the Compliance Group. The Compliance Group member shall consider the following factors in determining whether to approve a transaction in a Limited Offering:
| 1. | Whether the investment opportunity should be reserved for clients; |
| 2. | Whether the Adviser Access Person is being offered the investment opportunity due to his or her employment with the Adviser; and |
| 3. | Any other relevant factors (e.g., whether the Adviser has any business dealings with the issuer, general partner, or any of the individuals named in the offering documents, or if the Adviser Access Person has knowledge of an impending IPO by the issuer). |
The Compliance Group member may approve a single transaction in a Limited Offering or additional investments in previously-approved Limited Offerings (such as subsequent investments in the same limited partnership). The approval may be subject to limitations, including timing of investments, number of investments, or amount of investments.
| C. | Frequent Trading (Open-End Funds) |
Frequent Trading can harm shareholders in various ways, including reducing the returns to long-term shareholders by increasing costs to the fund and disrupting portfolio management strategies. Adviser Access Persons are required to comply with the policies of any open-end funds in which they invest regarding purchases, redemptions and exchanges, and are prohibited from engaging in Frequent Trading in open-end funds which indicate in their prospectus or statement of additional information that the funds prohibit or restrict Frequent Trading.
| D. | Late Trading (Open-End Funds) |
Late Trading is prohibited by law and, with respect to Reportable Funds, may represent a violation of fiduciary duty. This Code prohibits Adviser Access Persons from engaging in or facilitating Late Trading in shares of any open-end Fund.
| E. | Short-Term Trading (All Securities) |
The Adviser considers short-term trading problematic because it (1) may interfere with the Adviser Access Person’s duties, obligations or loyalties to the Adviser or the Adviser’s clients; (2) may be indicative of using Material, Non-Public Information, or (3) may be in violation of applicable laws, rules and regulations or the Adviser’s or issuer’s policies and procedures.
Accordingly, all Adviser Access Persons are required to hold securities for a minimum of ninety (90) calendar days, to avoid short-term trading practices. The Compliance Group may approve exceptions to the ninety (90)calendar day holding period in certain limited circumstances, for instance to reduce the level of investment losses to the Adviser Access Person if the security has significantly decreased in value. The ninety (90)calendar day hold period does not apply to transactions resulting from certain corporate actions or assets attributable to an Automatic Investment Plan.
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The Compliance Group may impose restrictions on Personal Securities Transactions, or deny a request for prior approval of Personal Securities Transactions, if it believes that the transactions may interfere with the Adviser Access Person’s duties, obligations or loyalties to the Adviser or the Adviser’s clients, impose undue burden on the Adviser, or may otherwise be contrary to the interests of the Adviser or the Adviser’s clients.
| F. | Options Trading |
Adviser Access Persons are permitted to invest in options. All personal securities transactions involving options must be pre-approved through Schwab Compliance Technologies and are subject to the mandatory ninety (90) calendar-day holding period detailed in Section III.E. (unless the strike date of the option is less than ninety (90) calendar days). Access Persons may not take an options position opposite of any options holding in the Adviser’s or a Client’s accounts (same underlying security, same strike price, and same expiration).
| G. | Closed-End Funds, Business Development Companies (BDCs) and Special Purpose Acquisition Companies (SPACs) |
Because of the Adviser’s expertise and access to analytic information regarding the closed-end fund markets, caution must be exercised to avoid an appearance of a conflict of interest when investing in any closed-end fund. business development companies and special purpose acquisition companies, direct investments in these vehicles (excluding those managed by the Adviser) is prohibited. Trading in closed-end funds managed by the Adviser is permitted but limited to a percentage of the average daily trading volume as determined by the Compliance Group and then subject to pre-clearance by the Compliance Group
| H. | Marketplace Loans and Related Securities |
Because of the Adviser’s expertise and access to analytic and platform-proprietary information regarding marketplace loans, direct investments in marketplace loans, including investments in the platforms themselves is prohibited. Access persons are also prohibited from borrowing with any current of the platform(s) utilized by strategies managed by RiverNorth. Currently, the prohibited platform is Square Capital LLC.
| I. | Blackout Period |
To avoid Front Running or other conflict of interest with client accounts, or the appearance of Front Running or a conflict of interest with client accounts, no Adviser Access Person may engage in a Personal Securities Transaction in a security that is in a Blackout Period.
Requests for a waiver of the Blackout Period will be considered by a member of the Compliance Group on a case-by-case basis. Factors that may be considered include, but are not limited to, the size of the proposed Personal Securities Transaction in relation to average daily trading volumes, whether transactions for client accounts have been completed, and whether the proposed Personal Securities Transaction is directionally aligned or opposed to transactions for client accounts.
| J. | De Minimis Exception |
Purchases or sales in an amount of less than $50,000 within a thirty (30) calendar day period in a Reportable Security of an issuer that is a component security in the Standard & Poor’s 500 Index are exempt from the prohibitions with respect to whether the Adviser is trading the same or equivalent security for the accounts of its clients under this Code, and are exempt from the prohibitive sections of the Code.
Purchases or sales of broad based index open-ended exchange traded funds (ETFs) with either a market capitalization exceeding $1 billion OR an average daily trading volume exceeding 1 million shares (measured over a 90 day period) are exempt from the prohibitive sections of the Code.
However, it should be noted that trades falling within these de minimis exceptions must be submitted for approval and reported in Schwab Compliance Technologies pursuant to the applicable requirements of the Code and are subject to the mandatory ninety (90)calendar day holding period detailed in Section III.E.
| K. | Prior Approval Required |
Adviser Access Persons must obtain prior approval for all Personal Securities Transactions (other than Personal Securities Transactions in securities set forth below in Section V, Administration of the Code of Ethics).
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| L. | Disgorgement of Profits |
If, within any ten (10) calendar day period, an Access Person transacts in a security in a more advantageous manner than a Client account, the Chief Compliance Officer may require disgorgement of the profits realized vis-à-vis the Client account.
Each Adviser Access Person is responsible for ensuring that his or her Personal Securities Transactions for which he or she requests prior approval will not violate the Adviser’s policies or applicable Federal Securities Laws.
| IV. | Reporting and Certification Requirements |
Each Access Person must comply with the following reporting and certification requirements:
| A. | Initial Holdings Report |
Each new Access Person is required to complete and submit an Initial Holdings Report to the CCO or designee within ten (10) calendar days of becoming an Access Person. The new Access Person must disclose all the security holdings in which he or she may have a Beneficial Interest, including in all Reportable Accounts holding Reportable Securities, including Limited Offerings and Reportable Funds. The new Access Person must also disclose all of his or her brokerage accounts and all other accounts that hold Reportable Securities at that time (including IRA accounts and custodial accounts), even if the only securities held in such accounts are Reportable Funds. Personal Securities Transactions are prohibited until the Initial Holdings Report is filed.
The Initial Holdings Report must be current as of a date no more than forty-five (45) calendar days prior to the date the person becomes an Access Person. The Initial Holdings Report must contain the following information:
| 1. | The title and type of security, and as applicable the exchange ticker or CUSIP number, number of shares, and principal amount of each Reportable Security in which the Access Person has any direct or indirect Beneficial Ownership when the person became an Access Person; |
| 2. | The name of any broker, dealer or bank with which the Access Person maintains an account in which any securities are held for the Access Person’s direct or indirect benefit as of the date the person became an Access Person; |
| 3. | The number and title of each account in which the Access Person has any direct or indirect Beneficial Ownership; and |
| 4. | The date the Access Person submits the Initial Holdings Report. |
In addition, an Access Person must notify the Compliance Department within ten (10) calendar days of the opening of a new investment or brokerage account in which the Access Person has a Beneficial Interest.
| B. | Duplicate Confirmations |
Access Persons may maintain accounts with any broker or brokers of their choosing, but are strongly encouraged to utilize a broker from list of preferred brokers maintained by the Compliance Group. In certain instances, the Compliance Group may require Access Persons to move accounts from existing brokers to a preferred broker. Adviser Access Persons must instruct their brokers to send duplicate confirmations for their Reportable Transactions to the Adviser’s CCO. Duplicate confirmations are used to reconcile the Quarterly Transaction Reports submitted by each Adviser Access Person. The CCO can provide sample letters requesting duplicate confirmations. Alternatively, a feed of certain data direct from your broker may be acceptable to the Compliance Group.
| C. | Initial Conflicts of Interest Questionnaire |
Each new Adviser Access Person is required to complete and submit an Initial Conflicts of Interest Questionnaire to the CCO or designee within ten (10) calendar days of becoming an Adviser Access Person. The CCO may request additional details based upon the information furnished by the Adviser Access Person.
| D. | Quarterly Transaction Report |
Each Access Person must complete and submit a Quarterly Transaction Report to the CCO or designee within thirty (30) calendar days following the close of the quarter, even if there were no transactions in Reportable Securities during the reporting period. Such reports may be completed using Schwab Compliance Technologies.
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The Quarterly Transaction Report must contain the following information:
| 1. | With respect to any Personal Securities Transaction: |
| a. | The date of the transaction, the title of the security, and as applicable the exchange ticker symbol or CUSIP number, the interest rate and maturity date (if applicable), the number of shares and principal amount of each Reportable Security involved; |
| b. | The nature of the transaction (i.e., purchase, sale, gift or any other type of acquisition or disposition); |
| c. | The price of the security at which the transaction was effected; |
| d. | The name of the broker, dealer or bank with or through which the transaction was effected. |
| 2. | Any additions (including the date the account was established), deletions or changes to the securities account information previously provided by the Access Person that are necessary to bring it up to date. |
| 3. | The date the Access Person submits the Quarterly Transaction Report. |
Transactions effected through an Automatic Investment Plan do not need to be reported on a Quarterly Transaction Report, unless the transaction(s) overrides the pre-set schedule or allocations of the Automatic Investment Plan, in which case the transaction(s) must be reported.
| E. | Quarterly Outside Accounts Report |
Each Access Person is required to complete and submit a Quarterly Outside Accounts Report to the CCO or designee within thirty (30) calendar days following the close of the quarter. Such reports may be completed using Schwab Compliance Technologies, a compliance software product.
The Quarterly Outside Accounts Report must contain the following information:
| 1. | The name of any broker, dealer or bank with which the Access Person maintains an account in which any securities are held for the Access Person’s direct or indirect benefit; and |
| 2. | The number and title of each account in which the Access Person has any direct or indirect Beneficial Ownership. |
| F. | Annual Holdings Report |
Each Access Person is required to complete and submit an Annual Holdings Report to the CCO or designee within thirty (30) calendar days following the close of the calendar year. Such reports may be completed using Schwab Compliance Technologies..
The Annual Holdings Report must be current as of a date no more than forty-five (45) calendar days prior to the date the report is submitted and contain the following information:
| 3. | The title and type of security, and as applicable the exchange ticker or CUSIP number, number of shares, and principal amount of each Reportable Security in which the Access Person has any direct or indirect Beneficial Ownership; |
| 4. | The name of any broker, dealer or bank with which the Access Person maintains an account in which any securities are held for the Access Person’s direct or indirect benefit; |
| 5. | The number and title of each account in which the Access Person has any direct or indirect Beneficial Ownership; and |
| 6. | The date the Access Person submits the Annual Holdings Report. |
| G. | Annual Certifications |
Each Adviser Access Person is required to certify annually that he or she has received, read, and understands the Code, including any amendments thereto, recognizes that he or she is subject to the Code and will continue to comply with all requirements set forth in the Code. In addition, each Adviser Access Person is required to certify annually that he or she has disclosed or reported all Reportable Transactions. Certifications may be requested of Access Persons, and may be submitted by Access Persons, manually or electronically.
The Adviser will provide each Adviser Access Person with a copy of the Code, and any amendments thereto.
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| H. | Annual Conflicts of Interest Questionnaire |
Each Adviser Access Person is required to complete and submit an Annual Conflicts of Interest Questionnaire. The CCO reviews the information furnished on the Questionnaire and may request additional details based upon the information furnished by the Adviser Access Person.
| I. | Independent Trustees |
An Independent Trustee does not need to provide the following reports or certifications: Initial or Annual Holdings Reports, Duplicate Confirmations, or Initial or Annual Conflict of Interest Questionnaire. An Independent Trustee need not file Quarterly Transaction Reports, unless the Independent Trustee knew or, in the ordinary course of fulfilling his or her official duties as an Independent Trustee, should have known that during the fifteen (15) calendar day period immediately before or after the Independent Trustee’s transaction in a Reportable Security, the RiverNorth Funds purchased or sold the Reportable Security, or the Adviser considered purchasing or selling the Reportable Security.
V. Administration of the Code of Ethics
| A. | Prior Approval Requirements and Procedures |
Adviser Access Persons must obtain prior approval for Personal Securities Transactions in certain Reportable Securities in accordance with these procedures. It is encouraged that all Access Persons seek prior approval for all Personal Securities Transactions through Schwab Compliance Technologies, although alternative approval, including written or verbal approval, may be granted. In the case of verbal approval, the Compliance Group will document the reasons written approval was not possible.
Adviser Access Persons must request prior approval via Schwab Compliance Technologies. Unless the CCO permits or requests a different form, the request must contain the following information:
| 1. | The name of the security; |
| 2. | The exchange ticker or CUSIP number; |
| 3. | Whether the transaction is a purchase or sale; |
| 4. | The quantity of shares or principal amount; and |
| 5. | The account or broker or dealer where the transaction will take place. |
The Adviser Access Person will receive a response from a member of the Compliance Group or Schwab Compliance Technologies. If prior approval is granted, the Adviser Access Person must execute his or her Personal Securities Transaction no later than the close of business on the same Trading Day. Approval expires at the close of business on the Trading Day. If the Adviser Access Person receives prior approval for a Personal Securities Transaction and places a limit order with his or her broker, that limit order must either execute or expire no later than the close of business on the Trading Day.
If the Personal Securities Transaction is not executed within the specified timeframe, the Adviser Access Person must re-submit his or her prior approval request if he or she still desires to execute the Personal Securities Transaction.
An Adviser Access Person is prohibited from engaging in a Personal Securities Transaction in advance of receiving written approval, even if he or she expects that approval will be forthcoming.
Investments in IPOs and Limited Offerings are governed by Section III of the Code, not the requirements of this section of the Code.
Note – transactions in retirement accounts of an Access Person’s immediate family member that can only invest in unaffiliated mutual funds do not require pre-approval or entry in Schwab Compliance Technologies, although periodic reporting may be required and an Access Person may need to periodically certify that the account can only hold unaffiliated mutual funds.
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| B. | Some Reasons for Denial of Prior Approval |
Adviser Access Persons are reminded that engaging in Personal Securities Transactions in Reportable Securities is a privilege and not a right.
Although this list is not meant to be exhaustive, an Adviser Access Person will be denied prior approval of a Personal Securities Transaction if the security is subject to a Blackout Period. Approval can also be denied if: the CCO or any member of the Compliance Group believes that the Adviser Access Person’s pattern of trading is inconsistent with the spirit of the Code regardless of whether it meets the letter of the Code; if a Reportable Security was the subject of a newly-issued or changed outlook of the Adviser within five (5) business days prior to the request; or to avoid a conflict, or the appearance of a conflict, with the interests of the Adviser’s clients. Approvals are denied without prejudice, so an Adviser Access Person can resubmit his or her request for prior approval for reconsideration at any time.
| C. | Managed Account Exemption |
Transactions in accounts holding Reportable Securities in which an Access Person has Beneficial Ownership but over which the Access Person and his or her family members have no direct or indirect influence or control may be exempted from the definition of Reportable Transactions.
An example of an eligible managed account would be an account managed by an independent investment professional that neither consults with nor accepts guidance from the account owner on specific securities transactions prior to execution.
Exemption of a managed account from the prior approval and reporting requirements of this Code must be requested in writing by the Adviser Access Person to the CCO.
Adviser Access Persons are required to submit a quarterly affirmation certifying they did not suggest or direct any transactions or allocations in managed accounts.
| D. | Written Report to RiverNorth Funds Board |
No less frequently than annually, the Adviser must furnish to the RiverNorth Funds Board of Trustees, and the RiverNorth Funds Board of Trustees must consider, a written report that:
| 1. | Describes any issues arising under this Code or procedures since the last report to the Board, including but not limited to information about violations of the Code or procedures or sanctions imposed in response to the violations; |
| 2. | Discusses whether any significant conflicts of interest arose during the reporting period, even if the conflicts have not resulted in a violation of the Code; |
| 3. | Discusses any waivers that might be considered important by the Board that were granted during the reporting period; and |
| 4. | Certifies that the RiverNorth Funds and the Adviser have adopted procedures reasonably necessary to prevent Access Persons from violating the Code. |
| VI. | Duty of Confidentiality |
Confidentiality is a cornerstone of the Adviser’s fiduciary obligation to its clients. Adviser Access Persons owe a duty of confidentiality to both the Adviser and its clients. Information acquired in the course of employment by the Adviser, including but not limited to information regarding actual or contemplated investment decisions, securities under Active Consideration, portfolio composition, client interests, non-public client information, research, research recommendations, Adviser activities and new business initiatives is confidential.
Adviser Access Persons must not discuss client business (e.g., strategy, holdings, assets under management, etc.), including the existence of a client relationship, with outsiders except as necessary to perform his or her job responsibilities.
In addition, Adviser Access Persons should be familiar with the RiverNorth Funds’ Policies and Procedures Regarding Selective Disclosure of Portfolio Holdings, which addresses the requirements for disclosure of the RiverNorth Funds’ portfolio holdings to ensure equality of dissemination.
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| VII. | Outside Affiliations |
The Adviser recognizes that an Adviser Access Person has outside affiliations to which he or she dedicates personal time. An employee seeking approval of outside employment or other business or investment-related activities shall provide the following information to RiverNorth’s CCO:
(1) the name and address of the outside business organization;
(2) a description of the business or the organization;
(3) compensation, if any, to be received;
(4) a description of the activities to be performed; and
(5) the amount of time per month that will be spent on the outside activity.
Records of requests for approval, along with the reasons such requests were granted or denied, are maintained by the CCO or designee. In situations where a RiverNorth employee has been granted permission to engage in outside activities within the investment management industry, that employee must still:
• Treat any information learned as a result of his or her RiverNorth duties as proprietary and confidential; and
• Comply in all respects with RiverNorth compliance procedures and applicable codes of ethics, including, without limitation, providing to RiverNorth all necessary transactions and holdings reports.
• Disclose if the outside business activity is related to a client of the firm.
| A. | Directorships |
An Adviser Access Person who wishes to serve on the Board of Directors of any organization must first obtain approval from the CCO, or another member of the Compliance Group, prior to accepting the position. The Compliance Group will determine if a new Adviser Access Person can continue to serve as a director of a publicly-traded company if he or she is already in that position prior to joining the Adviser. In either case, approval will be granted only if the Compliance Group determines that the activity does not present a significant conflict of interest with the Adviser or the Adviser’s clients.
The above restrictions and procedures for approval do not apply to unpaid service with a charitable or non-profit organization.
These disclosures are required on the Initial Conflicts of Interest and annually thereafter on the Annual Conflicts of Interest Questionnaire.
| VIII. | Oversight of the Code of Ethics |
| A. | Compliance Group |
The Compliance Group, led by the CCO, is responsible for monitoring and oversight of this Code.
| B. | Responsibilities of Each Employee |
It is expected that Employees will embrace and comply with both the letter and spirit of the Code and to uphold its fiduciary obligations.
Adherence to the Code is a basic condition of employment. If an Employee has any doubt as to the appropriateness of any activity, believes that he or she has violated the Code, or becomes aware of a violation of the Code by another Employee, the Employee is obligated to bring these matters to the attention of the Compliance Group.
| C. | Enforcement of the Code |
Potential violations of the Code will be investigated and considered by the Compliance Group and/or Management of the Adviser.
Violations of the Code’s provisions are taken seriously and may result in sanctions or other consequences, including but not limited to the following:
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| 1. | A warning; |
| 2. | A reversal of a Personal Securities Transaction; |
| 3. | Disgorgement of profits from the Personal Securities Transaction; |
| 4. | A limitation or restriction on engaging in Personal Securities Transactions; |
| 5. | A monetary fine; |
| 6. | Termination of employment; and |
| 7. | Referral to civil or criminal authorities. |
As described above in Section V, Administration of the Code of Ethics, violations are reported to the Board of Trustees of the RiverNorth Funds no less frequently than annually.
Any questions about the Code of Ethics or the existence of a conflict of interest, or the appearance of a conflict of interest, should be brought to the attention of the CCO or other member of the Compliance Group.
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Exhibit A
Text of Rule 16a-1(a)(2) of the Securities Exchange Act of 1934
Rule 16a-1(a)(2) Other than for purposes of determining whether a person is a beneficial owner of more than ten percent of any class of equity securities registered under Section 12 of the Act, the term beneficial owner shall mean any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares a direct or indirect pecuniary interest in the equity securities, subject to the following:
(i) The term pecuniary interest in any class of equity securities shall mean the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the subject securities.
(ii) The term indirect pecuniary interest in any class of equity securities shall include, but not be limited to:
(A) Securities held by members of a person's immediate family sharing the same household; provided, however, that the presumption of such beneficial ownership may be rebutted; see also § 240.16a-1(a)(4) ;
(B) A general partner's proportionate interest in the portfolio securities held by a general or limited partnership. The general partner's proportionate interest, as evidenced by the partnership agreement in effect at the time of the transaction and the partnership's most recent financial statements, shall be the greater of:
(1) The general partner's share of the partnership's profits, including profits attributed to any limited partnership interests held by the general partner and any other interests in profits that arise from the purchase and sale of the partnership's portfolio securities; or
(2) The general partner's share of the partnership capital account, including the share attributable to any limited partnership interest held by the general partner.
(C) A performance-related fee, other than an asset-based fee, received by any broker, dealer, bank, insurance company, investment company, investment adviser, investment manager, trustee or person or entity performing a similar function; provided, however, that no pecuniary interest shall be present where:
(1) The performance-related fee, regardless of when payable, is calculated based upon net capital gains and/or net capital appreciation generated from the portfolio or from the fiduciary's overall performance over a period of one year or more; and
(2) Equity securities of the issuer do not account for more than ten percent of the market value of the portfolio. A right to a nonperformance-related fee alone shall not represent a pecuniary interest in the securities;
(D) A person's right to dividends that is separated or separable from the underlying securities. Otherwise, a right to dividends alone shall not represent a pecuniary interest in the securities;
(E) A person's interest in securities held by a trust, as specified in § 240.16a-8(b); and
(F) A person's right to acquire equity securities through the exercise or conversion of any derivative security, whether or not presently exercisable.
(iii) A shareholder shall not be deemed to have a pecuniary interest in the portfolio securities held by a corporation or similar entity in which the person owns securities if the shareholder is not a controlling shareholder of the entity and does not have or share investment control over the entity's portfolio.
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Exhibit B
Members of Compliance Group
Marc Collins, Chief Compliance Officer
Erin Heitman, Compliance Manager
Jon Mohrhardt
Melissa Hale
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Exhibit C
Exempt Transactions
The following transactions shall be exempt from the pre-clearance requirements and other provisions of this Code of Ethics, but the reporting and disclosure requirements of the Code shall apply:
A. Non-discretionary Transactions
Purchases or sales effected in any account over which an Access Person has no direct or indirect influence or control, or in any account of the Access Person which is managed on a discretionary basis by a person: (a) unrelated to the Access Person; (b) whom the Access Person does not, in fact, influence or control; and (c) with whom the Access Person does not confer or otherwise participate in connection with the purchase and sale of securities in the account.
Note: Any registered investment adviser retained by an Access Person shall be pre-approved by the Compliance Officer before the Access Person may rely upon this exemption. For this purpose, transactions effected under a power of attorney or a brokerage account agreement are not eligible for this exemption unless they contain an express delegation of investment discretion.
B. Non-volitional Transactions
Purchases or sales that are non-volitional on the part of the Access Person, including mergers, recapitalizations or similar transactions. Non-volitional transactions also include gifts of a Reportable Security to an Access Person over which the Access Person has no control of the timing.
C. Automatic Investment Plans
A program in which regular periodic purchases or sales are made automatically in or from investment accounts in accordance with a predetermined schedule and allocation, including an issuer’s automatic dividend reinvestment plan.
D. Rights Issuances
Purchases effected upon the exercise of rights issued by the issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired.
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Exhibit D
List of RiverNorth Funds
RiverNorth Core Opportunity Fund
RiverNorth/DoubleLine Strategic Income Fund
RiverNorth/Oaktree High Income Fund
| Revised | 6/30/2013 |
2/28/2014
11/7/2014
12/1/2014
9/1/2021
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