RIV 8-K
Rivernorth Opportunities Fund, Inc. (RIV)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 13, 2022 (April 12, 2022)
RIVERNORTH OPPORTUNITIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
| Maryland | 811-22472 | 46-4084978 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 1290 Broadway, Suite 1000 | ||
| Denver, Colorado 80203 | 80203 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (303) 623-2577
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Shares of Common Stock | RIV | New York Stock Exchange |
| 6.00% Series A Perpetual Preferred Shares (Liquidation Preference $25.00) | RIV PRA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☐ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01. | Entry into a Material Definitive Agreement. |
On April 12, 2022, RiverNorth Opportunities Fund, Inc. (NYSE: RIV) (the “Fund”) entered into an underwriting agreement (the “Underwriting Agreement”) by and among the Fund, ALPS Advisors, Inc., RiverNorth Capital Management, LLC, and UBS Securities LLC, Morgan Stanley & Co. LLC, and RBC Capital Markets, LLC, as representatives of the underwriters named in Exhibit A thereto, in connection with the issuance and sale of 3,400,000 shares of the Fund’s 6.00% Series A Perpetual Preferred Shares, par value $0.0001 per share (the “Preferred Shares”) at a price to the public of $25.00 per share (the “Offering”). Pursuant to the terms of the Underwriting Agreement, the Fund granted the Underwriters a 30-day option to purchase, severally and not jointly, up to an additional 510,000 Preferred Shares.
The Offering has been made pursuant a preliminary prospectus supplement, dated April 5, 2022 and prospectus supplement, dated April 12, 2022 and the accompanying prospectus, dated January 25, 2022, each of which constitute part of the Fund’s effective shelf registration statement on Form N-2 (File No. 333- 261239) previously filed with the Securities and Exchange Commission (the “Registration Statement”).
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement filed with this report as Exhibit 1.1 and incorporated herein by reference.
In connection with the offering of the Preferred Shares, the Fund entered into an amendment, effective as of April 12, 2022, to the Transfer Agency, Registrar and Dividend Disbursing Agency Agreement (the “Transfer Agency Agreement”) with DST Systems, Inc. to provide services with respect to the Preferred Shares.
The foregoing description is only a summary of the amendment to the Transfer Agency Agreement and is qualified in its entirety by reference to the text of the amendment to the Transfer Agency Agreement filed with this report as Exhibit 10.1 and incorporated herein by reference.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On March 17, 2022, the Board of the Fund approved articles supplementary (the “Articles Supplementary”) establishing and fixing the rights and preferences of the Preferred Shares. The Articles Supplementary authorized 3,910,000 Preferred Shares, liquidation preference $25.00 per share. A copy of the Articles Supplementary is filed as Exhibit 3.1 to this report and incorporated herein by reference.
| Item 8.01. | Other Events. |
On April 12, 2022, the Fund conducted the Offering pursuant to the Fund’s Registration Statement. A copy of the opinion of McDermott Will & Emery LLP relating to the legality of the Preferred Shares is filed as Exhibit 5.1 to this report.
The Fund incorporates by reference the exhibits filed herewith into the Registration Statement.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
| 1.1 | Underwriting Agreement, dated April 12, 2022, by and among the Fund, ALPS Advisors, Inc., RiverNorth Capital Management, LLC, and UBS Securities LLC, Morgan Stanley & Co. LLC, and RBC Capital Markets, LLLC as representatives of the underwriters named in Exhibit A thereto | |
| 3.1 | Articles Supplementary of Perpetual Preferred Shares | |
| 5.1 | Opinion of McDermott Will & Emery LLP | |
| 10.1 | Amendment, effective as of April 12, 2022 to the Transfer Agency, Registrar and Dividend Disbursing Agency Agreement between the Fund and DST Systems, Inc. | |
| 23.1 | Consent of Dechert LLP | |
| 99.1 | Pricing Press Release |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| RiverNorth Opportunities Fund, Inc. | ||
| Date: April 13, 2022 | By: | /s/ Kathryn Burns |
| Kathryn Burns | ||
| President | ||
RiverNorth Opportunities Fund, Inc. 8-K
Exhibit 1.1
RiverNorth Opportunities Fund, Inc.
3,400,000 Shares of 6.00% Series A Perpetual Preferred Stock
Dated: April 12, 2022
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
UNDERWRITING AGREEMENT
UBS Securities LLC
Morgan Stanley & Co. 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 Opportunities Fund, Inc., a Maryland corporation (the “Fund”), ALPS Advisors, Inc., a Colorado corporation (the “Investment Adviser”) and RiverNorth Capital Management, LLC, a Delaware limited liability company (the “Subadviser” and together with the Investment Adviser, the “Advisers”) confirm their respective agreements with UBS Securities LLC (“UBS”), Morgan Stanley & Co. LLC (“Morgan Stanley”) and RBC Capital Markets, LLC (“RBCCM”) 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, Morgan Stanley and RBCCM are acting as representatives (in such capacity, the “Representatives”), with respect to the issue and sale by the Fund of a total of 3,400,000 shares of the Fund’s 6.00% Series A Perpetual Preferred Stock (the “Initial Securities”), and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of Initial Securities set forth in said Exhibit A hereto, and with respect to the grant by the Fund to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of 510,000 additional shares of the Fund’s 6.00% Series A Perpetual Preferred Stock (the “Option Securities”), to cover over allotments, if any. The Initial Securities to be purchased by the Underwriters and all or any part of the Option Securities are hereinafter called, collectively, the “Securities.” 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 April 5, 2022 (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) an Investment Advisory Agreement with the Investment Adviser dated as of June 29, 2018, (ii) a Master Custodian Agreement with State Street Bank and Trust Company dated as of November 17, 2015, (iii) an Administration, Bookkeeping and Pricing Services Agreement with ALPS Fund Services, Inc. dated as of November 20, 2015, as amended on June 20, 2018, (iv) an Agency Agreement with DST Systems, Inc. dated as of November 20, 2015, (v) a Distribution Agreement with ALPS Distributors, Inc. dated as of November 11, 2020 and amended on September 21, 2021 and January 27, 2022, (vi) a Special Custody Agreement among the Fund, National Financial services LLC, acting through its division Fidelity Capital Markets, and State Street Bank and Trust Company dated as of August 25, 2016 and (vii) a License Agreement with the Subadviser dated as of December 22, 2015, as amended on March 20, 2018, and such agreements are herein referred to as the “Investment Advisory Agreement,” the “Custody Agreement,” the “Administration Agreement,” the “Agency Agreement, the “Distribution Agreement,” the “Special Custody Agreement” and the “License Agreement” respectively. Collectively, the Investment Advisory Agreement, the Custody Agreement, the Administration Agreement, the Agency Agreement and the License Agreement are herein referred to as the “Fund Agreements.”
The Investment Adviser has entered into the Sub-advisory Agreement with the Subadviser dated as of June 29, 2018 (the “Sub-Advisory Agreement” together with the Investment 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. 333-261239 and 811-22472) 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. 1 to the Registration Statement, filed on January 24, 2022, 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 Advisers. The Fund and the Advisers, jointly and severally, represent and warrant to each Underwriter as of the date hereof, as of the Applicable Time, as of the Closing Date referred to in Section 2(c) hereof,and as of each Option Closing Date (if any) referred to in Section 2(b) hereof, and agree with each Underwriter, as follows:
3
(1) Compliance with Registration Requirements. The Original Registration Statement became effective under the 1933 Act on January 25, 2022 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 Investment 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 (and, if any Option Securities are purchased, at the applicable Option 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, if any Option Securities are purchased, at the applicable Option 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.
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.
4
(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 (and, if any Option Securities are purchased, at the applicable Option 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., 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 in all material respects 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.
(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.
5
(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. The provisions of the Fund’s Organizational Documents comply in all material respects with the requirements of the Investment Company Act.
(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 Investment 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.
6
(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 Advisers 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 Advisory Agreement and the Sub-advisory Agreement. The Fund’s Board of Directors and the Fund’s sole shareholder has approved the Investment Advisory 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.
7
(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 Perpetual Preferred Shares”, “Prospectus Supplement – Description of Securities”, “Prospectus Supplement – Asset Coverage Ratio”, “Prospectus Supplement – Special Characteristics and Risks of the Perpetual Preferred Shares”, “Prospectus Supplement – Taxation”, “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.
8
(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.
(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 (ii) and (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.
9
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.
10
(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 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.
(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.
11
(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).
(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.
12
(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.
(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 Investment 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.
13
(35) Pending Proceedings and Examinations. To the knowledge of the Fund and the Advisers, 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.
(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.
14
(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 Investment Adviser. The Investment Adviser represents and warrants to each Underwriter as of the date hereof, as of the Applicable Time, as of the Closing Date and as of each Option Closing Date (if any), and agrees with each Underwriter, as follows:
(1) Adviser Status. The Investment 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 Investment 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 Investment Adviser which are material with respect to the Investment Adviser other than those in the ordinary course of its business as described in the Original Registration Statement, the Preliminary Prospectus and the Prospectus.
(4) Good Standing. The Investment Adviser has been duly formed and is validly existing in good standing as a corporation under the laws of the State of Colorado 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 Investment 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.
15
(5) Power and Authority. The Investment 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 Investment Adviser of its obligations under this Agreement and the Adviser Agreements have been duly and validly authorized by the Investment Adviser; and this Agreement and the Adviser Agreements have been duly executed and delivered by the Investment 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 Investment Adviser, enforceable against the Investment 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 Investment 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 itself) 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 Investment Adviser. The description of the Investment Adviser and its business and the statements attributable to the Investment 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 Investment 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 Investment 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 Investment 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 Investment 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 Investment Adviser pursuant to the terms of any agreement or instrument to which the Investment Adviser is a party or by which the Investment Adviser may be bound or to which any of the property or assets of the Investment 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 Investment Adviser of its obligations under this Agreement or the Adviser Agreements.
16
(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 Investment Adviser, threatened, against or affecting the Investment 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 Investment Adviser of its obligations under this Agreement or the Adviser Agreements; the aggregate of all pending legal or governmental proceedings to which the Investment 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 Investment 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 Investment 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 Investment 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 Investment Adviser under any such Permit.
17
(12) Adviser Compliance with Policies and Procedures. The Investment 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 Investment Adviser and its supervised persons.
(13) Absence of Manipulation. The Investment 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 Investment Adviser or its affiliates, and the Investment Adviser is not aware of any such action taken or to be taken by any affiliates of the Investment Adviser, other than such actions as taken by the Underwriters that are affiliates of the Investment 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.
(14) Promotional Materials. In the event that the Fund or the Investment 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 Investment 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 Investment 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 Investment Adviser deems adequate; all such policies of insurance are in full force and effect; and the Investment 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.
18
(16) Internal Controls. The Investment Adviser maintains a system of internal controls sufficient to provide reasonable assurance that (i) transactions effectuated by it under the Investment Advisory 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 Investment 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 Investment 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 Investment Adviser or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Investment Adviser, threatened.
(19) Anti-Bribery Laws. Neither the Investment Adviser nor, to the knowledge of the Investment Adviser, any trustee, officer, agent, employee or affiliate of the Investment 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 Investment Adviser and, to the knowledge of the Investment 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 Investment Adviser nor, to the knowledge of the Investment Adviser, any trustee, officer, agent, employee or affiliate of the Investment Adviser is currently subject to any Sanctions and the Investment 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.
19
(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 as of each Option Closing Date (if any), and agrees with each Underwriter, as follows:
(1) 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.
(2) 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.
(3) 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.
(4) Good Standing. The Subadviser 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 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.
(5) 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.
20
(6) 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.
(7) 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 (ii) and (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.
(8) 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.
21
(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 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.
(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 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 Advisers 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 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.
(12) 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.
22
(13) 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.
(14) 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.
(15) 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.
(16) 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.
(17) 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.
23
(18) 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.
(19) 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.
(20) 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) Initial Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Fund agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Fund, at a purchase price per share set forth in Exhibit B hereto, the amount of the Initial 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.
24
(b) Option Securities. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Fund hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to 510,000 Option Securities at the same purchase price per share as the Underwriters shall pay for the Initial Securities less an amount per share equal to any dividends or distributions declared by the Fund and payable on the Initial Securities but not payable on the Option Securities. Said option may be exercised only to cover over-allotments in the sale of the Initial Securities by the Underwriters. Said option may be exercised in whole or in part at any time and from time to time on or before the 30th day after the date of the Prospectus upon written or telegraphic notice by the Representatives to the Fund setting forth the number of shares of the Option Securities as to which the several Underwriters are exercising the option and the settlement date. The number of Option Securities to be purchased by each Underwriter shall be the same percentage of the total number of shares of the Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Initial Securities, subject to such adjustments as the Fund or the Advisers in their absolute discretion shall make to eliminate any fractional shares. Any such time and date of delivery (an “Option Closing Date”) shall be determined by the Representative, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Date, as hereinafter defined.
(c) Payment. Payment of the purchase price for the Securities, and delivery of the related closing certificates therefor, shall be made at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 155 North Wacker Drive, Chicago, Illinois 60612, 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”).
In addition, in the event that any or all of the Option Securities are purchased by the Underwriters, payment for the purchase price for, and delivery of certificates for, such Option Securities shall be made at the above mentioned offices, or at such other place as shall be agreed upon by the Representatives and the Fund, on each Option Closing Date as specified in the notice from the Representatives to the Fund.
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 Initial Securities and the Option Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct. UBS, Morgan Stanley and RBCCM, individually and not as Representatives of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Initial Securities or the Option Securities, if any, to be purchased by any Underwriter whose funds have not been received by the Closing Date or the relevant Option Closing Date, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder.
25
Section 3. Covenants of the Fund and the Advisers. The Fund and the Advisers, jointly and severally, covenant with each Underwriter as follows:
(a) 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.
(b) Filing of Amendments and 1934 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 reasonably 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.
26
(c) 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.
(d) 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.
(e) 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.
27
(f) 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.
(g) 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.
(h) 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.”
(i) Listing. The Fund will use its best efforts to effect the listing of the Securities on the NYSE, subject to notice of issuance.
(j) Reporting Requirements. The Fund, during the period when the Prospectus is (or, but for the exception afforded by Rule 172 of the Securities Act, would be) required to be delivered 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.
(k) 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.
(l) Absence of Manipulation. The Fund and the Advisers 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).
28
(m) Restriction on Sale of Securities. The Fund and the Advisers 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 1934 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.
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 $135,000, 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; provided, however, that the Fund and the Advisers shall not be liable for any loss of anticipated profits or speculative or consequential or similar damages for such termination.
29
Section 5. Conditions of Underwriters’ Obligations. The obligations of the Underwriters to purchase the Initial Securities and the Option Securities, as the case may be, 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, the Closing Date and any Option 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 (or at the applicable Option Closing Date, as the case may be) 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. The Fund shall have filed with the Commission, in accordance with Section 12 of the 1934 Act, a registration statement on Form 8-A to register, under Section 12(b) of the 1934 Act, the class of securities consisting of the Preferred Shares.
(b) (i) Opinion of Counsel for the Fund. At the Closing Date, the Representatives shall have received the favorable opinion, dated as of the Closing Date, of Dechert 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, Dechert LLP will be permitted to rely on the opinion of McDermott Will & Emery LLP (“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 Skadden, Arps, Slate, Meagher & Flom 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, Skadden, Arps, Slate, Meagher & Flom LLP will be permitted to rely on the opinion of Maryland Counsel set forth in Exhibit G hereto.
30
(d) Certificates of the Fund. At the Closing Date or the applicable Option Closing Date, as the case may be, 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 Investment 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 Investment 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.
(f) Certificate of the Investment Adviser. At the Closing Date or the applicable Option Closing Date, as the case may be, 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 Investment Adviser and of the Chief Financial Officer or Chief Accounting Officer of the Investment 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 Investment 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 Investment 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 the General Counsel of 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.
31
(h) Certificate of the Subadviser. At the Closing Date or the applicable Option Closing Date, as the case may be, 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.
(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) Conditions to Purchase of Option Securities. In the event that the Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities on any Option Closing Date that is after the Closing Date, the obligations of the several Underwriters to purchase the applicable Option Securities shall be subject to the conditions specified in the introductory paragraph of this Section 5 and to the further condition that, at the applicable Option Closing Date, the Representatives shall have received:
(i) Officers’ Certificate of the Fund. A certificate, dated such Option Closing Date, to the effect set forth in, and signed by two of the officers specified in, Section 5(d) hereof, except that the references in such certificate to the Closing Date shall be changed to refer to such Option Closing Date.
32
(ii) (1) Opinion of Counsel for the Fund. The favorable opinion of Fund Counsel in form and substance satisfactory to counsel for the Underwriters, dated such Option Closing Date, relating to the Option Securities to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(b)(i) hereof. Insofar as the opinion expressed above related to or is dependent upon matters governed by Maryland law, Fund Counsel will be permitted to rely on the opinion of Maryland Counsel.
(2)
Opinion of Maryland Counsel. The favorable
opinion of Maryland Counsel in form and substance satisfactory to counsel for the Underwriters, dated such Option Closing Date, relating
to the Option Securities to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section
5(b)(ii) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable opinion of Skadden, Arps, Slate Meagher & Flom LLP, counsel for the Underwriters, dated such Option Closing Date, relating to the Option Securities to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(c) hereof. Insofar as the opinion expressed above related to or is dependent upon matters governed by Maryland law, Skadden, Arps, Slate Meagher & Flom LLP will be permitted to rely on the opinion of Maryland Counsel.
(iv) Certificates of the Fund. (i) A certificate, dated such Option Closing Date, to the effect set forth in, and signed by two of the officers specified in, Section 5(d) hereof, except that the references in such certificate to the Closing Date shall be changed to refer to such Option Closing Date; and (ii) a certificate, dated such Option Closing Date to the effect set forth in Section 5(d) hereof, and signed by the Fund’s Chief Financial Officer, except that the references in such certificate to the Closing Date shall be changed to refer to such Option Closing Date.
(v) Opinion of Counsel for the Investment Adviser. The favorable opinion of the General Counsel of the Investment Adviser, dated such Option Closing Date, relating to the Option Securities to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(e) hereof.
(vi) Certificate of the Investment Adviser. A certificate, dated such Option Closing Date, to the effect set forth in, and signed by two of the officers specified in, Section 5(f) hereof, except that the references in such certificate to the Closing Date shall be changed to refer to such Option Closing Date.
(vii) Opinion of Counsel for the Subadviser. The favorable opinion of the General Counsel of the Subadviser, dated such Option Closing Date, relating to the Option Securities to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(g) hereof.
(viii) Certificate of the Subadviser. A certificate, dated such Option Closing Date, to the effect set forth in, and signed by two of the officers specified in, Section 5(h) hereof, except that the references in such certificate to the Closing Date shall be changed to refer to such Option Closing Date.
(ix) Bring-down Comfort Letter. A letter from Cohen & Company, Ltd., in form and substance satisfactory to the Representative and dated such Option Closing Date, substantially in the same form and substance as the letter furnished to the Representative pursuant to Section 5(j) hereof, except that the “specified date” in the letter furnished pursuant to this paragraph shall be a date not more than five days prior to such Option Closing Date.
(l) 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.
(m) Filing of Articles Supplementary. The Fund will have filed the Articles Supplementary with the Commission prior to the Closing Date.
(n) No Downgrade. At the Closing Date and at each Option Closing Date, if any, the Securities shall be rated at least “A1” by Moody’s Investors Services Inc. and 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.
(o) Additional Documents. At the Closing Date and at each Option Closing Date, if any, 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.
(p) Delivery of Documents. The documents required to be delivered by this Section 5 shall be delivered at the office of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, at 155 N. Wacker Drive, Chicago, Illinois 60606, on the Closing Date and at each Option Closing Date, if any.
(q) 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, or, in the case of any condition to the purchase of Option Securities on an Option Closing Date which is after the Closing Date, the obligations of the several Underwriters to purchase the relevant Option Securities, may be terminated by the Representatives by notice to the Fund at any time at or prior to the Closing Date or the Option Closing Date, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4.
33
(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;
(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 reasonably incurred (including the fees and disbursements of counsel chosen by UBS), 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).
34
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 Investment Adviser or the Subadviser for use by the Underwriters and securities firms to whom the Fund, the Investment 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.
(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 Investment 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 Investment 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.
35
(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.
(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.
36
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.
37
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 Investment 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 Investment 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 (and, if any Option Securities are to be purchased on an Option Closing Date which occurs after the Closing Date, the Representatives may terminate the obligations of the several Underwriters to purchase such Option Securities, by notice to the Fund at any time on or prior to such Option 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, or an outbreak or escalation of hostilities, other calamity, 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.
38
(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.
Section 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Date or an Option 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 or, with respect to any Option Closing Date which occurs after the Closing Date, the obligation of the Underwriters to purchase and of the Fund to sell the Option Securities that were to have been purchased and sold on such Option Closing Date, 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 or, in the case of an Option Closing Date which is after the Closing Date, which does not result in a termination of the obligation of the Underwriters to purchase and the Fund to sell the relevant Option Securities, as the case may be, the Representatives shall have the right to postpone the Closing Date or the relevant Option Closing Date, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.
Section 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representatives 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 Opportunities Fund, Inc., 1290 Broadway, Suite 1000, Denver, Colorado 80203; notices to the Investment Adviser shall be directed to them at ALPS Advisors, Inc., 1290 Broadway, Suite 1000, Denver, Colorado 80203; and notices to the Subadviser shall be directed to them at RiverNorth Capital Management, LLC, 433 West Van Buren, 1150-E, Chicago, IL 60607, Attention: Marc L. Collins.
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.
39
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.
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 Investment 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.
40
“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.
“Original Registration Statement” means the registration statement at the time pre-effective amendment No. 1 to the Registration Statement, filed on January 24, 2022, 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. 333-261239 and 811-22472) 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.
41
“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.
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;
42
(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 INVESTMENT 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 INVESTMENT 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 INVESTMENT ADVISER OR THE UNDERWRITERS, AS THE CASE MAY BE, IS OR MAY BE SUBJECT, BY SUIT UPON SUCH JUDGMENT.
43
Section 18. Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) among the Fund, the Investment 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.
“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:
44
(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.
45
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 OPPORTUNITIES FUND, INC.
By
Name:
Title:
ALPS ADVISORS, INC.
By
Name:
Title:
RIVERNORTH CAPITAL MANAGEMENT, LLC
By
Name:
Title:
[Signature Page Follows]
As of the date first above written:
By: UBS SECURITIES LLC
By:
Name:
Title:
By:
Name:
Title:
By: MORGAN STANLEY & CO. LLC
By:
Name:
Title:
By: RBC CAPITAL MARKETS, LLC
By:
Name:
Title:
For themselves and as Representatives of the other Underwriters named in Exhibit A hereto, if applicable
[Signature Page Follows]
EXHIBIT A
RiverNorth Opportunities Fund, Inc.
6.00% Series A Perpetual Preferred Stock
| Name of Underwriter | Number of Securities | |
| UBS Securities LLC | 1,133,334 | |
| Morgan Stanley & Co. LLC | 1,133,333 | |
| RBC Capital Markets, LLC | 1,333,333 | |
| TOTAL | 3,400,000 |
A-1
The purchase price to be paid by the Underwriters for the Securities shall be $24.2125 per Security.
B-1
Issuer Free Writing Prospectus dated April 12, 2022
Relating to Preliminary Prospectus Supplement dated April 5, 2022 and
Prospectus dated January 25, 2022
RiverNorth Opportunities Fund, Inc.
6.00% Series A Perpetual Preferred Stock
April 12, 2022
The following sets forth the final terms of the 6.00% Series A Perpetual Preferred Stock, par value $0.0001 per share (the “Series A Preferred Shares”) and should only be read together with the preliminary prospectus supplement dated April 5, 2022, together with the accompanying prospectus dated January 25, 2022, relating to the Series A 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 Opportunities Fund, Inc. (the “Fund”) |
| Securities: | Series A Perpetual Preferred Stock |
| Type of Security: | Fixed-rate cumulative preferred stock |
| Title of the Securities: | 6.00% Series A Perpetual Preferred Stock, par value $0.0001 per share |
| Liquidation Preference: | $25.00 per share |
| Expected Rating:* | Moody’s: A1 |
|
Initial Aggregate Principal Amount Being Offered: |
$85,000,000 |
| Number of Preferred Shares | 3,400,000 |
C-1
| Over Allotment Option: | Up to 510,000 additional shares exercisable within 30 days of the date hereof solely to cover over allotments, if any. |
| Initial Public Offering Price: | 100% of aggregate principal amount ($25 per Preferred Share) |
| Listing: | The Fund has applied to list the Series A Preferred Shares on the New York Stock Exchange (“NYSE”). If the application is approved, the Series A Preferred Shares are expected to commence trading on the NYSE under the symbol “RIVPRA” within thirty days of the date of issuance. |
| Underwriting Discount: | $0.7875 per share (or $2,677,500 total) |
|
Proceeds, net of commissions, before Expenses: |
$82,322,500 |
| Trade Date: | April 12, 2022 |
| Settlement Date: | April 20, 2022 |
| Dividend Rate: | 6.00% (cumulative from April 20, 2022) |
| 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 May 15, 2022. |
| Dividend Periods: | The first period for which dividends on the Series A 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 May 15, 2027, the Fund may redeem in whole or from time to time in part outstanding Series A 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: | 76881Y 208 / US76881Y2081 |
| Underwriters: |
UBS Securities LLC Morgan Stanley & Co. 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.
C-2
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 A 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.
Investors are advised to carefully consider the investment objective, risks and charges and expenses of the Fund before investing. The preliminary prospectus supplement, dated April 5, 2022, and accompanying prospectus, dated January 25, 2022, 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, Morgan Stanley & Co. LLC toll-free at 1-866-718-1649 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
FORM OF OPINION OF FUND COUNSEL
D-1
FORM OF OPINION OF ADVISER COUNSEL
E-1
FORM OF OPINION OF SUBADVISER COUNSEL
F-1
FORM OF OPINION OF MARYLAND COUNSEL
G-1
RiverNorth Opportunities Fund, Inc. 8-K
Exhibit 3.1
RiverNorth OPPORTUNITIES FUND, INC.
ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES
OF PERPETUAL Preferred sTOCK
DATED AS OF APRIL 12, 2022
RiverNorth Opportunities Fund, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:
RECITALS
FIRST: The Corporation is authorized under Article V of the charter of the Corporation (the “Charter”) to issue up to 37,500,000 shares of stock (“Capital Stock”), all of which are shares of Common Stock, $0.0001 par value per share (“Common Stock”).
SECOND: Pursuant to the authority expressly vested in the Board of Directors of the Corporation (the “Board of Directors”) by Article V of the Charter and Section 2-208 of the Maryland General Corporation Law, the Board of Directors has, by resolutions duly adopted on March 17, 2022, and April 12, 2022 (a) reclassified and designated 3,910,000 authorized but unissued shares of Common Stock as shares of Perpetual Preferred Stock, $0.0001 par value per share (“Perpetual Preferred Stock”), with such class of stock to be issued in one or more series; and (b) reclassified and designated 3,910,000 authorized but unissued shares of Perpetual Preferred Stock as shares of Series A Perpetual Preferred Stock, $0.0001 par value per share (“Series A Perpetual Preferred Stock”).
THIRD: The preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption, of each series of Perpetual Preferred Stock, as established by the Board of Directors, are set forth in these Articles Supplementary, as modified, amended or supplemented from time to time in any Appendix (each, an “Appendix” and, collectively, the “Appendices”) to these Articles Supplementary specifically relating to such series (each such series being referred to herein as a “Series of Perpetual Preferred Shares”, “Perpetual Preferred Shares of a Series” or a “Series” and shares of all such Series being referred to herein individually as a “Perpetual Preferred Share” and, collectively, as the “Perpetual Preferred Shares”), which (upon any restatement of the Charter) shall become part of Article V of the Charter (or any successor provision thereto), with any necessary or appropriate renumbering or relettering of the sections or subsections hereof, as follows:
ARTICLE
I
DEFINITIONS
1.1.
Definitions. Unless the context or use indicates another or different meaning or intent and except with respect to any Series as specifically provided in the Appendix applicable to such Series, each of the following terms when used in these Articles Supplementary shall have the meaning ascribed to it below, whether such term is used in the singular or plural and regardless of tense:
“1940 Act” means the Investment Company Act of 1940, as amended, or any successor statute.
“1940 Act Asset Coverage” means the Asset Coverage specified in Section 18(a)(2)(B) of the 1940 Act as in effect on the date hereof.
“Appendices” and “Appendix” shall have the respective meanings as set forth in the Recitals of these Articles Supplementary.
“Articles Supplementary” means these Articles Supplementary Establishing and Fixing the Rights and Preferences of Perpetual Preferred Stock, as they may be amended from time to time in accordance with their terms.
“Asset Coverage” shall mean the “asset coverage” of a class of senior security which is stock, as specified in Section 18 of the 1940 Act as in effect on the date hereof.
“Asset Coverage Cure Date” means, with respect to the failure by the Corporation to maintain Asset Coverage as of the close of business on the last Business Day of a Calendar Quarter (as required by Section 2.4(a)), the date that is thirty (30) calendar days following the Filing Date with respect to such Calendar Quarter.
“Board of Directors” shall have the meaning as set forth in the Recitals of these Articles Supplementary.
“Business Day” means any calendar day on which the New York Stock Exchange is open for trading.
“Calendar Quarter” shall mean any of the three month periods ending March 31, June 30, September 30, or December 31 of each year.
“Capital Stock” shall have the meaning as set forth in the Recitals of these Articles Supplementary.
“Charter” shall have the meaning as set forth in the Recitals of these Articles Supplementary.
“Commission” means the U.S. Securities and Exchange Commission.
“Common Stock” shall have the meaning as set forth in the Recitals of these Articles Supplementary.
“Corporation” shall have the meaning as set forth in the Preamble to these Articles Supplementary.
“Custodian” means a bank, as defined in Section 2(a)(5) of the 1940 Act, that has the qualifications prescribed in paragraph 1 of Section 26(a) of the 1940 Act, or such other entity as shall be providing custodian services to the Corporation as permitted by the 1940 Act or any rule, regulation, or order thereunder, and shall include, as appropriate, any similarly qualified sub-custodian duly appointed by the Custodian.
“Custodian Agreement” means the Custodian Agreement by and among the Custodian and the Corporation.
“Date of Original Issue” means, with respect to any Series, the date specified as the Date of Original Issue for such Series in the Appendix for such Series.
“Default” shall have the meaning as set forth in Section 2.2(g)(i).
“Default Period” shall have the meaning as set forth in Section 2.2(g)(i).
“Default Rate” shall have the meaning as set forth in Section 2.2(g)(i).
“Deposit Securities” means, as of any date, any United States dollar-denominated security or other investment of a type described below that either (i) is a demand obligation payable to the holder thereof on any Business Day or (ii) has a maturity date, mandatory redemption date or mandatory payment date, on its face or at the option of the holder, preceding the relevant Redemption Date, Dividend Payment Date or other payment date in respect of which such security or other investment has been deposited or set aside as a Deposit Security:
(i)
cash or any cash equivalent;
(ii)
any U.S. Government Obligation;
(iii)
any Short-Term Money Market Instrument;
| - 2 - |
(iv)
any investment in any money market fund registered under the 1940 Act that qualifies under Rule 2a-7 under the 1940 Act, or similar investment vehicle described in Rule 12d1-1(b)(2) under the 1940 Act, that invests principally in Short-Term Money Market Instruments or U.S. Government Obligations or any combination thereof; or
(v)
any letter of credit from a bank or other financial institution that has a credit rating from at least one rating agency that is the highest applicable rating generally ascribed by such rating agency to bank deposits or short-term debt of similar banks or other financial institutions as of the date of these Articles Supplementary (or such rating’s future equivalent).
“Dividend Default” shall have the meaning as set forth in Section 2.2(g)(i).
“Dividend Payment Date” means, with respect to any Series, each of the Dividend Payment Dates for such Series set forth in the Appendix for such Series.
“Dividend Period” means, with respect to any Series, the Dividend Period for such Series set forth in the Appendix for such Series.
“Dividend Rate” means, with respect to any Series and as of any date, the Fixed Dividend Rate for that Series as adjusted, if a Default Period shall be in existence on such date, in accordance with the provisions of Section 2.2(g).
“Electronic Means” means email transmission, facsimile transmission or other similar electronic means of communication providing evidence of transmission (but excluding online communications systems covered by a separate agreement) acceptable to the sending party and the receiving party, in any case if operative as between any two parties, or, if not operative, by telephone (promptly confirmed by any other method set forth in this definition), which, in the case of notices to the Redemption and Paying Agent and the Custodian, shall be sent by such means to each of its representatives set forth in the Redemption and Paying Agent Agreement and the Custodian Agreement, respectively.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Filing Date” means, with respect to any Calendar Quarter, the date of filing of the Corporation’s SEC Report with respect to such Calendar Quarter.
“Fixed Dividend Rate” means, with respect to any Series, the rate per annum specified as the Fixed Dividend Rate for such Series in the Appendix for such Series.
“Holder” means, with respect to the Perpetual Preferred Shares of any Series or any other security issued by the Corporation, a Person in whose name such security is registered in the registration books of the Corporation maintained by the Redemption and Paying Agent or otherwise.
“Liquidation Preference” means, with respect to any Series, the amount specified as the liquidation preference per share for that Series in the Appendix for such Series.
“Mandatory Redemption Price” shall have the meaning as set forth in Section 2.5(a)(i).
“Market Value” of any asset of the Corporation means, for securities for which market quotations are readily available, the market value thereof determined by an independent third-party pricing service designated from time to time by the Board of Directors. Market Value of any asset shall include any interest accrued thereon. The pricing service shall value portfolio securities at the mean between the quoted bid and asked price or the yield equivalent when quotations are readily available. Securities for which quotations are not readily available shall be valued at fair value as determined by the pricing service using methods that include consideration of: yields or prices of securities of comparable quality, type of issue, coupon, maturity and rating; indications as to value from dealers; and general market conditions. The pricing service may employ electronic data processing techniques or a matrix system, or both, to determine recommended valuations.
| - 3 - |
“Non-Call Period” means, with respect to any Series, the period (if any) during which such Series shall not be subject to redemption at the option of the Corporation, as set forth in the Appendix for such Series.
“Notice of Redemption” shall have the meaning as set forth in Section 2.5(d).
“NRSRO” means any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act that is not an “affiliated person” (as defined in Section 2(a)(3) of the 1940 Act) of the Corporation.
“Optional Redemption Date” shall have the meaning as set forth in Section 2.5(b)(i).
“Optional Redemption Premium” means, with respect to any Series, the premium (expressed as a percentage of the Liquidation Preference of the shares of such Series), if any, payable by the Corporation upon the redemption of Perpetual Preferred Shares of such Series at the option of the Corporation, as set forth in the Appendix for such Series.
“Optional Redemption Price” shall have the meaning as set forth in Section 2.5(b)(i).
“Outstanding” means, as of any date with respect to Perpetual Preferred Shares of any Series, the number of Perpetual Preferred Shares of such Series theretofore issued by the Corporation except (without duplication):
(i)
any shares of such Series theretofore cancelled or redeemed or delivered to the Redemption and Paying Agent for cancellation or redemption in accordance with the terms hereof;
(ii)
any shares of such Series as to which the Corporation shall have given a Notice of Redemption and irrevocably deposited with the Redemption and Paying Agent sufficient Deposit Securities to redeem such shares in accordance with Section 2.5 hereof;
(iii)
any shares of such Series as to which the Corporation shall be the Holder or the beneficial owner; and
(iv)
any shares of such Series represented by any certificate in lieu of which any new certificate has been executed and delivered by the Corporation.
“Perpetual Preferred Shares” shall have the meaning as set forth in the Recitals of these Articles Supplementary.
“Person” means and includes an individual, a partnership, a trust, a corporation, a limited liability company, an unincorporated association, a joint venture or other entity or a government or any agency or political subdivision thereof.
“Preferred Stock” means any Capital Stock of the Corporation classified as preferred stock, including shares of each Series of Perpetual Preferred Shares, shares of any other series of such preferred stock now or hereafter issued by the Corporation, and any other shares of Capital Stock hereafter authorized and issued by the Corporation of a class having priority over any other class as to distribution of assets or payments of dividends.
| - 4 - |
“Rating Agency” means, as of any date and in respect of a Series of Perpetual Preferred Shares, (i) Moody’s Investors Service, Inc., to the extent it maintains a rating on the Perpetual Preferred Shares of such Series on such date and has not been replaced as a Rating Agency in accordance with Section 2.8 and (ii) any other NRSRO designated as a Rating Agency on such date in accordance with Section 2.8. Moody’s Investors Service, Inc. has initially been designated as Rating Agency for purposes of the Perpetual Preferred Shares subject to this Statement. In the event that at any time any Rating Agency (i) ceases to be a Rating Agency for purposes of any Series of Perpetual Preferred Shares and such Rating Agency has been replaced by another Rating Agency in accordance with Section 2.8, any references to any credit rating of the replaced Rating Agency in this Statement or any Appendix shall be deleted for purposes hereof as provided below and shall be deemed instead to be references to the equivalent credit rating of the Rating Agency that has replaced such Rating Agency as of the most recent date on which such replacement Rating Agency published credit ratings for such Series of Perpetual Preferred Shares or (ii) designates a new rating definition for any credit rating of such Rating Agency with a corresponding replacement rating definition for such credit rating of such Rating Agency, any references to such replaced rating definition of such Rating Agency contained in this statement or any Appendix shall instead be deemed to be references to such corresponding replacement rating definition. In the event that at any time the designation of any Rating Agency as a Rating Agency for purposes of any Series of Perpetual Preferred Shares is terminated in accordance with Section 2.8, any rating of such terminated Rating Agency, to the extent it would have been taken into account in any of the provisions of this Statement or the Appendix for such Series of Perpetual Preferred Shares, shall be disregarded, and only the ratings of the then-designated Rating Agency for such Series of Perpetual Preferred Shares shall be taken into account for purposes of this Statement and such Appendix.
“Rating Agency Guidelines” means the guidelines of any Rating Agency, as they may be amended or modified from time to time, compliance with which is required to cause such Rating Agency to continue to issue a rating with respect to a Series of Perpetual Preferred Shares for so long as any Perpetual Preferred Shares of such Series are Outstanding.
“Redemption and Paying Agent” means, with respect to any Series, DST Systems, Inc. and its successors or any other redemption and paying agent appointed by the Corporation with respect to such Series.
“Redemption and Paying Agent Agreement” means, with respect to any Series, the Redemption and Paying Agent Agreement or other similarly titled agreement by and among the Redemption and Paying Agent for such Series and the Corporation with respect to such Series.
“Redemption Date” shall have the meaning as set forth in Section 2.5(d).
“Redemption Default” shall have the meaning as set forth in Section 2.2(g)(i).
“Redemption Price” shall mean the Mandatory Redemption Price or the Optional Redemption Price, as applicable.
“SEC Report” means, with respect to any Calendar Quarter, the Corporation’s Annual Report on Form N-CSR or Form N-CEN, Semi-Annual Report on Form N-CSRS, or Monthly Report on Form N-PORT, as applicable, filed by the Corporation with the Securities and Exchange Commission with respect to the fiscal period ending as of the last day of such Calendar Quarter.
“Securities Depository” shall mean The Depository Trust Company and its successors and assigns or any other securities depository selected by the Corporation that agrees to follow the procedures required to be followed by such securities depository as set forth in these Articles Supplementary with respect to the Perpetual Preferred Shares.
“Senior Security” shall have the meaning specified in Section 18 under the 1940 Act, as in effect on the date hereof.
“Series” shall have the meaning as set forth in the Recitals of these Articles Supplementary.
“Short-Term Money Market Instruments” means the following types of instruments if, on the date of purchase or other acquisition thereof by the Corporation, the remaining term to maturity thereof is not in excess of 180 days:
(i)
commercial paper rated A-1 if such commercial paper matures in 30 days or A-1+ if such commercial paper matures in over 30 days;
| - 5 - |
(ii)
demand or time deposits in, and banker’s acceptances and certificates of deposit of (A) a depository institution or trust company incorporated under the laws of the United States of America or any state thereof or the District of Columbia or (B) a United States branch office or agency of a foreign depository institution (provided that such branch office or agency is subject to banking regulation under the laws of the United States, any state thereof or the District of Columbia); and
(iii)
overnight funds.
“U.S. Government Obligations” means direct obligations of the United States or of its agencies or instrumentalities that are entitled to the full faith and credit of the United States and that, other than United States Treasury Bills, provide for the periodic payment of interest and the full payment of principal at maturity or call for redemption.
“Voting Period” shall have the meaning as set forth in Section 2.6(b)(i).
With respect to any Series, any additional definitions specifically set forth in the Appendix relating to such Series and any amendments to any definitions specifically set forth in the Appendix relating to such Series, as such Appendix may be amended from time to time, shall be incorporated herein and made part hereof by reference thereto, but only with respect to such Series.
1.2.
Interpretation. The headings preceding the text of Articles and Sections included in these Articles Supplementary are for convenience only and shall not be deemed part of these Articles Supplementary or be given any effect in interpreting these Articles Supplementary. The use of the masculine, feminine or neuter gender or the singular or plural form of words herein shall not limit any provision of these Articles Supplementary. The use of the terms “including” or “include” shall in all cases herein mean “including, without limitation” or “include, without limitation,” respectively. Reference to any Person includes such Person’s successors and assigns to the extent such successors and assigns are permitted by the terms of any applicable agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually. Reference to any agreement (including these Articles Supplementary), document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof. Except as otherwise expressly set forth herein, reference to any law means such law as amended, modified, codified, replaced or re-enacted, in whole or in part, including rules, regulations, enforcement procedures and any interpretations promulgated thereunder. Underscored references to Articles or Sections shall refer to those portions of these Articles Supplementary. The use of the terms “hereunder,” “hereof,” “hereto” and words of similar import shall refer to these Articles Supplementary as a whole and not to any particular Article, Section or clause of these Articles Supplementary.
ARTICLE
II
TERMS APPLICABLE TO ALL SERIES OF
PERPETUAL PREFERRED SHARES
Except for such changes and amendments hereto with respect to a Series of Perpetual Preferred Shares that are specifically contemplated by the Appendix relating to such Series, each Series of Perpetual Preferred Shares shall have the following terms:
2.1.
Number of Shares; Ranking.
(a)
The number of authorized shares constituting any Series of Perpetual Preferred Shares shall be as set forth with respect to such Series in the Appendix hereto relating to such Series. No fractional Perpetual Preferred Shares shall be issued.
(b)
The Perpetual Preferred Shares of each Series shall rank on parity with shares of each other Series of Perpetual Preferred Shares and with shares of any other series of Preferred Stock as to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of the affairs of the Corporation. The Perpetual Preferred Shares of each Series shall have preference with respect to the payment of dividends and as to distribution of assets upon dissolution, liquidation or winding up of the affairs of the Corporation over the Common Stock as set forth herein.
| - 6 - |
(c)
No Holder of Perpetual Preferred Shares shall have, solely by reason of being such a Holder, any preemptive or other right to acquire, purchase or subscribe for any Perpetual Preferred Shares or shares of Common Stock or other securities of the Corporation which it may hereafter issue or sell.
2.2.
Dividends and Distributions.
(a)
The Holders of any Perpetual Preferred Shares of any Series shall be entitled to receive, when, as and if declared by, or under authority granted by, the Board of Directors, out of funds legally available therefor and in preference to dividends and distributions on the Common Stock, cumulative cash dividends and distributions on each share of such Series, calculated separately for each Dividend Period for such Series at the Dividend Rate in effect from time to time for such Series during such Dividend Period, computed on the basis of a 360-day year consisting of twelve 30-day months, on an amount equal to the Liquidation Preference for a share of such Series, and no more. Dividends and distributions on the Perpetual Preferred Shares of any Series shall accumulate from the Date of Original Issue with respect to such Series and shall be payable quarterly in arrears as provided in Section 2.2(f). Dividends payable on any Perpetual Preferred Shares of any Series for any period of less than a full quarterly Dividend Period, upon any redemption of such shares on any Redemption Date other than on a Dividend Payment Date, or, in the case of the first Dividend Period, more than a full quarterly period, shall be computed on the basis of a 360-day year consisting of twelve 30-day months and the actual number of days elapsed for any period of less than, or, in the case of the first Dividend Period, greater than, one quarter.
(b)
Dividends on shares of each Series of Perpetual Preferred Shares with respect to any Dividend Period shall be declared to the Holders of record of such shares as their names shall appear on the registration books of the Corporation at the close of business on the applicable record date, which shall be such date designated by the Board of Directors that is not more than twenty (20) nor less than ten (10) calendar days prior to the Dividend Payment Date with respect to such Dividend Period, and shall be paid as provided further in Section 2.2(f) hereof.
(c)
(i) No full dividends and distributions shall be declared or paid on shares of a Series of Perpetual Preferred Shares for any Dividend Period or part thereof unless full cumulative dividends and distributions due through the most recent dividend payment dates therefor for all outstanding shares of Preferred Stock (including shares of other Series of Perpetual Preferred Shares) have been or contemporaneously are declared and paid through the most recent dividend payment dates therefor. If full cumulative dividends and distributions due have not been declared and paid on all outstanding Preferred Stock of any series, any dividends and distributions being declared and paid on a Series of Perpetual Preferred Shares will be declared and paid as nearly pro rata as possible in proportion to the respective amounts of dividends and distributions accumulated but unpaid on each such series of Preferred Stock on the relevant dividend payment date for such series. No Holders of Perpetual Preferred Shares shall be entitled to any dividends and distributions, whether payable in cash, property or shares, in excess of full cumulative dividends and distributions as provided in this Section 2.2(c)(i) on such Perpetual Preferred Shares.
(ii)
Except as noted below, for so long as any Perpetual Preferred Shares are Outstanding, the Corporation shall not: (x) declare any dividend or other distribution (other than a dividend or distribution paid in shares of Common Stock) in respect of the Common Stock, (y) call for redemption, redeem, purchase or otherwise acquire for consideration any Common Stock, or (z) pay any proceeds of the liquidation of the Corporation in respect of the Common Stock, unless, in each case, (A) immediately thereafter, the Corporation shall have 1940 Act Asset Coverage after deducting the amount of such dividend or distribution or redemption or purchase price or liquidation proceeds, (B) all cumulative dividends and distributions on all Perpetual Preferred Shares and all other Preferred Stock ranking on a parity with the Perpetual Preferred Shares due on or prior to the earlier of the declaration, record or payment date, as applicable, of the applicable dividend, distribution, redemption, purchase or acquisition shall have been declared and paid (or shall have been declared and Deposit Securities or sufficient funds (in accordance with the terms of such Preferred Stock) for the payment thereof shall have been deposited irrevocably with the paying agent for such Preferred Stock) and (C) the Corporation shall have deposited Deposit Securities pursuant to and in accordance with the requirements of Section 2.5(d)(ii) hereof with respect to Outstanding Perpetual Preferred Shares of any Series to be redeemed pursuant to Section 2.5(a) hereof for which a Notice of Redemption shall have been given or shall have been required to be given in accordance with the terms hereof on or prior to the date of the applicable dividend, distribution, redemption, purchase or acquisition. Notwithstanding the foregoing, the Corporation shall not, at any time, be prohibited or otherwise restricted in its ability to call for redemption, redeem, purchase or otherwise acquire for consideration shares of its Capital Stock in compliance with the 1940 Act.
| - 7 - |
(iii)
Any dividend payment made on shares of a Series of Perpetual Preferred Shares shall be credited against the dividends and distributions accumulated with respect to the Dividend Period or Dividend Periods for such Series for which dividends and distributions have not been paid, in chronological order.
(d)
Not later than 12:00 noon, New York City time, on the Dividend Payment Date for a Series of Perpetual Preferred Shares, the Corporation shall deposit with the Redemption and Paying Agent Deposit Securities having an aggregate Market Value on such date sufficient to pay the dividends and distributions that are payable on such Dividend Payment Date in respect of such Series. The Corporation may direct the Redemption and Paying Agent with respect to the investment or reinvestment of any such Deposit Securities prior to the Dividend Payment Date, provided that such investment or reinvestment consists exclusively of Deposit Securities and provided further that the proceeds of any such investment will be available as same day funds at the opening of business on such Dividend Payment Date.
(e)
All Deposit Securities paid to the Redemption and Paying Agent for the payment of dividends payable on a Series of Perpetual Preferred Shares shall be held in trust for the payment of such dividends by the Redemption and Paying Agent for the benefit of the Holders of such Series entitled to the payment of such dividends pursuant to Section 2.2(f). Any moneys paid to the Redemption and Paying Agent in accordance with the foregoing but not applied by the Redemption and Paying Agent to the payment of dividends, including interest earned on such moneys while so held, will, to the extent permitted by law, be repaid to the Corporation as soon as possible after the date on which such moneys were to have been so applied, upon request of the Corporation.
(f)
Dividends on shares of a Series of Perpetual Preferred Shares shall be paid on each Dividend Payment Date for such Series to the Holders of shares of such Series as their names appear on the registration books of the Corporation at the close of business on the applicable record date for such dividend, which record date shall be determined as set forth in Section 2.2(b). Dividends in arrears on shares of a Series of Perpetual Preferred Shares for any past Dividend Period may be declared and paid at any time, without reference to any regular Dividend Payment Date, to the Holders of shares of such Series as their names appear on the registration books of the Corporation on such date, not exceeding twenty (20) nor less than ten (10) calendar days preceding the payment date thereof, as may be fixed by the Board of Directors. No interest or sum of money in lieu of interest will be payable in respect of any dividend payment or payments on shares of any Series of Perpetual Preferred Shares which may be in arrears.
(g)
(i) The Dividend Rate on a Series of Perpetual Preferred Shares shall be adjusted to the Default Rate (as defined below) in the following circumstances. Subject to the cure provisions below, a “Default Period” with respect to a Series of Perpetual Preferred Shares shall commence on any date the Corporation fails to deposit with the Redemption and Paying Agent by 12:00 noon, New York City time, on (A) a Dividend Payment Date for such Series, Deposit Securities that will provide funds available to the Redemption and Paying Agent on such Dividend Payment Date sufficient to pay the full amount of any dividend on such Series payable on such Dividend Payment Date (a “Dividend Default”) or (B) an applicable Redemption Date for such Series, Deposit Securities that will provide funds available to the Redemption and Paying Agent on such Redemption Date sufficient to pay the full amount of the Redemption Price payable in respect of such Series on such Redemption Date (a “Redemption Default” and together with a Dividend Default, hereinafter referred to as “Default”). Subject to the cure provisions of Section 2.2(g)(ii) below, a Default Period with respect to a Dividend Default or a Redemption Default on a Series of Perpetual Preferred Shares shall end on the Business Day on which, by 12:00 noon, New York City time, an amount equal to all unpaid dividends on such Series and any unpaid Redemption Price on such Series shall have been deposited irrevocably in trust in same-day funds with the Redemption and Paying Agent. In the case of any Default on a Series of Perpetual Preferred Shares, the Dividend Rate for such Series for each calendar day during the Default Period will be equal to the Default Rate. The “Default Rate” on a Series of Perpetual Preferred Shares for any calendar day shall be equal to the Fixed Dividend Rate for such Series plus two percent (2%) per annum.
| - 8 - |
(h)
No Default Period for a Series of Perpetual Preferred Shares with respect to any Default on such Series shall be deemed to commence if the amount of any dividend or any Redemption Price due in respect of such Series (if such Default is not solely due to the willful failure of the Corporation) is deposited irrevocably in trust, in same-day funds, with the Redemption and Paying Agent by 12:00 noon, New York City time, on a Business Day that is not later than three (3) Business Days after the applicable Dividend Payment Date or Redemption Date for such Series with respect to which such Default occurred, together with an amount equal to the Default Rate on such Series applied to the amount and period of such non-payment on such Series, based on the actual number of calendar days comprising such period divided by 360.
2.3.
Liquidation Rights.
(a)
In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the Holders of Perpetual Preferred Shares shall be entitled to receive out of the assets of the Corporation available for distribution to stockholders, after satisfying claims of creditors but before any distribution or payment shall be made in respect of the Common Stock, a liquidation distribution equal to the Liquidation Preference for such shares, plus an amount equal to all unpaid dividends and distributions on such shares accumulated to (but excluding) the date fixed for such distribution or payment on such shares (whether or not earned or declared by the Corporation, but excluding interest thereon), and such Holders shall be entitled to no further participation in any distribution or payment in connection with any such liquidation, dissolution or winding up.
(b)
If, upon any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the assets of the Corporation available for distribution among the Holders of all Outstanding Perpetual Preferred Shares and any other outstanding Preferred Stock shall be insufficient to permit the payment in full to such Holders of the Liquidation Preference of such Perpetual Preferred Shares plus accumulated and unpaid dividends and distributions on such shares as provided in Section 2.3(a) above and the amounts due upon liquidation with respect to such other Preferred Stock, then such available assets shall be distributed among the Holders of such Perpetual Preferred Shares and such other Preferred Stock ratably in proportion to the respective preferential liquidation amounts to which they are entitled. In connection with any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, unless and until the Liquidation Preference on each Outstanding Perpetual Preferred Share plus accumulated and unpaid dividends and distributions on such shares as provided in Section 2.3(a) above have been paid in full to the Holders of such shares, no dividends, distributions or other payments will be made on, and no redemption, purchase or other acquisition by the Corporation will be made by the Corporation in respect of, shares of the Common Stock.
(c)
Neither the sale of all or substantially all of the property or business of the Corporation, nor the merger, consolidation or reorganization of the Corporation into or with any other business or statutory trust, corporation or other entity, nor the merger, consolidation or reorganization of any other business or statutory trust, corporation or other entity into or with the Corporation shall be a dissolution, liquidation or winding up, whether voluntary or involuntary, for the purpose of this Section 2.3.
2.4.
Coverage Test.
(a)
Asset Coverage Requirement. For so long as any shares of a Series of Perpetual Preferred Shares are Outstanding, the Corporation shall have Asset Coverage of at least 200% as of the close of business on the last Business Day of each Calendar Quarter. If the Corporation shall fail to maintain such Asset Coverage as of any time as of which such compliance is required to be determined as aforesaid, the provisions of Section 2.5(a)(i) shall be applicable, which provisions shall constitute the sole remedy for the Corporation’s failure to comply with the provisions of this Section 2.4(a).
| - 9 - |
(b)
Calculation of Asset Coverage. For purposes of determining whether the requirements of Section 2.4(a) are satisfied, (i) no Perpetual Preferred Shares of any Series or other Preferred Stock shall be deemed to be Outstanding for purposes of any computation required by Section 2.4(a) if, prior to or concurrently with such determination, either (x) sufficient Deposit Securities or other sufficient funds (in accordance with the terms of such Series or other Preferred Stock) to pay the full redemption price for such Series or other Preferred Stock (or the portion thereof to be redeemed) shall have been deposited in trust with the paying agent for such Series or other Preferred Stock and the requisite notice of redemption for such Series or other Preferred Stock (or the portion thereof to be redeemed) shall have been given or (y) sufficient Deposit Securities or other sufficient funds (in accordance with the terms of such Series or other Preferred Stock) to pay the full redemption price for such Series or other Preferred Stock (or the portion thereof to be redeemed) shall have been segregated by the Custodian and the Corporation from the assets of the Corporation, by means of appropriate identification on the Custodian’s books and records or otherwise in accordance with the Custodian’s normal procedures, and (ii) the Deposit Securities or other sufficient funds that shall have been deposited with the applicable paying agent and/or segregated by the Custodian, as applicable, as provided in clause (i) of this sentence shall not be included as assets of the Corporation for purposes of such computation.
2.5.
Redemption. Each Series of Perpetual Preferred Shares shall be subject to redemption by the Corporation as provided below:
(a)
Asset Coverage Mandatory Redemption.
(i)
If the Corporation fails to comply with the Asset Coverage requirement as provided in Section 2.4(a) as of the last Business Day of any Calendar Quarter and such failure is not cured as of the Asset Coverage Cure Date, the Corporation shall, to the extent permitted by the 1940 Act and Maryland law and pursuant to the terms and conditions of any credit agreement, loan agreement, credit facility or other agreement representing borrowings of the Corporation (a “Credit Agreement”) that is in effect at such time, by the close of business on such Asset Coverage Cure Date, fix a redemption date and proceed to redeem in accordance with the terms of such Preferred Stock, a sufficient number of shares of Preferred Stock, which at the Corporation’s sole option (to the extent permitted by the 1940 Act and Maryland law) may include any number or proportion of Perpetual Preferred Shares of any Series, to enable it to meet the requirements of Section 2.5(a)(ii). In the event that any shares of a Series of Perpetual Preferred Shares then Outstanding are to be redeemed pursuant to this Section 2.5(a)(i), the Corporation shall redeem such shares at a price per share equal to the Liquidation Preference per share of such Series plus an amount equal to all unpaid dividends and distributions on such share of such Series accumulated to (but excluding) the date fixed for such redemption by the Board of Directors (whether or not earned or declared by the Corporation, but excluding interest thereon) (the “Mandatory Redemption Price”).
(ii)
On the Redemption Date for a redemption contemplated by Section 2.5(a)(i), the Corporation shall redeem, out of funds legally available therefor and to the extent permitted by any Credit Agreement in effect on such date, such number of shares of Preferred Stock (which may include at the sole option of the Corporation any number or proportion of Perpetual Preferred Shares of any Series) as shall be equal to the lesser of (x) the minimum number of shares of Preferred Stock, the redemption of which, if deemed to have occurred immediately prior to the opening of business on the Asset Coverage Cure Date, would result in the Corporation having Asset Coverage on such Asset Coverage Cure Date of at least 200% (provided, however, that if there is no such minimum number of Perpetual Preferred Shares and other shares of Preferred Stock the redemption or retirement of which would have such result, all Perpetual Preferred Shares and other shares of Preferred Stock then outstanding shall be redeemed), and (y) the maximum number of shares of Preferred Stock that can be redeemed out of funds expected to be legally available therefor in accordance with the Charter and applicable law and to the extent permitted by any Credit Agreement in effect on such date. Notwithstanding the foregoing, in the event that shares of Preferred Stock are redeemed pursuant to this Section 2.5(a), the Corporation may at its sole option, but is not required to, redeem a sufficient number of shares of any Series of Perpetual Preferred Shares pursuant to this Section 2.5(a) that, when aggregated with other shares of Preferred Stock redeemed by the Corporation, would result, if deemed to have occurred immediately prior to the opening of business on the Asset Coverage Cure Date, in the Corporation having Asset Coverage on such Asset Coverage Cure Date of up to and including 285%. The Corporation shall effect such redemption on the date fixed by the Corporation therefor, which date shall not be later than ninety (90) calendar days after such Asset Coverage Cure Date, except that if the Corporation does not have funds legally available for the redemption of all of the required number of Perpetual Preferred Shares and other shares of Preferred Stock which have been designated to be redeemed or the Corporation otherwise is unable to effect such redemption on or prior to ninety (90) calendar days after such Asset Coverage Cure Date, the Corporation shall redeem those Perpetual Preferred Shares and other shares of Preferred Stock which it was unable to redeem on the earliest practicable date on which it is able to effect such redemption. If fewer than all of the Outstanding Perpetual Preferred Shares of a Series are to be redeemed pursuant to this Section 2.5(a), the number of Perpetual Preferred Shares of such Series to be redeemed shall be redeemed (A) from each Holder pro rata based upon the number of Outstanding shares of such Series held by such Holder, or (B) by lot.
| - 10 - |
(b)
Optional Redemption.
(i)
Subject to the provisions of Section 2.5(b)(ii), on any Business Day following the expiration of the Non-Call Period (if any) for a Series of Perpetual Preferred Shares (any such Business Day referred to in this sentence, an “Optional Redemption Date”), the Corporation may redeem in whole or from time to time in part the Outstanding Perpetual Preferred Shares of such Series, at a redemption price per Perpetual Preferred Share (the “Optional Redemption Price”) equal to (x) the Liquidation Preference per Perpetual Preferred Share of such Series plus (y) an amount equal to all unpaid dividends and distributions on such Perpetual Preferred Share of such Series accumulated to (but excluding) the Optional Redemption Date (whether or not earned or declared by the Corporation, but excluding interest thereon) plus (z) the Optional Redemption Premium per share (if any) with respect to an optional redemption of Perpetual Preferred Shares of such Series that is effected on such Optional Redemption Date.
(ii)
If fewer than all of the outstanding shares of a Series of Perpetual Preferred Shares are to be redeemed pursuant to Section 2.5(b)(i), the shares of such Series to be redeemed shall be selected either (A) from each Holder pro rata based upon the number of Outstanding shares of such Series held by such Holder, or (B) by lot. Subject to the provisions of these Articles Supplementary and applicable law, the Board of Directors will have the full power and authority to prescribe the terms and conditions upon which Perpetual Preferred Shares will be redeemed pursuant to this Section 2.5(b) from time to time.
(iii)
The Corporation may not on any date deliver a Notice of Redemption pursuant to Section 2.5(b) in respect of a redemption contemplated to be effected pursuant to this Section 2.5(b) unless on such date the Corporation has available Deposit Securities for the Optional Redemption Date contemplated by such Notice of Redemption having a Market Value not less than the amount (including any applicable premium) due to Holders of Perpetual Preferred Shares by reason of the redemption of such Perpetual Preferred Shares on such Optional Redemption Date.
(c)
Procedures for Redemption.
(i)
If the Corporation shall determine or be required to redeem, in whole or in part, Perpetual Preferred Shares of a Series pursuant to Section 2.5(a), or (b) the Corporation shall deliver a notice of redemption (the “Notice of Redemption”), by overnight delivery, by first class mail, postage prepaid or by Electronic Means to Holders thereof, or request the Redemption and Paying Agent, on behalf of the Corporation, to promptly do so by overnight delivery, by first class mail, postage prepaid or by Electronic Means. A Notice of Redemption shall be provided not more than forty-five (45) calendar days prior to the date fixed for redemption in such Notice of Redemption (the “Redemption Date”). The Redemption Date shall be not less than thirty (30) calendar days and not more than ninety (90) calendar days following the date upon which the Notice of Redemption is provided to Holders thereof. Each such Notice of Redemption shall state: (A) the Redemption Date; (B) the Series and number of Perpetual Preferred Shares to be redeemed; (C) the CUSIP number for Perpetual Preferred Shares of such Series; (D) the applicable Redemption Price on a per share basis; (E) if applicable, the place or places where the certificate(s) for such shares (properly endorsed or assigned for transfer, if the Board of Directors requires and the Notice of Redemption states) are to be surrendered for payment of the Redemption Price; (F) that dividends on the Perpetual Preferred Shares to be redeemed will cease to accumulate from and after such Redemption Date; and (G) the provisions of these Articles Supplementary under which such redemption is made. If fewer than all Perpetual Preferred Shares held by any Holder are to be redeemed, the Notice of Redemption delivered to such Holder shall also specify the number of Perpetual Preferred Shares to be redeemed from such Holder or the method of determining such number. The Corporation may provide in any Notice of Redemption relating to a redemption contemplated to be effected pursuant to these Articles Supplementary that such redemption is subject to one or more conditions precedent and that the Corporation shall not be required to effect such redemption unless each such condition has been satisfied at the time or times and in the manner specified in such Notice of Redemption. No defect in the Notice of Redemption or delivery thereof shall affect the validity of redemption proceedings, except as required by applicable law.
| - 11 - |
(ii)
If the Corporation shall give a Notice of Redemption, then at any time from and after the giving of such Notice of Redemption and prior to 12:00 noon, New York City time, on the Redemption Date (so long as any conditions precedent to such redemption have been met or waived by the Corporation), the Corporation shall (A) deposit with the Redemption and Paying Agent Deposit Securities having an aggregate Market Value on the date thereof no less than the Redemption Price of the Perpetual Preferred Shares to be redeemed on the Redemption Date and (B) give the Redemption and Paying Agent irrevocable instructions and authority to pay the applicable Redemption Price to the Holders of the Perpetual Preferred Shares called for redemption on the Redemption Date. The Corporation may direct the Redemption and Paying Agent with respect to the investment or reinvestment of any Deposit Securities prior to the Redemption Date, provided that such investment or reinvestment consists exclusively of Deposit Securities and provided further that the proceeds of any such investment shall be available at the opening of business on the Redemption Date as same day funds.
(iii)
Upon the date of the deposit of such Deposit Securities, provided that notice has been published that sufficient funds will be made available to Holders within ninety (90) calendar days, all rights of the Holders of the Perpetual Preferred Shares so called for redemption shall cease and terminate except the right of the Holders thereof to receive the Redemption Price thereof and such Perpetual Preferred Shares shall no longer be deemed Outstanding for any purpose whatsoever (other than (A) the transfer thereof prior to the applicable Redemption Date and (B) the accumulation of dividends thereon in accordance with the terms hereof up to (but excluding) the applicable Redemption Date, which accumulated dividends shall be payable only as part of the applicable Redemption Price on the Redemption Date). The Corporation shall be entitled to receive, promptly after the Redemption Date, any Deposit Securities in excess of the aggregate Redemption Price of the Perpetual Preferred Shares called for redemption on the Redemption Date. Any Deposit Securities so deposited that are unclaimed at the end of ninety (90) calendar days from the Redemption Date shall, to the extent permitted by law, be repaid to the Corporation, after which the Holders of the Perpetual Preferred Shares so called for redemption shall look only to the Corporation for payment of the Redemption Price thereof. The Corporation shall be entitled to receive, from time to time after the Redemption Date, any interest on the Deposit Securities so deposited. Notwithstanding anything in this Section 2.5(c)(iv) to the contrary, the rights of the Holders of the Perpetual Preferred Shares called for redemption shall not be terminated in the event that there is a default in funds available for redemption.
(iv)
On or after the Redemption Date, each Holder of Perpetual Preferred Shares in certificated form (if any) that are subject to redemption shall surrender the certificate(s) evidencing such Perpetual Preferred Shares to the Corporation at the place designated in the Notice of Redemption and shall then be entitled to receive the Redemption Price for such Perpetual Preferred Shares, without interest, and in the case of a redemption of fewer than all the Perpetual Preferred Shares represented by such certificate(s), a new certificate representing the Perpetual Preferred Shares that were not redeemed.
(v)
Notwithstanding the other provisions of this Section 2.5, except as otherwise required by law, the Corporation shall not redeem any Perpetual Preferred Shares unless all accumulated and unpaid dividends and distributions on all Outstanding Perpetual Preferred Shares and other series of Preferred Shares ranking on a parity with the Perpetual Preferred Shares with respect to dividends and distributions for all applicable past dividend periods (whether or not earned or declared by the Corporation) (x) shall have been or are contemporaneously paid or (y) shall have been or are contemporaneously declared and Deposit Securities or sufficient funds (in accordance with the terms of such Preferred Stock) for the payment of such dividends and distributions shall have been or are contemporaneously deposited with the Redemption and Paying Agent or other applicable paying agent for such Preferred Stock in accordance with the terms of such Preferred Stock, provided, however, that the foregoing shall not prevent the purchase or acquisition of Outstanding Perpetual Preferred Shares pursuant to an otherwise lawful purchase or exchange offer made on the same terms to Holders of all Outstanding Perpetual Preferred Shares and any other series of Preferred Stock for which all accumulated and unpaid dividends and distributions have not been paid.
| - 12 - |
(vi)
To the extent that any redemption for which Notice of Redemption has been provided is not made (A) by reason of the absence of legally available funds therefor in accordance with the Charter and applicable law or (B) pursuant to the terms and conditions of any Credit Agreement in effect on the date on which such redemption is scheduled, such redemption shall be made as soon as practicable to the extent such funds become available. No Redemption Default shall be deemed to have occurred if the Corporation shall fail to deposit in trust with the Redemption and Paying Agent the Redemption Price with respect to any shares where (1) the Notice of Redemption relating to such redemption provided that such redemption was subject to one or more conditions precedent and (2) any such condition precedent shall not have been satisfied at the time or times and in the manner specified in such Notice of Redemption. Notwithstanding the fact that a Notice of Redemption has been provided with respect to any Perpetual Preferred Shares, dividends may be declared and paid on such Perpetual Preferred Shares in accordance with their terms if Deposit Securities for the payment of the Redemption Price of such Perpetual Preferred Shares shall not have been deposited in trust with the Redemption and Paying Agent for that purpose.
(d)
Redemption and Paying Agent as Trustee of Redemption Payments by Corporation. All Deposit Securities transferred to the Redemption and Paying Agent for payment of the Redemption Price of Perpetual Preferred Shares called for redemption shall be held in trust by the Redemption and Paying Agent for the benefit of Holders of Perpetual Preferred Shares so to be redeemed until paid to such Holders in accordance with the terms hereof or returned to the Corporation in accordance with the provisions of Section 2.5(c)(iii) above.
(e)
Compliance With Applicable Law and Credit Agreement. In effecting any redemption pursuant to this Section 2.5, the Corporation shall use its best efforts to comply with all applicable conditions precedent to effecting such redemption under the 1940 Act and any applicable Maryland law and pursuant to the terms and conditions of any Credit Agreement in effect as of the date of such redemption, but shall effect no redemption except in accordance with the 1940 Act and any applicable Maryland law and pursuant to the terms and conditions of any Credit Agreement in effect as of the date of such redemption. In determining for the purposes of Section 2-311 of the Maryland General Corporation Law or otherwise under Maryland General Corporation Law whether a distribution (other than upon voluntary or involuntary liquidation, dissolution, or winding up of the Corporation), by dividend, redemption, or otherwise, is permitted, amounts that would be needed, if the Corporation were to be dissolved at the time of the distribution, to satisfy the liquidation preference of any series of Preferred Stock with preferential rights on dissolution senior to the Perpetual Preferred Shares will not be added to the Corporation’s total liabilities.
(f)
Modification of Redemption Procedures. Notwithstanding the foregoing provisions of this Section 2.5, the Corporation may, in its sole discretion and without a stockholder vote, modify the procedures set forth above with respect to notification of redemption for the Perpetual Preferred Shares, provided that such modification does not materially and adversely affect the Holders of the Perpetual Preferred Shares or cause the Corporation to violate any applicable law, rule or regulation; and provided further that no such modification shall in any way alter the rights or obligations of the Redemption and Paying Agent without its prior consent.
2.6.
Voting Rights.
(a)
One Vote Per Perpetual Preferred Share. Except as otherwise provided in the Charter or as otherwise required by law, (i) each Holder of Perpetual Preferred Shares shall be entitled to one vote for each Perpetual Preferred Share held by such Holder on each matter submitted to a vote of stockholders of the Corporation, and (ii) the holders of outstanding shares of Preferred Stock, including Outstanding Perpetual Preferred Shares, and of outstanding shares of Common Stock shall vote together as a single class; provided, however, that the holders of outstanding shares of Preferred Stock, including Outstanding Perpetual Preferred Shares, shall be entitled, voting as a separate class on a one-vote-per-share basis (to the exclusion of the Holders of all other securities and classes of Capital Stock of the Corporation), to elect two Directors of the Corporation at all times. Subject to Section 2.6(b), the Holders of outstanding shares of Common Stock and Preferred Stock, including Perpetual Preferred Shares, voting together as a single class, shall elect the balance of the Directors.
(b)
Voting For Additional Directors.
(i)
Voting Period. During any period in which any one or more of the conditions described in clauses (A) or (B) of this Section 2.6(b)(i) shall exist (such period being referred to herein as a “Voting Period”), the number of Directors constituting the Board of Directors shall be automatically increased by the smallest number that, when added to the two Directors elected by the Holders of Preferred Stock, including Perpetual Preferred Shares, would constitute a majority of the Board of Directors as so increased by such smallest number; and the Holders of Preferred Shares, including Perpetual Preferred Shares, shall be entitled, voting as a separate class on a one-vote-per-share basis (to the exclusion of the Holders of all other securities and classes of Capital Stock of the Corporation), to elect such smallest number of additional Directors, together with the two Directors that such Holders are in any event entitled to elect. A Voting Period shall commence:
| - 13 - |
(A)
if, at the close of business on any dividend payment date for any outstanding Preferred Share including any Outstanding Perpetual Preferred Share, accumulated dividends (whether or not earned or declared) on such outstanding share of Preferred Stock equal to at least two (2) full years’ dividends shall be due and unpaid and sufficient cash or specified securities shall not have been deposited with the Redemption and Paying Agent or other applicable paying agent for the payment of such accumulated dividends; or
(B)
if at any time Holders of shares of Preferred Stock are otherwise entitled under the 1940 Act to elect a majority of the Board of Directors.
Upon the termination of a Voting Period, the voting rights described in this Section 2.6(b)(i) shall cease, subject always, however, to the revesting of such voting rights in the Holders of shares of Preferred Stock upon the further occurrence of any of the events described in this Section 2.6(b)(i).
(ii)
Notice of Special Meeting. As soon as practicable after the accrual of any right of the Holders of shares of Preferred Stock to elect additional Directors as described in Section 2.6(b)(i), at the request of any Holder, the Chairman of the Board, the Chief Executive Officer, the President, or the Board of Directors shall call a special meeting of such Holders and notify the Redemption and Paying Agent and/or such other Person as is specified in the terms of such Preferred Stock to receive notice in accordance with the Maryland General Corporation Law (i) by mailing or delivery by Electronic Means or (ii) in such other manner and by such other means as are specified in the terms of such Preferred Stock, a notice of such special meeting to such Holders, such meeting to be held not less than ten (10) nor more than thirty (30) calendar days after the date of the delivery by Electronic Means or mailing of such notice. If the Chairman of the Board, the Chief Executive Officer, the President, or the Board of Directors fails to call such a special meeting, it may be called at the expense of the Corporation by any such Holder on like notice. The record date for determining the Holders of shares of Preferred Stock entitled to notice of and to vote at such special meeting shall be the close of business on the fifth (5th) Business Day preceding the calendar day on which such notice is mailed or otherwise delivered, provided that the record date may not be prior to the close of business on the day the record date is fixed. At any such special meeting and at each meeting of Holders of shares of Preferred Stock held during a Voting Period at which Directors are to be elected, such Holders, voting together as a class (to the exclusion of the Holders of all other securities and classes of capital stock of the Corporation), shall be entitled to elect the number of Directors prescribed in Section 2.6(b)(i) on a one-vote-per-share basis.
(iii)
Terms of Office of Existing Directors. The terms of office of the incumbent Directors of the Corporation at the time of a special meeting of Holders of the shares of Preferred Stock to elect additional Directors in accordance with Section 2.6(b)(i) shall not be affected by the election at such meeting by the Holders of Perpetual Preferred Shares and such other Holders of shares of Preferred Stock of the number of Directors that they are entitled to elect, and the Directors so elected by the Holders of Perpetual Preferred Shares and such other Holders of shares of Preferred Stock, together with the two (2) Directors elected by the Holders of shares of Preferred Stock in accordance with Section 2.6(a) hereof and the remaining Directors elected by the holders of the shares of Common Stock and Preferred Stock, voting together as a single class, shall constitute the duly elected Directors of the Corporation.
(iv)
Certain Directors to Stand for Election Each Year that a Voting Period Continues. For so long as a Voting Period continues, the additional Directors elected by the Holders of the Preferred Stock pursuant to Section 2.6(b)(i) shall stand for election each year.
(v)
Terms of Office of Certain Directors to Terminate Upon Termination of Voting Period. Simultaneously with the termination of a Voting Period, the terms of office of the additional Directors elected by the Holders of the shares of Preferred Stock pursuant to Section 2.6(b)(i) shall terminate, the remaining Directors shall constitute the Directors of the Corporation and the voting rights of the Holders of shares of Preferred Stock to elect additional Directors pursuant to Section 2.6(b)(i) shall cease, subject to the provisions of the last sentence of Section 2.6(b)(i).
| - 14 - |
(c)
Holders of Perpetual Preferred Shares to Vote on Certain Matters.
(i)
Certain Amendments Requiring Approval of Perpetual Preferred Shares. Except as otherwise permitted by the terms of these Articles Supplementary, so long as any Perpetual Preferred Shares are Outstanding, the Corporation shall not, without the affirmative vote or consent of the Holders of at least two-thirds (2/3) of the Perpetual Preferred Shares of all Series Outstanding at the time, voting together as a separate class, amend, alter or repeal the provisions of the Charter, or these Articles Supplementary, whether by merger, consolidation or otherwise, so as to materially and adversely affect any preference, conversion or other right, voting power, restriction, limitation as to dividends, qualification, or term and condition, of redemption of such Perpetual Preferred Shares or the Holders thereof; provided, however, that (i) a change in the capitalization of the Corporation in accordance with Section 2.9 hereof shall not be considered to materially and adversely affect the rights and preferences of the Perpetual Preferred Shares, and (ii) a division of a Perpetual Preferred Share shall be deemed to affect such preferences, rights or powers only if the terms of such division materially and adversely affect the Holders of the Perpetual Preferred Shares. For purposes of the foregoing, no matter shall be deemed to adversely affect any preference, right or power of a Perpetual Preferred Share of such Series or the Holder thereof unless such matter (i) alters or abolishes any preferential right of such Perpetual Preferred Share, or (ii) creates, alters or abolishes any right in respect of redemption of such Perpetual Preferred Share (other than as a result of a division of a Perpetual Preferred Share). So long as any Perpetual Preferred Shares are Outstanding, the Corporation shall not, without the affirmative vote or consent of at least two-thirds (2/3) of the Holders of the Perpetual Preferred Shares Outstanding at the time, voting as a separate class, file a voluntary application for relief under Federal bankruptcy law or any similar application under state law for so long as the Corporation is solvent and does not foresee becoming insolvent.
(ii)
1940 Act Matters. Unless a higher percentage is provided for in the Charter, the affirmative vote of the Holders of at least “a majority of the outstanding shares of Preferred Stock,” as determined in accordance with Section 2(a)(42) of the 1940 Act, including Perpetual Preferred Shares Outstanding at the time, voting as a separate class, shall be required to approve (A) any plan of reorganization (as such terms is used in the 1940 Act) adversely affecting such shares, or (B) any action requiring a vote of security holders of the Corporation pursuant to Section 13(a) of the 1940 Act.
(iii)
Certain Amendments Requiring Approval of Specific Series of Perpetual Preferred Shares. Except as otherwise permitted by the terms of these Articles Supplementary, so long as any Perpetual Preferred Shares of a Series are Outstanding, the Corporation shall not, without the affirmative vote or consent of the Holders of at least two-thirds (2/3) of the Perpetual Preferred Shares of such Series, Outstanding at the time, voting as a separate class, amend, alter or repeal the provisions of the Appendix relating to such Series, whether by merger, consolidation or otherwise, so as to materially and adversely affect any preference, right or power set forth in such Appendix of the Perpetual Preferred Shares of such Series or the Holders thereof; provided, however, that (i) a change in the capitalization of the Corporation in accordance with Section 2.9 hereof shall not be considered to materially and adversely affect the rights and preferences of the Perpetual Preferred Shares of such Series, and (ii) a division of a Perpetual Preferred Share shall be deemed to affect such preferences, rights or powers only if the terms of such division materially and adversely affect the Holders of the Perpetual Preferred Shares of such Series; and provided, further, that no amendment, alteration or repeal of the obligation of the Corporation to accumulate dividends at the Dividend Rate (as set forth in these Articles Supplementary and the applicable Appendix hereto) for a Series shall be effected without, in each case, the prior unanimous vote or consent of the Holders of such Series of Perpetual Preferred Shares. For purposes of the foregoing, no matter shall be deemed to adversely affect any preference, right or power of a Perpetual Preferred Share of a Series or the Holder thereof unless such matter (i) alters or abolishes any preferential right of such Perpetual Preferred Share, or (ii) creates, alters or abolishes any right in respect of redemption of such Perpetual Preferred Share.
(d)
Voting Rights Set Forth Herein Are Sole Voting Rights. Unless otherwise required by law or the Charter, the Holders of Perpetual Preferred Shares shall not have any relative voting rights or preferences or other special rights with respect to voting other than those expressly set forth in this Section 2.6.
(e)
No Cumulative Voting. The Holders of Perpetual Preferred Shares shall have no rights to cumulative voting.
| - 15 - |
(f)
Voting for Directors Sole Remedy for Corporation’s Failure to Declare or Pay Dividends. In the event that the Corporation fails to declare or pay any dividends on any Series of Perpetual Preferred Shares on the Dividend Payment Date therefor, the exclusive remedy of the Holders of the Perpetual Preferred Shares shall be the right to vote for Directors pursuant to the provisions of this Section 2.6. Nothing in this Section 2.6(f) shall be deemed to affect the obligation of the Corporation to accumulate and, if permitted by applicable law, the Charter and these Articles Supplementary, pay dividends at the Default Rate in the circumstances contemplated by Section 2.2(g) hereof.
(g)
Holders Entitled to Vote. For purposes of determining any rights of the Holders of Perpetual Preferred Shares to vote on any matter, whether such right is created by these Articles Supplementary, by the Charter, by statute or otherwise, no Holder of Perpetual Preferred Shares shall be entitled to vote any Perpetual Preferred Share and no Perpetual Preferred Share shall be deemed to be “Outstanding” for the purpose of voting or determining the number of shares required to constitute a quorum if, prior to or concurrently with the time of determination of shares entitled to vote or the time of the actual vote on the matter, as the case may be, the requisite Notice of Redemption with respect to such Perpetual Preferred Share shall have been given in accordance with these Articles Supplementary and Deposit Securities for the payment of the Redemption Price of such Perpetual Preferred Share shall have been deposited in trust with the Redemption and Paying Agent for that purpose. No Perpetual Preferred Share held by the Corporation shall have any voting rights or be deemed to be outstanding for voting or for calculating the voting percentage required on any other matter or other purposes.
(h)
Maryland General Corporation Law Matters. The Corporation shall take such actions as may be necessary to effect the provisions of this Section 2.6 in accordance with the Maryland General Corporation Law.
2.7.
Maturity. The Perpetual Preferred Shares shall be perpetual.
2.8.
Rating Agency. The Corporation shall use commercially reasonable efforts to cause at least one Rating Agency to issue long-term credit ratings with respect to each Series of Perpetual Preferred Shares for so long as such Series of Perpetual Preferred Shares is Outstanding. The Corporation shall use commercially reasonable efforts to comply with any applicable Rating Agency Guidelines. If a Rating Agency shall cease to rate the securities of closed-end management investment companies generally, the Board of Directors shall terminate the designation of such Rating Agency as a Rating Agency hereunder. The Board of Directors may elect to terminate the designation of any Rating Agency as a Rating Agency hereunder with respect to a Series of Perpetual Preferred Shares so long as either (i) immediately following such termination, there would be at least one Rating Agency with respect to such Series of Perpetual Preferred Shares or (ii) it replaces the terminated Rating Agency with another NRSRO and provides notice thereof to the Holders of such Series of Perpetual Preferred Shares; provided that such replacement shall not occur unless such replacement Rating Agency shall have at the time of such replacement (i) published a rating for the Perpetual Preferred Shares of such Series and (ii) entered into an agreement with the Corporation to continue to publish such rating subject to the Rating Agency’s customary conditions. The Board of Directors may also elect to designate one or more other NRSROs as Rating Agencies hereunder with respect to a Series of Perpetual Preferred Shares by notice to the Holders of the Perpetual Preferred Shares. The Rating Agency Guidelines of any Rating Agency may be amended by such Rating Agency without the vote, consent or approval of the Corporation, the Board of Directors or any Holder of Preferred Shares, including any Perpetual Preferred Shares, or Common Stock.
2.9.
Issuance of Additional Preferred Stock.
So long as any Perpetual Preferred Shares are Outstanding, the Corporation may, without the vote or consent of the Holders thereof, authorize, establish and create and issue and sell shares of one or more series of a class of senior securities of the Corporation representing stock under Section 18 of the 1940 Act, ranking on a parity with Perpetual Preferred Shares as to the payment of dividends and the distribution of assets upon dissolution, liquidation or the winding up of the affairs of the Corporation, in addition to then Outstanding Series of Perpetual Preferred Shares, including additional Series of Perpetual Preferred Shares, and authorize, issue and sell additional shares of any such series of Preferred Stock then outstanding or so established and created, including additional Perpetual Preferred Shares of any Series, in each case in accordance with applicable law, provided that the Corporation shall, immediately after giving effect to the issuance of such additional shares of Preferred Stock and to its receipt and application of the proceeds thereof, including to the redemption of shares of Preferred Stock with such proceeds, have Asset Coverage (calculated in the same manner as is contemplated by Section 2.4(b) hereof) of at least 200%.
| - 16 - |
2.10.
Status of Redeemed or Repurchased Perpetual Preferred Shares.
Perpetual Preferred Shares that at any time have been redeemed or purchased by the Corporation shall, after such redemption or purchase, have the status of authorized but unissued shares of Capital Stock.
2.11.
Global Certificate.
For so long as any Perpetual Preferred Shares are Outstanding (i) all shares of any Series of Perpetual Preferred Shares Outstanding from time to time shall be represented by one global certificate for such Series registered in the name of the Securities Depository or its nominee and (ii) no registration of transfer of shares of such Series of Perpetual Preferred Shares shall be made on the books of the Corporation to any Person other than the Securities Depository or its nominee. The foregoing restriction on registration of transfer shall be conspicuously noted on the face or back of the global certificates.
2.12.
Notice.
All notices or communications hereunder, unless otherwise specified in these Articles Supplementary, shall be sufficiently given if in writing and delivered in person, by telecopier, by Electronic Means or by overnight mail or delivery or mailed by first-class mail, postage prepaid. Notices delivered pursuant to this Section 2.12 shall be deemed given on the date received or, if mailed by first class mail, on the date five (5) calendar days after which such notice is mailed.
2.13.
Termination.
In the event that no shares of a Series of Perpetual Preferred Shares are Outstanding, all rights and preferences of the shares of such Series established and designated hereunder shall cease and terminate, and all obligations of the Corporation under these Articles Supplementary with respect to such Series shall terminate, other than in respect to the payment of and the right to receive the Redemption Price in accordance with Section 2.5 of these Articles Supplementary.
2.14.
Appendices.
The designation of each Series of Perpetual Preferred Shares shall be set forth in an Appendix to these Articles Supplementary. The Board of Directors may, by resolution duly adopted, without stockholder approval (except as otherwise provided by these Articles Supplementary or required by applicable law) (1) amend the Appendix to these Articles Supplementary relating to a Series so as to reflect any amendments to the terms applicable to such Series including an increase in the number of authorized shares of such Series and (2) add additional Series of Perpetual Preferred Shares by including a new Appendix to these Articles Supplementary relating to such Series.
2.15.
Actions on Other than Business Days.
Unless otherwise provided herein, if the date for making any payment, performing any act or exercising any right, in each case as provided for in these Articles Supplementary, is not a Business Day, such payment shall be made, act performed or right exercised on the next succeeding Business Day, with the same force and effect as if made or done on the nominal date provided therefor, and, with respect to any payment so made, no dividends, interest or other amount shall accrue for the period between such nominal date and the date of payment.
| - 17 - |
2.16.
Modification.
The Board of Directors, without the vote of the Holders of Perpetual Preferred Shares, may interpret, supplement or amend the provisions of these Articles Supplementary or any Appendix hereto to supply any omission, resolve any inconsistency or ambiguity or to cure, correct or supplement any defective or inconsistent provision, including any provision that is inconsistent or otherwise conflicts with any provision of the 1940 Act, the rules and regulations promulgated thereunder, any order issued thereunder by the Commission, or any interpretive position of the staff of the Commission pertaining thereto, in each case, that is applicable to the Corporation, or any provision that becomes defective after the date hereof because of impossibility of performance or any provision that is inconsistent with any provision of any other Capital Stock of the Corporation.
2.17.
No Additional Rights.
Unless otherwise required by law or the Charter, the Holders of Perpetual Preferred Shares shall not have any relative rights or preferences or other special rights other than those specifically set forth in these Articles Supplementary.
FOURTH: The shares of Perpetual Preferred Stock and shares of Series A Preferred Stock have been classified and designated by the Board of Directors under the authority contained in the Charter.
FIFTH: As contemplated by these Articles Supplementary, the designation of shares of Series A Perpetual Stock is set forth in Appendix A attached hereto and made a part hereof (“Appendix A”).
FIFTH: These Articles Supplementary, together with Appendix A, have been approved by the Board of Directors in the manner and by the vote required by law.
SIXTH: These Articles Supplementary, together with Appendix A, shall be effective upon the acceptance of these Articles Supplementary for record by the SDAT.
SEVENTH: The undersigned Chairman and President acknowledges these Articles Supplementary, together with Appendix A, 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 her 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.
[Signature Page Begins on the Following Page]
| - 18 - |
In Witness Whereof, these Articles Supplementary, together with Appendix A, are executed on behalf of the Corporation by its President and attested to by its Secretary on this 12th day of April, 2022.
| ATTEST: | RIVERNORTH OPPORTUNITIES FUND, INC. | |||
| /s/ Sareena Khwaja-Dixon | /s/ Kathryn A. Burns | |||
| Name: | Sareena Khwaja-Dixon | Name: | Kathryn A. Burns | |
| Title: | Secretary | Title: | President | |
| - 19 - |
APPENDIX A
RIVERNORTH OPPORTUNITIES FUND, INC.
SERIES A PERPETUAL PREFERRED STOCK
This Appendix establishes a Series of Perpetual Preferred Shares of RiverNorth Opportunities Fund, Inc. Except as set forth below, this Appendix incorporates by reference the terms set forth with respect to all Series of such Perpetual Preferred Shares in those “Articles Supplementary Establishing and Fixing the Rights and Preferences of Perpetual Preferred Stock” dated April 6, 2022 (the “PP Articles Supplementary”). This Appendix has been adopted by resolution of the Board of Directors of RiverNorth Opportunities Fund, Inc. 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.
Series A Perpetual Preferred Stock: A series of 3,910,000 shares of Perpetual Preferred Stock is hereby classified and designated as shares of “Series A Perpetual Preferred Stock” (collectively, “Series A 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 A. The Series A Perpetual Preferred Shares shall constitute a separate series of Capital Stock and of the Perpetual Preferred Shares and each Series A Perpetual Preferred Share shall be identical. The following terms and conditions shall apply solely to the Series A Perpetual Preferred Shares:
Section 2.
Number of Authorized Shares of Series.
The number of authorized shares is 3,910,000.
Section 3.
Date of Original Issue with respect to Series.
The Date of Original Issue is on or about April 20, 2022.
Section 4.
Fixed Dividend Rate Applicable to Series.
The Fixed Dividend Rate is 6.00%.
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 May 15, 2022. If any Dividend Payment Date is not a Business Day, then the dividend with respect to that Dividend Payment Date will be paid on the next succeeding day that is a Business Day, without any interest or other payment in respect of such delay.
Section 7.
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 May 14, 2027.
| - 20 - |
Section 8.
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 9.
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:
“Dividend Period” means, 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 10.
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 11.
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.
| - 21 - |
RiverNorth Opportunities Fund, Inc. 8-K
Exhibit 5.1
 |
mwe.com Tracy Bacigalupo Attorney at Law +1 212 547 5656
|
April 13, 2022
RiverNorth Opportunities Fund, Inc.
351 West Camden Street
Baltimore, Maryland 21201
| Re: | Registration Statement on Form N-2 |
Ladies and Gentlemen:
We have acted as Maryland counsel to RiverNorth Opportunities Fund, Inc., a Maryland corporation (the “Company”), in connection with the registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a Registration Statement on Form N-2 (1933 Act File No. 333-261239 and 1940 Act File No. 811-22472) (the “Registration Statement”) as filed with the Securities and Exchange Commission (the “Commission”), including the Final Prospectus (as defined below), for the offering by the Company of 3,400,000 shares (the “Shares”) of Series A, Perpetual Preferred Shares, $0.0001 par value per share, of the Company (“Preferred Stock”) with a liquidation preference of $25.00 per share. This opinion is being provided at your request in connection with the filing of the Registration Statement.
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (collectively, the “Documents”):
1. The Registration Statement and the related form of prospectus included therein (the “Prospectus”), in the form in which it was transmitted to the Commission under the Securities Act;
2. The preliminary prospectus supplement of the Company, dated April 5, 2022 (together with the Prospectus, the “Preliminary Prospectus”), relating to the offering of the Shares, in the form in which it was transmitted to the Commission pursuant to Rule 424(b) under the Securities Act;
3. The final prospectus supplement of the Company, dated April 12, 2022 (together with the Prospectus, the “Final Prospectus”), relating to the offering of the Shares, in the form in which it was transmitted to the Commission pursuant to Rule 424(b) under the Securities Act;
4. The charter of the Company (the “Charter”), certified as of a recent date by the State Department of Assessments and Taxation of Maryland (the “SDAT”);
|
One Vanderbilt Avenue New York NY 10017-3852 Tel +1 212 547 5400 Fax +1 212 547 5444 US practice conducted through McDermott Will & Emery LLP. |
RiverNorth Opportunities Fund, Inc. April 13, 2022 Page 2 |
5. The Bylaws of the Company (the “Bylaws”), certified as of the date hereof by the Secretary of the Company;
6. Resolutions adopted by the Board of Directors of the Company (the “Board”) relating to the registration, sale and issuance of the Shares, certified as of the date hereof by the Secretary of the Company;
7. A certificate of the SDAT as to the good standing of the Company, dated as of the date hereof; and
8. A certificate executed by Sareena Khwaja-Dixon, Secretary of the Company, dated as of the date hereof.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) 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.
4. All Documents submitted to us as originals are authentic. All Documents submitted to us as certified or photostatic 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. All statements and information contained in the Documents are true and complete. There has been no oral or written modification or amendment to the Documents, or waiver of any provision of the Documents, by action or omission of the parties or otherwise.
5. The Company will issue the Shares in accordance with the resolutions of the Board and, prior to the issuance of any shares of Preferred Stock, the Company will have available for issuance, under the Charter, the requisite number of authorized but unissued shares of Preferred Stock.
6. The Company does not intend to issue certificates representing the Shares. The Company will send in writing to each stockholder of the Company the information required by the Charter and the Bylaws and the information as contemplated by Section 2-210(c) of the Maryland General Corporation Law for any Shares to be issued, on request by a stockholder of the Company.
RiverNorth Opportunities Fund, Inc. April 13, 2022 Page 3 |
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that, upon issuance and delivery of the Shares as contemplated by the resolutions of the Board and upon payment therefor, the Shares will be duly authorized, validly issued, fully paid and non-assessable.
The foregoing opinion is limited to the substantive laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with the securities (or “blue sky”) laws of the State of Maryland. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.
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. This opinion is limited to the matters set forth herein, and no other opinion should be inferred beyond the matters expressly stated.
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 with the Commission 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 Securities Act or the rules and regulations of the Commission thereunder.
| Very truly yours, | |
| MCDERMOTT WILL & EMERY LLP | |
| /McDermott Will & Emery LLP/ |
RiverNorth Opportunities Fund, Inc. 8-K
Exhibit (d)(10.1)
AMENDMENT
TO THE
AGENCY AGREEMENT
THIS AMENDMENT TO THE AGENCY AGREEMENT (this “Amendment”) is entered into as of the 12th day of April, 2022 (the “Effective Date”) by and between RIVERNORTH OPPORTUNITIES FUND, INC., a Maryland corporation, with offices at 1290 Broadway, Suite 1000, Denver, CO 80203 (the “Fund”), and DST SYSTEMS, INC., a Delaware corporation, with offices at 1055 Broadway, Kansas City, MO 64105 (“DST”).
WHEREAS, the Fund and DST entered into the certain Agency Agreement on the 20th day of November, 2015 (the “Agreement”);
WHEREAS, the Fund’s name was reflected incorrectly in the Agreement and the parties wish to remedy the error; and
WHEREAS, the Fund and DST wish to amend the terms of the Agreement as outlined below.
NOW, THEREFORE, in consideration of the mutual promises, undertakings, covenants and conditions set forth herein, the Fund and DST agree as follows:
| 1. | Amendment to Agreement. With effect as of the Effective Date, the Agreement is hereby modified as follows: |
| a. | All references to RiverNorth Opportunity Fund, Inc. are hereby replaced and superseded with RiverNorth Opportunities Fund, Inc. |
| b. | Schedule I. Schedule I attached to the Agreement is hereby deleted in its entirety and replaced with the Schedule I attached hereto. |
| 2. | Effect on Agreement. As of the Effective Date, this Amendment shall be effective to amend the Agreement and to the extent of any conflict between the Agreement and this Amendment, this Amendment supersedes and replaces the Agreement. |
| 3. | Execution in Counterparts/Facsimile Transmission. This Amendment may be executed in separate counterparts, each of which will be deemed to be an original and all of which, collectively, will be deemed to constitute one in the same Amendment. This Amendment may also be signed by exchanging facsimile copies of this Amendment, duly executed, in which event the parties hereto will promptly thereafter exchange original counterpart signed copies hereof. |
| 4. | Terminology. The words “include”, “includes” and “including” will be deemed to be followed by the phrase “Without limitation”. The words “herein”, “hereof”, “hereunder” and similar terms will refer to this Amendment unless context required otherwise. |
| 5. | Agreement in Full Force and Effect. Except as specifically modified by this Amendment, the terms and conditions of the Agreement shall remain in full force and effect, and the Agreement, as amended by this Amendment, and all of its terms, including but not limited to any warranties and representations set forth therein, if any, are hereby ratified and confirmed by the Fund and DST as of the Effective Date. |
| 6. | Capitalized Terms. All capitalized terms used but not defined in this Amendment will be deemed to be defined as set forth in the Agreement. | |
| 7. | Authorization. Each party hereby represents and warrants to the other that the person or entity signing this Amendment on behalf of such party is fully authorized to execute and deliver this Amendment and to legally bind the party on whose behalf this Amendment is signed to all of the terms, covenants and conditions contained in this Amendment. |
| 8. | Governing Law. This Amendment shall be construed according to and governed by the laws of the State of Missouri. |
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized representatives as of the date first written above.
| RIVERNORTH OPPORTUNITIES FUND, INC. | DST SYSTEMS, INC. | |||
| By: | By: | |||
| Name: | Name: | |||
| Title: | Title: | |||
Schedule I
LIST OF CLASSES
Name: |
CUSIP | |
RiverNorth Opportunities Fund – Common Stock |
76881Y109 | |
RiverNorth Opportunities Fund – Preferred Shares |
76881Y208 | |
RiverNorth Opportunities Fund, Inc. 8-K
Exhibit (d)(23.1)
CONSENT OF DECHERT LLP
We hereby consent to the reference to this firm, as counsel to RiverNorth Opportunities Fund, Inc., in its Registration Statement on Form N-2, until such time as we revoke such consent. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
| /s/ Dechert LLP |
New York, New York
April 13, 2022
RiverNorth Opportunities Fund, Inc. 8-K
Exhibit (d)(99.1)
RIVERNORTH OPPORTUNITIES FUND, INC.
PRICES OFFERING OF PREFERRED STOCK
DENVER – April 12, 2022 – RiverNorth Opportunities Fund, Inc. (NYSE: RIV) (the “Fund”) today announced that it has priced an underwritten public offering of 3,400,000 shares of 6.00% Series A Perpetual Preferred Stock (the “Preferred Stock”) at a public offering price of $25.00 per share, which will result in net proceeds to the Fund of approximately $81,877,500 after payment of underwriting discounts and commissions and estimated offering expenses payable by the Fund. In addition, the Fund has granted the underwriters a 30-day option to purchase up to an additional 510,000 shares of Preferred Stock to cover overallotments, if any.
The Fund has applied to list the Preferred Stock on the New York Stock Exchange (“NYSE”) under the ticker symbol “RIVPRA”. If the application is approved, trading on the NYSE in the Preferred Stock is expected to begin within 30 days following the issuance date of the Preferred Stock.
The Fund plans to use the net proceeds from the offering of the Preferred Stock to invest in accordance with its investment objective and policies, repay borrowings under the Fund’s credit facility and for general working capital purposes.
The offering is expected to close on April 20, 2022, subject to customary closing conditions.
UBS Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC are acting as the joint book-running managers for the offering.
The information in the preliminary prospectus supplement, the accompanying prospectus and this press release is not complete and may be changed. A registration statement relating to these securities has been filed with and declared effective by the Securities and Exchange Commission (“SEC”). This press release is not an offer to sell these securities and is not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
Investors should consider the Fund’s investment objective, risks, and expenses carefully before investing. The preliminary prospectus supplement (and the final prospectus supplement, when available) and accompanying prospectus contains this and other information about the Fund and should be read carefully before investing. Copies of the preliminary prospectus supplement, final prospectus supplement (when complete) and accompanying prospectus may be obtained for no charge by calling UBS Securities LLC toll-free at 1-888-827-7275, Morgan Stanley & Co. LLC at 1-866-718-1649 or RBC Capital Markets, LLC at 1-866-375-6829. Copies of these documents, when finalized, and other documents the Fund has filed with the SEC may also be obtained by visiting EDGAR on the SEC’s website at www.sec.gov or on the Fund’s website at www.rivernorthcef.com.
The investment objective of the Fund is total return consisting of capital appreciation and current income. The Fund had approximately $286 million of net assets and 17.5 million shares of common stock outstanding as of December 31, 2021.
Closed-end funds are traded on the secondary market through one of the stock exchanges. The Fund’s investment return and principal value will fluctuate so that an investor’s shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value of the fund’s portfolio. There is no assurance that the Fund will achieve its investment objective.
ALPS Advisors, Inc. is the investment adviser to the Fund.
RiverNorth Capital Management, LLC is the investment sub-adviser to the Fund. RiverNorth Capital Management, LLC is not affiliated with ALPS Advisors, Inc. or any of its affiliates.
ALPS Portfolio Solutions Distributor, Inc. is the FINRA Member firm.
NOT FDIC INSURED | May Lose Value | No Bank Guarantee
About SS&C Technologies
SS&C Technologies, Inc. ("SS&C”) is a global provider of services and software for the financial services and healthcare industries. Founded in 1986, SS&C is headquartered in Windsor, Connecticut, and has offices around the world. Some 18,000 financial services and healthcare organizations, from the world's largest companies to small and mid-market firms, rely on SS&C for expertise, scale, and technology.
About SS&C ALPS Advisors
ALPS Advisors, Inc., a wholly-owned subsidiary of SS&C, is a leading provider of investment products for advisors and institutions. With over $17 billion in assets under management as of December 31, 2021, the firm provides access to asset classes and boutique asset managers in real assets, alternatives, thematic/factor and fixed income through both ETF and open-end mutual fund structures.
About RiverNorth Capital Management, LLC
RiverNorth Capital Management, LLC is an investment management firm founded in 2000. With $5.8 billion1 in assets under management as of December 31, 2021, RiverNorth specializes in opportunistic investment strategies in niche markets where the potential to exploit inefficiencies is greatest. RiverNorth is an institutional investment manager to registered funds, private funds and separately managed accounts.
1 Firm AUM reflects Managed Assets which includes the effects of leverage and investments in affiliated funds.
This press release contains certain statements that may include “forward-looking statements.” Forward-looking statements can be identified by the words “may,” “will,” “intend,” “expect,” “estimate,” “continue,” “plan,” “anticipate,” and similar terms and the negatives of such terms. By their nature, all forward-looking statements involve risks and uncertainties, and actual results could differ materially from those contemplated by the forward-looking statements. Many factors that could materially affect the Fund’s actual results are the performance of the portfolio of securities held by the Fund, the conditions in the U.S. and international financial and other markets, the price at which Preferred Stock trades in the public markets and other factors discussed in the Fund’s preliminary prospectus supplement and accompanying prospectus and to be discussed in the Fund’s periodic filings with the SEC.
Although the Fund believes that the expectations expressed in such forward-looking statements are reasonable, actual results could differ materially from those expressed or implied in such forward-looking statements. The Fund’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties. You are cautioned not to place undue reliance on these forward-looking statements, which are made as of the date of this press release. Except for the Fund’s ongoing obligations under the federal securities laws, the Fund does not intend, and the Fund undertakes no obligation, to update any forward-looking statement.
Media Contact:
Christopher Murphy*
Head of Advisor Marketing
SS&C ALPS Advisors
720.277.7861
* Registered Representative of ALPS Distributors, Inc.
RVC000368 4/30/2023
###