Exhibit h.5
____________ Shares of Common Stock
Par Value $0.001 Per Share
of
TORTOISE ENERGY CAPITAL CORPORATION
FORM OF PLACEMENT AGENCY AGREEMENT
[Date]
[Placement Agent]
______________________
______________________
______________________
Ladies and Gentlemen:
Tortoise Energy Capital Corporation, a Maryland corporation (the "FUND"),
proposes to sell shares of common stock, par value $0.001 per share, of the Fund
(the "SHARES"), directly to certain investors (the "INVESTORS"). The Fund and
Tortoise Capital Advisors, LLC (the "ADVISER") desire to engage [Placement
Agent] as the placement agent (the "PLACEMENT AGENT") in connection with such
issuance and sale. The Shares are more fully described in the Registration
Statement (as hereinafter defined).
The Fund has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form N-2 (File Nos. ____________ and
____________) which became effective on [Date], covering the registration of the
Shares under the Securities Act of 1933, as amended (the "1933 ACT"), and a
notification on Form N-8A of registration of the Fund as an investment company
under the Investment Company Act of 1940, as amended (the "1940 ACT"), and the
rules and regulations of the Commission under the 1933 Act and the 1940 Act (the
"RULES AND REGULATIONS"). Promptly after execution and delivery of this
Agreement, the Fund will prepare and file a prospectus supplement in accordance
with the provisions of Rule 430A ("RULE 430A") and paragraph (c) and/or (h) of
Rule 497 ("RULE 497") of the Rules and Regulations. The information included in
any such prospectus that was omitted from such registration statement at the
time it became effective but that is deemed to be part of such registration
statement at the time it became effective pursuant to paragraph (b) of Rule 430A
is referred to as "RULE 430A INFORMATION." Each prospectus used before such
registration statement became effective, including any statement of additional
information incorporated therein by reference, is herein called a "PRELIMINARY
PROSPECTUS." Such registration statement, including a 462(d) post-effective
amendment or other amendment thereto, the exhibits and schedules thereto at the
time it became effective and including the Rule 430A Information and any
statement of additional information incorporated therein by reference, is herein
called the "REGISTRATION STATEMENT." The final prospectus in the form first
furnished to the Placement Agent for use in connection with the issuance and
sale of the Shares to the Investors, including the statement of additional
information
incorporated therein by reference, is herein called the "PROSPECTUS." For
purposes of this Agreement, all references to the Registration Statement, any
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 its Electronic Data Gathering, Analysis and Retrieval system
("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which are incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case maybe.
The Fund hereby confirms that the Placement Agent, in connection with its
duties in such capacity, is authorized to distribute or cause to be distributed
the Prospectus in accordance with the terms of this Agreement.
Section 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Adviser. The Fund
and the Adviser represent and warrant to the Placement Agent as of the date
hereof and as of the Closing Time referred to in Section 2(b) hereof, and agree
with the Placement Agent, as follows:
(i) Compliance With Registration Requirements. Each of the
Registration Statement and any Rule 462(d) post-effective amendment has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933
Act, or order of suspension or revocation of registration pursuant to
Section 8(e) of the 1940 Act, and no proceedings for any such purpose, have
been instituted or are pending or, to the knowledge of the Fund or the
Adviser, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(d)
post-effective amendment and any other post-effective amendment thereto relating
to the issuance and sale of the Shares to the Investors (filed before the
Closing Time) became effective and at the Closing Time, as hereinafter defined,
the Registration Statement, the Rule 462(d) post-effective amendment, the
notification on Form N-8A and all amendments and supplements thereto complied
and will comply in all material respects with the requirements of the 1933 Act,
the 1940 Act and the Rules and Regulations and did not and will not contain 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.
Neither the Prospectus, any Preliminary Prospectus nor any amendment or
supplement thereto, at the time, the Prospectus, Preliminary Prospectus or any
such amendment or supplement was issued and at the Closing Time, 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. The
representations and warranties in this subsection shall not apply to statements
in or omissions from the Registration Statement, Prospectus or Preliminary
2
Prospectus made in reliance upon and in conformity with written information
furnished to the Fund by or on behalf of the Placement Agent for use in the
Registration Statement or Prospectus.
As of the date hereof, the Statutory Prospectus (as defined below) and the
information included on Schedule A hereto, all considered together
(collectively, the "GENERAL DISCLOSURE PACKAGE"), did not include any untrue
statement of a material fact or omitted 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.
As used in this subsection and elsewhere in this Agreement, "Statutory
Prospectus" as of any time means the prospectus relating to the Shares that is
included in the Registration Statement immediately prior to that time, including
any document incorporated by reference therein.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 497 under the 1933 Act, complied when so filed in all
material respects with the Rules and Regulations and the Prospectus delivered to
the Placement Agent for use in connection with the issuance and sale of Shares
to the Investors was identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
At the time of filing the Registration Statement or any 462(d)
post-effective amendments thereto relating to the issuance and sale of the
Shares to the Investors and at the date hereof, the Fund was not and is not an
"ineligible issuer," as defined in Rule 405 of the Rules and Regulations.
(ii) Incorporation of Documents by Reference. The documents
incorporated in the Registration Statement, the Prospectus and the
Statutory Prospectus, 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 1934 Act and the rules and regulations of
the Commission under the 1934 Act, the 1940 Act and the Rules and
Regulations and, when read together with the other information in the
Prospectus, (a) at the time the Registration Statement became
effective, (b) at the time the Prospectus was issued and (c) at the
Closing Time, 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.
(iii) Independent Accountants. The accountants who certified the
statement of assets and liabilities included in the Registration
Statement have confirmed to the Fund their status as independent
public accountants as required by the 1933 Act and the Rules and
Regulations and the Fund and the Adviser have no reason to believe
that they are not independent public accountants.
(iv) Financial Statements. The statement of assets and
liabilities included in the Registration Statement, the General
Disclosure Package and the Prospectus, together with the related
notes, presents fairly in accordance with generally accepted
accounting principles ("GAAP") in all material respects the financial
position of the Fund at the date indicated and has
3
been prepared in conformity with GAAP. The supporting schedules, if
any, present fairly in accordance with GAAP the information required
to be stated therein. The selected financial data and the summary
financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of audited financial statements included in the Registration
Statement.
(v) Expense Summary. The information set forth in the Prospectus
in the fee table contained in the section of the Prospectus entitled
"Summary of Company Expenses" has been prepared in all material
respects in accordance with the requirements of Form N-2, and
interpretations thereunder, and to the extent estimated or projected,
such estimates or projections are reasonably believed to be attainable
and reasonably based.
(vi) No Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement, the General
Disclosure Package and the Prospectus, except as otherwise stated
therein, (A) there has been no 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 (other than as a result of changes in
market conditions generally) (a "MATERIAL ADVERSE EFFECT"), (B) there
have been no transactions entered into by the Fund, other than those
in the ordinary course of business, which are material with respect to
the Fund, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Fund on any class of its capital
stock.
(vii) Good Standing of the Fund. The Fund has been duly organized
and is validly existing as a corporation in good standing under the
laws of the State of Maryland and has the corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Fund is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be
in good standing would not result in a Material Adverse Effect.
(viii) No Subsidiaries. The Fund has no subsidiaries.
(ix) Investment Company Status. The Fund is duly registered with
the Commission under the 1940 Act as a nondiversified, closed-end
management investment company, and no order of suspension or
revocation of such registration has been issued or proceedings
therefor initiated or, to the Fund's knowledge, threatened by the
Commission.
(x) 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 Investment Advisers Act of 1940, as amended (the
"ADVISERS ACT"), and the rules and regulations of the Commission
promulgated under the Advisers Act (the "ADVISERS ACT RULES AND
REGULATIONS"). Except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus, to the Fund's knowledge
after due inquiry, no director of the Fund is an "Interested Person"
(as defined in the ▇▇▇▇ ▇▇▇) of the Fund or an "Affiliated Person" (as
defined in the ▇▇▇▇ ▇▇▇) of the Placement Agent.
4
(xi) Capitalization. The authorized, issued and outstanding
capital stock of the Fund is as set forth in the General Disclosure
Package and the Prospectus as of the date thereof under the captions
"The Company" and "Description of Securities." All issued and
outstanding shares of common stock, par value $0.001 per share (the
"COMMON SHARES"), and all issued and outstanding Preferred Shares of
the Fund (the "PREFERRED SHARES") have been duly authorized and
validly issued and are fully paid and non-assessable, and have been
offered and sold or exchanged by the Fund in compliance with all
applicable laws (including, without limitation, federal and state
securities laws). None of the outstanding Common Shares or Preferred
Shares of the Fund was issued in violation of the preemptive or other
similar rights of any securityholder of the Fund.
(xii) Authorization and Description of Shares. The Shares to be
purchased by the Investors from the Fund have been duly authorized for
issuance and sale to the Investors pursuant to this Agreement and,
when issued and delivered by the Fund pursuant to one or more Purchase
Agreements (as defined herein) against payment of the consideration
set forth therein, will be validly issued, fully paid and
non-assessable. The Shares conform to all statements relating thereto
contained in the General Disclosure Package 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 and sale
of the Shares is not subject to the preemptive or other similar rights
of any securityholder of the Fund.
(xiii) Absence of Defaults and Conflicts. The Fund is not in
violation of its charter or by-laws, or in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound, or to
which any of the property or assets of the Fund is subject
(collectively, "AGREEMENTS AND INSTRUMENTS") except for such
violations or defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement
and any Purchase Agreements (collectively, the "OFFERING AGREEMENTS")
and the consummation of the transactions contemplated in the Offering
Agreements and in the Registration Statement (including the issuance
and sale of the Shares to the Investors and the use of the proceeds
from the sale of the Shares as described in the General Disclosure
Package 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, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Fund pursuant to, the Agreements and Instruments or the
Investment Advisory Agreement, the Custody Agreement, the Stock
Transfer Agency Agreement, the Fund Administration Servicing Agreement
and the Fund Accounting Servicing Agreement referred to in the
Registration Statement (as used herein, individually the "Investment
Advisory Agreement," the "Custody Agreement," the "Stock Transfer
Agency Agreement," the "Fund Administration Servicing Agreement," and
the "Fund Accounting Servicing Agreement," respectively and
collectively the "FUND AGREEMENTS") (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in
any violation of the provisions of the charter or by-laws of the Fund
or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any
5
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Fund or any of its assets, properties or
operations (except for such violations that would not result in a
Material Adverse Effect). As used herein, a "REPAYMENT EVENT" means
any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Fund.
(xiv) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Fund or the Adviser, threatened, against or
affecting the Fund, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
could reasonably be expected to result in a Material Adverse Effect,
or which 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 and any Purchase
Agreements or the performance by the Fund of its obligations hereunder
and thereunder. 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, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xv) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement or
the Prospectus (or the documents incorporated by reference therein) or
to be filed as exhibits thereto by the 1933 Act, the 1940 Act or by
the Rules and Regulations which have not been so described and filed
as required.
(xvi) 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, 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.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Fund of its
obligations hereunder and under any Purchase Agreement, in connection
with the issuance and sale of the Shares to the Investors or the
consummation of the transactions contemplated by this Agreement and
any Purchase Agreement, except such as have been already obtained or
as may be required under the 1933 Act, the 1940 Act, the Securities
Exchange Act of 1934, as amended (the "1934 ACT"), or under the rules
of the New York Stock Exchange ("NYSE") or the Financial Industry
Regulatory Authority, Inc. ("FINRA") or state securities laws.
(xviii) Possession of Licenses and Permits. The Fund possesses
such permits, licenses, approvals, consents and other authorizations
(collectively, "GOVERNMENTAL
6
LICENSES") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to operate its properties and
to conduct the business as contemplated in the Prospectus. The Fund is
in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or
in the aggregate, have a Material Adverse Effect. All of the
Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect. The Fund has not received any notice
of proceedings relating to the revocation or modification of any such
Governmental Licenses.
(xix) [Intentionally Omitted].
(xx) Subchapter M. The Fund has not made and will not make an
election under Section 851(b) of the Internal Revenue Code of 1986, as
amended (the "CODE") (or any successor provisions thereto), to be
treated as a regulated investment company for federal income tax
purposes.
(xxi) Distribution of Offering Materials. The Fund has not
distributed and, prior to the later of (A) the Closing Time and (B)
completion of the distribution of the Shares, will not distribute any
offering material to the public in connection with the offering and
sale of the Shares other than the Registration Statement, the
Statutory Prospectus and the Prospectus.
(xxii) 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 authorization and
with the applicable requirements of the 1940 Act, the Rules and
Regulations, FINRA and the Code; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain
accountability for assets and to maintain compliance with the books
and records requirements under the 1940 Act and the Rules and
Regulations; (C) access to assets is permitted only in accordance with
the management's general or specific authorization; and (D) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences. The Fund has developed and maintains disclosure
controls and procedures (as such term is defined in Rule 30a-3 of the
▇▇▇▇ ▇▇▇) that are effective in ensuring that information required to
be disclosed by the Fund in the reports that it files or submits under
the 1940 Act is recorded, processed, summarized and reported, within
the time periods specified in the rules and forms of the Commission,
including, without limitation, controls and procedures designed to
ensure that information required to be disclosed by the Fund in the
reports that it files or submits under the 1940 Act is accumulated and
communicated to the Fund's management, including its principal
executive officer or officers and its principal financial officer or
officers, as appropriate to allow timely decisions regarding required
disclosure.
(xxiii) 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 Prospectus and which payment has not been so
disclosed.
7
(xxiv) Material Agreements; Enforceability. The Offering
Agreements and the Fund Agreements have each been duly authorized by
all requisite action on the part of the Fund and executed and
delivered by the Fund, as of the dates noted therein, and each
complies with all applicable provisions of the 1940 Act in all
material respects. Assuming due authorization, execution and delivery
by the other parties thereto with respect to this Agreement, the
Offering Agreements and the Fund Agreements, each Offering Agreement
and each Fund Agreement constitutes a valid and binding agreement of
the Fund, enforceable in accordance with its terms, except as affected
by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing and except as rights to indemnification or
contribution thereunder may be limited by federal or state laws.
(xxv) Registration Rights. There are no persons with registration
rights or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the
Fund under the 1933 Act.
(xxvi) NYSE Listing. The Fund's common stock has been duly
authorized for listing on the NYSE and the Fund's registration
statement on Form 8-A under the 1934 Act has become effective.
(xxvii) Payment of Taxes. All United States federal income tax
returns of the Fund required by law to be filed have been filed and
all taxes shown by such returns or otherwise assessed, which are due
and payable, have been paid, except assessments that are being
contested in good faith and as to which adequate reserves have been
provided. The United States federal income tax returns of the Fund
through the fiscal year ended [Date] have been settled and no
assessment in connection therewith has been made against the Fund. The
Fund has filed all other tax returns that are required to have been
filed by them pursuant to applicable foreign, state, local or other
law except insofar as the failure to file such returns would not
result in a Material Adverse Effect, and has paid all taxes due
pursuant to such returns or pursuant to any assessment received by the
Fund, except for such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided. 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 result in a 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.
(xxviii) Insurance. The Fund carries on or is entitled to the
benefits of insurance, with financially sound and reputable insurers,
in such amounts and covering such risks as are generally maintained by
companies of established repute engaged in the same or similar
business, and all such insurance is in full force and effect. The Fund
has no reason to believe that it will not be able to (A) renew its
existing insurance coverage as and when such policies expire or (B)
obtain comparable coverage from similar institutions as may be
necessary
8
or appropriate to conduct its business as now conducted and at a cost
that would not result in a Material Adverse Effect.
(xxix) Statistical and Market-Related Data. Any statistical and
market-related data included in the Registration Statement, the
General Disclosure Package and the Prospectus are based on or derived
from sources that the Fund believes to be reliable and accurate, and
the Fund has obtained written consent to the use of such data from
such sources.
(b) Representations and Warranties by the Adviser. The Adviser
represents and warrants to the Placement Agent as of the date hereof and as
of the Closing Time referred to in Section 2(b) hereof as follows:
(i) Good Standing of the Adviser. The Adviser has been duly
organized and is validly existing and in good standing as a limited
liability company under the laws of the State of Delaware with full
power and authority to own, lease and operate its properties and to
conduct its business as described in the General Disclosure Package
and the Prospectus and is duly qualified as a foreign entity to
transact business and is in good standing in each other jurisdiction
in which such qualification is required except as would not,
individually or in the aggregate, result in a material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of such Adviser, whether or not arising
in the ordinary course of business (an "ADVISER MATERIAL ADVERSE
EFFECT").
(ii) Investment Adviser Status. The Adviser is duly registered
and in good standing with the Commission as an investment adviser
under the Advisers Act, and is not prohibited by the Advisers Act, the
1940 Act, or the rules and regulations under such acts, from acting
under the Investment Advisory Agreement for the Fund as contemplated
by the Prospectus.
(iii) Description of Adviser. The description of the Adviser in
the Registration Statement, the General Disclosure Package and the
Prospectus (including any amendment or supplement thereto) complied
and comply in all material respects with the provisions of the 1933
Act, the 1940 Act, the Advisers Act; the Rules and Regulations and the
Advisers Act Rules and Regulations and is true and correct and does
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(iv) Capitalization. The Adviser has the financial resources
available to it necessary for the performance of its services and
obligations as contemplated in the General Disclosure Package,
Prospectus, the Investment Advisory Agreement and in the Offering
Agreements.
(v) Authorization of Offering Agreements; Absence of Defaults and
Conflicts. This Agreement and the Investment Advisory Agreement have
each been duly authorized, executed and delivered by the Adviser, and
(assuming the due authorization, execution and delivery of each other
party thereto) each such Agreement constitutes a valid and binding
obligation of the Adviser, enforceable in accordance with its terms,
except as affected by
9
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and general equitable principles (whether considered
in a proceeding in equity or at law) or an implied covenant of good
faith and fair dealing and except as rights to indemnification or
contribution thereunder may be limited by federal or state laws; and
neither the execution and delivery of this Agreement, any Purchase
Agreement or the Investment Advisory Agreement nor the performance by
the Adviser of its obligations hereunder or thereunder will conflict
with, or result in a breach of any of the terms and provisions of, or
constitute, with or without the giving of notice or lapse of time or
both, a default under, (i) any agreement or instrument to which the
Adviser is a party or by which it is bound, (ii) the limited liability
company operating agreement and other organizational documents of the
Adviser, or (iii) to the Adviser's knowledge, by any law, order,
decree, rule or regulation applicable to it of any jurisdiction,
court, federal or state regulatory body, administrative agency or
other governmental body, stock exchange or securities association
having jurisdiction over the Adviser or its properties or operations
other than any conflict, breach or default that would not,
individually or in the aggregate, reasonably be expected to result in
an Adviser Material Adverse Effect; and no consent, approval,
authorization or order of any court or governmental authority or
agency is required for the consummation by the Adviser of the
transactions contemplated by this Agreement, any Purchase Agreement or
the Investment Advisory Agreement, except as have been obtained or
will be obtained prior to the Closing Time or may be required under
the 1933 Act, the 1940 Act, the 1934 Act or state securities laws.
(vi) No Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement, the General
Disclosure Package and the Prospectus, there has not occurred any
event which could reasonably be expected to have a material adverse
effect on the ability of the Adviser to perform its respective
obligations under this Agreement and the Investment Advisory
Agreement.
(vii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Adviser, threatened against or affecting the
Adviser or any "affiliated person" of the Adviser (as such term is
defined in the ▇▇▇▇ ▇▇▇) or any partners, directors, officers or
employees of the foregoing, whether or not arising in the ordinary
course of business, which could reasonably be expected to result in
Adviser Material Adverse Effect or, materially and adversely affect
the ability of the Adviser to function as an investment adviser with
respect to the Fund or perform its obligations under this Agreement or
the Investment Advisory Agreement, or which is required to be
disclosed in the Registration Statement and the Prospectus.
(viii) Absence of Violation or Default. The Adviser is not in
violation of its limited liability company operating agreement or
other organizational documents or in default under any agreement,
indenture or instrument, except for such violations or defaults that
have not and could not result in an Adviser Material Adverse Effect.
(c) Officer's Certificates. Any certificate signed by any officer of
the Fund or the Adviser delivered to the Placement Agent or to counsel for
the Placement Agent shall be deemed a representation and warranty by the
Fund or the Adviser, as the case may be, to the Placement Agent as to the
matters covered thereby.
10
Section 2. Agreement to Act as Placement Agent, Delivery and Payment.
(a) Engagement of Placement Agent. The Placement Agent agrees to act as the
Fund's exclusive placement agent, on a reasonable efforts basis, in connection
with the issuance and sale by the Fund of the Shares to the Investors. The Fund
acknowledges and agrees that the Placement Agent's engagement hereunder is not
an agreement by the Placement Agent or any of its affiliates to underwrite or
purchase any securities or otherwise provide any financing. As compensation for
their services hereunder, the Fund agrees to pay at the Closing Time (as defined
below) to the Placement Agent by wire transfer of immediately available funds an
amount equal to ___% of the proceeds received by the Fund from the sale of the
Shares.
(b) Payment. Payment of the purchase price for, and delivery of the Shares
shall be made at a closing (the "Closing") at the offices of [Name], [Address],
at ____ _.M. (Eastern time) to take place no later than the third or fourth
business day (as permitted under Rule 15c6-1 under the ▇▇▇▇ ▇▇▇) after the
determination of the sales price of the Shares (such time and date of payment
and delivery being herein called the "CLOSING TIME"). All actions taken at the
Closing shall be deemed to have occurred simultaneously.
(c) Payment for the Shares. Payment of the purchase price for the Shares
shall be made by the Investors by wire transfer in immediately available funds
to a bank account designated by the Fund, upon delivery of the Shares through
the facilities of The Depository Trust Company, to the Investors, and shall be
registered in such name or names and shall be in such denominations, as the
Investors may request at least one business day before the Closing Time.
(d) Purchase Agreements. The several purchases of the Shares by the
Investors shall be evidenced by the execution of one or more purchase agreements
each substantially in the form attached hereto as Exhibit A (the "PURCHASE
AGREEMENT").
(e) No other Sales of Common Shares. Prior to the earlier of (i) the date
on which this Agreement is terminated and (ii) the Closing Time, the Fund shall
not, without the prior consent of the Placement Agent, solicit or accept offers
to purchase Common Shares (other than pursuant to the exercise of options or
warrants to purchase Common Shares that are outstanding at the date hereof)
otherwise than through the Placement Agent.
Section 3. Covenants.
(a) The Fund and Adviser covenant with the Placement Agent as follows:
(i) Compliance With Securities Regulations and Commission Requests.
The Fund, subject to Section 3(a)(ii), will comply with the requirements of
Rule 430A or Rule 430C, as applicable, and will notify the Placement Agent
as soon as practicable, and confirm the notice in writing, (1) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus (or
any document incorporated by reference therein) or for additional
information, (iv) of the issuance by the Commission of any stop order
suspending the
11
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of
the qualification of the Shares 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 1933 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 issuance and sale of the Shares to the investors. The Fund will
promptly effect any necessary post-effective amendment and the filings
required pursuant to Rule 497 and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted
for filing under Rule 497 was received for filing by the Commission and, in
the event that it was not, it will promptly file such prospectus. The Fund
will make every reasonable effort to prevent the issuance of any stop
order, or order of suspension or revocation of registration pursuant to
Section 8(e) of the 1940 Act, and, if any such stop order or order of
suspension or revocation of registration is issued, to obtain the lifting
thereof at the earliest possible moment.
(ii) Filing of Amendments and Exchange Act Documents. The Fund will
give the Placement Agent notice of its intention to file or prepare any
amendment to the Registration Statement relating to the offering, issuance
or sale of Shares (including any filing under Rule 462(d)) or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectus, and will furnish the Placement Agent with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such documents to which
the Placement Agent or counsel for the Placement Agent shall reasonably
object. The Fund has given the Placement Agent notice of any filings made
pursuant to the 1934 Act or the rules and regulations of the Commission
under the 1934 Act (the "1934 ACT REGULATIONS") within 48 hours prior to
the date hereof; the Fund will give the Placement Agent notice of its
intention to make any such filing from the date hereof to the Closing Time
and will furnish the Placement Agent with copies of any such documents a
reasonable amount of time prior to such proposed filing, or as the case may
be, and will not file or use any such document to which the Placement Agent
or counsel for the Placement Agent shall object; provided, however that
this covenant shall not apply to any post-effective amendment required by
Rule 8b-16 of the 1940 Act which is filed with the Commission after the
later of (x) one year from the date of this Agreement or (y) the date on
which the distribution of the Shares is completed.
(iii) Delivery of Registration Statements. The Fund has furnished or
will deliver to the Placement Agent and counsel for the Placement Agent,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto relating to the offering, issuance or
sale of Shares (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 Placement Agent, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment relating
to the offering, issuance or sale of Shares (except 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 Shares is completed)
thereto (without exhibits). The copies of the Registration Statement and
each amendment thereto, relating to the offering, issuance or sale of
Shares to the Investors, furnished
12
to the Placement Agent will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(iv) Delivery of Prospectuses. The Fund has delivered to the Placement
Agent, without charge, as many copies of each preliminary prospectus as the
Placement Agent 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 the Placement Agent, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the Prospectus (as amended or supplemented) as the
Placement Agent may reasonably request. The Prospectus and any amendments
or supplements thereto furnished to the Placement Agent will be identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(v) Continued Compliance With Securities Laws. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the Shares, any event shall occur or condition shall exist as a
result of which it is necessary, in the reasonable opinion of counsel for
the Placement Agent or for the Fund, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or amend
or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the Rules and Regulations, the Fund will promptly prepare
and file with the Commission, subject to Section 3(a)(ii), such amendment
or supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Fund will furnish to the Placement Agent such number
of copies of such amendment or supplement as the Placement Agent may
reasonably request.
(vi) Blue Sky Qualifications. The Fund will use its best efforts, in
cooperation with the Placement Agent, to qualify the Shares for issuance
and sale to the Investors under the applicable securities laws of such
states and other jurisdictions of the United States as the Placement Agent
may designate and to maintain such qualifications in effect so long as
required in connection with the issuance and sale of the Shares; provided,
however, that the foregoing shall not apply to the extent that the Shares
are "covered securities" that are exempt from state regulation of
securities offerings pursuant to Section 18 of the 1933 Act; and provided,
further, 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.
(vii) Rule 158. The Fund will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide to the Placement Agent the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
13
(viii) Use of Proceeds. The Fund will use the net proceeds received by
it from the sale of the Shares in the manner specified in the General
Disclosure Package and the Prospectus under "Use of Proceeds."
(ix) Listing. The Fund will use its best efforts to effect the listing
of the Shares on the NYSE, subject to notice of issuance.
(x) [Intentionally Omitted].
(xi) Reporting Requirements. The Fund, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1940 Act and the 1934 Act within the time periods required by the
1940 Act and the Rules and Regulations and the 1934 Act and the rules and
regulations of the Commission thereunder, respectively.
(xii) No Manipulation of Market for Shares. Except for the
authorization of actions permitted to be taken by the Placement Agent as
contemplated herein, in the General Disclosure Package or in the
Prospectus, the Fund will not (a) take, directly or indirectly, any action
designed to cause or to result in, or that might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security
of the Fund to facilitate the sale or resale of the Shares in violation of
federal or state securities laws, and (b) until the Closing Time (i) except
for Share repurchases permitted in accordance with applicable laws and
issuances of Shares or purchases of Shares in the open market pursuant to
the Fund's dividend reinvestment plan, sell, bid for or purchase the Shares
or pay any person any compensation for soliciting purchases of the Shares
or (ii) pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Fund.
(xiii) [Intentionally Omitted].
(xiv) Sales Materials. The Fund represents and agrees that, unless it
obtains the prior consent of the Placement Agent, it will not use any sales
or marketing materials in connection with any issuance or sale of any
Shares.
Section 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the performance of
its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Placement Agent of this Agreement and
such other documents as may be required in connection with the issuance, sale
and delivery of the Shares to the Investors, including, without limitation, any
Purchase Agreements, (iii) the preparation, issuance and delivery of the
certificates for the Shares to the Investors, including any stock or other
transfer taxes and any stamp or other duties payable upon the sale, issuance or
delivery of the Shares to the Investors, (iv) the fees and disbursements of the
Fund's counsel, accountants and other advisers, (v) the printing and delivery to
the Placement Agent of copies of each preliminary prospectus and of the
Prospectus and any amendments or supplements thereto and any costs associated
with electronic delivery of any of the foregoing by the Placement Agent to
investors, (vi) the fees and expenses of any transfer agent or registrar for
14
the Shares, (vii) the fees and disbursements of the Placement Agent's counsel
(not to exceed $25,000), and the fees and disbursements of counsel in connection
with any state "blue sky" laws (and filing fees in connection therewith), (viii)
the fees and expenses incurred in connection with the listing of the Shares on
the NYSE and (ix) the fees and expenses (including, without limitation, any
damages or other amounts payable in connection with legal or contractual
liability) associated with the reforming of any contracts for sale of the Shares
to the investors caused by a breach of the representation contained in the third
paragraph of Section l(a)(i) hereof.
(b) Termination of Agreement. If this Agreement is terminated by the
Placement Agent in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Fund or the Adviser shall reimburse, or arrange for an
affiliate to reimburse, the Placement Agent for all of the Placement Agent's out
of pocket expenses, including reasonable fees and disbursements of counsel for
the Placement Agent. If this Agreement is terminated for any reason other than
by the Placement Agent in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Fund or the Adviser shall reimburse, or arrange for an
affiliate to reimburse, the Placement Agent for all of the Placement Agent's out
of pocket expenses, including reasonable fees and disbursements of counsel for
the Placement Agent up to a maximum reimbursement of $25,000.
Section 5. Conditions of the Placement Agent's Obligations.
The obligations of the Placement Agent hereunder are subject to the accuracy of
the representations and warranties of the Fund and the Adviser contained in
Section 1 hereof or in certificates of any officer of the Fund or the Adviser
delivered pursuant to the provisions hereof, to the performance by the Fund and
the Adviser of their respective covenants and other obligations hereunder, and
to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(d) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act, no notice or order pursuant
to Section 8(e) of the 1940 Act shall have been issued, and no proceedings with
respect to either shall have been initiated or, to the Fund's knowledge,
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Placement Agent. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance with
Rule 497 (or a post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of Rule
430A).
(b) Opinions of Counsel.
(i) Opinion of Counsel for the Fund and the Adviser. At the Closing
Time, the Placement Agent shall have received the favorable opinions, dated
as of Closing Time, from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel for the Fund
and the Adviser, which opinions shall be substantially similar to those
opinions delivered on [Date], in connection with a registered direct
offering by the Fund of shares of common stock, in the case of the opinion
from counsel to the Adviser, and to the opinion delivered on [Date] in
connection with the secondary public
16
offering of Common Shares, in the case of the opinion from counsel to the
Fund, and to such further effect as counsel to the Placement Agent may
reasonably request. As to matters of Maryland law, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
may rely on the opinion of ▇▇▇▇▇▇▇ LLP.
(ii) Opinion of Counsel for the Placement Agent. At the Closing Time,
the Placement Agent shall have received the favorable opinion, dated as of
Closing Time, from [Law Firm], counsel for the Placement Agent, which
opinion shall be in form and substance satisfactory to the Placement Agent.
(c) Officers' Certificates. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus or the General Disclosure Package,
any 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, and the Placement Agent
shall have received a certificate of a duly authorized officer of the Fund
and of the chief financial or chief accounting officer of the Fund and of
the President or a Vice President or Managing Director of the Adviser,
dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in
Sections 1(a) and (b) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Fund
or the Adviser, as applicable, has complied with all agreements and
satisfied all conditions on its part to be-performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement, or order of suspension or revocation of
registration pursuant to Section 8(e) of the 1940 Act, has been issued and
no proceedings for any such purpose have been instituted or are pending or,
to the knowledge of the Fund or the Adviser, contemplated by the
Commission.
(d) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Placement Agent shall have received from Ernst & Young LLP
("E&Y") a letter dated such date, in form and substance satisfactory to the
Placement Agent, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to the Placement
Agent with respect to the financial statements and certain financial
information contained in the Registration Statement, the General Disclosure
Package and the Prospectus.
(e) Bring-Down Comfort Letter. At the Closing Time, the Placement
Agent shall have received from E&Y a letter, dated as of the Closing Time,
to the effect that they reaffirm the statements made in the letter famished
pursuant to subsection (d) of this Section, except that the specified date
referred to shall be a date not more than three (3) business days prior to
Closing Time.
(f) Approval of Listing. At Closing Time, the Shares shall have been
approved for listing on the NYSE, subject only to official notice of
issuance.
(g) Maintenance of Rating. Since the execution of this Agreement,
there shall not have been any decrease in the rating of any of the Fund's
securities by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the ▇▇▇▇ ▇▇▇) or any notice
given of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction of
the possible change.
16
(h) Additional Documents. At the Closing Time counsel for the
Placement Agent 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 Shares to the Investors as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions
herein contained; and all proceedings taken by the Fund and the Adviser in
connection with the organization and registration of the Fund under the
1940 Act and the issuance and sale of the Shares to the Investors as
contemplated herein and under any Purchase Agreements, shall be reasonably
satisfactory in form and substance to the Placement Agent and counsel for
the Placement Agent.
(i) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Placement Agent by notice to the
Fund at any time at or prior to Closing Time, and such termination shall be
without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7, 8 and 12 shall survive any such
termination and remain in full force and effect.
Section 6. Indemnification.
(a) Indemnification of the Placement Agent. The Fund and the Adviser agree,
jointly and severally, to indemnify and hold harmless the Placement Agent and
each person, if any, who controls the Placement Agent within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, and any director,
officer, employee or affiliate thereof as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto) relating to the offering, issuance or sale of
the Shares, including the Rule 430A 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 preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of the
Fund; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Placement Agent),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to
17
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 Adviser by the Placement Agent expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any Preliminary Prospectus or the Prospectus (or any
amendment or supplement thereto).
(b) Indemnification of Fund, Adviser, Directors and Officers. The Placement
Agent agrees to indemnify and hold harmless the Fund and the Adviser, their
respective directors, each of the Fund's officers who signed the Registration
Statement, and each person, if any, who controls the Fund or the Adviser within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Fund or the Adviser by the
Placement Agent expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) [Intentionally Omitted].
(d) Actions Against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Placement Agent,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Fund and the Adviser. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii)
18
does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(e) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 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.
(f) Limitations on Indemnification. Any indemnification by the Fund shall
be subject to the requirements and limitations of Section 17(i) of the 1940 Act
and 1940 Act Release 11330.
Section 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Fund and the
Adviser on the one hand and the Placement Agent on the other hand from the
issuance and sale of the Shares to the Investors pursuant to this Agreement and
any Purchase Agreement or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Fund and the Adviser on the one hand and of the Placement Agent 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 Adviser on the one hand
and the Placement Agent on the other hand in connection with the issuance and
sale of the Shares to the Investors pursuant to this Agreement and any Purchase
Agreements shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Shares pursuant to this Agreement (before
deducting expenses) received by the Fund and the total placement agent fees
received by the Placement Agent (whether from the Fund or otherwise), in each
case as set forth on the cover of the Prospectus, bear to the aggregate public
offering price of the Shares as set forth on such cover.
The relative fault of the Fund and the Adviser on the one hand and the
Placement Agent on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Fund or the Adviser or by the Placement Agent and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
19
The Fund, the Adviser and the Placement Agent agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 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, the Placement Agent shall
not be required to contribute any amount in excess of the amount of placement
agent fees actually received by the Placement Agent pursuant to the terms of
this Agreement. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Placement
Agent, and each director of the Fund and each director of the Adviser,
respectively, each officer of the Fund who signed the Registration Statement,
and each person, if any, who controls the Fund or the Adviser, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Fund and the Adviser, respectively.
Any contribution by the Fund shall be subject to the requirements and
limitations of Section 17(i) of the 1940 Act and 1940 Act Release 11330.
Section 8. Representations and Warranties To Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Fund or the Adviser submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Placement Agent or a controlling
person, or by or on behalf of the Fund or the Adviser, and shall survive
delivery of the Shares to the Placement Agent.
Section 9. Termination of Agreement.
(a) Termination; General. The Placement Agent may terminate this Agreement,
by notice to the Fund, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus or General Disclosure
Package, any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Fund or the
Adviser, whether or not arising in the ordinary course of business, or (ii) if
there has occurred any material adverse change in the financial markets in the
United States or the international financial markets, any material outbreak of
hostilities or material escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Placement Agent,
impracticable or inadvisable to market the
20
Shares or to enforce contracts for the sale of the Shares, or (iii) if trading
in the Common Shares of the Fund has been suspended or materially limited by the
Commission or the NYSE, or if trading generally on the American Stock Exchange
or in the NASDAQ Global Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, 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 Kansas authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7, 8 and 12 shall survive such termination and remain in full force and effect.
Section 10. 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 Placement
Agent shall be directed to [Placement Agent] at [Address], attention of [Name],
[Position]; and notices to the Fund or the Adviser shall be directed, as
appropriate, to the office of the Adviser, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, attention of Management Committee.
Section 11. No Advisory or Fiduciary Relationship. The Fund acknowledges
and agrees that (a) the issuance and sale of the Shares pursuant to the Purchase
Agreements, including the determination of the price per share of the Shares and
any related discounts and commissions and placement agent fees, will be an
arm's-length commercial transaction between the Fund, on the one hand, and the
Investors, on the other hand, (b) in connection with the issuance and sale of
the Shares to the Investors contemplated hereby and the process leading to such
transaction the Placement Agent is not a fiduciary of the Fund nor the agent or
fiduciary of any of the stockholders, creditors or employees of the Fund or any
other party, (c) the Placement Agent has not assumed nor will it assume an
advisory or fiduciary responsibility in favor of the Fund with respect to the
issuance and sale of Shares to the Investors contemplated hereby or the process
leading thereto (irrespective of whether the Placement Agent has advised or is
currently advising the Fund on other matters) and the Placement Agent has no
obligation to the Fund with respect to the issuance and sale of Shares to the
Investors contemplated hereby except for any obligations which are expressly set
forth in this Agreement, (d) the Placement Agent and its affiliates maybe
engaged in abroad range of transactions that involve interests that differ from
those of the Fund, and (e) the Placement Agent has not provided legal,
accounting, regulatory or tax advice with respect to the issuance and sale of
Shares to the Investors as contemplated hereby and under any Purchase Agreements
and the Fund has consulted its own respective legal, accounting, regulatory and
tax advisors to the extent it deemed appropriate.
Section 12. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Placement Agent, the Fund, the Adviser and their respective
partners and successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Placement Agent, the Fund, the Adviser and their respective successors
and the controlling persons and officers and directors referred to in
21
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 Placement
Agent, the Fund, the Adviser and their respective partners and successors, and
said controlling persons and officers, directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
investor shall be deemed to be a successor by reason merely by reason of its
purchase of Shares from the Fund.
Section 13. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY
PROVIDED, SPECIFIED TIMES OF DAY REFER TO CENTRAL STANDARD TIME.
Section 14. Effect of Headings. The Article and Section headings herein are
for convenience only and shall not affect the construction hereof.
22
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement among the Placement
Agent, the Fund and the Adviser in accordance with its terms.
Very truly yours,
TORTOISE ENERGY CAPITAL CORPORATION
By: _________________________________
Name: ___________________________
Title ___________________________
TORTOISE CAPITAL ADVISORS, LLC
By: _________________________________
Name: ___________________________
Title ___________________________
CONFIRMED AND ACCEPTED, as of the
date first above written:
[PLACEMENT AGENT]
By:___________________________________
Authorized Signatory
23
SCHEDULE A
Price Per Share = $____
24