AUCTION RATE SENIOR NOTES
$______________ SERIES __, DUE ___________, ______
($25,000 DENOMINATIONS)
TORTOISE ENERGY CAPITAL CORPORATION
UNDERWRITING AGREEMENT
[Date]
▇▇▇▇▇▇ BROTHERS INC.
[ ]
As Representative[s] of the several
Underwriters named in Schedule I
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Tortoise Energy Capital Corporation, a Maryland corporation (the
"Company"), proposes to, subject to the terms and conditions stated herein,
issue and sell to the Underwriters named in Schedule I hereto (each an
"Underwriter" and, together the "Underwriters") for whom you are acting as
representatives (the "Representatives") $______________ aggregate principal
amount of auction rate senior notes Series __, due _____, ____ (the "Tortoise
Notes"). The Tortoise Notes will be issued pursuant to the provisions of an
indenture (the "Base Indenture") dated as of November 14, 2005 between the
Company and The Bank of New York Trust Company, N.A., as trustee (the
"Trustee"), and a supplemental indenture between the Company and the Trustee, to
be dated ________, 2007 (the "Supplemental Indenture," and together with the
Base Indenture, the "Indenture"). The Company and the Company's investment
adviser, Tortoise Capital Advisors, LLC, a Delaware limited liability company
(the "Investment Adviser"), each wishes to confirm its agreement concerning the
purchase of the Tortoise Notes from the Company by the Underwriters.
The Company has entered into an Investment Advisory Agreement with the
Investment Adviser dated May 1, 2005 (the "Advisory Agreement"); a Custody
Agreement with U.S. Bank National Association, dated May 25, 2005 ("Custody
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Agreement"); a Stock Transfer Agency Agreement with Computershare Investor
Services, LLC, dated May 10, 2005 ("Transfer Agency Agreement"); a Fund
Administration Servicing Agreement with U.S. Bancorp Fund Services, LLC, dated
May 25, 2005 ("Administration Agreement"); a Fund Accounting Servicing Agreement
with U.S. Bancorp Fund Services, LLC, dated May 25, 2005 ("Accounting
Agreement"); and an Auction Agency Agreement, including the form of
Broker-Dealer Agreement, with The Bank of New York, dated ________, 2007 (the
"Auction Agreement"). Collectively, the Advisory Agreement, the Custody
Agreement, the Transfer Agency Agreement, the Administration Agreement, the
Accounting Agreement and the Auction Agreement (but excluding the Broker-Dealer
Agreement) are referred to herein as the "Company Agreements." This Underwriting
Agreement is herein referred to as the "Agreement."
Section 1. Representations, Warranties and Agreements of the Company
and the Investment Adviser. The Company and the Investment Adviser jointly
and severally represent, warrant and agree that:
(a) A registration statement on Form N-2 (File Nos. 333-139963 and
811-21725) with respect to the Tortoise Notes has (i) been prepared by the
Company in conformity with the requirements of the Securities Act of 1933,
as amended (the "Securities Act"), the Investment Company Act of 1940, as
amended (the "1940 Act"), the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") and the rules and regulations of the United States
Securities and Exchange Commission (the "Commission") promulgated under the
Securities Act (the "1933 Act Rules and Regulations") and promulgated under
the 1940 Act (the "1940 Act Rules and Regulations"), (ii) been filed with
the Commission under the Securities Act and the 1940 Act and (iii) become
effective under the Securities Act. If any post-effective amendment to such
registration statement has been filed with the Commission prior to
execution and delivery of this Agreement, the most recent such amendment
has become effective under the Securities Act. Copies of such registration
statement and each of the amendments thereto have been delivered by the
Company to you. As used in this Agreement, the following terms have the
specified meanings:
"Applicable Time" means ________[a.m.][p.m.] (New York City time)
on the date of this Agreement;
"Base Prospectus" means the base prospectus filed as part of the
Registration Statement, in the form in which it has most recently been
amended on or prior to the date hereof, relating to the Tortoise
Notes;
"Disclosure Package" means, as of the Applicable Time, the most
recent Preliminary Prospectus, together with the Final Term Sheet;
"Effective Date" means any date as of which any part of the
Registration Statement or any post-effective amendment thereto
relating to the Tortoise Notes became, or is deemed to have become,
effective under the Securities Act in accordance with the 1933 Act
Rules and Regulations;
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"Final Term Sheet" means the term sheet prepared pursuant to
Section 8 of the Agreement and contained in Schedule II hereto;
"Preliminary Prospectus" means any preliminary prospectus and
related statement of additional information relating to the Tortoise
Notes, including the Base Prospectus and any preliminary prospectus
supplement thereto, included in the Registration Statement or as filed
with the Commission pursuant to Rule 497(a) and/or Rule 497(c) of the
1933 Act Rules and Regulations and provided to the Representatives for
use by the Underwriters;
"Prospectus" means the final prospectus and related statement of
additional information relating to the Tortoise Notes, including the
Base Prospectus and the final prospectus supplement thereto relating
to the Tortoise Notes, as filed with the Commission pursuant to Rule
497(c) and/or Rule 497(h) of the 1933 Act Rules and Regulations and
provided to the Representatives for use by the Underwriters; and
"Registration Statement" means, collectively, the various parts
of the above-referenced registration statement (including the
statement of additional information), each as amended as of the
Effective Date for such part, including any Preliminary Prospectus or
the Prospectus and all exhibits to such registration statement.
["Rule 482 Statement" means a document prepared in accordance
with the provision of Rule 482 of the Securities Act in connection
with the offering of the Tortoise Notes and which is listed on
Schedule III hereto.]
For purposes of this Agreement, all references to the Registration
Statement, any Preliminary Prospectus, the Prospectus, the Base 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 ("▇▇▇▇▇"). Any reference to the "most recent
Preliminary Prospectus" will be deemed to refer to the latest Preliminary
Prospectus included in the Registration Statement or filed pursuant to Rule
497(c) and/or Rule 497(h) of the 1933 Act Rules and Regulations prior to or on
the date hereof (including, for purposes of this Agreement, any documents
incorporated by reference therein prior to or on the date of this Agreement).
Any reference to any Preliminary Prospectus or the Prospectus will be deemed to
refer to and include any documents incorporated by reference therein pursuant to
Form N-2 under the Securities Act as of the date of such Preliminary Prospectus
or the Prospectus, as the case may be.
(b) The Commission has not issued any order preventing or suspending
the effectiveness of the Registration Statement or preventing or suspending
the use of any Preliminary Prospectus or the Prospectus.
(c) The Company is duly registered under the 1940 Act as a closed-end,
non-diversified, management investment company. A notification of
registration of
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the Company as an investment company under the 1940 Act on Form N-8A (the
"1940 Act Notification") has been prepared by the Company in conformity
with the 1940 Act and has been filed with the Commission and, at the time
of filing thereof and at the time of filing any amendment or supplement
thereto, conformed in all material respects with all applicable provisions
of the 1940 Act and the 1940 Act Rules and Regulations. The Company 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 (or any amendment or supplement to either of them).
(d) To the knowledge of the Company and the Investment Adviser, no
person is serving or acting as an officer, director or investment adviser
of the Company except in accordance with the provisions of the 1940 Act and
the 1940 Act Rules and Regulations and the Investment Advisers Act of 1940,
as amended (the "Investment Advisers Act") and the rules and regulations
adopted by the Commission under the Investment Advisers Act (the
"Investment Advisers Act Rules and Regulations").
(e) The Registration Statement and the 1940 Act Notification conformed
on the Effective Date and conform, and any amendment thereto filed after
the date hereof will conform, in all material respects to the requirements
of the Securities Act, the 1940 Act, the Trust Indenture Act, the 1933 Act
Rules and Regulations, the 1940 Act Rules and Regulations and the rules and
regulations of the Commission promulgated under the Exchange Act of 1934,
as amended (the "Exchange Act;" such rules and regulations the "1934 Act
Rules and Regulations," and together with the 1933 Act Rules and
Regulations and the 1940 Act Rules and Regulations, the "Rules and
Regulations"). The most recent Preliminary Prospectus conforms on the date
hereof, and the Prospectus, and any amendments or supplements thereto will
conform as of its date and as of the Delivery Date (as defined in Section 5
below), in all material respects to the requirements of the Securities Act,
the 1940 Act, the Trust Indenture Act and the Rules and Regulations. The
documents incorporated by reference in the most recent Preliminary
Prospectus or the Prospectus, when they became effective or were filed with
the Commission, as the case may be, conformed in all material respects to
the requirements of the Securities Act, the Exchange Act, the Trust
Indenture Act or the 1940 Act, as applicable, and the Rules and
Regulations, and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform, in all material respects to the requirements
of the Securities Act, the 1940 Act, the Trust Indenture Act or the
Exchange Act, as applicable, and the Rules and Regulations; and no such
documents have been filed with the Commission since the close of business
of the Commission on the business day immediately prior to the date hereof.
(f) The Registration Statement did not, as of the Effective Date,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that no
representation or warranty is made as to information contained in or
omitted from the Registration Statement in reliance upon and in conformity
with written
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information furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein.
(g) The 1940 Act Notification, and any amendment or supplement
thereto, will not, as of its date and on the Delivery Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that no representation or warranty is made
as to information contained in or omitted from the Prospectus in reliance
upon and in conformity with written information furnished to the Company
through the Representatives by or on behalf of any Underwriter specifically
for inclusion therein.
(h) The Disclosure Package did not, as of the Applicable Time, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that no representation or warranty is made
as to information contained in or omitted from the Disclosure Package in
reliance upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(i) The Prospectus, and any amendment or supplement thereto, will not,
as of its date and on the Delivery Date, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that no representation or warranty is made as to information
contained in or omitted from the Prospectus in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(j) The documents incorporated by reference in the Registration
Statement, any Preliminary Prospectus or the Prospectus, at the time they
were filed with the Commission, complied in all material respects with the
requirements of the requirements of the Exchange Act, the 1934 Act Rules
and Regulations and the 1940 Act 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 Applicable Time and (c)
at the Delivery Date, did not and will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(k) The Company has been duly incorporated and is existing as a
corporation in good standing under the laws of the State of Maryland, is
duly qualified to do business and is in good standing in each jurisdiction
in which its ownership or lease of property or the conduct of its business
as described in the most recent Preliminary Prospectus and the Prospectus
requires such qualification, and has all power and authority necessary to
own or hold property and to conduct the business as described in
5
the most recent Preliminary Prospectus and the Prospectus, except where the
failure to so qualify or to be in good standing would not reasonably be
expected to have a material adverse effect on the condition (financial or
other), business, prospects, management, shareholders' equity or results of
operations of the Company (a "Material Adverse Effect"). The Company has no
subsidiaries.
(l) The Company has an authorized capitalization as set forth in the
most recent Preliminary Prospectus and the Prospectus. All of the issued
shares of common stock and preferred stock of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and
conform in all material respects to the description thereof contained in
the most recent Preliminary Prospectus and the Prospectus.
(m) The Tortoise Notes to be issued and sold by the Company to the
Underwriters hereunder have been duly authorized and, when issued,
authenticated and delivered against payment therefor in accordance with
this Agreement and the Indenture, will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture; and
the Tortoise Notes will conform in all material respects to the description
thereof contained in the Indenture, the Disclosure Package and the
Prospectus.
(n) This Agreement, the Indenture and each of the Company Agreements
have been duly authorized, executed and delivered by the Company and
constitute valid and legally binding agreements of the Company, enforceable
against the Company in accordance with their terms, except as rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws and subject to the qualification that the enforceability of
the Company's obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally and by general equitable
principles.
(o) The Company is not (i) in violation of its Charter or by-laws,
(ii) in default, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) in violation of any law,
ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental authorization
or permit necessary to the ownership of its property or to the conduct of
its business, except, in the case of clauses (ii) and (iii), such defaults,
events, violations or failures that in the aggregate would not reasonably
be expected to have a Material Adverse Effect.
(p) None of the execution, delivery and performance of this Agreement
or the Indenture by the Company, the performance of the Company Agreements
or the consummation of the transactions contemplated hereby and thereby (i)
6
conflict with, result in the creation or imposition of any lien, charge or
encumbrance upon the assets of the Company under the terms or provisions
of, or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property or
assets of the Company is subject, (ii) result in any violation of the
provisions of the Charter or by-laws of the Company or (iii) result in the
violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties or assets, except in the case of clauses (i) and (iii), such
conflicts, breaches or violations that in the aggregate would not
reasonably be expected to have a Material Adverse Effect; and except for
the registration of the Tortoise Notes under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may
be required under the 1940 Act, the Exchange Act, and applicable state
securities laws in connection with the purchase and distribution of the
Tortoise Notes by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance of
this Agreement or the Indenture by the Company, the performance of the
Company Agreements by the Company or the consummation of the transactions
contemplated hereby and thereby by the Company.
(q) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Securities Act. There are no outstanding
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or exchange
any securities for, shares of capital stock of or ownership interests in
the Company.
(r) The Company has not sustained, since the respective dates as of
which information is given in the most recent Preliminary Prospectus and
the Prospectus, any material loss or interference with its business that
has had, or could reasonably be expected to have, a Material Adverse
Effect, and since such date, there has not been any change in the capital
stock or long-term debt of the Company or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, consolidated financial position, shareholders' equity, results
of operations, business or prospects of the Company that has had or could
reasonably be expected to have a Material Adverse Effect, other than as set
forth or contemplated in the most recent Preliminary Prospectus and the
Prospectus.
(s) The financial statements and the notes thereto included or
incorporated by reference in the most recent Preliminary Prospectus and the
Prospectus present fairly the financial condition and results of operations
of the Company, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
7
involved; and the supporting schedules included or incorporated by
reference in the most recent Preliminary Prospectus and the Prospectus
present fairly in all material respects the information required to be
stated therein.
(t) Ernst & Young LLP, who have reviewed the financial statements of
the Company, whose report appears in the Registration Statement and who
have delivered the letters referred to in Sections 9(f) and (g) hereof,
have represented to the Company that they are an independent registered
public accounting firm as required by the Securities Act, the 1940 Act, the
1933 Act Rules and Regulations and the 1940 Act Rules and Regulations and
the rules and regulations of the Public Company Accounting Oversight Board.
(u) The Company carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its business and
the value of its property and as is customary for companies engaged in
similar businesses in similar industries.
(v) There are no legal or governmental proceedings pending to which
the Company is a party or of which any property or assets of the Company is
the subject which are reasonably likely to be determined adversely to the
Company and, if determined adversely to the Company, would be reasonably
likely to have a Material Adverse Effect; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(w) There are no contracts or other documents which are required to be
described in the Registration Statement, any Preliminary Prospectus or the
Prospectus or filed as exhibits to the Registration Statement or to a
document incorporated by reference into the Registration Statement, any
Preliminary Prospectus or the Prospectus by the Securities Act, the
Exchange Act, the 1940 Act, the Trust Indenture Act or by the Rules and
Regulations which have not been described or filed as required.
(x) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company which has had (nor does the Company have any
knowledge of any tax deficiency which, if determined adversely to the
Company, might have) a Material Adverse Effect.
(y) The Company 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.
(z) Since the respective dates as of which information is given in the
most recent Preliminary Prospectus and the Prospectus, and except as may
otherwise be disclosed in the most recent Preliminary Prospectus and the
Prospectus, the Company has not (i) issued or granted any securities other
than shares of common stock of the Company, (ii) incurred any liability or
obligation, direct or contingent, other than non-
8
material liabilities and obligations which were incurred in the ordinary
course of business, or (iii) entered into any transaction not in the
ordinary course of business.
(aa) The Company or its designee (i) makes and keeps accurate books
and records and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (B) access to its assets is permitted only
in accordance with management's authorization and (C) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(bb) There are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the
Company or the Underwriters for a brokerage commission, finder's fee or
other like payment in connection with this offering.
(cc) The statistical, market-related and industry data included in the
most recent Preliminary Prospectus and the Prospectus are based on or
derived from sources which the Company believes to be reliable and
accurate.
(dd) The Company, subject to the filing of the Prospectus under Rule
497 under the 1933 Act Rules and Regulations, has taken all required action
under the Securities Act, the 1940 Act, the Trust Indenture Act, the 1933
Act Rules and Regulations and the 1940 Act Rules and Regulations to make
the public offering and consummate the sale of the Tortoise Notes as
contemplated by this Agreement.
(ee) Except as stated in this Agreement and in the most recent
Preliminary Prospectus and the Prospectus, the Company has not taken and
shall not take, directly or indirectly, any action designed to cause or
result in, or which constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the Tortoise
Notes to facilitate the sale or resale of the Tortoise Notes.
(ff) Other than the Disclosure Package and the Prospectus, neither the
Company nor the Investment Adviser has provided or prepared any marketing
materials in connection with the offering and sale of the Tortoise Notes.
(gg) This Agreement and each of the Company Agreements complies in all
material respects with all applicable provisions of the 1940 Act, the 1940
Act Rules and Regulations, the Investment Advisers Act and the Investment
Advisers Act Rules and Regulations and the Indenture complies in all
material respects with the applicable provisions of the Trust Indenture
Act.
(hh) Except as disclosed in the most recent Preliminary Prospectus and
the Prospectus, no director of the Company is an "interested person" (as
defined in the 1940 Act) of the Company or an "affiliated person" (as
defined in the 1940 Act) of the Underwriters.
Section 2. Representations, Warranties and Agreements of the Investment
Adviser. The Investment Adviser represents, warrants and agrees that:
9
(a) The Investment Adviser has been duly formed and is validly
existing as a limited liability company in good standing under the laws of
the State of Delaware, is duly qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of property
or the conduct of its business as described in the most recent Preliminary
Prospectus and the Prospectus requires such qualification (except where the
failure to so qualify or to be in good standing would not reasonably be
expected to have a Material Adverse Effect), and has the power and
authority to own or hold its properties and to conduct its business as
described in the most recent Preliminary Prospectus and the Prospectus.
(b) The Investment Adviser is duly registered as an investment adviser
under the Investment Advisers Act and there does not exist any proceeding
or any facts or circumstances the existence of which could lead to any
proceeding which could affect adversely the registration or good standing
of the Investment Adviser with the Commission. The Investment Adviser is
not prohibited by the Investment Advisers Act, the 1940 Act, the Investment
Advisers Act Rules and Regulations or the 1940 Act Rules and Regulations
from acting under the Advisory Agreement as contemplated by the most recent
Preliminary Prospectus and the Prospectus.
(c) This Agreement and the Advisory Agreement have each been duly
authorized, executed and delivered by the Investment Adviser, and
constitute 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 hereunder may be limited by
federal or state securities laws and subject to the qualification that the
enforceability of the Investment Adviser's obligations hereunder and
thereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights
generally and by general equitable principles.
(d) None of the execution, delivery and performance of this Agreement,
the performance of the Advisory Agreement or the consummation of the
transactions contemplated hereby and thereby (i) conflict with, result in
the creation or imposition of any lien, charge or encumbrance upon the
assets of the Company under the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Investment Adviser is a party or
by which the Investment Adviser is bound or to which any of the property or
assets of the Investment Adviser is subject, (ii) result in any violation
of the provisions of the limited liability company operating agreement or
other organizational documents of the Investment Adviser or (iii) result in
the violation of any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Investment
Adviser or any of its properties or assets, except in the case of clauses
(i) and (iii), such conflicts, breaches or violations that in the aggregate
would not reasonably be expected to have a Material Adverse Effect; and
except for the registration of the Tortoise Notes under the Securities Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution of
the Tortoise Notes by
10
the Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body
is required for the execution, delivery and performance of this Agreement
by the Investment Adviser, the performance of the Advisory Agreement by the
Investment Adviser or the consummation of the transactions contemplated
hereby and thereby by the Investment Adviser.
(e) The Investment Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the most recent Preliminary Prospectus and the Prospectus
and under this Agreement and the Advisory Agreement. (f) The Investment
Adviser carries, or is covered by, insurance in such amounts and covering
such risks as is adequate for the conduct of its business and the value of
its property and as is customary for companies engaged in similar
businesses in similar industries.
(g) The description of the Investment Adviser and its business in the
most recent Preliminary Prospectus and the Prospectus conformed as of the
date hereof and as of the Delivery Date (as defined herein) will conform in
all material respects with the provisions of the Securities Act, the 1940
Act, the 1933 Act Rules and Regulations and the 1940 Act Rules and
Regulations and such description did not as of the date hereof and will not
as of the Delivery Date (as defined herein) contain an untrue statement of
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(h) There are no legal or governmental proceedings pending to which
the Investment Adviser is a party or of which any property or assets of the
Investment Adviser is the subject which is reasonably likely to be
determined adversely to the Investment Adviser and, if determined adversely
to the Investment Adviser, would be reasonably likely to have a Material
Adverse Effect; and to the best of the Investment Adviser's knowledge, no
such proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(i) Since the respective dates as of which information is given in the
most recent Preliminary Prospectus and the Prospectus, and except as may
otherwise be disclosed in the most recent Preliminary Prospectus and the
Prospectus, there have been no transactions entered into by the Investment
Adviser which are material to the Investment Adviser other than in the
ordinary course of its business.
(j) This Agreement and the Advisory Agreement comply in all material
respects with all applicable provisions of the 1940 Act, the 1940 Act Rules
and Regulations, the Investment Advisers Act and the Investment Advisers
Act Rules and Regulations.
(k) Except as stated in this Agreement and in the most recent
Preliminary Prospectus and the Prospectus, the Investment Adviser has not
taken and shall not take, directly or indirectly, any action designed to
cause or result in, or which
11
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Tortoise Notes to
facilitate the sale or resale of the Tortoise Notes.
(l) The Investment Adviser is not (i) in violation of its limited
liability company operating agreement or other organizational documents,
(ii) in default in any material respect, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject or (iii) in
violation of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business, except, in the case of clauses
(ii) and (iii), such defaults, events, violations or failures that in the
aggregate would not reasonably be expected to have a Material Adverse
Effect.
(m) Neither the Investment Adviser, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the
Investment Adviser, has (i) used any funds of the Company or the Investment
Adviser for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity, (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from any funds of the Company or the Investment Adviser, (iii)
violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977, or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(n) Neither the Investment Advisor nor any employee or agent of the
Investment Adviser has made any payment of funds of the Company or the
Investment Adviser or received or retained any funds, which payment,
receipt or retention of funds is of a character required to be disclosed in
the Registration Statement, any Preliminary Prospectus or the Prospectus
which is not so disclosed.
(o) There are no contracts, agreements or understandings between the
Investment Adviser and any person that would give rise to a valid claim
against the Company or the Underwriters for a brokerage commission,
finder's fee or other like payment in connection with this offering.
Section 3. Purchase of the Tortoise Notes by the Underwriters. On the basis
of the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to issue and sell to the
Underwriters and the Underwriters agree to purchase from the Company the
principal amount of Tortoise Notes set forth opposite such Underwriter's name in
Schedule I hereto.
12
The Company shall not be obligated to deliver any of the Tortoise Notes on
the Delivery Date (as hereinafter defined), except upon payment for all the
Tortoise Notes to be purchased on the Delivery Date as provided herein.
Section 4. Offering of Tortoise Notes by the Underwriters. The
Underwriters propose to offer the Tortoise Notes for sale upon the terms and
conditions set forth in the Prospectus.
Section 5. Delivery of and Payment for the Tortoise Notes. Delivery of and
payment for the Tortoise Notes shall be made at the offices of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or through
the facilities of The Depository Trust Company or another mutually agreeable
facility, at 10:00 A.M., New York City time, on ________, 2007 or at such other
date or place as shall be determined by agreement between the Underwriters and
the Company (the "Delivery Date"). On the Delivery Date, the Company shall
deliver or cause to be delivered the Tortoise Notes to the Underwriters through
the facilities of the Depository Trust Company against payment to or upon the
order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of the Underwriters hereunder.
Section 6. Further Agreements of the Company and the Investment Adviser.
The Company and the Investment Adviser covenant and agree:
(a) To prepare the Prospectus in a form approved by the
Representatives and file the Prospectus with the Commission pursuant to
Rule 497(c) or Rule 497(h) of the 1933 Act Rules and Regulations as
promptly as possible, not later than the Commission's close of business on
the second business day following the execution and delivery of this
Agreement; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Underwriters, promptly after it receives notice thereof, of the
time when any amendment or supplement to the Registration Statement, the
most recent Preliminary Prospectus or the Prospectus has been filed and to
furnish the Underwriters with copies thereof; to prepare the Final Term
Sheet, as approved by the Representatives; to advise the Underwriters,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order suspending the effectiveness
of the Registration Statement, suspending or preventing the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Tortoise Notes for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus for
additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(b) To deliver promptly to the Underwriters such number of the
following documents as it shall reasonably request: (i) conformed copies of
the
13
Registration Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits) and (ii) any
Preliminary Prospectus, the Final Term Sheet and the Prospectus and all
amendments or supplements to any of such documents (including any document
filed under the Exchange Act and deemed to be incorporated by reference in
the Registration Statement, any Preliminary Prospectus or the Prospectus);
during the period in which the Prospectus relating to the Tortoise Notes is
required to be delivered under the Securities Act, to comply with all
requirements of the Securities Act and the Rules and Regulations, as from
time to time in force, so far as is necessary to permit the continuance of
sales of or dealings in the Tortoise Notes as contemplated by the
provisions of this Agreement and by the Prospectus; and, if during such
period any event occurs as a result of which the Disclosure Package or the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend
the Registration Statement or amend or supplement the Disclosure Package or
the Prospectus or file any document to comply with the Securities Act, to
promptly notify the Representatives and, subject to Section 6(a) hereof, to
amend the Registration Statement, amend or supplement the Disclosure
Package or the Prospectus, as the case may be, or file any document (in
each case, at the expense of the Company) so as to correct such statement
or omission or to effect such compliance, and to furnish without charge to
each Underwriter as many written and electronic copies of any such
amendment or supplement as the Representatives may from time to time
reasonably request;
(c) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Underwriters, be
required by the Securities Act or requested by the Commission;
(d) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 497 of the 1933 Act Rules and Regulations, to furnish a
copy thereof to the Underwriters and their counsel and obtain the consent
of the Underwriters to the filing, which consent shall not be unreasonably
withheld;
(e) During the period when the Prospectus is required to be delivered
under the Securities Act or the Exchange Act, to file all documents
required to be filed with the Commission pursuant to the 1940 Act and the
Exchange Act within the time periods required by the 1940 Act and the 1940
Act Rules and Regulations and the Exchange Act and the 1934 Act Rules and
Regulations, respectively;
(f) To make generally available to the Company's security holders and
to deliver to the Underwriters an earnings statement of the Company (which
need not be audited) complying with Section 11(a) of the Securities Act and
the applicable Rules and Regulations (including, at the option of the
Company, Rule 158) covering a twelve-month period commencing after the
Effective Date and ending not later than 15 months thereafter;
14
(g) For a period of three years following the Effective Date, to
furnish to the Underwriters, to the extent such information is not freely
available on the Internet, copies of all materials furnished by the Company
to its shareholders and all public reports and all reports and financial
statements furnished by the Company to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder;
(h) Promptly from time to time, to take such action as the
Underwriters may reasonably request to qualify the Tortoise Notes for
offering and sale under the securities laws of such jurisdictions as the
Underwriters may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of the Tortoise Notes;
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus, not to,
without the prior written consent of the Underwriters, directly or
indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the
future of) any Tortoise Notes or securities convertible into or
exchangeable for Tortoise Notes, or sell or grant options, rights or
warrants with respect to any Tortoise Notes or securities convertible into
or exchangeable for Tortoise Notes, or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of the economic benefits or risks of ownership of such Tortoise Notes,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Tortoise Notes or other securities, in cash or
otherwise;
(j) To apply the net proceeds from the sale of the Tortoise Notes in a
manner consistent with the investment objectives, policies and restrictions
of the Company as set forth in the Prospectus; and
(k) Without the prior consent of the Representatives, not to use any
marketing materials in connection with any public offering of the Tortoise
Notes.
Section 7. Expenses. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Tortoise Notes and any
taxes payable in connection therewith; (b) the costs incident to the
preparation, printing and filing under the Securities Act and the 1940 Act of
the Registration Statement, any Preliminary Prospectus, the Prospectus, and the
1940 Act Notification and any amendments or supplements and exhibits thereto;
(c) the costs of distributing the Registration Statement as originally filed and
each amendment thereto and any post-effective amendments thereof (including, in
each case, exhibits), any Preliminary Prospectus and the Prospectus and any
amendment or supplements thereto, all as provided in this Agreement; (d) the
costs of producing and distributing this Agreement, and any other related
documents in connection with the offering, purchase, sale and delivery of the
Tortoise Notes; (e) the preparation, issuance and delivery of the certificates
for the Tortoise Notes, if any, to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties
15
payable upon the sale, issuance or delivery of the Tortoise Notes to the
Underwriters, (f) any applicable listing or other fees including the fees paid
to the rating agencies in connection with the rating of the Tortoise Notes; (g)
the fees and expenses of qualifying the Tortoise Notes under the securities laws
of the several jurisdictions as provided in Section 6(h) and of preparing,
printing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the Underwriters); (h) all costs and reasonable expenses
of the Underwriters, other than the fees and disbursements of counsel to the
Underwriters; (i) the fees and expenses of the Company's accountants and the
fees and expenses of counsel for the Company, of the transfer agent and the
auction agent as set forth in the Auction Agreement; and (j) all other costs and
reasonable expenses incident to the performance of the obligations of the
Company under this Agreement.
Section 8. Final Term Sheet. The Company represents and warrants to, and
agrees with, each Underwriter that (i) the Final Term Sheet will not, as of its
issue date and through the time the Tortoise Notes are delivered pursuant to
Section 5 hereof, include any information that conflicts with the information
contained in the Registration Statement, the most recent Preliminary Prospectus
and the Prospectus; and (ii) the Final Term Sheet, when considered together with
the information contained in the most recent Preliminary Prospectus, did not, as
of the Applicable Time, does not, as of the date hereof, and will not, as of the
Delivery Date, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
Section 9. Conditions of Underwriters' Obligations. The obligations of the
Underwriters hereunder are subject to the accuracy, when made and on the
Delivery Date, of the representations and warranties of the Company and the
Investment Adviser contained herein, to the performance by the Company and the
Investment Adviser of their respective obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a); all filings required by Rule 497 of the 1933
Act Rules and Regulations shall have been made within the time periods
prescribed by such rules, and no such filings will have been made without
the consent of the Representatives; no stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto, preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, or suspending the qualification of the Tortoise Notes for
offering or sale in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise
shall have been complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Indenture, the
Auction Agreement, the Tortoise Notes, the Registration Statement , any
Preliminary Prospectus
16
and the Prospectus, and all other legal matters relating to this Agreement
and the transactions contemplated hereby shall be reasonably satisfactory
in all material respects to counsel for the Underwriters, and the Company
shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(c) The Company shall have furnished to the Underwriters, in form and
substance reasonably satisfactory to the Underwriters, the written opinion
of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, dated the Delivery Date, to the
effect of paragraphs (i) through (xvii) below:
(i) The Company is a corporation duly incorporated and existing
under and by virtue of the laws of the State of Maryland and is in
good standing with the State Department of Assessments and Taxation of
the State of Maryland;
(ii) The Company has the corporate power to own, lease and
operate its property or assets and to conduct its business in all
material respects as substantially described in the most recent
Preliminary Prospectus and the Prospectus under the caption "The
Company."
(iii) The authorized stock of the Company conforms as to legal
matters in all material respects to the description thereof in the
most recent Preliminary Prospectus and the Prospectus.
(iv) The sale and issuance of the Tortoise Notes have been duly
authorized and, when issued and delivered in accordance with the terms
of this Agreement, the Indenture and resolutions adopted by the Board
of Directors of the Company, or a duly authorized committee thereof,
the Tortoise Notes will be validly issued.
(v) When authenticated and delivered in accordance with the terms
of this Agreement, the Indenture and resolutions adopted by the
Company's Board of Directors, or a duly authorized committee thereof,
the Tortoise Notes will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture;
(vi) The Tortoise Notes conform in all material respects to the
statements concerning them contained in the most recent Preliminary
Prospectus, the Prospectus and the Indenture and there are no
restrictions upon the transfer of any of the Tortoise Notes pursuant
to the Company's Charter or by-laws or any Company Agreement; except
for the restrictions on transfer of the Tortoise Notes contained in
the Auction Agreement;
(vii) To such counsel's knowledge, the Company is not (i) in
violation of its Charter or by-laws, (ii) in default, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in
17
any Company Agreement or (iii) in violation of any law, governmental
rule, regulation or court decree to which it or its property or assets
may be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business, except in the case of clauses (ii) and (iii), such defaults,
events, violations or failures that in the aggregate would not
reasonably be expected to have a Material Adverse Effect;
(viii) To such counsel's knowledge, and other than as set forth
in the most recent Preliminary Prospectus and the Prospectus, there
are no legal or governmental proceedings pending to which the Company
is a party or to which any property or assets of the Company is the
subject which is reasonably likely to be determined adversely to the
Company and, if determined adversely to the Company, would be
reasonably likely to have a Material Adverse Effect; and, to such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(ix) The Registration Statement was declared effective under the
Securities Act, the Prospectus was filed with the Commission within
the time period required by Rule 497(c)and (h) of the 1933 Act Rules
and Regulations on the date specified in such opinion and no stop
order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any Preliminary Prospectus has
been issued and, to such counsel's knowledge, no proceeding for that
purpose is pending or threatened by the Commission;
(x) The Registration Statement, as of the Effective Date, and the
Prospectus as of its date and as of the Delivery Date, and any further
amendments or supplements thereto made by the Company as of their
respective effective or issue dates and as of the Delivery Date
(except for the financial statements and related schedules therein, as
to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Securities Act, the
1940 Act, the Trust Indenture Act, the 1933 Act Rules and Regulations
and the 1940 Act Rules and Regulations;
(xi) The statements contained in the most recent Preliminary
Prospectus and the Prospectus (and any amendment or supplement thereto
through the date of the opinion) under the captions "The Auction,"
"Description of Tortoise Notes," "Description of Securities" and
"Certain Federal Income Tax Matters," insofar as they purport to
summarize provisions of the Indenture, the Company's Charter and
by-laws, contracts, agreements or other legal documents referred to
therein, tax laws, legal conclusions, doctrines or practices of the
United States, constitute accurate summaries of the terms of such
documents, laws, legal conclusions, doctrines or practices in all
material respects;
(xii) To such counsel's knowledge, there are no contracts or
other documents which are required to be described in the Registration
Statement and the Prospectus or filed as exhibits to the Registration
Statement by the Securities
18
Act, the 1940 Act, the Trust Indenture Act or by the 1933 Act Rules
and Regulations or the 1940 Act Rules and Regulations which have not
been described in the Registration Statement and the Prospectus or
filed as exhibits to the Registration Statement;
(xiii) The execution and delivery of the Indenture has been duly
authorized, by the Company. The Indenture has been duly executed and,
so far as known to counsel to the Company, delivered by the Company;
(xiv) The Indenture has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms;
(xv) The execution and delivery of this Agreement has been duly
authorized, by the Company. This Agreement has been duly executed,
and, so far as known to counsel to the Company, delivered by the
Company.
(xvi) This Agreement constitutes the valid and legally binding
agreement of the Company, and is enforceable against the Company in
accordance with its terms.
(xvii) None of the sale and issuance of the Tortoise Notes by the
Company pursuant to this Agreement, the execution, delivery and
performance by the Company of this Agreement or the Indenture, the
performance by the Company of each of the Company Agreements or the
consummation of the transactions contemplated by this Agreement and
the Company Agreements will (i) result in the creation or imposition
of any lien, charge or encumbrance upon the assets of the Company
under the terms of provisions of, or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any Company Agreement, (ii) result in any violation of the provisions
of the Charter or by-laws of the Company or (iii) result in the
violation of any Federal law or regulation or any order of any Federal
governmental authority known to such counsel, except in the case of
clauses (i) and (iii), such breaches or violations that in the
aggregate would not reasonably be expected to have a Material Adverse
Effect; and, except for the registration of the Tortoise Notes under
the Securities Act, the 1940 Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws (to which
counsel to the Company need not express an opinion), no consent,
approval, authorization or order of, or filing or registration with,
any such governmental authority is required for the execution,
delivery and performance of this Agreement or the Indenture, the
performance of the Company Agreements by the Company or the
consummation of the transactions contemplated hereby, except for such
consents, approvals, authorizations, orders, filings or registrations
as have been obtained or made;
(xviii) None of (a) the sale and issuance of the Tortoise Notes
by the Company pursuant to this Agreement, (b) the execution, delivery
and
19
performance by the Company of this Agreement or the Indenture, or (c)
the performance by the Company of each of the Company Agreements or
the consummation of the transactions contemplated by this Agreement
and the Company Agreements will result in the violation of any
Maryland law or regulation or any order of any Maryland governmental
authority known to us, except for such violations that in the
aggregate would not reasonably be expected to have a Material Adverse
Effect (and except for any law, regulation or order in connection with
the securities laws of the State of Maryland, as to which no opinion
need be expressed);
(xix) This Agreement and each of the Company Agreements complies
in all material respects with all applicable provisions of the 1940
Act, the Investment Advisers Act, the 1940 Act Rules and Regulations
and the Investment Advisers Act Rules and Regulations and the
Indenture complies in all material respects with the applicable
provisions of the Trust Indenture Act;
(xx) The Company is duly registered under the 1940 Act as a
closed-end, non-diversified, management investment company and the
1940 Act Notification has been duly filed with the Commission, and, at
the time of filing thereof and at the time of filing any amendment or
supplement thereto, complied as to form in all material respects with
all applicable provisions of the 1940 Act and the 1940 Act Rules and
Regulations and, to such counsel's knowledge, the Company 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 (or any amendment or supplement to either of
them).
In rendering such opinions, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of Maryland and the laws of the State of Missouri. To the
extent such counsel deems proper and to the extent specified in such opinion,
such counsel may rely, as to matters involving the application of laws of the
State of Maryland upon the opinion of ▇▇▇▇▇▇▇ LLP or other counsel of good
standing whom such counsel believes to be reliable and who are satisfactory to
the Underwriters; provided that (x) such reliance is expressly authorized by the
opinion so relied upon and a copy of each such opinion is delivered to the
Underwriters and is, in form and substance, satisfactory to the Underwriters and
their counsel and (y) such counsel states in their opinion that they believe
that they and the Underwriters are justified in relying thereon.
Such counsel shall also state that it has participated in conferences with
officers and employees of the Company and the Investment Adviser,
representatives of the independent auditors for the Company, Maryland counsel to
the Company, the Underwriters and counsel for the Underwriters at which the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, although such counsel is not passing upon, and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, any Preliminary Prospectus
or the Prospectus, except to the limited extent otherwise covered by paragraphs
(viii) and (ix) hereof and have made no independent check or verification
20
thereof, on the basis of the foregoing, no facts have come to such counsel's
attention that would have led such counsel to believe that (a) the Registration
Statement (except the financial statements and other financial and statistical
data contained therein, as to which such counsel expresses no opinion), as of
the Effective Date, contained an untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements contained therein not misleading; (b) as of the Applicable Time,
the Disclosure Package (except the financial statements and other financial and
statistical data contained therein, as to which such counsel expresses no
opinion), including in each case any document incorporated by reference therein,
contained any untrue statement or a material fact or omitted 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; or (c) the Prospectus (except the financial statements and other
financial and statistical data contained therein, as to which such counsel
expresses no opinion), as of its date and as of the Delivery Date, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.
(d) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, counsel to the Investment
Adviser, shall have furnished to the Underwriters their written opinion,
addressed to the Underwriters and dated the Delivery Date, in form and
substance reasonably satisfactory to the Underwriters, to the effect that:
(i) The Investment Adviser has been formed and is validly
existing as a limited liability company in good standing under the
laws of the State of Delaware, is duly qualified to do business as a
foreign limited liability company and is in good standing in the
States of Missouri and Kansas; and has the limited liability company
power and authority to own or hold its properties and to conduct its
business as described in the Registration Statement, the most recent
Preliminary Prospectus and the Prospectus;
(ii) The Investment Adviser is duly registered as an investment
adviser under the Investment Advisers Act and is not prohibited by the
Investment Advisers Act, the 1940 Act, the Investment Advisers Act
Rules and Regulations or the 1940 Act Rules and Regulations from
acting under the Advisory Agreement as contemplated by the
Registration Statement, the most recent Preliminary Prospectus and the
Prospectus;
(iii) This Agreement and the Advisory Agreement have each been
duly authorized, executed and delivered by the Investment Adviser, and
constitute the valid and legally binding agreements of the Investment
Adviser, and, this Agreement is enforceable against the Investment
Adviser in accordance with its terms;
(iv) None of the execution, delivery and performance of this
Agreement by the Investment Adviser, the performance of the Advisory
Agreement or the consummation of the transactions contemplated by this
21
Agreement or the Advisory Agreement by the Company (i) conflict with,
result in the creation or imposition of any lien, charge or
encumbrance upon the assets of the Investment Adviser under the terms
or provisions of, or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any agreement
listed on Exhibit A attached to such opinion (ii) result in any
violation of the provisions of the limited liability company operating
agreement or other organizational documents of the Investment Adviser
or (iii) result in any violation of any statute or any order, rule or
regulation known to such counsel of any court or governmental agency
or body having jurisdiction over the Investment Adviser or any of its
properties or assets, except in the case of clauses (i) and (iii),
such conflicts, breaches and violations that in the aggregate would
not reasonably be expected to have a Material Adverse Effect; and
except for the registration of the Tortoise Notes under the Securities
Act and the 1940 Act, and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws (as to which such counsel
need not express an opinion), no consent, approval, authorization or
order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement, the performance of the Advisory
Agreement or the consummation of the transactions contemplated by this
Agreement or the Advisory Agreement by the Investment Adviser;
(v) To such counsel's knowledge and other than as set forth in
the most recent Preliminary Prospectus and the Prospectus, there are
no legal or governmental proceedings pending to which the Investment
Adviser is a party or to which any property or assets of the
Investment Adviser is the subject which is reasonably likely to be
determined adversely to the Investment Adviser and, if determined
adversely to the Investment Adviser, would be reasonably likely to
have a Material Adverse Effect; and, to such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and
(vi) The description of the Investment Adviser and its business
in the Registration Statement, the most recent Preliminary Prospectus
and the Prospectus complied and comply in all material respects with
the requirements of the Securities Act, the 1940 Act, the Investment
Advisers Act, the Rules and Regulations and the Investment Advisers
Act Rules and Regulations.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the General Corporation Law of the State of Delaware, and the laws of the State
of Missouri.
(e) The Underwriters shall have received from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
counsel to the Underwriters, such opinion or opinions, dated the Delivery
Date, with respect to the issuance and sale of the Tortoise Notes, the
Indenture, the Registration Statement, any Preliminary Prospectus, the
Prospectus and other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such
22
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Underwriters shall
have received from Ernst & Young LLP a letter or letters, in form and
substance satisfactory to the Underwriters, addressed to the Underwriters
and dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission and (ii)
stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the most recent Preliminary Prospectus,
as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings.
(g) With respect to the letter or letters of ▇▇▇▇▇ & Young LLP
referred to in the preceding paragraph and delivered to the Underwriters
concurrently with the execution of this Agreement (the "Initial Letter"),
the Company shall have furnished to the Underwriters a letter (the
"Bring-Down Letter") of such accountants, addressed to the Underwriters and
dated the Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the Bring-Down Letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date of the Bring-Down Letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the Initial Letter and (iii)
confirming in all material respects the conclusions and findings set forth
in the Initial Letter.
(h) The Company shall have furnished to the Underwriters on the
Delivery Date a certificate, dated the Delivery Date, of its Chairman of
the Board of Directors, its Chief Executive Officer or President and its
Chief Financial Officer or Treasurer or an Assistant Treasurer stating
that:
(i) The representations, warranties and agreements of the Company
contained herein and in the Auction Agreement are true and correct as
of the date hereof and as of the Delivery Date; the Company has
complied with all its agreements contained herein prior to or on the
Delivery Date; and the conditions set forth in Section 9 have been
fulfilled;
(ii) Since the respective dates as of which information is given
in the most recent Preliminary Prospectus and the Prospectus, other
than as set forth in or contemplated by the most recent Preliminary
Prospectus and the Prospectus, (A) there has not occurred any change
or any development that might have a Material Adverse Effect, (B)
there has not been any change in the capital
23
stock, short-term debt or long-term debt of the Company that might
have a Material Adverse Effect, (C) the Company has not incurred any
material liability or obligation, direct or contingent, (D) there has
not occurred a material loss or interference with the Company's
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree and (E) the Company has not
declared or paid any dividend on its shares of common stock, except
for dividends declared in the ordinary course of business, and, except
as set forth in or contemplated by the most recent Preliminary
Prospectus and the Prospectus, the Company has not entered into any
transaction (other than purchases and sales of portfolio transactions)
or agreement (other than investment-related agreements) material to
the Company; and
(iii) They carefully have examined the Registration Statement,
the most recent Preliminary Prospectus, the Disclosure Package and the
Prospectus, and any amendments or supplements thereto (including any
documents incorporated or deemed to be incorporated by reference into
the most recent Preliminary Prospectus and the Prospectus), and, in
their opinion (and in forming such opinion each officer may rely on
information provided by the other parties to this Agreement) (A) the
Registration Statement, as of the Effective Date, the Disclosure
Package, as of the Applicable Time, and the Prospectus, as of its
date, did not and, on the Delivery Date, will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and (B) since the initial Effective Date of the
Registration Statement, no event has occurred which should have been
set forth in a supplement to, or amendment of, the Registration
Statement, the most recent Preliminary Prospectus or the Prospectus
which has not been so set forth and there has been no document
required to be filed under the Securities Act, the Exchange Act, the
1940 Act, the Trust Indenture Act or by the Rules and Regulations that
upon such filing would be deemed incorporated by reference into the
Registration Statement, the most recent Preliminary Prospectus or the
Prospectus that has not be so filed.
(i) The Investment Adviser shall have furnished to the Underwriters on
the Delivery Date a certificate, dated the Delivery Date, of a member of
its Board of Managers, dated the Delivery Date, stating that:
(i) The representations, warranties and agreements of the
Investment Adviser contained herein are true and correct as of the
date hereof and as of the Delivery Date; the Investment Adviser has
complied with all its agreements contained herein prior to or on the
Delivery Date; and the conditions set forth in Section 9 of this
Agreement have been fulfilled; and
(ii) They have examined Registration Statement, the most recent
Preliminary Prospectus, the Disclosure Package and the Prospectus, and
any amendments or supplements thereto (including any documents
incorporated or deemed to be incorporated by reference into the most
recent Preliminary
24
Prospectus and the Prospectus), and, in their opinion (and in forming
such opinion each officer may rely on information provided by the
other parties to this Agreement) (A) the Registration Statement, as of
the Effective Date, the Disclosure Package, as of the Applicable Time,
and the Prospectus, as of its date, did not and, on the Delivery Date,
will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) since the initial
Effective Date of the Registration Statement, no event has occurred
which should have been set forth in a supplement to, or amendment of,
the Registration Statement, the most recent Preliminary Prospectus or
the Prospectus which has not been so set forth and there has been no
document required to be filed under the Securities Act, the 1940 Act,
the Trust Indenture Act or by the Rules and Regulations or the
Exchange Act and the rules and regulations thereunder that upon such
filing would be deemed incorporated by reference into the Registration
Statement, the most recent Preliminary Prospectus or the Prospectus
that has not be so filed.
(j) The Company shall not have sustained since the date of the latest
audited financial statements included in the most recent Preliminary
Prospectus and the Prospectus (A) any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, or (B) since such date, there shall not have been
any change in the capital stock, short-term debt or long-term debt of the
Company or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
prospects, shareholders' equity or results of operations of the Company,
otherwise than as described or contemplated in the Prospectus, the effect
of which, in any such case described in clause (A) or (B), is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Tortoise Notes being delivered on the Delivery Date on the
terms and in the manner contemplated in the most recent Preliminary
Prospectus, the Prospectus and in this Agreement.
(k) The Company shall have furnished to the Underwriters a report
showing compliance with the asset coverage requirements of the 1940 Act and
the 1940 Act Tortoise Notes Asset Coverage (as defined in the Registration
Statement), each dated the Delivery Date and in form and substance
satisfactory to the Underwriters. Each such report shall assume the receipt
of the net proceeds from the sale of the Tortoise Notes and may use
portfolio holdings and valuations as of the close of business of any day
not more than six business days preceding the Delivery Date, provided,
however, that the Company represents in such report that its total net
assets as of the Delivery Date have not declined by 5% or more from such
valuation date.
(l) The Company shall have delivered and the Underwriters shall have
received evidence satisfactory to it that the Tortoise Notes are rated at
least "Aaa" by ▇▇▇▇▇'▇ Investors Service, Inc. and "AAA" by Fitch, Inc., a
division of the McGraw Hill Companies, as of the Delivery Date, and
subsequent to the execution and delivery of this Agreement, (i) no
downgrading shall have occurred in the rating accorded the Tortoise
25
Notes by any "nationally recognized statistical rating organization" as
that term is defined by the Commission for purposes of Rule 436(g)(2) of
the 1933 Act Rules and Regulations and (ii) no such organization shall have
publicly announced that is has under surveillance or review, with possible
negative implications, its rating of the Tortoise Notes.
(m) Neither the Company nor the Investment Adviser shall have failed
at or prior to the Delivery Date to have performed or complied with any of
the agreements contained herein and required to be performed or complied
with by them at or prior to the Delivery Date.
(n) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been
suspended or materially limited or the settlement of such trading generally
shall have been materially disrupted or minimum prices shall have been
established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal
or state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such), including, without limitation,
as a result of terrorist activities after the date hereof, or any other
calamity or crisis as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the public offering or
delivery of the Tortoise Notes being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(o) The Underwriters shall not have discovered and disclosed to the
Company on or prior to the Delivery Date that the Registration Statement,
any Prospectus Supplement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of a fact which, in the reasonable
opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, is
material or omits to state a fact which, in the reasonable opinion of such
counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(p) The Company and the Investment Adviser shall have furnished to the
Underwriters such further certificates, documents and opinions of counsel
as the Underwriters shall reasonably request (including certificates of
officers of the Company and the Investment Adviser).
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
26
Section 10. Indemnification and Contribution.
(a) The Company and the Investment Adviser shall jointly and severally
indemnify and hold harmless each Underwriter, its directors, officers and
employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
but not limited to, any loss, claim, damage, liability or action relating
to purchases and sales of Tortoise Notes), to which such Underwriter,
director, officer, employee or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in
the 1940 Act Notification, or (B) in the Registration Statement, any
Preliminary Prospectus, the Prospectus, the Disclosure Package, any
amendment or supplement thereto including information deemed to be part of
the Registration Statement pursuant to Rule 430B, or any "issuer
information" filed or required to be filed pursuant to the 1933 Act Rules
and Regulations (ii) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, the Prospectus, the
Disclosure Package, or the Registration Statement as amended or
supplemented, any such issuer information, a material fact required to be
stated therein or necessary to make the statements therein not misleading
or (iii) any act or failure to act or any alleged act or failure to act by
such Underwriter in connection with, or relating in any manner to, the
Tortoise Notes or the offering contemplated hereby, and which is included
as part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii) above
(provided that neither the Company nor the Investment Adviser shall be
liable under Section 10(a) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter
through its willful misfeasance, bad faith or gross negligence in the
performance of its duties or reckless disregard of applicable obligations
and duties), and shall reimburse such Underwriter and each such director,
officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by such Underwriter, director,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided,
however, that neither the Company nor the Investment Adviser shall be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement
or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company or the Investment Adviser by or on behalf of the Underwriters
through the Representatives specifically for inclusion therein which
information consists solely of the information specified in Section 10(e).
The foregoing indemnity agreement is in addition to any liability which the
Company or the Investment Adviser may otherwise have to any Underwriter or
to any director, officer, employee or controlling person of that
Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its
directors, and each
27
person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or
any such director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus,
the Disclosure Package, the Registration Statement as amended or
supplemented, or (ii) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, the Prospectus, the
Disclosure Package, or the Registration Statement as amended or
supplemented, any material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Underwriters
specifically for inclusion therein, which information is limited to the
information set forth in Section 10(e), and shall reimburse the Company and
any such director, officer, employee or controlling person for any legal or
other expenses reasonably incurred by the Company or any such director,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability which the Underwriters may
otherwise have to the Company or any such director, officer, employee or
controlling person.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 10 except to the extent it has been materially prejudiced by such
failure and, provided further, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 10. If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this Section 10
for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the indemnified party shall have the
right to employ separate counsel to represent the indemnified party, and
its respective directors, officers, employees and controlling persons who
may be subject to liability arising out of any claim in respect of which
indemnity may be sought under this Section 10 if, the named parties to any
such action, suit or proceeding (including any impleaded parties) include
both an indemnified party (and/or its officers, employees, directors and
each person who controls the indemnified
28
party within the meaning of the Securities Act) and the indemnifying party
and the indemnified party shall have been advised by its counsel that
representation of both the indemnified party (and/or its officers,
employees, directors and each person who controls the indemnified party
within the meaning of the Securities Act) and the indemnifying party would
be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been proposed)
and in the reasonable judgment of the indemnified party, it is advisable
for the indemnified party and its directors, officers, employees and
controlling persons to be jointly represented by separate counsel, then in
that event the fees and expenses of one such separate counsel shall be paid
by the indemnifying party. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not
be unreasonably withheld), settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or
proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a) or 10(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company and the Investment
Adviser (treated jointly as one person for this purpose) on the one hand
and the Underwriters on the other from the offering of the Tortoise Notes
or (ii) if the allocation provided by clause (i) above 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 Company and the Investment Adviser (treated jointly as one
person for this purpose) on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by
the Company and the Investment Adviser (treated jointly as one person for
this purpose) on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Tortoise Notes purchased
under this Agreement (before deducting expenses) received by the Company,
on the one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the Tortoise Notes purchased
under this Agreement, on the other hand, bear to the total gross proceeds
from the offering of the Tortoise Notes under this Agreement, in each case
as set forth in the table on the cover page of the Prospectus.
29
The relative fault shall be determined by reference to whether the 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
Company or the Investment Adviser, on one hand, or the Underwriters, on the
other hand, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company, the Investment Adviser and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section were to be determined by pro rata allocation or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 10(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 10(d), the Underwriters shall not be required to contribute any
amount in excess of the amount by which the total price at which the
Tortoise Notes underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The Underwriters severally confirm and the Company and the
Investment Adviser acknowledge that the statements set forth in the [last
sentence on the front cover page, its name and paragraphs four, six, seven
and eight under the section "Underwriting"] in the Prospectus are correct
and constitute the only information concerning the Underwriters furnished
in writing to the Company specifically for inclusion in the Registration
Statement and the Prospectus.
Section 11. Defaulting Underwriters. If, on the Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Tortoise Notes which the defaulting Underwriter agreed but failed to purchase on
the Delivery Date in the respective proportions which the aggregate principal
amount of Tortoise Notes set forth opposite the name of each remaining
non-defaulting Underwriter in Schedule I hereto bears to the total aggregate
principal amount of Tortoise Notes set forth opposite the names of all the
remaining non-defaulting Underwriters in Schedule I hereto; provided, however,
that the remaining non-defaulting Underwriters shall not be obligated to
purchase any amount of the Tortoise Notes on the Delivery Date if the aggregate
principal amount of Tortoise Notes which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
aggregate principal amount of Tortoise Notes to be purchased on the Delivery
Date, and any remaining non-defaulting Underwriter shall not be obligated to
purchase more than 110% of the aggregate principal amount of Tortoise Notes
which it agreed to purchase on the Delivery Date pursuant to the terms of
Section 3. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, the total aggregate
30
principal amount of Tortoise Notes to be purchased on such Delivery Date. If the
remaining Underwriters do not elect to purchase the Tortoise Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase on the
Delivery Date, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 7 and 13. As used in this Agreement, the term "Underwriter" includes,
for all purposes of this Agreement unless the context requires otherwise, any
party not listed in Schedule I hereto who, pursuant to this Section 11,
purchases Tortoise Notes which a defaulting Underwriter agreed but failed to
purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Tortoise Notes of a
defaulting or withdrawing Underwriter, either the non-defaulting Underwriters or
the Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
Section 12. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representatives on behalf of the Underwriters by notice
given to and received by the Company prior to delivery of and payment for the
Tortoise Notes if, prior to that time, any of the events described in Sections
9(j) or 9(n), shall have occurred or if the Underwriters shall decline to
purchase the Tortoise Notes for any reason permitted under this Agreement.
Section 13. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the Tortoise Notes for delivery to the Underwriters by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed, or because any other
condition of the Underwriters' obligations hereunder required to be fulfilled by
the Company is not fulfilled or (b) the Underwriters decline to purchase the
Tortoise Notes because of a failure by the Company or the Investment Adviser to
perform their respective obligations under this Agreement, the Company shall
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel) incurred by the Underwriters in connection
with this Agreement and the proposed purchase of the Tortoise Notes, and upon
demand the Company shall pay the full amount thereof to the Underwriters.
Section 14. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Debt Capital Markets, Power Group (Fax:
▇▇▇-▇▇▇-▇▇▇▇), with a copy to the General Counsel at the same address; and
with a copy to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇;
Telephone ▇▇▇-▇▇▇-▇▇▇▇);
31
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇); with
a copy to Vedder, ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C., ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
,▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇;
Telephone ▇▇▇-▇▇▇-▇▇▇▇); and
(c) if to the Investment Adviser, shall be delivered or sent by mail,
telex or facsimile transmission to Tortoise Capital Advisors, LLC, ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, with a
copy to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ , ▇▇. ▇▇▇▇▇,
▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇; Telephone
▇▇▇-▇▇▇-▇▇▇▇).
Any such statements, requests, notices or agreements shall take effect at
the time of receipt thereof. The Company shall be entitled to act and rely upon
any request, consent, notice or agreement given or made on behalf of the
Underwriters.
Section 15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Investment Adviser, and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Investment Adviser contained in this Agreement shall also be
deemed to be for the benefit of the directors, officers and the person or
persons, if any, who control the Underwriters within the meaning of Section 15
of the Securities Act and (B) the indemnity agreement of the Underwriters
contained in Section 10(b) of this Agreement shall be deemed to be for the
benefit of the Board of Directors of the Company, officers and employees of the
Company who have signed the Registration Statement and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 15, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
Section 16. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Tortoise Notes and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
Section 17. Definition of the Term "Business Day". For purposes of this
Agreement, "business day" means each Monday, Tuesday, Wednesday, Thursday or
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
Section 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
32
Section 19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
Section 20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
Section 21. Limitation of Liability. A copy of the Charter of the Company
is on file with the Secretary of State of the State of Maryland. This Agreement
has been executed on behalf of the Company by an officer of the Company in such
capacity and not individually and the obligations of the Company under this
Agreement are not binding upon such officer or any of the directors or the
shareholders of the Company individually but are binding only upon the assets
and property of the Company.
Section 22. No Fiduciary Duty. The Company and the Investment Adviser
acknowledge and agree that in connection with this offering, sale of the
Tortoise Notes or any other services the Underwriters may be deemed to be
providing hereunder, notwithstanding any preexisting relationship, advisory or
otherwise, between the parties or any oral representations or assurances
previously or subsequently made by the Underwriters: (i) no fiduciary or agency
relationship between the Company, the Investment Adviser and any other person,
on the one hand, and the Underwriters, on the other, exists; (ii) the
Underwriters are not acting as advisors, expert or otherwise, to either the
Company or the Investment Adviser, including, without limitation, with respect
to the determination of the public offering price of the Tortoise Notes, and
such relationship between the Company and the Investment Adviser, on the one
hand, and the Underwriters, on the other, is entirely and solely commercial,
based on arms-length negotiations; (iii) any duties and obligations that the
Underwriters may have to the Company or the Investment Adviser shall be limited
to those duties and obligations specifically stated herein; and (iv) the
Underwriters and their respective affiliates may have interests that differ from
those of the Company and the Investment Adviser. The Company and the Investment
Adviser hereby waive any claims that the Company or the Investment Adviser may
have against the Underwriters with respect to any breach of fiduciary duty in
connection with this offering.
33
If the foregoing correctly sets forth the agreement among the Company, the
Investment Adviser and the Underwriters, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
TORTOISE ENERGY CAPITAL CORPORATION
By:
-----------------------------------------------
Name:
Title:
TORTOISE CAPITAL ADVISORS LLC
By:
-----------------------------------------------
Name:
Title:
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
[ ]
By: ▇▇▇▇▇▇ BROTHERS INC.
By:
--------------------------------------
Name:
Authorized Representative
34
SCHEDULE I
Principal Amount of Purchase Price Paid by
Name of Underwriter Tortoise Notes, Series Underwriters
------------------- ---------------------- ------------
1
SCHEDULE II
Tortoise Energy Capital Corporation
Auction Rate Senior Notes
$______________ Series __, due ___________, ______
($25,000 denominations)
Form of Final Term Sheet
1
[SCHEDULE III
Rule 482 Statement]