Class B Shares (i) In consideration of the Underwriter's services as principal underwriter of each Fund's Class B shares pursuant to this Agreement and in accordance with the provisions of the Trust's Amended and Restated Distribution and Service Plan (the "Class B Plan") in respect of such shares each Fund agrees:
(I) to pay to the Underwriter or, at the Underwriter's direction, to a third party, monthly in arrears on or prior to the 5th business day of the following calendar month (A) a service fee (the "Service Fee") equal to 0.25 of 1% per annum of the average daily net asset value of the Class B shares of the Fund outstanding from time to time, and (B) the Underwriter's "Allocable Portion" (as hereinafter defined) of a fee (the "Distribution Fee") equal to 0.75% of 1% per annum of the average daily net asset value of the Class B shares of the Fund outstanding from time to time, and (II) to withhold from redemption proceeds in respect of Class B shares of the Fund the Underwriter's Allocable Portion of the Contingent Deferred Sales Charges ("CDSCs") payable in respect of such redemption as provided in the Prospectus of the Fund and to pay the same over to the Underwriter or, at the Underwriter's direction, to a third party, at the time the redemption proceeds in respect of such redemption are payable to the holder of the Class B shares redeemed.
(ii) The Underwriter will be deemed to have performed all services required to be performed in order to be entitled to receive its Allocable Portion of the Distribution Fee payable in respect of the Class B shares of the Fund upon the settlement date of each sale of a "Commission Share" (as defined in the Allocation Schedule attached hereto as Schedule A) of the Fund taken into account in determining the Underwriter's Allocable Portion of such Distribution Fees.
(iii) Notwithstanding anything to the contrary set forth in this Agreement of (to the extent waiver thereof is permitted thereby) applicable law, the Fund's obligation to pay the Underwriter's Allocable Portion of the Distribution Fees payable in respect to the Class B shares of the Fund shall not be terminated or modified for any reason (including a termination of this Agreement) except to the extent required by a change in the 1940 Act, the rules thereunder or the Conduct Rules of the NASD, in each case enacted or promulgated after December 29, 1997, or in connection with a "Complete Termination" (as hereinafter defined) of the Class B Plan.
(iv) The Fund will not take any action to waive or change any CDSC in respect of the Class B shares of the Fund, except as provided in the Fund's Prospectus or statement of additional information as in effect as of the date hereof, without the consent of the Underwriter and the permitted assigns of all or any portion of its rights to its Allocable Portion of the CDSCs.
(v) Notwithstanding anything to the contrary in this Agreement, neither the termination of the Underwriter's role as principal distributor of the Class B shares of any fund, nor the termination of this Agreement nor the termination of the Class B Plan will terminate the Underwriter's right to its Allocable Portion of the CDSCs in respect of the Class B shares of the Fund.
(vi) Notwithstanding anything to the contrary in this Agreement, the Underwriter may assign, sell or pledge (collectively, "Transfer") its rights to the Service Fees and its Allocable Portion of the Distribution Fees and CDSCs (but not its obligations to the Fund under this Agreement) to raise funds to make the expenditures related to the distribution of Class B shares of the Fund and in connection therewith, upon receipt of notice of such Transfer, the Fund shall pay, or cause to be paid, to the assignee, purchaser or pledgee (collectively with their subsequent transferees, "Transferees") such portion of the Underwriter's Service Fees, Allocable Portion of the Distribution Fees and CDSCs in respect of the Class B shares of the Fund so Transferred. Except as provided in (iii) above and notwithstanding anything to the contrary set forth elsewhere in this Agreement, to the extent the Underwriter has Transferred its rights thereto to raise funds as aforesaid, the Fund's obligation to pay the Underwriter's Allocable Portion of the Distribution Fees and CDSCs payable in respect of the Class B shares of the Fund shall be absolute and unconditional and shall not be subject to dispute, offset, counterclaim or any defense whatsoever, at law or equity, including, without limitation, any of the foregoing based on the insolvency or bankruptcy of the Underwriter's right to the Distribution Fees and CDSCs in respect of the Class B shares of the Fund, which have been so transferred in connection with such Transfer). The Fund agrees that each such Transferee is a third party beneficiary of the provisions of this clause (vi) but only insofar as those provisions relate to Distribution Fees and CDSCs transferred to such Transferee.
(vii) For purposes of the Agreement, the term "Allocable Portion" of Distribution Fees and CDSCs payable in respect of the Class B shares of the Fund shall mean the portion of such Distribution Fees and CDSCs allocated to the Underwriter in accordance with the Allocation Schedule attached hereto as Schedule A.
(viii) For purposes of this Agreement, the term "Complete Termination" of the Plan in respect of the Fund means a termination of the Class B Plan involving the complete cessation of the payment of Distribution Fees in respect of all Class B shares of the Fund, and the termination of the Class B Plan and the complete cessation of the payment of distribution fees pursuant to any other distribution Plan pursuant to Rule 12b-1 under the 1940 Act in respect of the Class B shares of the Fund and any successor fund or the Fund acquiring a substantial portion of the assets of the Fund and for every future class of shares which has substantially similar characteristics to the Class B shares of the Fund taking into account the manner of payment and amount of sales charge, CDSC or other similar charges borne directly or indirectly by the holders of such shares.
Parent Shares All outstanding Parent Shares, and all Parent Shares, which may be issued pursuant to this Agreement shall when issued in accordance with this Agreement be, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights.
Company Shares If the managing underwriter has not limited the number of Registrable Securities to be underwritten, the Company may include securities for its own account or for the account of others in such registration if the managing underwriter so agrees and if the number of Registrable Securities which would otherwise have been included in such registration and underwriting will not thereby be limited.
Buyer Shares Each Buyer Share issued and outstanding at and as of the Effective Time will remain issued and outstanding.
Class B Units Class B Unitholders shall not be entitled to vote in any matters relating to the Company, unless otherwise reserved to the Members by the Act. In addition to the other rights and obligations of Class B Unitholders hereunder, Class B Units shall entitle the holder of such Class B Units to (i) Tax Distributions pursuant to Section 4.01(b), and (ii) a preferred return equal to the Class B Preferred Return Amount. The Class B Preferred Return Amount shall not be required to be paid annually but shall accrue and become payable at the earlier of (x) the fifth (5th) anniversary of the Effective Time, or (y) a liquidation of, or a taxable sale of substantially all of the assets of, the Company. Upon the occurrence of an event referenced in clause (y) above, each Class B Unitholder shall also be paid such Class B Unitholder’s Class B Preferred Return Base Amount, in addition to all of the outstanding, accrued and unpaid Class B Preferred Return Amount. On the seventh (7th) anniversary of the Effective Time, each Class B Unitholder may, at its option and in accordance with the notice and other procedural provisions set forth in Section 11.01(a) (the “7 Year Put Option”), sell all (but not less than all) of its Class B Units to the Company for an amount equal to such Class B Unitholder’s Class B Preferred Return Base Amount plus any outstanding and accrued Class B Preferred Return Amount of such Class B Unitholder (the “Class B Option Consideration”) and, upon the exercise of the 7 Year Put Option by any Class B Unitholder, the Company shall purchase all of such holder’s Class B Units for the Class B Option Consideration. Notwithstanding anything herein to the contrary, no Class B Preferred Return Amount shall be due and payable with respect to such Class B Units pursuant this Section 3.02(b) at such time or times specified in this Section 3.02(b) unless such Class B Units remain issued and outstanding at such time or times and no Redemption or Direct Exchange of such Class B Units described in Article XI hereof has occurred.
Shares; Membership Interests (a) The total of the membership interests in the Company shall be divided into (i) Class A Ordinary Shares having the rights and preferences as set forth herein (the “Class A Ordinary Shares”), (ii) Class A Preferred Shares having the rights and preferences as set forth herein (the “Class A Preferred Shares” and, together with the Class A Ordinary Shares, the “Class A Shares”), (iii) Class B Ordinary Shares having the rights and preferences as set forth herein (the “Class B Ordinary Shares”), and (iv) Class C Ordinary Share having the rights and preferences as set forth herein (the “Class C Ordinary Share” and, together with the Class A Ordinary Shares, the Class A Preferred Shares and the Class B Ordinary Shares, the “Shares” and each a “Share”). Class A Ordinary Shares, Class A Preferred Shares and Class B Ordinary Shares shall have the same rights, powers and duties, except as otherwise set forth in this Agreement. The number of Class A Ordinary Shares shall be limited to the maximum number of Class A Ordinary shares offered in the Offering, plus (i) the number of Class A Ordinary Shares which may be issued upon conversion of the Class A Preferred Shares, plus (ii) the number of Class A Ordinary Shares which may be issued upon conversion of the Class B Ordinary Shares. The number of Class A Preferred Shares shall be limited to the number of Class A Preferred Shares which may be issued pursuant to the Management Services Agreement. The number of Class B Ordinary Shares shall be limited to up to 1,000. The number of Class C Ordinary Shares shall be limited to one. Class A Preferred Shares issued pursuant to the Management Services Agreement (“ASA Shares”) may be subject to vesting provisions as set forth in the Management Services Agreement. The Shares of the Members shall be as set forth on Exhibit A attached hereto, which may be updated as set forth herein. For the avoidance of doubt, in the event that all of the Class A Ordinary Shares are not sold pursuant to the Offering, the Board shall, upon the final closing of the Offering, issue a number of Class A Ordinary Shares to the Initial Member equal to the aggregate number of Class A Ordinary Shares that remain unsold in the Offering, as repayment in full of any and all obligations owing to the Initial Member in respect of advances made to acquire the Artwork and true-up fees payable to the Initial Member. The name and mailing address of each Member or such Member’s representative shall be listed on the books and records of the Company maintained for such purpose by the Company or the Transfer Agent.
(b) Prior to the date hereof and as set forth in the Original Agreement, the Initial Member has been issued 100% of the membership interests in the Company in return for a capital contribution of $100 (the “Prior Interests”). Upon execution of this Agreement, the Prior Interests shall be automatically converted into 1,000 Class B Ordinary Shares. As of the date of such conversion, the Class B Ordinary Shares shall constitute all of the membership interests of the Company and, prior to the issuance of Class A Ordinary Shares, Class A Preferred Shares and Class C Ordinary Share, shall have all of the rights and privileges of 100% of the membership interests in the Company afforded pursuant to this Agreement and applicable law.
(c) Notwithstanding any provision to the contrary in this Agreement, the Board shall have full power and authority to schedule one or more closings to issue Class A Ordinary Shares and admit Members to the Company in accordance with the provisions of this Agreement. Any Person that acquires Class A Ordinary Shares and is admitted as a Member of the Company after the date hereof, shall, in connection with such Member’s acquisition of such Class A Ordinary Shares, be deemed to pay to the Company such Member’s pro rata share of any amounts used to acquire the Artwork, including any true-up fees and any other amounts paid to the Company by the previously admitted Members.
(d) The Class A Members may elect to convert their Class A Preferred Shares into Class A Ordinary Shares, in whole or in part, at any time prior to the consummation of the Sale of the Artwork, subject to the terms and conditions herein, for no additional consideration. Each Class A Preferred Shares will automatically convert to one Class A Ordinary Share upon any Transfer of such Class A Preferred Shares to an entity that is not an Affiliate of the Administrator.
(e) The Class B Members may elect to convert their Class B Ordinary Shares into Class A Ordinary Shares, in whole or in part, at any time prior to the consummation of the Sale of the Artwork, subject to the terms and conditions herein, for no additional consideration pursuant and to the following conversion formula: The number of Class A Ordinary Shares issuable upon conversion of Class B Ordinary Shares shall equal (A) the Value Increase, multiplied by (B) the Conversion Percentage, multiplied by (C) 20%, divided by (D) the Class A Ordinary Share Value. For purposes herein:
Founder Shares In July 2023 and September 2023, Hercules Capital Management Corp (the “Sponsor”) acquired an aggregate of 1,437,500 Class B ordinary shares of the Company, par value $0.0001 per share (the “Founder Shares”), for an aggregate consideration of $25,000 to. No underwriting discounts, commissions, or placement fees have been or will be payable in connection with the purchase of Founder Shares. Except as described in the Registration Statement, none of the Founder Shares may be sold, assigned or transferred by the Sponsor or any of its transferees prior to the date hereof (collectively, the “Initial Shareholders”) until the earlier of: (i) six months following the consummation of the Business Combination; or (ii) subsequent to the consummation of a Business Combination, the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after the initial Business Combination, that results in all of the Company’s public shareholders having the right to exchange their Ordinary Shares for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period after the initial Business Combination, 50% of the Founder Shares will be released from such transfer restrictions. The holders of Founder Shares shall have no right to any liquidating distributions with respect to any portion of the Founder Shares in the event the Company fails to consummate a Business Combination within the period of time as provided in its amended and restated memorandum and articles of association. The holders of the Founder Shares shall not have redemption rights with respect to the Founder Shares. In the event that the Over-allotment Option is not exercised in full, the Sponsor will be required to forfeit such number of Founder Shares (up to 187,500 Founder Shares) such that the Founder Shares then outstanding will comprise approximately 20% of the issued and outstanding shares of the Company (excluding the Placement Shares (as defined below) and the Representative Shares (as defined below)) after giving effect to the Offering and exercise, if any, of the Over-allotment Option.
Class A Units If a Warrantholder exercises Warrants in connection with a tender offer for settlement prior to the First Regular Call Date, each Class A Unit called in connection with such exercise shall receive, in addition to principal and accrued interest, $1.50 per Class A Unit from the proceeds of the Warrant exercise. Class B Payments: If a Warrantholder exercises Warrants, then the Class B Units designated to be called in connection with such exercise shall receive the corresponding portion of the Class B Present Value Amount, adjusted for accrued Class B Payments on the Class B Units otherwise paid. If the Underlying Security Issuer redeems Underlying Securities and the previous paragraph does not apply, then the Class B Units designated for a redemption in connection with such redemption of Underlying Securities shall receive the amount with respect to the Class B Present Value Amount allocated for distribution in accordance with the applicable provisions of the Distribution Priorities below, paid as of the date of such redemption as an additional distribution.
Common Units The capital structure of the Company shall consist of one class of common interests (the "Common Units"). The Company shall have authority to issue one thousand (1,000) Common Units. Each Common Unit shall have one vote and shall otherwise be identical with each other Common Unit in every respect.
Subject Shares (a) The Stockholder agrees that (i) from the date hereof until the Closing Date, it shall not, and shall not commit or agree to, without Parent’s prior written consent, directly or indirectly, whether by merger, consolidation or otherwise, offer for sale, sell (including short sales), transfer, tender, pledge, encumber, assign or otherwise dispose of (including by gift) (collectively, a “Transfer”), or enter into any contract, option, derivative, hedging or other agreement or arrangement or understanding (including any profit-sharing arrangement) with respect to, or consent to or permit, a Transfer of, any or all of the Subject Shares or any interest therein; and (ii) during the Voting Period it shall not, and shall not commit or agree to, without Parent’s prior written consent, (A) grant any proxies or powers of attorney with respect to any or all of the Subject Shares or agree to vote the Subject Shares on any matter or divest itself of any voting rights in the Subject Shares, or (B) take any action that would have the effect of preventing or disabling the Stockholder from performing its obligations under this Agreement. The Stockholder agrees that any Transfer of Subject Shares not permitted hereby shall be null and void and that any such prohibited Transfer may and should be enjoined. If any involuntary transfer of any Subject Shares covered hereby shall occur (including, but not limited to, a sale by the Stockholder’s trustee in bankruptcy, or a sale to a purchaser at any creditor’s or court sale), the transferee (which term, as used herein, shall include any and all transferees and subsequent transferees of the initial transferee) shall take and hold such Subject Shares subject to all of the restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect.
(b) In the event of a stock dividend or distribution, or any change in the Subject Shares by reason of any stock dividend or distribution, split-up, recapitalization, combination, conversion, exchange of shares or the like, the term “Subject Shares” shall be deemed to refer to and include the Subject Shares as well as all such stock dividends and distributions and any securities into which or for which any or all of the Subject Shares may be changed or exchanged or which are received in such transaction. The Stockholder further agrees that, in the event Stockholder purchases or otherwise acquires beneficial or record ownership of or an interest in, or acquires the right to vote or share in the voting of, any additional Shares, in each case after the execution of this Agreement, the Stockholder shall deliver promptly to Parent written notice of such event, which notice shall state the number of additional Shares so acquired. The Stockholder agrees that any such additional Shares shall be subject to the terms of this Agreement, including all covenants, agreements, obligations, representations and warranties set forth herein as if those additional shares were owned by the Stockholder on the date of this Agreement.
