Exhibit 99.h.2.
13,375,000 SHARES
MCG CAPITAL CORPORATION
COMMON STOCK
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SELECTED DEALERS AGREEMENT
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Arlington, Virginia
November 28, 2001
Dear Sirs:
We have delivered to you a Prospectus relating to the offering by MCG
Capital Corporation (the "Company") of the number of shares of common stock of
the Company therein stated (the "Shares"). The undersigned (the "Underwriters")
have agreed to purchase the Shares, subject to the conditions specified in the
Underwriting Agreement (the "Underwriting Agreement") referred to in the
Prospectus.
Subject to the terms and conditions hereof and to the modification,
withdrawal or cancellation of the offering without notice, and subject to the
terms and conditions of the Underwriting Agreement, the Underwriters are
offering to certain dealers (the "Dealers") (including among whom may be the
Underwriters, their partners and subsidiaries) who are members of the National
Association of Securities Dealers, Inc. (the "NASD") or foreign dealers
registered under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), who shall agree in making sales of the Shares in the United States to
conform to the Conduct Rules of the NASD (the "Conduct Rules"), or, if not so
registered, shall agree not to reoffer, resell or deliver the Shares in the
United States, its territories or possessions or to persons who they have reason
to believe are citizens thereof or residents therein, unless they comply with
IM-2110-1 under Conduct Rule 2110, relating to "Free-Riding and Withholding,"
and comply, as though they were a member of the NASD, with the provisions of
Conduct Rules 2730, 2740 and 2750 and with Conduct Rule 2420 as it applies to a
non-member foreign dealer, the opportunity to purchase Shares at $___ per share
(the "public offering price") less a concession to Dealers of $____ per share.
This offer is extended to you only on behalf of such Underwriters as may
lawfully sell Shares to Dealers in your State.
The offering to Dealers may be on the basis of a reservation of Shares
or an allotment against subscriptions. We shall advise you by telegram or letter
of the method and terms of the offering. Acceptance of any reserved Shares,
which must be sent by telegraph or in writing to us, received by the time
specified therefor in the offering telegram or letter, and any application for
additional Shares, will be subject to rejection as a whole or in part. The
subscription books for the offering to Dealers may be closed by us at any time
without notice and we reserve the right to reject any subscription as a whole or
in part. All subscriptions will be received subject to prior sale.
Immediately upon receipt of the aforementioned telegram or letter, you
may reoffer the Shares purchased by you hereunder, subject to their receipt and
acceptance by the Underwriters, and upon the other terms and conditions set
forth herein and in the Prospectus. Shares purchased hereunder or pursuant to
the following sentence are to be offered to the public at the public offering
price, except that an amount not exceeding $_____ per share may be allowed to
any member of the NASD (or to foreign dealers who are not eligible for such
membership but who agree to conform to the Conduct Rules in making sales to
purchasers in the United States), acting as principal or as buyer's agent, if
such allowance is to be retained and not reallowed in whole or in part. With our
consent or after the books in respect of the offering to Dealers have been
closed, Dealers who are parties to the Selected Dealers Agreement and the
Underwriters may deal in Shares with each other at the public offering price
less an amount not exceeding the concession to Dealers. After the Shares are
released for sale to the public, we are authorized to vary the public offering
price and other selling terms.
The Shares confirmed to you are to be paid for at the public offering
price less the concession to Dealers at the offices of Friedman, Billings,
Xxxxxx & Co., Inc. at 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx, 00000
prior to 9:30 A.M., New York City time, at the Closing Time or on each Date of
Delivery, as defined in the Underwriting Agreement, by certified or official
bank check payable in immediately available funds to our order against delivery
of such Shares.
In order to facilitate distribution of the Shares, we, for the account
of the Underwriters, may, within the limits specified in such agreement, during
the term of the Agreement Among Underwriters, make purchases and sales of Shares
(but are without obligation to do so) in the open market or otherwise, for long
or short account, at such prices, in such amounts and in such manner as we may
determine, and, in arranging for the sale of Shares to Dealers, may overallot
for the account of the Underwriters, and may make purchases for the purposes of
covering such overallotments. This is not assurance that the price of Shares
will be stabilized or that stabilization, if commenced, will not be discontinued
at any time.
Your acceptance hereof shall constitute an obligation on your part to
purchase, upon the terms and conditions specified herein, the Shares confirmed
to you in respect hereof and to observe all of the terms and conditions hereof.
You agree that in reoffering the Shares you will comply with all applicable
requirements of the Securities Act of 1933, as amended, of the Exchange Act, and
of all applicable rules and regulations under the federal securities laws. If
you fail to pay for the Shares confirmed to you or fail to perform any of your
other obligations hereunder, we may, in our discretion and without demand,
notice or legal proceedings, and in addition to any and all remedies otherwise
available to the several Underwriters (a) terminate any right or interest on
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your part hereunder, and (b) at any time and from time to time sell, without
notice to you, any Shares then held for your account at public or private sale
at such price or prices and upon such terms and conditions as we may deem fair,
and apply the net proceeds so realized, as determined by us, toward payment of
any obligations in respect of which you are in default, and, notwithstanding any
action taken under (a) or (b) above, or both, you shall remain liable to the
Underwriter, for all loss and expense resulting from your default. At any such
sale or sales, the Underwriters may for their own account, or for the account of
any other person, become the purchaser of any Shares so sold, free from any
right or interest on your part in such Shares. A default by one or more Dealers
shall not release you from any obligation hereunder.
You agree that until termination of this Agreement you will advise us,
from time to time upon request, as to the number of Shares confirmed to you
hereunder which then remain unsold; and you further agree that, until
termination of this Agreement, you will upon our request sell to us such number
of such unsold Shares as we may specify (in order to enable us to deliver Shares
sold by or for the account of the Underwriters) at the public offering price or,
if agreeable to you, at the public offering price less an amount not in excess
of the concession to Dealers.
We shall have full authority to take such action as we may deem
advisable in respect to all matters pertaining to the offering or arising
hereunder. You are not authorized (a) by the Company or the Underwriters to give
any information or to make any representations in connection with the offering
or sale of the Shares other than those contained in the Prospectus or (b) to act
as agent for the Company or the Underwriters when offering the Shares to the
public or otherwise. Nothing contained herein shall constitute the Dealers as an
association or partnership with the Underwriters, or with each other, or an
unincorporated business or other separate entity.
Counsel for the Underwriters has advised us that the Shares are exempt
from registration or qualification under the Blue Sky laws of all States of the
United States. We will furnish you on request a copy of the advice received from
Underwriters' counsel concerning exemptions available for certain categories of
transactions in particular jurisdictions under the Blue Sky laws for offers and
sales in those jurisdictions without requirement that the seller be registered
or licensed as a broker or dealer therein. We shall, however, be under no
responsibility whatsoever to any Dealer with respect to the right of such Dealer
to sell the Shares in any jurisdiction.
We have undertaken and undertake to mail copies of the Prospectus upon
receipt of written request to the addresses stated in such requests. You confirm
that you have undertaken and undertake to do the same with regard to the
delivery of such copies to your associated persons and to other persons.
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The Underwriters shall be under no liability (except for our own want
of good faith) for or in respect of the validity or value of, or title to, any
of the Shares, the form of, or the statements contained in, or the validity of,
the Prospectus or any amendment or supplement thereto, or any other instruments
executed by or on behalf of the Company or others, the form or validity of the
Underwriting Agreement, the Agreement Among Underwriters or this Agreement, the
delivery of the Shares, the performance by the Company or others of any
agreement on its or their part or any matter in connection with any of the
foregoing; provided, however, that nothing in this paragraph shall be deemed to
relieve us from any liability imposed by federal securities laws.
You confirm that you are familiar with IM-2110-1 under the Conduct
Rules, and you agree that you will comply with IM-2110-1 in offering and selling
Shares to the public. You further represent that neither you nor any of your
directors, officers, partners or "persons associated with" you (as defined in
the By-Laws of the NASD), nor, to your knowledge any "related person" (as
defined in Conduct Rule 2710) have participated or intend to participate in any
transaction or dealing, including, without limitation, the receipt of
unregistered securities of the Company since January 5, 2001, as to which
documents or information would be required to be filed with the NASD in
connection with the Underwriting Agreement pursuant to Conduct Rules 2710 or
2810, other than participation as a Dealer hereunder.
All communications from you should be addressed to Friedman, Billings,
Xxxxxx & Co., Inc., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Corporate Syndicate Department. Any notice from us to you shall be
deemed to have been duly given if mailed or telegraphed to you at the address to
which this letter is addressed.
This Agreement shall terminate simultaneously with termination of the
Agreement Among Underwriters, but it may be terminated by us at any time
theretofore without notice. Upon termination of this Agreement, all
authorizations, rights and obligations hereunder shall cease, except rights and
obligations accrued or unsatisfied at the date of termination. Notwithstanding
termination of this Agreement, you shall be liable for your proper proportion of
any transfer tax or other liability which may be asserted against us or any of
the Dealers purchasing Shares hereunder, based upon the claim that the Dealers,
or any of them, constitute a partnership, an association, an unincorporated
business or other separate entity.
If, before the termination of this Agreement, we shall purchase, or
contract to purchase, in the open market or otherwise, any Shares delivered to
you pursuant hereto, you shall repay to us, for the account of the Underwriters,
the concession to Dealers with respect to such Shares, and all brokerage
commissions and transfer taxes paid in connection with such purchase or contract
to purchase.
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Please confirm your agreement to abide by and conform to all the terms
and conditions of this Agreement by signing and returning at once the duplicate
copy enclosed herewith.
Yours very truly,
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
U.S. BANCORP XXXXX XXXXXXX INC.
BY: FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By:
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Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
Please execute Confirmation on next page.
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CONFIRMATION
MCG CAPITAL CORPORATION
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
U.S. BANCORP XXXXX XXXXXXX INC.
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
We hereby confirm our agreement to purchase _______________ of the
Shares to which the foregoing Selected Dealers Agreement relates, subject to
your acceptance or rejection as a whole or in part in case of a subscription or
application in excess of any reservation, and acknowledge that such purchase and
the purchase of additional Shares, if any, prior to the termination of the
Selected Dealers Agreement, are subject to all the applicable terms and
conditions thereof. We agree to abide by and conform to the Selected Dealers
Agreement and to your offering telegram or letter referred to therein, and to
take up and pay for such Shares as therein provided. We acknowledge receipt of
the Prospectus relating to the Shares and we hereby confirm that in entering
into the Selected Dealers Agreement and in offering the Shares we have relied
and will rely upon the Prospectus and on no other statements whatsoever, written
or oral. We further confirm that we are a member of the National Association of
Securities Dealers, Inc. (the "NASD"), or, if we are not such a member, that (i)
we are a foreign dealer registered under the Securities Exchange Act of 1934, as
amended, and hereby agree that in making sales of Shares in the United States we
will conform to the Conduct Rules of the NASD (the "Conduct Rules"), or (ii) if
not so registered, we hereby agree not to reoffer, resell or deliver Shares in
the United States, its territories or possessions or to any person who we have
reason to believe is a citizen thereof or resident therein, unless we comply
with IM-2110-1 under the Conduct Rules, relating to "Free-Riding and
Withholding," and comply, as though we were a member of the NASD, with the
provisions of Conduct Rules 2730, 2740 and 2750 and with Conduct Rule 2420 as it
applies to a non-member foreign dealer.
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By:
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Name:
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Title:
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(Address)
Dated: November __, 2001 -------------------------------------
(City and State)
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