Exhibit h.2
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TORTOISE GAS AND OIL CORPORATION
(a Maryland corporation)
________ Common Shares
PLACEMENT AGREEMENT
Dated: July 17, 2007
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TORTOISE GAS AND OIL CORPORATION
(a Maryland corporation)
__________ Common Shares
(Par Value $.001 Per Share)
PLACEMENT AGREEMENT
July 17, 2007
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
WACHOVIA CAPITAL MARKETS, LLC,
as Representatives of the several Placement Agents
x/x Xxxxxx, Xxxxxxxx & Company, Incorporated
000 X. Xxxxxxxx Xx. Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Tortoise Gas and Oil Corporation, a Maryland corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell in a private placement ______ shares of common stock, par value
$.001 per share (the "Common Shares"), of the Company to certain accredited
investors as defined in Rule 501(a) (the "Purchasers") under the Securities Act
of 1933, as amended (the "1933 Act"), in reliance upon an exemption from
registration pursuant to Section 4(2) of the 1933 Act, by means of and on the
terms and in the manner set forth herein and in the Final Offering Memorandum
(as defined below). The term "Preliminary Offering Memorandum" as used herein
means, collectively, the preliminary offering memorandum dated June 13, 2007 as
supplemental by the supplement to preliminary offering memorandum dated July 13,
2007, and the term "Final Offering Memorandum" means the final Offering
Memorandum, dated July 16, 2007. The ______ Common Shares to be sold by the
Company to Purchasers hereunder are hereinafter called the "Securities."
Pursuant to this agreement between the Company and each of the
placement agents named in Schedule A hereto (collectively, the "Placement
Agents"), for whom Xxxxxx, Xxxxxxxx & Company, Incorporated ("Xxxxxx Xxxxxxxx")
and Wachovia Capital Markets, LLC ("Wachovia") are acting as representatives (in
such capacity, the "Representatives"), the Company hereby appoints the Placement
Agents as exclusive placement agents through which the Company will offer and
sell the Securities to Purchasers and to provide for certain additional matters
respecting such appointment.
The Company understands that the Placement Agents will act as exclusive
placement agents for the Company in the private placement of the Securities. In
acting as the exclusive placement agent pursuant to this agreement, the
Placement Agents will seek to complete the financing on a reasonable best
efforts basis, acting as the Company's agent and not as a principal in the sale
and placement of the Securities. The Securities are to be offered and sold by
the Company to Purchasers through the Placement Agents without being registered
under the 1933 Act, in reliance upon exemptions therefrom. Purchasers and any
subsequent purchasers ("Subsequent Purchasers") that acquire Securities may only
resell or otherwise transfer such Securities if such Securities are hereafter
registered under the 1933 Act or if an exemption from the registration
requirements of the 1933 Act is available (including the exemptions afforded by
the rules and regulations promulgated under the 1933 Act (the "1933 Act
Regulations") by the Securities and Exchange Commission (the "Commission").
The Company has prepared and delivered to the Placement Agents and each
Purchaser copies of the Preliminary Offering Memorandum and the Final Offering
Memorandum, setting forth information
concerning the Company and the Securities, each for use by such Placement Agent
and each Purchaser in connection with the Offering.
On the basis of the representations, warranties and covenants contained
in this Agreement, but subject to the terms and conditions set forth herein, the
Company hereby confirms its appointment of the Placement Agents as the Company's
exclusive placement agents for the purpose of finding Purchasers for the
Securities, for the account and risk of the Company, through the private
placement herein contemplated. Subject to the performance by the Company of its
obligations under this Agreement and the completeness and accuracy of all the
representations and warranties contained herein, the Placement Agents confirm
their acceptance of such appointment and severally and not jointly, agree, on
the terms and conditions herein set forth, to use their reasonable best efforts,
in accordance with their customary practice, to find prospective Purchasers for
the Securities. The Company expressly acknowledges and agrees that the Placement
Agents' obligations hereunder are on a "best efforts" basis only and that the
execution of this Agreement does not in any way constitute a commitment by the
Placement Agents to purchase the Securities and does not ensure the successful
placement of the Securities or any portion thereof.
The Company has entered into an Investment Advisory Agreement, dated as
of June 8, 2007 (the "Investment Advisory Agreement"), with Tortoise Capital
Advisors, L.L.C., a Delaware limited liability company registered as an
investment adviser (the "Advisor"), under the Investment Advisers Act of 1940,
as amended, and the rules and regulations thereunder (collectively, the
"Advisers Act").
The Company will enter into a Registration Rights Agreement, to be
dated as of July 17, 2007 (the "Registration Rights Agreement") with the
Representatives relating to the subsequent registration of the Securities under
the 1933 Act.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company and the
Advisor, jointly and severally, represent and warrant to each Placement Agent as
of the date hereof, the Applicable Time referred to in Section 1(a)(i) and as of
the Closing Time referred to in Section 2(b) hereof, and agrees with each
Placement Agent, as follows:
(i) Offering Memorandum. The Final Offering Memorandum does not, and
at the Closing Time will not, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation, warranty and
agreement shall not apply to statements in or omissions from the Final
Offering Memorandum made in reliance upon and in conformity with
information furnished in writing to the Company by any Placement Agent
through the Representatives expressly for use in the Final Offering
Memorandum, with the parties hereto confirming that no such information has
been furnished.
As of the Applicable Time (as defined below), the Preliminary Offering
Memorandum distributed to investors did not, and as of the Closing Time,
will not, include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. As
used in this subsection and elsewhere in this Agreement: "Applicable Time"
means __:__ _.m. (Eastern Time) on July 17, 2007 or such other time as
agreed by the Company and the Representatives.
The Preliminary Offering Memorandum and the Final Offering Memorandum
have been carefully prepared by the Company (i) in conformity with the
requirements of Regulation D of
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the 1933 Act Regulations and (ii) in a manner intended to ensure that the
offering of the Securities complies with Rule 506 of Regulation D.
(ii) Independent Accountants. The accountants who certified the
statement of assets and liabilities and the statement of operations, and
the related notes, included in the Final Offering Memorandum are (A)
independent public accountants as defined by the 1933 Act and the 1933 Act
Regulations, (B) in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 under Regulation S-X and
(C) a registered public accounting firm as defined by the Public Company
Accounting Oversight Board ("PCAOB"), whose registration has not been
suspended or revoked and who has not requested such registration to be
withdrawn.
(iii) Financial Statements. The audited statement of assets and
liabilities and the audited statement of operations included in the Final
Offering Memorandum, together with the related notes, present fairly the
financial position of the Company as of the date indicated; there are no
financial statements that are required to be included in the Final Offering
Memorandum that are not included as required; said financial statements
have been prepared in conformity with generally accepted accounting
principles in the United States ("GAAP") applied on a consistent basis
throughout the periods involved. The financial data set forth in the Final
Offering Memorandum under the caption "Capitalization and Dilution" fairly
presents the information set forth therein on a basis consistent with that
of the audited financial statements and related notes thereto contained in
the Final Offering Memorandum.
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Preliminary Offering
Memorandum, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
business affairs or business prospects of the Company, whether or not
arising in the ordinary course of business (a "Material Adverse Effect"),
(B) there have been no transactions entered into by the Company, other than
those in the ordinary course of business, which are material with respect
to the Company, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(v) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Maryland and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Preliminary Offering Memorandum and the Final Offering Memorandum and to
enter into and perform its obligations under this Agreement, the Investment
Advisory Agreement and the Registration Rights Agreement; and the Company
is duly qualified as a foreign corporation to transact business and is in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not be reasonably likely to result in a Material
Adverse Effect.
(vi) Subsidiaries. The Company has no subsidiaries. The Company does
not own, directly or indirectly, any shares of stock or any other equity or
debt securities of any corporation or have any equity or debt interest in
any firm, partnership, joint venture, association or other entity.
(vii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Preliminary Offering Memorandum
and the Final Offering Memorandum under the caption "Description of Capital
Stock". The shares of issued and
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outstanding capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company was issued in violation
of preemptive or other similar rights of any securityholder of the Company.
(viii) Authorization of Agreements. This Agreement and the Investment
Advisory Agreement have each been, and the Registration Rights Agreement
will be as of the Closing Time, duly authorized, executed and delivered by
the Company and are, and will be as of the Closing Time, valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except as the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or thereafter in effect relating to creditors' rights generally and
(ii) general principles of equity and the discretion of the court before
which any proceeding therefor may be brought.
(ix) Authorization and Description of Securities. The Securities have
been duly authorized for issuance and sale by the Company to the Purchasers
through the Placement Agents pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement against payment of
the consideration set forth herein, will be validly issued and fully paid
and non-assessable; the Common Shares conform to all statements relating
thereto contained in the Preliminary Offering Memorandum and the Final
Offering Memorandum and such descriptions conform to the rights set forth
in the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. The Company is not in violation
of its articles or by-laws or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company is a
party or by which it may be bound, or to which any of the property or
assets of the Company is subject (collectively, "Agreements and
Instruments") except for such defaults that would not be reasonably likely
to result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Registration Rights Agreement and the
Investment Advisory Agreement and the consummation of the transactions
contemplated herein and therein (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Preliminary Offering Memorandum and the Final Offering
Memorandum under the caption "Use of Proceeds") and compliance by the
Company with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to, the Agreements and Instruments, nor
will such action result in any violation of the provisions of the articles
or by-laws of the Company, any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its assets, properties or operations.
(xi) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company, which is
required to be disclosed in the Preliminary Offering Memorandum and the
Final Offering Memorandum (other than as disclosed therein), or that is
reasonably likely to
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result in a Material Adverse Effect, or that is reasonably likely to
materially and adversely affect the properties or assets of the Company or
the consummation of the transactions contemplated in this Agreement, the
Registration Rights Agreement or the Investment Advisory Agreement or the
performance by the Company of its obligations hereunder or thereunder; the
aggregate of all pending legal or governmental proceedings to which the
Company is a party or of which any of its properties or assets is the
subject which are not described in the Preliminary Offering Memorandum and
the Final Offering Memorandum, including ordinary routine litigation
incidental to the business, is not reasonably likely to result in a
Material Adverse Effect.
(xii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement or the Investment Advisory Agreement, except
such as have been already obtained and except for filing of a Form D and
related information with the Commission and various state securities law
agencies and administrators.
(xiii) Possession of Licenses and Permits. The Company possesses such
permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by it or proposed to be operated by it
immediately following the offering of the Securities as described in the
Preliminary Offering Memorandum and the Final Offering Memorandum, except
where the failure so to possess is not reasonably likely to, singly or in
the aggregate, result in a Material Adverse Effect; the Company is in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply is not reasonably likely to, singly
or in the aggregate, result in a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect is not reasonably
likely to, singly or in the aggregate, result in a Material Adverse Effect;
and the Company has not received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xiv) Registration Rights. Other than as set forth in the Registration
Rights Agreement, there are no persons with registration rights or other
similar rights requiring the Company to register any securities as a result
of the Offering.
(xv) Related Party Transactions. There are no business relationships
or related party transactions involving the Company or any other person
required to be described in the Preliminary Offering Memorandum and the
Final Offering Memorandum which have not been described as required.
(xvi) Investment Advisory Agreement. (A) The terms of the Investment
Advisory Agreement, including compensation terms, comply in all material
respects with all applicable provisions of the Investment Company Act of
1940, as amended (the "1940 Act") and the Advisers Act and (B) the
approvals by the board of directors and the stockholders of the Company of
the Investment Advisory Agreement have been made in accordance with the
requirements of Section 15 of the 1940 Act.
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(xvii) Interested Persons. Except as disclosed in the Preliminary
Offering Memorandum and the Final Offering Memorandum, (A) 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
Advisers Act, and (B) to the knowledge of the Company, no director of the
Company is an "interested person" (as defined in the 0000 Xxx) of the
Company or an "affiliated person" (as defined in the 0000 Xxx) of any of
the Placement Agents.
(xviii) Employees and Executives. The Company is not aware that (A)
any executive officer, key employee or significant group of employees of
the Advisor plans to terminate employment with the Advisor or (B) any such
executive officer or key employee is subject to any noncompete,
nondisclosure, confidentiality, employment, consulting or similar
arrangement that would be violated by the present or proposed business
activities of the Company or the Advisor.
(xix) Similar Offerings. Except for the placement by the Company of
Common Shares as set forth in the Final Offering Memorandum, none of the
Company or any of its respective affiliates, as such term is defined in
Rule 501(b) under the 1933 Act (each, an "Affiliate"), has, directly or
indirectly, solicited any offer to buy, sold or offered to sell or
otherwise negotiated in respect of, or will, directly or indirectly,
solicit any offer to buy, sell or offer to sell or otherwise negotiate in
respect of, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of the
Securities in a manner that would require the Securities to be registered
under the 1933 Act.
(xx) No General Solicitation. None of the Company or its respective
Affiliates or any person acting on its or any of their behalf (other than
the Placement Agents or the Purchasers, as to whom the Company makes no
representation) has engaged or will engage, in connection with the offering
or sale of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the 1933 Act,
including, without limitation, by means of presentations, speeches, media
advertisements or written publications.
(xxi) No 1933 Act Registration Required. (A) Subject to compliance by
the Placement Agents with the representations and warranties set forth in
Section 2 and the procedures set forth in Section 6 hereof, it is not
necessary in connection with the offer, sale and delivery of the Securities
by the Company to the Purchasers in the manner contemplated by this
Agreement and the Final Offering Memorandum to register the Securities
under the 1933 Act and (B) it is not necessary in connection with the
placement of Common Shares by the Company to the initial investors as
reflected in the Final Offering Memorandum to register such securities
under the 1933 Act.
(xxii) Accounting Controls. The Company has established and maintains
a system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions will be executed in accordance with
management's authorization; (B) transactions will be recorded as necessary
to permit preparation of financial statements in conformity with GAAP and
to maintain accountability for assets; (C) access to assets will be
permitted only in accordance with management's authorization; (D) the
recorded accountability for assets will be compared with the existing
assets at reasonable intervals and appropriate action will be taken with
respect to any differences; (E) material information relating to the
Company and the assets managed by the Advisor will be promptly made known
to the officers responsible for establishing and maintaining the system of
internal accounting controls; and (F) any significant deficiencies or
weaknesses in the design or operation of internal accounting controls which
could adversely affect the Company's ability to record, process, summarize
and report financial data, and any fraud whether or not material that
involves management or other employees who have a
6
significant role in internal controls, will be adequately and promptly
disclosed to the Company's independent auditors and the audit committee of
the Company's board of directors.
(xxiii) No Extension of Credit. The Company has not, directly or
indirectly, extended credit, arranged to extend credit, or renewed any
extension of credit, in the form of a personal loan, to or for any director
or executive officer of the Company, or to or for any family member or
affiliate of any director or executive officer of the Company.
(b) Representations and Warranties of the Advisor. The Advisor
represents to each Placement Agent as of the date hereof and, as of the Closing
Time referred in Section 2(b) hereof, and agrees with each Placement Agent as
follows:
(i) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Preliminary Offering Memorandum,
except as otherwise stated therein, there has been no material adverse
change in the condition, financial or otherwise, or in the business
affairs, business prospects or regulatory status of the Advisor, whether or
not arising in the ordinary course of business, or that would otherwise
prevent the Advisor from carrying out its respective obligations under the
Investment Advisory Agreement (an "Advisor's Material Adverse Effect").
(ii) Good Standing. The Advisor has been duly organized and is validly
existing as a limited liability company in good standing under the laws of
the State of Delaware, and has limited liability company power and
authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum and to enter into and
perform its obligations under this Agreement; the Advisor also has limited
liability company power and authority to execute and deliver and perform
its obligations under the Investment Advisory Agreement; the Advisor is
duly qualified to transact business as a foreign entity and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of ownership or leasing of its property or the
conduct of business, except where the failure to qualify or be in good
standing would not be reasonably likely to result in an Advisor's Material
Adverse Effect.
(iii) Registration Under Advisers Act. The Advisor is duly registered
with the Commission as an investment adviser under the Advisers Act and is
not prohibited by the Advisers Act, the 1940 Act or the applicable
published rules and regulations thereunder from acting under the Investment
Advisory Agreement for the Company as contemplated by the Preliminary
Offering Memorandum and the Final Offering Memorandum. There does not exist
any proceeding or, to the Advisor's knowledge, any facts or circumstances
the existence of which could lead to any proceeding which might adversely
affect the registration of the Advisor with the Commission.
(iv) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Advisor, threatened, against or affecting the Advisor, which is
required to be disclosed in the Preliminary Offering Memorandum and the
Final Offering Memorandum (other than as disclosed therein), or which might
result in a Material Adverse Effect or an Advisor's Material Adverse
Effect, or which might materially and adversely affect the properties or
assets of the Advisor or the consummation of the transactions contemplated
in this Agreement or the Investment Advisory Agreement, or the performance
by the Advisor of its obligations hereunder or thereunder; the aggregate of
all pending legal or governmental proceedings to which the Advisor is a
party or of which any of its property or
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assets is the subject which are not described in the Preliminary Offering
Memorandum or the Final Offering Memorandum, including ordinary routine
litigation incidental to its business, could not result in an Advisor's
Material Adverse Effect.
(v) Absence of Defaults and Conflicts. The Advisor is not in violation
of its limited liability company agreement or in default in the performance
or observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Advisor is a party or by which it may be bound, or to which any of the
properties or assets of the Advisor is subject (collectively, the "Advisor
Agreements and Instruments"), or in violation of any law, statute, rule,
regulation, judgment, order or decree except for such violations or
defaults that would not be reasonably likely to result in a Material
Adverse Effect or an Advisor's Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the Investment Advisory
Agreement, and the consummation of the transactions contemplated herein and
therein (including the issuance and sale of the Securities and the use of
the proceeds from the sale of the Securities as described in the
Preliminary Offering Memorandum and the Final Offering Memorandum under the
caption "Use of Proceeds") and compliance by the Advisor with its
obligations hereunder and under the Investment Advisory Agreement have been
duly authorized by all necessary limited liability company action and do
not and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or default or
Advisor Repayment Event (as defined below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any properties or
assets of the Advisor pursuant to, the Advisor Agreements and Instruments,
nor will such action result in any violation of the provisions of the
limited liability company agreement of the Advisor, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Advisor or any of its assets, properties or
operations. As used herein, an "Advisor Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Advisor.
(vi) Authorization of Agreements. This Agreement and the Investment
Advisory Agreement have been duly authorized, executed and delivered by the
Advisor. This Agreement and the Investment Advisory Agreement are valid and
binding obligations of the Advisor, as applicable, enforceable against it
in accordance with their terms, except as the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or thereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought.
(vii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Advisor of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement or the Investment Advisory Agreement, except
such as have already been made or obtained.
(viii) Description of Advisor. The descriptions of the Advisor
contained in the Preliminary Offering Memorandum and the Final Offering
Memorandum do not, and prior to the time of purchase will not, contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading.
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(ix) Financial Resources. The Advisor has the financial resources
available to it necessary for the performance of its services and
obligations as contemplated in the Preliminary Offering Memorandum and the
Final Offering Memorandum and under this Agreement and the Investment
Advisory Agreement.
(x) Possession of Licenses and Permits. The Advisor possesses such
Governmental Licenses issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by it, except where the failure so to possess would not, singly or
in the aggregate, result in a Material Adverse Effect or an Advisor's
Material Adverse Effect; the Advisor is in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, result in a Material
Adverse Effect or an Advisor's Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not, singly or
in the aggregate, result in a Material Adverse Effect or an Advisor's
Material Adverse Effect; and the Advisor has not received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect or an Advisor's Material Adverse Effect.
(xi) Employment Status. The Advisor is not aware that (A) any
executive, key employee or significant group of employees of the Advisor
plans to terminate employment with the Advisor (B) any such executive
officer or key employee is subject to any non-compete, nondisclosure,
confidentiality, employment, consulting or similar agreement that would be
violated by the present or proposed business activities of the Company or
the Advisor except where such termination or violation would not constitute
a Material Adverse Effect or an Advisor's Material Adverse Effect.
(xii) Internal Controls. The Advisor operates a system of internal
controls sufficient to provide reasonable assurance that (A) transactions
effectuated by it under the Investment Advisory Agreement are executed in
accordance with its management's general or specific authorization; and (B)
access to the Company's assets is permitted only in accordance with its
management's general or specific authorization.
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or the Advisor delivered to the Representatives or to counsel for
the Placement Agents shall be deemed a representation and warranty by the
Company or the Advisor, respectively, to each Placement Agent as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Placement Agents; Closing.
(a) Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth and in
the subscription agreements entered into by each of the Purchasers, the Company
agrees to sell to each Purchaser, severally and not jointly, at a price per
share of $15.00, the number of Securities set forth in Schedule B opposite the
name of such Purchaser.
(b) Payment. At ___:00 _.m. (Eastern time) on the date of this
Agreement, or such other time not later than ten business days after such date
as shall be agreed upon by the Representatives and the Company (such time and
date of payment and delivery being herein called "Closing Time"), payment shall
be made to the Company from each of the Placement Agents, on behalf of the
Purchasers identified
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by such Placement Agents, by wire transfer of immediately available funds to a
bank account designated by the Company, against delivery to each of the
Placement Agents of the Securities to be purchased by their respective
Purchasers. Xxxxxx Xxxxxxxx or Wachovia, individually and not as representative
of the Placement Agents, may (but shall not be obligated to) make payment of the
purchase price for the Securities to be purchased by any Purchaser or on behalf
of any Purchaser whose funds have not been received by the Company at the
Closing Time.
(c) [Reserved]
(d) Placement Fee. The Company hereby agrees that the aggregate fee
for the Placement Agents' services hereunder shall be 6.00% of the gross
proceeds of any sale of Securities pursuant to a placement arranged by the
Placement Agents pursuant to this Agreement, with such fee to be earned upon any
such sale to any Purchaser and payable by the Company to the Placement Agents at
the Closing Time. For the avoidance of doubt, (i) this fee shall be in addition
to the separate structuring fee payable to Xxxxxx Xxxxxxxx and Wachovia as set
forth in that certain letter agreement dated June 12, 2007, between the Company,
Xxxxxx Xxxxxxxx and Wachovia, and (ii) Xxxxxx Xxxxxxxx and Wachovia shall be
entitled to one placement fee of 6% of gross proceeds of any sale of Securities
arranged by either of them.
SECTION 3. Covenants of the Company and the Advisor. The Company and
the Advisor, jointly and severally, covenant with each Placement Agent as
follows:
(a) Offering Memorandum. The Company, as promptly as possible, will
furnish to each Placement Agent, without charge, such number of copies of the
Preliminary Offering Memorandum and the Final Offering Memorandum and any
amendments and supplements thereto as such Placement Agent may reasonably
request.
(b) Notice and Effect of Material Events. The Company will promptly
notify the Representatives, and confirm such notice in writing, of (x) any
filing made by the Company of information relating to the offering of the
Securities with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (y) prior to the completion of the
placement of the offered Securities by the Placement Agents, as evidenced by a
notice in writing from each Placement Agent to the Company, any material changes
in or affecting the condition, financial or otherwise, or the business affairs
or business prospects of the Company or the Advisor which (i) make any statement
in the Preliminary Offering Memorandum and the Final Offering Memorandum false
or misleading or (ii) are not disclosed in the Preliminary Offering Memorandum
and the Final Offering Memorandum. In such event or if during such time any
event shall occur as a result of which it is necessary, in the reasonable
opinion of any of the Company, its counsel, the Placement Agents or counsel for
the Placement Agents, to amend or supplement the Preliminary Offering Memorandum
and the Final Offering Memorandum in order that the Offering Memorandum not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances then existing, the Company will forthwith amend or supplement
the Preliminary Offering Memorandum and the Final Offering Memorandum by
preparing and furnishing to each Placement Agent an amendment or amendments of,
or a supplement or supplements to, the Preliminary Offering Memorandum and the
Final Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Placement Agents) so that, as so amended or
supplemented, the Preliminary Offering Memorandum and the Final Offering
Memorandum will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a Purchaser,
not misleading.
(c) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Final Offering
Memorandum under "Use of Proceeds."
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(d) Qualification of Securities for Offer and Sale. The Company will
use its best efforts, in cooperation with the Placement Agents, to qualify the
offered Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions as the Placement Agents may designate and to
maintain such qualifications in effect as long as required for the sale of the
Securities; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(e) Amendment to Final Offering Memorandum and Supplements. The
Company will advise each Representative promptly of any proposal to amend or
supplement the Final Offering Memorandum and will not effect such amendment or
supplement if the Representatives or counsel to the Placement Agents shall
reasonably object. Neither the consent of the Representatives, nor the delivery
by a Placement Agent of any such amendment or supplement, shall constitute a
waiver of any of the conditions set forth in Section 5 hereof or waiver of
termination rights.
(f) DTC. The Company will cooperate with the Placement Agents and use
its best efforts to permit the offered Securities to be eligible for clearance
and settlement through the facilities of the Depository Trust Company ("DTC").
(g) Provision of Information. Unless the Company furnishes information
to the Commission pursuant to Section 13 or 15(d) of the 1934 Act, the Company
agrees that, prior to any public offering of its Common Shares, it will make
available on the Advisor's website, or, at its option mail to all holders of its
Securities, including any subsequent holders of its Securities, any information
that it files under the 1940 Act and quarterly and annual reports with respect
to the Company.
(h) Accounting Controls. The Company will establish and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with management's
authorization; (B) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain accountability
for assets; (C) access to assets is permitted only in accordance with
management's authorization; (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences; (E) material information relating to
the Company and the assets managed by the Advisor is promptly made known to the
officers responsible for establishing and maintaining the system of internal
accounting controls; and (F) any significant deficiencies or weaknesses in the
design or operation of internal accounting controls which could adversely affect
the Company's ability to record, process, summarize and report financial data,
and any fraud whether or not material that involves management or other
employees who have a significant role in internal controls, are adequately and
promptly disclosed to the Company's independent auditors and the audit committee
of the Company's board of directors.
(i) Disclosure Controls. The Company will use its commercially
reasonable efforts to establish and employ disclosure controls and procedures
that are designed to ensure that information required to be disclosed by the
Company in the reports that it prepares for its shareholders is accumulated and
communicated to the Company's management, including its principal executive
officer or officers and principal financial officer or officers, as appropriate
to allow timely decisions regarding disclosure and at such time as it registers
its Common Shares under the Securities Exchange Act of 1934 ("1934 Act"), the
reports that it files or submits under the 1934 Act are recorded, processed,
summarized and reported, within the time periods specified in the Commission's
rules and forms.
11
(j) The Company will file all reports (including Form Ds) and general
consents to service of process in jurisdictions required by Regulation D and
applicable state securities laws with regard to sales of the Securities and the
use of the proceeds therefrom; provided, however, that the Representatives
provide all relevant information to the Company in writing as to the Purchasers
required for such filings.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation and printing of the Preliminary Offering Memorandum and the Final
Offering Memorandum (including financial statements and exhibits) and of each
amendment or supplement thereto, (ii) the preparation, printing and delivery to
the Placement Agents of this Agreement, any other agreement with the Placement
Agents and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, and the
Registration Rights Agreement, (iii) the preparation, issuance and delivery of
the Securities to the Placement Agents, including any stock or other transfer
taxes and any stamp or other duties payable upon the sale, issuance or delivery
of the Securities to the Placement Agents, (iv) the fees and disbursements of
the Company's, and the Advisor's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Placement Agents in connection therewith
and in connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Placement Agents of copies of
each Preliminary Offering Memorandum and of the Final Offering Memorandum and
any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Placement Agents of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, and (ix) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in connection
with the marketing of the Securities, including without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations, travel and lodging expenses of the representatives and officers
of the Company and any such consultants, and the cost of aircraft and other
transportation chartered in connection with the road show; provided, however,
that the Company shall not pay such expenses of the Placement Agents that exceed
$75,000 in the aggregate. The Placement Agents and the Company will each pay
fees, costs and expenses of their respective counsel, other than those
contemplated by Sections 4(a)(v) and 4(a)(vii), which shall be paid by the
Company.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company and the Advisor, jointly and severally, shall
reimburse the Placement Agents for all of their out-of-pocket expenses incurred,
including the reasonable fees and disbursements of counsel for the Placement
Agents.
SECTION 5. Conditions of Placement Agents' Obligations. The
obligations of the several Placement Agents hereunder are subject to the
accuracy of the representations and warranties of the Company and the Advisor
contained in Section 1 hereof or in certificates of any officer of the Company
or the Advisor, to the performance by the Company and the Advisor of their
respective covenants and other obligations hereunder, and to the following
further conditions:
(a) Opinions of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing
Time, of Xxxxxxxxx Xxxxxxx LLP, counsel for the Company, and Xxxxxxx LLP,
special Maryland counsel for the Company, in each case in form and substance
satisfactory to counsel for the Placement Agents, together with signed or
reproduced copies of such letter for each of the other Placement Agents to such
effect as counsel to the Placement Agents may reasonably request. In giving such
opinions, Xxxxxxxxx Xxxxxxx LLP may rely, as to all matters governed
12
by the laws of jurisdictions other than the law of the State of Missouri and the
federal law of the United States, on an assumption that the law of such other
jurisdiction is identical to the law of Missouri. Such counsel may also state
that, insofar as such opinions involve factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
certificates of public officials.
(b) Opinion of Counsel for Placement Agents. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxx Xxxxx LLP, counsel for the Placement Agents, together with
signed or reproduced copies of such letter for each of the other Placement
Agents with respect to the matters as the Placement Agents may reasonably
request. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representative, including counsel of the Company. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and certificates of public officials.
(c) Officers' Certificates. (i) At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Preliminary Offering Memorandum, any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company, whether or not arising in
the ordinary course of business, and the Representatives shall have received a
certificate of the president of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, and (iii) the Company
has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time.
(ii) At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Preliminary Offering Memorandum, any material adverse change in the condition,
financial or otherwise, or in the business affairs or business prospects of the
Advisor, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the president of the
Advisor and of the chief financial or chief accounting officer of the Advisor,
dated as of Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1(a) and 1(b)
hereof are true and correct with the same force and effect as though expressly
made at and as of Closing Time, and (iii) the Advisor has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to Closing Time.
(d) Subscription Agreements. At the time of the execution of this
Agreement, the definitive Subscription Agreements shall have been duly executed
and delivered by each Purchaser set forth in Schedule B hereto and shall be in
full force and effect.
(e) Accountant's Comfort Letter. At the Closing Time of the execution
of this Agreement, the Representatives shall have received from Ernst & Young
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Placement Agents containing statements and information of the
type ordinarily included in accountants' "comfort letters" to initial purchasers
with respect to the financial statements and certain financial information
contained in the Final Offering Memorandum.
(f) Additional Documents. At Closing Time, counsel for the Placement Agents
shall have been furnished with such documents and opinions as they may require
for the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the
13
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company
and the Advisor in connection with the issuance and sale of the Securities as
herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Placement Agents.
(g) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to Closing Time and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 7, 8 and 9 shall survive any such termination and remain
in full force and effect.
SECTION 6. Offers and Resales of the Securities.
(a) Offer and Sale Procedures. Each of the Placement Agents and the
Company, with respect to its own respective activities, hereby establish and
agree to observe the following procedures in connection with the offer and sale
of the Securities:
(i) Offers and Sales. Offers and sales of the Securities shall be made
to such persons and in such manner as is contemplated by the Preliminary
Offering Memorandum and the Final Offering Memorandum. No offers, sales or
deliveries of any of the Securities will be made in any jurisdiction
outside the United States except under circumstances that will result in
compliance with the applicable laws thereof.
(ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the 0000 Xxx) will be
used in the United States in connection with the offering or sale of the
Securities.
(iii) Purchaser Notification. Each Placement Agent will take
reasonable steps to inform persons acquiring Securities from the Company
that the Securities (A) have not been and may not be registered under the
1933 Act, (B) are being sold to them without registration under the 1933
Act in reliance on the exemption from registration pursuant to Section 4(2)
of the 1933 Act, and (C) may not be offered, sold or otherwise transferred
except (1) to the Company or (2) inside the United States pursuant to an
available exemption from registration under the 1933 Act.
(b) Covenants of the Company. The Company covenants with each
Placement Agent as follows:
(i) Integration. The Company agrees that it will not and will cause
its Affiliates not to, directly or indirectly, solicit any offer to buy,
sell or make any offer or sale of, or otherwise negotiate in respect of,
securities of the Company of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 under the 1933 Act, such offer or
sale would render invalid (for the purpose of (i) the sale of the offered
Securities by the Company to the Purchasers or (ii) the resale of the
offered Securities by such Purchasers to others) the exemption from the
registration requirements of the 1933 Act provided by Section 4(2) thereof.
(ii) Restriction on Repurchases. Until the expiration of one year
after the original issuance of the offered Securities, the Company will
not, and will cause its Affiliates not to, resell any offered Securities
which are "restricted securities" (as such term is defined under Rule
144(a)(3) under the 1933 Act), whether as beneficial owner or otherwise
(except as agent acting as a securities broker on behalf of and for the
account of customers in the ordinary course of business in unsolicited
broker's transactions).
14
SECTION 7. Indemnification.
(a) Indemnification of Placement Agents. The Company and the Advisor,
jointly and severally, agree to indemnify and hold harmless each Placement
Agent, its affiliates, as such term is defined in Rule 501(b) under the 1933 Act
(each, an "Affiliate"), its selling agents, officers, directors and employees
and each person, if any, who controls any Placement Agent within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, related to or arising out of any untrue statement
or alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum and the Final Offering Memorandum (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
7(d) below) any such settlement is effected with the written consent of the
Company;
(iii) against any and all loss, liability, claim, damage and expense
whatsover, as incurred, related to or arising out of any breach of a
representation, warranty or covenant by the Company or the Advisor set
forth in this Agreement; and
(iv) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by the
Representatives), reasonably incurred in investigating, preparing,
conducting or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i), (ii) or (iii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Placement Agent through the Representatives expressly for use in the Preliminary
Offering Memorandum and the Final Offering Memorandum (or any amendment or
supplement thereto), with the parties hereto confirming that no such information
has been furnished.
(b) Indemnification of Company, Directors, Officers and Advisor. Each
Placement Agent severally agrees to indemnify and hold harmless the Company and
the Advisor and each person, if any, who controls the Company or the Advisor
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Preliminary Offering Memorandum and the Final Offering
Memorandum, in reliance upon and in conformity with information furnished in
writing or electronic mail to the Company by such Placement Agent through the
Representatives expressly for use in the Preliminary Offering Memorandum and the
Final Offering Memorandum, with the parties hereto confirming that no such
information has been furnished.
15
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder (an "Action"), but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 7(a) above, counsel to the indemnified parties shall be selected by
the Representatives, and, in the case of parties indemnified pursuant to Section
7(b) above, counsel to the indemnified parties shall be selected by the Company.
An indemnifying party may participate at its own expense in the defense of any
such Action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one Action or separate but similar or related Actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 7 or Section 8 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 8. Contribution. If the indemnification provided for in
Section 7 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Advisor on the one hand and the Placement Agents on the other
hand from the offering of the Securities pursuant to this Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Advisor on the one hand and of the Placement Agents on the other hand in
connection with the statements or omissions, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Advisor on the
one hand and the Placement Agents on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total placement agents fee received by the Placement
Agents, in each case as set forth
16
on the cover of the Final Offering Memorandum, bear to the aggregate initial
offering price of the Securities as set forth on the cover of the Final Offering
Memorandum; provided, however, that each Placement Agent's individual
contribution shall not exceed the amount of the placement fee received by such
Placement Agent pursuant to Section 2(d).
The relative fault of the Company and the Advisor on the one hand and
the Placement Agents on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company and the Advisor or by the Placement
Agents and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Advisor and the Placement Agents agree that it
would not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Placement Agents were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 8 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls a
Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act and each Placement Agent's Affiliates and selling agents shall
have the same rights to contribution as such Placement Agent, and each executive
officer or director of the Company and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The
Placement Agents' respective obligations to contribute pursuant to this Section
8 are several in proportion to the number of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 9. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company and the Advisor submitted pursuant
hereto, shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of any Placement Agent or its Affiliates
or selling agents, any person controlling any Placement Agent, its officers or
directors or any person controlling the Company and (ii) delivery of and payment
for the Securities.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Preliminary Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company or the Advisor, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation
18
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the NASDAQ Select Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (iv) a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United
States, or (v) if a banking moratorium has been declared by either Federal or
New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7, 8 and 9 shall survive such termination and remain in full force and
effect.
SECTION 11. [Reserved]
SECTION 12. Tax Disclosure. Notwithstanding any other provision of
this Agreement, from the commencement of discussions with respect to the
transactions contemplated hereby, the Company (and each employee, representative
or other agent of the Company) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure (as such terms are
used in Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury
Regulations promulgated thereunder) of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided relating to such tax treatment and tax structure.
SECTION 13. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Placement
Agents shall be directed to the Representatives x/x Xxxxxx, Xxxxxxxx & Company,
Incorporated, 000 X. Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, attention of T.
Xxxxxxx Xxxxxxxx III, with a copy to Xxxxxxx Xxxxx LLP, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxxxx Xxxxxxxx, Esq.; and notices to
the Company and the Advisor shall be directed to them at Tortoise Capital
Resources Corporation, 00000 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxx
00000, attention of Xxxxx Xxxxxxx, with a copy to Xxxxxxxxx Xxxxxxx LLP, 0000
Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxxxxxxx 00000, attention of Xxxxx Xxxxxx,
Esq.
SECTION 14. No Advisory or Fiduciary Relationship. The Company
acknowledges and agrees that (i) the purchase and sale of the Securities
pursuant to this Agreement, including the determination of the offering price of
the Securities and any related discounts and commissions, is an arm's-length
commercial transaction between the Company, on the one hand, and the several
Placement Agents, on the other hand, (ii) no Placement Agent has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company with
respect to the offering contemplated hereby or the process leading thereto
(irrespective of whether such Placement Agent has advised or is currently
advising the Company on other matters) and no Placement Agent has any obligation
to the Company with respect to the offering contemplated hereby except the
obligations expressly set forth in this Agreement, (iii) the Placement Agents
and their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Company, and (iv) the
Placement Agents have not provided any legal, accounting, regulatory or tax
advice with respect to the offering contemplated hereby and the Company has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate.
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SECTION 15. Parties. This Agreement shall inure to the benefit of and
be binding upon the Placement Agents and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Placement Agents, the Company and the Advisor and their respective successors
and the controlling persons and officers and directors referred to in Sections 7
and 8 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Placement Agents, the Company
and the Advisor and their respective successors, and said controlling persons
and officers and directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No purchaser of Securities
from any Placement Agent shall be deemed to be a successor by reason merely of
such purchase.
SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 17. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 18. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 19. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
[SIGNATURE PAGE FOLLOWS]
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Placement Agents, the Company and the Advisor in accordance with its
terms.
Very truly yours,
COMPANY:
TORTOISE GAS AND OIL CORPORATION
By _____________________________________
Name:
Title:
ADVISOR:
TORTOISE CAPITAL ADVISORS, L.L.C.
By _____________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED,
as Representative of the several Placement Agents
By _________________________________________________
Authorized Signatory
WACHOVIA CAPITAL MARKETS, LLC,
as Representative of the several Placement Agents
By _________________________________________________
Authorized Signatory
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SCHEDULE A
Placement Agents
Name of Placement Agent
Xxxxxx, Xxxxxxxx & Company, Incorporated
Wachovia Capital Markets, LLC
Xxxxxx, Xxxxx Xxxxx Incorporated
Xxxxxxxxxxx & Co.
Wunderloch Securities, Inc.
SCHEDULE B
Purchasers
See list attached hereto.
