KAYNE ANDERSON MLP INVESTMENT COMPANY (a Maryland corporation) 4,800,000 Shares of Series E Mandatory Redeemable Preferred Shares (Liquidation Preference $25.00 Per Share) UNDERWRITING AGREEMENT
Exhibit (h)(2)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ MLP INVESTMENT COMPANY
(a Maryland corporation)
(a Maryland corporation)
4,800,000 Shares of Series E Mandatory Redeemable Preferred Shares
(Liquidation Preference $25.00 Per Share)
(Liquidation Preference $25.00 Per Share)
March 14, 2012
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Incorporated
Citigroup Global Markets Inc.
▇▇▇▇▇ Fargo Securities, LLC
▇▇▇▇▇ Fargo Securities, LLC
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Incorporated
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ MLP Investment Company, a Maryland corporation (the
“Company”), KA Fund Advisors, LLC, a Delaware limited liability company (the “Adviser”), and ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Capital Advisors, L.P., a California limited partnership, parent of the Adviser (“KACALP”)
(solely with respect to Section 2(b), Section 2(e), Section 7(k), Section 9 and Section 12 hereof),
address you as the underwriters as named on Schedule I hereto (the “Underwriters”). The Company
proposes to sell to the Underwriters an aggregate of 4,800,000 shares of Series E Mandatory
Redeemable Preferred Shares of the Company, par value $0.001 per share, with a liquidation
preference of $25.00 per share, which have a term of 7 years and an applicable rate of 4.25% (the
“Preferred Stock”) (said shares to be issued and sold by the Company being hereinafter called the
“Securities”). The Securities will be authorized by, and subject to the terms and conditions of,
the Articles Supplementary of the Series E Mandatory Redeemable Preferred Shares (the “Articles
Supplementary”) in substantially the form filed as an exhibit to the registration statement
referred to in Section 1 of this Agreement.
Unless otherwise stated, the term “you” as used herein means each of ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, Citigroup Global Markets Inc. and ▇▇▇▇▇ Fargo Securities, LLC. All
references herein to the Registration Statement, the Base Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to General Instruction F of Form N-2 which were filed
under the 1940 Act Rules and Regulations on
or before the Effective Date of the Registration Statement or the issue date of the Base
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be;
and any
reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement, the Base Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to include the filing of any document under the 1940 Act Rules and Regulations after the
Effective Date of the Registration Statement or the issue date of the Base Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated
therein by reference. Certain terms used herein are defined in Section 20 hereof.
The Company and the Adviser wish to confirm as follows their agreements with the Underwriters
in connection with the several purchases of the Securities by the Underwriters.
The Company has entered into (i) an Investment Management Agreement with KACALP, dated as of
December 12, 2006, which was assigned to the Adviser on December 31, 2006 (the “Advisory
Agreement”); (ii) a Custody Agreement with The Custodial Trust Company, dated September 27, 2004,
which was assigned to JPMorgan Chase Bank, N.A. on June 15, 2009 (the “Custodian Agreement”); (iii)
a Certificate of Appointment with the American Stock Transfer & Trust Company, dated September 27,
2004 (the “Common Stock Transfer Agency Agreement”); (iv) a Certificate of Appointment with the
American Stock Transfer & Trust Company dated March 14, 2012 (the “Series E Transfer Agency
Agreement”); (v) an Administration Agreement with Ultimus Fund Solutions, LLC (“Ultimus”), dated as
of February 28, 2009, as amended on December 12, 2011 (the “Administration Agreement”); and (vi) a
Fund Accounting Agreement with Ultimus, dated September 27, 2004 (the “Accounting Agreement”).
Collectively, the Advisory Agreement, the Custodian Agreement, the Common Stock Transfer Agency
Agreement, the Series E Transfer Agency Agreement, the Administration Agreement and the Accounting
Agreement are herein referred to as the “Company Agreements.”
1. Representations and Warranties of the Company and the Adviser. The Company and the
Adviser, jointly and severally, represent and warrant to, and agree with, each Underwriter as set
forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a registration
statement (file numbers 333-177550 and 811-21593) on Form N-2, including a related base
prospectus (including the statement of additional information incorporated by reference
therein), for registration under the Acts of the offering and sale of the Securities.
Such Registration Statement, including any amendments thereto filed prior to the
Execution Time, has become effective. The Company may have filed with the Commission
as part of an amendment to the Registration Statement or pursuant to Rule 497, one or
more Preliminary Final Prospectuses (including the related base prospectus, the
statement of additional information incorporated by reference therein, and a related
preliminary final prospectus supplement), each of which has previously been furnished
to you. The Company will file with the
Commission a final prospectus (including the related base prospectus, the
statement of additional information incorporated by reference therein, and
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related
final prospectus supplement) relating to the Securities in accordance with Rule 497.
As filed, such final prospectus shall contain all information required by the Acts and
the Rules and Regulations to be included in such registration statement and the Final
Prospectus, except to the extent the Underwriters shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond that
contained in the Base Prospectus and any Preliminary Final Prospectus) as the Company
has advised you, prior to the Execution Time, will be included or made therein. The
Registration Statement, at the Execution Time, meets the requirements set forth in Rule
415(a)(1)(x) applicable for use on Form N-2 based on interpretive guidance of the staff
of the Commission set forth in the “no-action” letter Nuveen Virginia Premium Income
Municipal Fund (available October 6, 2006). The Company has furnished the Underwriters
with copies of such Registration Statement, each amendment to such Registration
Statement filed with the Commission and each Preliminary Final Prospectus.
(b) Each Preliminary Final Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement thereto, or
filed pursuant to Rule 497, complied when so filed in all material respects with the
applicable provisions of the Acts and the Rules and Regulations.
(c) On the Effective Date, the Registration Statement did, and when the Final
Prospectus is first filed (if required) in accordance with Rule 497 and on the Closing
Date (as defined herein), the Final Prospectus (and any supplements thereto) will, and
the 1940 Act Notification when originally filed with the Commission did and any
amendment or supplement thereto when filed with the Commission did, and any subsequent
amendment or supplements thereto when filed with the Commission will, comply in all
material respects with the applicable requirements of the Acts and the Rules and
Regulations and the Registration Statement did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and, on the Effective
Date, the Final Prospectus, if not filed pursuant to Rule 497, will not, and on the
date of any filing pursuant to Rule 497 and on the Closing Date, the Final Prospectus
(together with any supplement thereto) will not, include any 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, however, that the Company makes no representations or warranties
as to the information contained in or omitted from the Registration Statement, or the
Final Prospectus (or any supplement thereto), in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf of
any Underwriter specifically for inclusion in the Registration
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Statement or the Final
Prospectus (or any supplement thereto), it being understood and agreed that the only
such information furnished by or on behalf of any Underwriters, consists of the
information described as such in the last sentence of Section 9(b) hereof. The
Commission has not issued any order preventing or suspending the use of any Preliminary
Final Prospectus or the Final Prospectus.
(d) The Disclosure Package as of the Time of Sale does not, and the Final
Prospectus as of its date and as of the Closing Date 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 the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements in or
omissions from the Disclosure Package or the Final Prospectus based upon and in
conformity with written information furnished through the Underwriters or on the
Underwriters’ behalf specifically for use therein, it being understood and agreed that
the only such information furnished by or on behalf of any Underwriter consists of the
information described as such in the last sentence of Section 9(b) hereof.
(e) The Company is a corporation duly organized and validly existing in good
standing under the laws of the State of Maryland with full corporate power and
authority to own, lease and operate its properties and assets and to conduct its
business as described in the Registration Statement, the Disclosure Package and the
Final Prospectus, and is duly qualified to conduct business as a foreign corporation
and is in good standing under the laws of each jurisdiction which requires such
qualifications, except where the failure to be so qualified and in good standing would
not, individually or in the aggregate, have a material adverse effect on (i) the
performance of this Agreement or the consummation of any of the transactions herein
contemplated or (ii) the condition (financial or otherwise), prospects, earnings,
business or properties of the Company, whether or not arising from transactions in the
ordinary course of business (clauses (i) and (ii) together or individually with respect
to the Adviser, KACALP or the Company, a “Material Adverse Effect”). The Company has
no subsidiaries.
(f) The Company’s authorized equity capitalization is as set forth in the
Registration Statement, the Disclosure Package and the Final Prospectus; the capital
stock of the Company conforms to the description thereof contained in the Registration
Statement, the Disclosure Package and the Final Prospectus; all outstanding shares of
Common Stock have been duly and validly authorized and issued, are fully paid and
nonassessable and are free of any preemptive or other similar rights; the Securities
have been duly and validly authorized, and, when issued and delivered to and paid for
by the Underwriters pursuant to this Agreement, will be fully paid and nonassessable,
and free of any preemptive or similar rights that entitle or will
entitle any person to acquire any Securities upon issuance thereof by the Company;
the Company has made an application to list the Securities, subject
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to official notice
of issuance, on the NYSE; the certificates for the Securities are in valid and
sufficient form; and, except as disclosed in the Registration Statement, the Disclosure
Package and the Final Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership interests in the
Company are outstanding.
(g) The Company’s registration statement on Form 8-A, as amended, under the
Exchange Act has become effective.
(h) The Company, subject to the Registration Statement having been declared
effective and the filing of the Final Prospectus under Rule 497, has taken all required
action under the Acts and the Rules and Regulations to make the public offering and
consummate the sale of the Securities as contemplated by this Agreement.
(i) There are no agreements, contracts, indentures, leases or other instruments
that are required to be described in the Registration Statement, the Disclosure Package
or the Final Prospectus, or to be filed as an exhibit thereto, which are not described
or filed as required by the Acts or the Rules and Regulations; and the statements in
the Disclosure Package and the Final Prospectus under the headings “Description of
Mandatory Redeemable Preferred Shares,” “Tax Matters” and “Description of Capital
Stock” fairly summarize the matters therein described.
(j) The execution and delivery of, and the performance by the Company of its
obligations under, this Agreement and the Company Agreements have been duly and validly
authorized by the Company, and this Agreement and the Company Agreements have been duly
executed and delivered by the Company.
(k) The Company is duly registered under the 1940 Act as a closed-end,
non-diversified management investment company and the 1940 Act Notification has been
duly filed with the Commission and, at the time of filing thereof and any amendment or
supplement thereto, conformed in all material respects with all applicable provisions
of the 1940 Act and the 1940 Act Rules and Regulations. The Company is, and at all
times through the completion of the transactions contemplated hereby will be, in
compliance in all material respects with the terms and conditions of the Acts. 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, the 1940 Act Rules
and Regulations, the Advisers Act, and the Advisers Act Rules and Regulations; the
Company has not received any notice from the Commission pursuant to Section 8(e) of the
1940 Act with respect to the 1940 Act Notification or the Registration Statement. The
Company and the Adviser are not aware that any
executive, key employee or significant group of employees of the Company plans to
terminate employment with the Company, it being understood that a
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member of the board
of directors of the Company who is not an “interested person” (as defined in the ▇▇▇▇
▇▇▇) thereof is not an executive or employee for purposes of the representation and
warranty in this Section 1(k).
(l) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the transactions
contemplated herein or in the Company Agreements, other than (a) those that have been
made or obtained under the Acts, (b) those under state securities or blue sky laws of
any jurisdiction in connection with the purchase and distribution of the Securities by
the Underwriters in the manner contemplated in this Agreement and in the Disclosure
Package and the Final Prospectus, (c) any necessary approval of the Corporate Financing
Department of FINRA, and (d) such other approvals as have been obtained, it being
understood and agreed that for purposes of this representation and warranty, the
transactions contemplated under the Advisory Agreement do not include any prospective
investment transactions generally authorized therein.
(m) Subsequent to the respective dates as of which information is given in the
Disclosure Package and the Final Prospectus: (i) there has been no Material Adverse
Effect with respect to the Company or the Adviser; and (ii) neither the Company nor the
Adviser has incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into any material
transaction or agreement not in the ordinary course of business other than as may be
incurred hereunder or entered into herewith.
(n) Neither the issuance and sale of the Securities, the execution, delivery or
performance of this Agreement or any of the Company Agreements by the Company, nor the
consummation by the Company of the transactions herein or therein contemplated (i)
conflicts or will conflict with or constitutes or will constitute a breach of the
articles of incorporation of the Company, as amended to date and as supplemented by the
Articles Supplementary (the “Charter”), or bylaws of the Company, as amended to date
(the “Bylaws”), (ii) conflicts or will conflict with or constitutes or will constitute
a breach of or a default under, any material agreement, indenture, lease or other
instrument to which the Company is a party or by which it or any of its properties may
be bound or (iii) violates or will violate any material statute, law, regulation or
filing or judgment, injunction, order or decree applicable to the Company or any of its
properties or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to the terms of any
agreement or instrument to which it is a party or by which it may be bound or to which
any of the property or assets of the Company is subject, it being understood and agreed
that for purposes of this representation and warranty, the transactions
contemplated under the Advisory Agreement do not include any prospective
investment transactions generally authorized therein.
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(o) There are no contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company to include any
securities of the Company owned or to be owned by such person in the securities
registered pursuant to the Registration Statement.
(p) The financial statements, together with related schedules and notes, included
or incorporated by reference in the Registration Statement, the Disclosure Package and
the Final Prospectus, present fairly in all material respects the financial condition,
results of operations and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting requirements of the Acts
and have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as otherwise
noted therein); and the other financial and statistical information and data included
in the Registration Statement, the Disclosure Package and the Final Prospectus are
accurately derived from such financial statements and the books and records of the
Company.
(q) No action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or its property is pending
or, to the best knowledge of the Company, threatened that could reasonably be expected
to have a Material Adverse Effect.
(r) The Company owns or leases all such properties as are necessary to the conduct
of its operations as presently conducted.
(s) The Company is not (i) in violation of its Charter or Bylaws, (ii) in breach
or default in the performance of the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to which its
property is subject or (iii) in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or of any decree of the
Commission, FINRA, any state securities commission, any national securities exchange,
any arbitrator, any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official having jurisdiction over the Company.
(t) PricewaterhouseCoopers LLP, is the independent registered public accounting
firm with respect to the Company within the meaning of the 1933 Act and the 1933 Act
Rules and Regulations.
(u) The Company has not distributed and, prior to the later to occur of (i) the
Closing Date and (ii) completion of the distribution of the Securities,
will not distribute any offering material in connection with the offering and sale
of the Securities other than the Registration Statement, the Disclosure Package and the
Final Prospectus.
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(v) There are no transfer taxes or other similar fees or charges under federal law
or the laws of any state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the issuance by the
Company or sale by the Company of the Securities.
(w) The Company has filed all foreign, federal, state and local tax returns that
are required to be filed or has requested extensions thereof (except in any case in
which the failure so to file would not have a Material Adverse Effect) and has paid all
taxes required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except for any
such assessment, fine or penalty that is currently being contested in good faith or as
would not have a Material Adverse Effect.
(x) The Company’s directors and officers/errors and omissions insurance policy and
its fidelity bond required by Rule 17g-1 of the 1940 Act Rules and Regulations are in
full force and effect; the Company is in compliance with the terms of such policy and
fidelity bond in all material respects; and there are no claims by the Company under
any such policy or fidelity bond; the Company has not been refused any insurance
coverage sought or applied for; and the Company has no reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
(y) The Company has such licenses, permits and authorizations of governmental or
regulatory authorities (“permits”) as are necessary to own its property and assets and
to conduct its business in the manner described in the Disclosure Package and the Final
Prospectus, except where the failure to obtain such licenses, permits or authorizations
would not have a Material Adverse Effect; the Company has fulfilled and performed all
its material obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination thereof
or results in any other material impairment of the rights of the Company under any such
permit; and none of such permits contains any restriction that is materially burdensome
to the Company.
(z) The Company maintains and will maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with general or specific authorization from the Company’s officers and
with the investment objectives, policies and
restrictions of the Company and the applicable requirements of the 1940 Act, the
1940 Act Rules and Regulations and the Code; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally
accepted accounting principles, to calculate net
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asset value, to maintain
accountability for assets and to maintain material compliance with the books and
records requirements under the 1940 Act and the 1940 Act Rules and Regulations; (iii)
access to assets is permitted only in accordance with general or specific authorization
from the Company’s officers; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(aa) The Company has not taken, directly or indirectly, any action designed to or
that would constitute or that might reasonably be expected to cause or result in, under
the Exchange Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities, and the
Company is not aware of any such action taken or to be taken by any affiliates of the
Company.
(bb) The Company has established and shall maintain disclosure controls and
procedures (as defined in Rule 30a-3 of the 1940 Act Rules and Regulations), which: (i)
are designed to ensure that material information relating to the Company is made known
to the Company’s principal executive officer and its principal financial officer by
others within the Company, particularly during the periods in which the periodic
reports required under the Exchange Act are being prepared; and (ii) are effective in
all material respects to perform the functions for which they were established.
(cc) This Agreement and each of the Company Agreements complies in all material
respects with all applicable provisions of the 1940 Act, the 1940 Act Rules and
Regulations, the Advisers Act and the Advisers Act Rules and Regulations. The
provisions of the Charter and Bylaws and the investment objectives, policies and
restrictions described in the Disclosure Package and the Final Prospectus, assuming
they are implemented as so described, will comply in all material respects with the
applicable requirements of the 1940 Act.
(dd) Except as disclosed in the Registration Statement and the Final Prospectus,
no director of the Company is an “interested person” (as defined in the ▇▇▇▇ ▇▇▇) of
the Company or an “affiliated person” (as defined in the ▇▇▇▇ ▇▇▇) of any Underwriter
named in Schedule I hereto.
(ee) There are no business relationships or related-party transactions involving
the Company or any other person required to be described in the Registration Statement,
the Disclosure Package and Final Prospectus which have not been described as required,
it being understood and agreed that the Company and the Adviser make no representation
or warranty with respect to
any such relationships involving any Underwriter and any third party that have not
been disclosed to the Company.
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(ff) The Company has not made and will not make an election under Section 851(b)
of the Code, or any successor provisions thereto, to be treated as a regulated
investment company (“RIC”) for federal income tax purposes; provided however, that the
Company may, in the future, seek to elect to be treated as a RIC if legislation is
enacted or regulations adopted that would allow the Company to do so while maintaining,
in the Adviser’s judgment, the Company’s investment objective.
(gg) The conduct by the Company of its business (as described in the Disclosure
Package and the Final Prospectus) does not require it to be the owner, possessor or
licensee of any patents, patent licenses, trademarks, service marks or trade names
which it does not own, possess or license.
(hh) To the Company’s knowledge, neither the Company nor any employee or agent of
the Company has made any payment of funds of the Company or received or retained any
funds in violation of any law, rule or regulation, which payment, receipt or retention
of funds is of a character required to be disclosed in the Disclosure Package and the
Final Prospectus.
(ii) The Company does not have any material lending or other relationship with any
bank or lending affiliate of any Underwriter required to be described in the
Registration Statement, the Disclosure Package and Final Prospectus which has not been
described as required.
(jj) There is and has been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply in all material
respects with any applicable provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended,
and the rules and regulations promulgated in connection therewith (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”), including Sections 302 and 906 related to certifications.
(kk) The Company has satisfied the conditions for the use of Rule 415(a)(1)(x)
with respect to the Registration Statement applicable for use on Form N-2 based on
interpretive guidance of the staff of the Commission set forth in the “no-action”
letter Nuveen Virginia Premium Income Municipal Fund (available October 6, 2006).
(ll) The operations of the Company are and have been conducted at all times in
compliance in all material respects with any applicable financial recordkeeping and
reporting requirements of The Bank Secrecy Act of 1970, as amended (including
amendments pursuant to the International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001), the money laundering statutes of all jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or guidelines,
issued, administered
or enforced by any governmental agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the
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Company with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened.
(mm) Neither the Company nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the proceeds
of the offering, or lend, contribute or otherwise make available such proceeds to any
other person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
(nn) Neither the Company nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company is aware of or has taken any
action, directly or indirectly, that would result in a violation by such persons of the
FCPA, including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift, promise to
give, or authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official thereof or
any candidate for foreign political office, in contravention of the FCPA and the
Company, and, to the knowledge of the Company, its affiliates have conducted their
businesses in compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to ensure,
continued compliance therewith.
Any certificate signed by any officer of the Company and delivered to the Underwriters or
counsel for the Underwriters in connection with the offering of the Securities shall be deemed a
joint and several representation and warranty by the Company and the Adviser, as to matters covered
therein, to any Underwriter.
2. Representations and Warranties of the Adviser and KACALP. The Adviser and KACALP
(solely with respect to paragraphs (b) and (e) below) represent and warrant to each Underwriter as
follows:
(a) The Adviser is a limited liability company duly formed and validly existing in
good standing under the laws of the State of Delaware, with full limited liability
company power and authority to own, lease and operate its properties and assets and to
conduct its business as described in the Registration Statement, the Disclosure Package
and the Final Prospectus, and is duly qualified to do business as a foreign limited
liability company and is in good standing under the laws of each jurisdiction which
requires such qualification, except where the failure to be so qualified and in good
standing
would not, individually or in the aggregate, have a Material Adverse Effect on the
Adviser. KACALP holds of record 99% of the membership interests of
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the Adviser and
▇▇▇▇▇▇▇ ▇▇▇▇▇ holds of record 1% of the membership interests of the Adviser.
(b) KACALP is a limited partnership duly formed and validly existing in good
standing under the laws of the State of California, with full limited partnership power
and authority to own, lease and operate its properties and assets and to conduct its
business as described in the Registration Statement and the Final Prospectus, and is
duly qualified to do business as a foreign limited partnership and is in good standing
under the laws of each jurisdiction which requires such qualification, except where the
failure to be so qualified and in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on KACALP.
(c) The Adviser is duly registered with the Commission as an investment adviser
under the Advisers Act and is not prohibited by the Advisers Act, the Advisers Act
Rules and Regulations, the 1940 Act or the 1940 Act Rules and Regulations from acting
under the Advisory Agreement as investment adviser to the Company as contemplated by
the Disclosure Package and the Final Prospectus. There does not exist any proceeding
or, to the Adviser’s knowledge, any facts or circumstances the existence of which could
lead to any proceeding which might adversely affect the registration of the Adviser
with the Commission.
(d) The Adviser has full limited liability company power and authority to enter
into this Agreement and be party to the Advisory Agreement; the execution and delivery
of this Agreement, and the assignment of the Advisory Agreement to the Adviser, and the
performance by the Adviser of its obligations under, this Agreement and the Advisory
Agreement have been duly and validly authorized by the Adviser; and this Agreement and
the assignment of the Advisory Agreement to the Adviser have been duly executed and
delivered by the Adviser and, assuming due execution and delivery hereof by you and
thereof by KACALP, constitute the valid and legally binding agreements of the Adviser,
enforceable against the Adviser in accordance with their terms, except as rights to
indemnity and contribution hereunder may be limited by federal or state securities laws
or principles of public policy and subject to the qualification that the enforceability
of the Adviser’s obligations hereunder and thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors’ rights generally and by general equitable principles,
regardless whether enforcement is considered in a proceeding in equity or at law.
(e) KACALP has full limited partnership power and authority to enter into this
Agreement, the execution and delivery of, and the performance by the Adviser of its
obligations under, this Agreement has been duly and validly
authorized by KACALP; and this Agreement has been duly executed and delivered by
KACALP and, assuming due execution and delivery hereof by
-12-
you, constitutes the valid
and legally binding agreement of KACALP, enforceable against KACALP in accordance with
its terms, except as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws or principles of public policy and subject to the
qualification that the enforceability of KACALP’s obligations hereunder may be limited
by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors’ rights generally and by general equitable
principles, regardless whether enforcement is considered in a proceeding in equity or
at law.
(f) The Adviser has the financial resources available to it necessary for the
performance of its services and obligations as described in the Disclosure Package and
the Final Prospectus and as contemplated under this Agreement and the Advisory
Agreement.
(g) The description of the Adviser and its business, and the statements
attributable to the Adviser in the Registration Statement, the Disclosure Package and
the Final Prospectus complied and comply in all material respects with the provisions
of the 1933 Act, the 1933 Act Rules and Regulations, the Advisers Act, the Advisers Act
Rules and Regulations and the 1940 Act and 1940 Act Rules and Regulations and did not
and will not contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Adviser is not aware that any
executive, key employee or significant group of employees of the Adviser plans to
terminate employment with the Company or the Adviser.
(h) No action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Adviser or its property is pending
or, to the best knowledge of the Adviser, threatened that (i) could reasonably be
expected to have a material adverse effect on the ability of the Adviser to fulfill its
obligations hereunder or under the Advisory Agreement or (ii) could reasonably be
expected to have a Material Adverse Effect.
(i) The Adviser has such licenses, permits and authorizations of governmental or
regulatory authorities (“permits”) as are necessary to own its property and to conduct
its business in the manner described in the Disclosure Package and the Final
Prospectus, except where the failure to obtain such licenses, permits or authorizations
would not have a Material Adverse Effect; the Adviser has fulfilled and performed all
its material obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination thereof
or
results in any other material impairment of the rights of the Adviser under any
such permit.
-13-
(j) Neither the execution, delivery or performance of this Agreement by the
Adviser or of the assignment of the Advisory Agreement to the Adviser nor the
consummation by the Adviser of the transactions herein contemplated or by the Adviser
of the transactions therein contemplated (i) conflicts or will conflict with or
constitutes or will constitute a breach of the certificate of formation or limited
liability company operating agreement of the Adviser, (ii) conflicts or will conflict
with or constitutes or will constitute a breach of or a default under, any material
agreement, indenture, lease or other instrument to which the Adviser is a party or by
which it or any of its properties may be bound or (iii) violates or will violate any
material statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Adviser or any of its properties or, other than pursuant to the terms
of Section 6(i) hereof, will result in the creation or imposition of any material lien,
charge or encumbrance upon any property or assets of the Adviser pursuant to the terms
of any agreement or instrument to which the Adviser is a party or by which the Adviser
may be bound or to which any of the property or assets of the Adviser is subject, it
being understood and agreed that for purposes of this representation and warranty, the
transactions contemplated under the Advisory Agreement do not include any prospective
investment transactions generally authorized therein.
(k) The Adviser has not taken, directly or indirectly, any action designed to or
that would constitute or that might reasonably be expected to cause or result in, under
the Exchange Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities, and the
Adviser is not aware of any such action taken or to be taken by any affiliates of the
Adviser.
Any certificate signed by any officer of the Adviser and delivered to the Underwriters or
counsel for the Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by the Adviser, as to matters covered therein, to each Underwriter.
3. Purchase and Sale. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to each Underwriter,
and each Underwriter agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $25.00 per share, the number of the Securities set forth opposite such Underwriter’s name
in Schedule I hereto.
4. Delivery and Payment. Delivery of and payment for the Securities shall be made at
10:00 AM, New York City time, on March 21, 2012, or at such time on such later date not more than
three Business Days after the foregoing date as the Underwriters shall designate, which date and
time may be postponed by agreement between the Underwriters and the Company or as provided in
Section 10 hereof (such date and time of delivery and payment for
the Securities being herein called the “Closing Date”). Delivery of the Securities shall be
made to the Underwriters against payment by the Underwriters of the purchase price thereof to or
upon the order of the Company by wire transfer payable in same-day funds to an account
-14-
specified by
the Company. Delivery of the Securities shall be made through the facilities of The Depository
Trust Company (“DTC”) unless the Underwriters shall otherwise instruct the Company in writing.
5. Offering by the Underwriters. It is understood that the several Underwriters
propose to offer the Securities for sale to the public as set forth in the Final Prospectus.
6. Agreements of the Company and the Adviser. The Company and the Adviser, jointly
and severally, agree with the Underwriters as follows:
(a) Prior to the termination of the offering of the Securities, the Company will
not file any amendment of the Registration Statement or supplement (including the Final
Prospectus or any Preliminary Final Prospectus) to the Base Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or supplement to
which you reasonably object. The Company will cause the Final Prospectus, properly
completed, and any supplement thereto, to be filed in a form approved by the
Underwriters with the Commission pursuant to Rule 497 within the time period prescribed
and will provide evidence satisfactory to the Underwriters of such timely filing. The
Company will promptly advise the Underwriters (1) when the Final Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission pursuant to
Rule 497 or when any Rule 462(b) Registration Statement shall have been filed with the
Commission, (2) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become effective, (3)
of any request by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement to the
Final Prospectus or for any additional information, (4) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration Statement
or of any notice objecting to its use or the institution or threatening of any
proceeding for that purpose and (5) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such stop order or of
any such suspension or objection to the use of the Registration Statement and, upon
such issuance, occurrence or notice of objection, to obtain as soon as possible the
withdrawal of such stop order or relief from such occurrence or objection, including,
if necessary, by filing an amendment to the Registration Statement or a new
registration statement and using its best efforts to have such amendment or new
registration statement declared effective as soon as practicable.
(b) If, at any time prior to the filing of the Final Prospectus pursuant to Rule
497, any event occurs as a result of which the Disclosure Package would include any
-15-
untrue statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which they were
made at such time not misleading, the Company will (i) notify promptly the Underwriters
so that any use of the Disclosure Package may cease until it is amended or
supplemented; (ii) amend or supplement the Disclosure Package to correct such statement
or omission; and (iii) supply any amendment or supplement to you in such quantities as
you may reasonably request.
(c) If, at any time when a prospectus relating to the Securities is required to be
delivered under the 1933 Act, any event occurs as a result of which, in the reasonable
judgment of the Company or in the reasonable opinion of the Underwriters or their
counsel, the Final Prospectus as then supplemented would include any untrue statement
of a material fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading,
or if it shall be necessary to amend the Registration Statement or supplement the Final
Prospectus to comply with the Acts and the Rules and Regulations, the Company promptly
will (1) notify the Underwriters of any such event; (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section 6, an
amendment or supplement which will correct such statement or omission or effect such
compliance; and (3) supply any supplemented prospectus to you in such quantities as you
may reasonably request.
(d) If there occurs an event or development as a result of which the Disclosure
Package would include an untrue statement of a material fact or would omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Company will notify promptly the
Underwriters so that any use of the Disclosure Package may cease until it is amended or
supplemented.
(e) As soon as practicable, the Company will make generally available to its
security holders and to the Underwriters an earnings statement or statements of the
Company which will satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158
under the 1933 Act.
(f) The Company will use its best efforts to effect the listing of the Securities
on the NYSE, subject to official notice of issuance, within 30 days after the date of
the Final Prospectus.
(g) The Company will cooperate with the Underwriters and use its reasonable best
efforts to permit the Securities to be eligible for clearance and settlement through
the facilities of DTC.
(h) The Company will furnish (i) to the Underwriters and counsel for the
Underwriters signed copies of the Registration Statement (including exhibits thereto)
and (ii) so long as delivery of a prospectus by an Underwriter
-16-
or dealer may be
required by the 1933 Act, as many copies of each Preliminary Final Prospectus, the
Final Prospectus and any supplement thereto as the Underwriters may reasonably request.
(i) The Company will arrange, if necessary, for the qualification of the
Securities for sale under the laws of such jurisdictions as the Underwriters may
designate and will maintain such qualifications in effect so long as required for the
distribution of the Securities; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(j) The Company and the Adviser will not, without the prior written consent of the
Underwriters, offer, sell, contract to sell, pledge or otherwise dispose of, or enter
into any transaction which is designed to, or might reasonably be expected to, result
in the disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the Company or the Adviser or any affiliate, as
such term is defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”), of the
Company or the Adviser or any person in privity with the Company, the Adviser or any
Affiliate of the Company, directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act) any preferred
stock (as defined in the Company’s Charter) or any securities convertible into, or
exercisable or exchangeable for, preferred stock; or publicly announce an intention to
effect any such transaction for a period of 30 days following the Execution Time. In
the event that either (x) during the last 17 days of the 30-day period referred to
above, the Company issues an earnings release or (y) prior to the expiration of such
30-day period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of such 30-day period, the restrictions
described above shall continue to apply until the expiration of the 18-day period
beginning on the date of the earnings release.
(k) The Company will comply with all applicable securities and other applicable
laws, rules and regulations, including, without limitation, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and
will use its best efforts to cause the Company’s directors and officers, in their
capacities as such, to comply with such laws, rules and regulations, including, without
limitation, the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
(l) The Company and the Adviser will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected to cause or
result in, under the Exchange Act or otherwise,
-17-
stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities.
(m) The Company agrees to apply the net proceeds from the sale of the Securities
in the manner set forth under the caption “Use of Proceeds” in the Disclosure Package
and the Final Prospectus.
(n) The Company agrees to pay the costs and expenses relating to the following
matters: (A) the preparation, printing or reproduction and filing with the Commission
of the Registration Statement (including financial statements and exhibits thereto),
each Preliminary Final Prospectus, the Final Prospectus and the 1940 Act Notification,
and each amendment or supplement to any of them; (B) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Preliminary Final
Prospectus, the Final Prospectus and all amendments or supplements to any of them, as
may, in each case, be reasonably requested for use in connection with the offering and
sale of the Securities; (C) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (D) the printing (or
reproduction) and delivery of this Agreement, any blue sky memorandum, dealer
agreements and all other agreements or documents printed (or reproduced) and delivered
in connection with the offering of the Securities; (E) the registration of the
Securities under the 1933 Act and the listing of the Securities on the NYSE; (F) any
registration or qualification of the Securities for offer and sale under the securities
or blue sky laws of the several states (including filing fees and the reasonable fees
and expenses of counsel for the Underwriters relating to such registration and
qualification and the preparation of the blue sky memorandum); (G) any filings required
to be made with FINRA (including filing fees and the reasonable fees and expenses of
counsel for the Underwriters relating to such filings); (H) the transportation and
other expenses incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (I) the fees and expenses of
the Company’s accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; and (J) all other costs and expenses incident to the
performance by the Company of its obligations hereunder, but not including the fees,
expenses, and costs of Sidley Austin llp, counsel to the Underwriters, except
as provided in Sections 6(n)(D), (F) and (G) above and in Section 8 of this Agreement.
(o) The Company will direct the investment of the net proceeds of the offering of
the Securities in such a manner as to comply with the investment
objectives, policies and restrictions of the Company as described in the Final
Prospectus.
-18-
(p) The Company has established and shall maintain disclosure controls and
procedures (as defined in Rule 30a-3 of the 1940 Act Rules and Regulations), which: (i)
are designed to ensure that material information relating to the Company is made known
to the Company’s principal executive officer and its principal financial officer by
others within the Company, particularly during the periods in which the periodic
reports required under the Exchange Act are being prepared; and (ii) are effective in
all material respects to perform the functions for which they were established.
(q) The Company and the Adviser will use their reasonable best efforts to perform
all of the agreements required of them by this Agreement and discharge all their
conditions to closing as set forth in this Agreement.
7. Conditions to the Obligations of the Underwriters. The obligations of the
Underwriters to purchase the Securities shall be subject to the accuracy of the representations and
warranties on the part of the Company and the Adviser contained herein as of the Execution Time,
the Time of Sale and the Closing Date, to the accuracy of the statements of the Company or the
Adviser made in any certificates pursuant to the provisions hereof, to the performance by the
Company or the Adviser of its obligations hereunder and to the following additional conditions
(except to the extent that any such conditions may have been waived in writing by the Underwriters
on or prior to such respective dates):
(a) The Registration Statement, including any amendments thereto prior to the
Execution Time, has become effective, the Final Prospectus and any supplement, will be
filed in the manner and within the time period required by Rule 497, and no stop order
suspending the effectiveness of the Registration Statement or any notice objecting to
its use shall have been issued and no proceedings for that purpose shall have been
instituted or threatened, and any request of the Commission for additional information
(to be included in the Registration Statement or Final Prospectus or otherwise) shall
have been complied with in all material respects.
(b) The Company shall have requested and caused ▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel for the
Company, to have furnished to the Underwriters their opinion, dated the Closing Date
and addressed to the Underwriters, substantially to the effect that:
(i) Based solely on a review of good standing certificates (or other evidence
described in the opinion) of the Secretary of State of California and the Secretary
of State of the State of Texas, the Company is duly qualified to do business as a
foreign corporation in the States of California and Texas and is in good standing
under the laws of each of the States of California and Texas;
(ii) The Company is duly registered with the Commission under the 1940 Act as
a closed-end, non-diversified management investment company, and all required
action has been taken by the Company under
-19-
the Acts and the Rules and Regulations
in connection with the issuance and sale of the Securities to make the public
offering and consummate the sale of the Securities as contemplated by this
Agreement; the provisions of the Charter and the Bylaws of the Company comply as to
form in all material respects with the requirements of the 1940 Act and the 1940
Act Rules and Regulations; and the Company has not received any notice from the
Commission pursuant to Section 8(e) of the 1940 Act with respect to the 1940 Act
Notification or the Registration Statement;
(iii) This Agreement has been delivered by the Company and complies with the
provisions of the 1940 Act and the 1940 Act Rules and Regulations applicable to the
Company;
(iv) Each of the Company Agreements complies in all material respects with all
applicable provisions of the 1940 Act, the Advisers Act, the 1940 Act Rules and
Regulations, and the Advisers Act Rules and Regulations; and each of the Company
Agreements constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as rights to
indemnity and contribution may be limited by federal or state securities laws or
principles of public policy and subject to the qualification that the
enforceability of the Company’s obligations thereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors’ rights generally and by general equitable
principles, regardless whether enforcement is considered in a proceeding in equity
or at law;
(v) Neither the issuance and sale of the Securities, the execution, delivery
or performance of this Agreement or any of the Company Agreements by the Company,
nor the consummation by the Company of the transactions herein or therein
contemplated (i) to the knowledge of such counsel, conflicts or will conflict with
or constitutes or will constitute a material breach of or a default under, any
agreement, indenture, lease or other instrument to which the Company is a party or
by which it or any of its properties may be bound, in each case, as such agreement,
indenture, lease or other instrument has been amended through the Closing Date and
which has been filed as an exhibit to the Registration Statement, or (ii) violates
or will violate any material statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any of its properties or
(iii) to the knowledge of such counsel, will result in the creation or imposition
of any material lien, charge or encumbrance upon any property or assets of the
Company pursuant to the terms of any agreement or instrument to which it is a party
or by which it may be bound or to which any of the property or assets of the
Company is subject;
(vi) To such counsel’s knowledge, there is no pending or threatened action,
suit or proceeding by or before any court or
-20-
governmental agency, authority or body
or any arbitrator involving the Company or its property of a character required to
be disclosed in the Registration Statement which is not adequately disclosed in the
Disclosure Package and the Final Prospectus, and there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or Final Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required by the Acts or the
Rules and Regulations; and the statements included in the Final Prospectus under
the captions “Tax Matters” insofar as they purport to constitute summaries of legal
matters, agreements, documents or proceedings discussed therein, accurately and
fairly summarize such legal matters, agreements, documents or proceedings described
therein in all material respects;
(vii) No consent, approval, authorization, filing with or order of any federal
or California governmental agency or body or supervisory authority, or to our
knowledge, any California or United States federal court, is required in connection
with the transactions contemplated in this Agreement or the Company Agreements,
other than (a) those that have been made or obtained under the Acts, (b) those
under state securities or blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Final Prospectus (as to which such
counsel expresses no opinion) and (c) such other approvals (specified herein) as
have been obtained;
(viii) Except as set forth in the Final Prospectus, no options, warrants or
other rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding;
(ix) No holders of securities of the Company have rights to the registration
of such securities under the Registration Statement; and
(x) The Registration Statement has become effective under the 1933 Act (which
opinion is based solely on telephonic advice received by such counsel from the
Commission); any required filing of the Final Prospectus, and any supplements
thereto, pursuant to Rule 497 have been made in the manner and within the time
period required by Rule 497; to our knowledge, based solely on telephonic advice
received by such counsel from the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued, no proceedings for
that purpose have been instituted or threatened and the Registration Statement, the
Disclosure Package and the Final Prospectus (other than the financial statements
and other financial and statistical information contained
therein, as to which such counsel express no opinion) appear on their face
-21-
to
comply as to form in all material respects with the applicable requirements of the
Acts and the Rules and Regulations.
Such counsel shall also state that, although such counsel has not independently verified and
is not passing upon and does not assume responsibility, explicitly or implicitly, for the accuracy,
completeness or fairness of the statements contained in the Registration Statement, the Disclosure
Package or the Final Prospectus (except as to the extent expressly stated in the opinion of such
counsel), such counsel has no reason to believe (i) that on the Effective Date or the date the
Registration Statement was last deemed amended the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) that the Final Prospectus as of its
date and on the Closing Date included or includes any untrue statement of a material fact or
omitted or omits 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, or (iii) that the Disclosure
Package as of the Time of Sale included any untrue statement of a material fact or omitted or omits
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 (in each case, other than the financial
statements and other financial information contained therein, as to which such counsel need express
no opinion).
In rendering such opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the State of California or the Federal laws of the United
States, to the extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are satisfactory to counsel for
the Underwriters (which shall include as to matters involving the laws of the State of Maryland the
opinion of ▇▇▇▇▇▇▇ LLP referred to in paragraph (c) of this Section 7) and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of the Company and
public officials and, where appropriate, a review of the Registration Statement, the Disclosure
Package, the Final Prospectus, the Charter and Bylaws. References to the Final Prospectus and the
Disclosure Package in this paragraph (b) shall also include any supplements thereto at the Closing
Date.
(c) You shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇ LLP, special
Maryland counsel to the Company, dated the Closing Date and addressed to you, as
Underwriters, substantially to the effect that:
(i) The Company is a corporation duly incorporated and existing under and by
virtue of the laws of the State of Maryland and is in good standing with the State
Department of Assessments and Taxation of Maryland;
(ii) The Company has the corporate power to own its properties and assets and
to conduct its business as a closed-end investment company;
-22-
(iii) The Company has the number of authorized shares of capital stock as set
forth in the Final Prospectus under the captions “Capitalization” and “Description
of Capital Stock — Capital Stock”;
(iv) The authorized stock of the Company conforms in all material respects as
to legal matters to the description thereof contained in the Final Prospectus under
the caption “Description of Capital Stock”;
(v) The shares of Common Stock issued and outstanding as of the date hereof
have been duly authorized and are validly issued, fully paid and nonassessable;
(vi) The sale and issuance of the Securities have been duly authorized and,
when issued and delivered to and paid for by the Underwriters in accordance with
this Agreement and the Resolutions, the Securities will be validly issued, fully
paid and nonassessable;
(vii) The Securities conform as to legal matters in all material respects to
the statements concerning them contained in the Disclosure Package and in the Final
Prospectus under the headings “Description of Capital Stock” and “Description of
Mandatory Redeemable Preferred Shares”;
(viii) There are no restrictions upon the transfer of any of the Securities
pursuant to the Company’s Charter or Bylaws;
(ix) The form of certificate representing shares of the Preferred Stock
complies in all material respects with the applicable statutory requirements of the
Maryland General Corporation Law (the “MGCL”) and with any applicable requirements
of the Charter and the Bylaws;
(x) The Securities are not subject to preemptive or other similar rights under
the MGCL, the Charter or the Bylaws;
(xi) The Company has corporate power to execute and deliver this Agreement and
the Company Agreements and perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the Company Agreements by the
Company have been duly authorized by all necessary corporate action of the Company.
Each of this Agreement and the Company Agreements have been duly executed and, so
far as is known to such counsel, delivered by the Company;
(xii) The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not conflict
with or constitute a breach of the Charter or the Bylaws, or any Maryland law
or regulation, or, so far as is known to such counsel, any order of any Maryland
governmental authority (other than any law, regulation or order
-23-
in connection with
the securities laws of the State of Maryland, as to which such counsel need not
express an opinion); and
(xiii) The statements in the Final Prospectus under the caption “Description
of Capital Stock” and “Risk Factors — Risks Related to Our Business and Structure
— Anti-Takeover Provisions,” insofar as such statements purport to summarize
certain provisions of Maryland law or the Charter or the Bylaws, constitute a fair
summary of such provisions and are accurate in all material respects.
In rendering such opinion, ▇▇▇▇▇▇▇ LLP may rely, as to matters of fact, upon the
representations and warranties made by the Company and the Adviser herein and on certificates and
written statements of officers and employees of and accountants for the Company and the Adviser and
of public officials. Except as otherwise specifically provided herein, when giving their opinions
to their “knowledge”, ▇▇▇▇▇▇▇ LLP has relied solely upon an inquiry of the attorneys of that firm
who have worked on matters for the Company, on certificates or written statements of officers of
the Company and, where appropriate, a review of the Registration Statement, the Disclosure Package,
the Final Prospectus, exhibits to the Registration Statement, the Charter and Bylaws.
(d) You shall have received on the Closing Date an opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Esq., General Counsel for the Adviser, dated the Closing Date and addressed to you, as
Underwriters, substantially to the effect that:
(i) The Adviser has been duly organized and is validly existing as a limited
liability company in good standing under the laws of the State of Delaware, with
limited liability company power and authority to own, lease and operate its
properties or assets and to conduct its business as described in the Registration
Statement, the Disclosure Package and in the Final Prospectus, and is duly
qualified to do business as a foreign limited liability company and is in good
standing under the laws of each jurisdiction which requires such qualification;
(ii) The Adviser is duly registered as an investment adviser under the
Advisers Act, and is not prohibited by the Advisers Act, the rules and regulations
promulgated by the commission under the Advisers Act Rules and Regulations, the
1940 Act, or the 1940 Act Rules and Regulations from acting under the Advisory
Agreement as contemplated by the Final Prospectus;
(iii) The Adviser has full limited liability company power and authority to
enter into this Agreement and the Advisory Agreement; and this Agreement and the
assignment to the Advisory Agreement to the Adviser have been duly authorized,
executed and delivered by the
Adviser; this Agreement and the Advisory Agreement are each a valid and
legally binding agreement of the Adviser, enforceable against the Adviser in
accordance with its terms except as rights to indemnity and contribution
-24-
hereunder
and thereunder may be limited by federal or state securities laws or principles of
public policy and subject to the qualification that the enforceability of the
Adviser’s obligations thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to or
affecting creditors’ rights generally and by general equitable principles whether
enforcement is considered in a proceeding in equity or at law;
(iv) To the knowledge of such counsel, this Agreement and the Advisory
Agreement comply in all material respects with all applicable provisions of the
Acts, the Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations;
(v) Neither the issuance and sale of the Securities, the execution or delivery
of this Agreement or the assignment of the Advisory Agreement, the performance of
this Agreement or the Advisory Agreement, nor the consummation by the Adviser of
the transactions contemplated thereby (a) conflicts or will conflict with or
constitutes or will constitute a breach of or default under the certificate of
formation or limited liability company agreement, or other organizational
documents, of the Adviser, (b) conflicts or will conflict with, or constitutes or
will constitute a breach of or default under any agreement, indenture, lease or
other instrument to which the Adviser is a party or by which it or any of its
properties may be bound or (c) to such counsel’s knowledge, violates or will
violate any statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Adviser or any of its properties or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Adviser pursuant to the terms of any agreement or instrument to which
it is a party or by which it may be bound or to which any of the property or assets
of the Adviser are subject, except in the case of clauses (a) and (b), such
conflicts, breaches and violations that in the aggregate would not reasonably be
expected to have a Material Adverse Effect;
(vi) To the knowledge of such counsel, the description of the Adviser and its
business in the Final Prospectus complies in all material respects with all
requirements of the Acts and the Rules and Regulations;
(vii) To the knowledge of such counsel, there is no pending or threatened
action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Adviser or its property of a character
required to be disclosed in the Registration Statement which is not adequately
disclosed in the Disclosure Package and the Final Prospectus, and there are no
agreements, contracts, indentures, leases or other instruments that are required to
be described in
the Registration Statement, the Disclosure Package or the Final Prospectus, or
to be filed as an exhibit thereto, which is not described or filed as required by
the Acts or the Rules and Regulations;
-25-
(viii) To the knowledge of such counsel, no consent, approval, authorization,
filing with or order of any court or governmental agency or body or supervisory
authority is required in connection with the transactions contemplated in this
Agreement or in the Advisory Agreement, other than (a) those that have been made or
obtained under the Acts, (b) those with FINRA and (c) those under state securities
or blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner contemplated in
this Agreement and in the Final Prospectus (as to which such counsel need not
express an opinion); and
Such counsel shall also state that, although such counsel has not independently verified and
is not passing upon and does not assume responsibility, explicitly or implicitly, for the accuracy,
completeness or fairness of the statements contained in the Final Prospectus (except as to the
extent expressly stated in the opinion of such counsel), such counsel has no reason to believe
that (a) on the Effective Date or the date the Registration Statement was last deemed amended the
Registration Statement contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements therein not
misleading, (b) the Final Prospectus as of its date and on the Closing Date included or includes
any untrue statement of a material fact or omitted or omits 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, or (c) the Disclosure Package as of the Time of Sale included any untrue statement
of a material fact or omitted 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 (in each
case, other than the financial statements and other financial and statistical information contained
therein or omitted therefrom, as to which such counsel need express no opinion).
In rendering such opinion, such counsel (A) may state that he expresses no opinion as to the
laws of any jurisdiction other than the laws of the State of California and the Delaware Limited
Liability Company Act and the federal laws of the United States of America, (B) may rely, as to
matters of fact, upon the representations and warranties made by the Company and the Adviser herein
and on certificates and written statements of officers and employees of and accountants for the
Company and the Adviser and of public officials, and (C) may state that he is a member of the Bar
of the State of California.
(e) The Underwriters shall have received on the Closing Date an opinion of Sidley
Austin llp, counsel for the Underwriters, dated the Closing Date and addressed
to the Underwriters, with respect to the issuance and sale of the Securities, the
Registration Statement, the Disclosure Package, the Final Prospectus (together with any
supplement thereto) and other related matters as
the Underwriters may reasonably require. In rendering such opinion, Sidley Austin
llp (A) may state that they express no opinion as to the laws of any
jurisdiction other than the laws of the State of New York, the laws of the State of
Maryland and the federal laws of the United States of America, (B) may
-26-
rely as to
matters involving the laws of the State of Maryland upon the opinion of ▇▇▇▇▇▇▇ LLP
referred to in paragraph (c) of this Section 7 and (C) may rely, as to matters of fact,
upon the representations and warranties made by the Company and the Adviser herein and
in certificates and written statements of officers and employees of and accountants for
the Company and the Adviser and of public officials. Except as otherwise specifically
provided herein, when giving their opinions to their “knowledge”, Sidley Austin
llp has relied solely upon (i) an inquiry of the attorneys of that firm who
have worked on matters involving the issuance of the Securities as contemplated by this
Agreement or otherwise devoted substantive attention to matters involving the Company,
(ii) certificates or written statements of officers of the Company and the Adviser,
(iii) where appropriate, a review of the Registration Statement, the Disclosure
Package, the Final Prospectus, exhibits to the Registration Statement, the Charter and
Bylaws and (iv) a review of the minute books of the Company and have made no other
investigation or inquiry.
(f) Each of the Company and the Adviser shall have furnished to the Underwriters a
certificate, signed by the Chief Executive Officer and the principal financial or
accounting officer of each of the Company and by the manager of the Adviser, as the
case may be, dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Disclosure Package, the Final
Prospectus, any supplements or amendments to the Final Prospectus and this Agreement
and that:
(i) The representations and warranties of the Company and the Adviser in this
Agreement are true and correct as of the date hereof, as of the Time of Sale and on
and as of the Closing Date with the same effect as if made on the Closing Date and
the Company and the Adviser have complied with all the agreements and satisfied all
the conditions on its part that are respectively required to be performed or
satisfied by them at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted by the
Commission or, to the knowledge of the Company or the Adviser, threatened by the
Commission; and
(iii) Since the date of the most recent financial statements included or
incorporated in the Final Prospectus (with respect to the certificate of the
Company) and since the date of the Final Prospectus (with respect to the
certificate of the Adviser), there has been no Material Adverse Effect.
(g) The Company shall have requested and caused PricewaterhouseCoopers LLP to have
furnished to the Underwriters, at the Execution Time and at the Closing Date, letters,
dated respectively as of the
-27-
Execution Time and as of the Closing Date, in form and
substance heretofore approved by the Underwriters.
(h) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Registration Statement (exclusive of any amendment
thereof), the Disclosure Package (exclusive of any supplement thereto) and the Final
Prospectus (exclusive of any supplement thereto), there shall not have been (i) any
material change specified in the letter or letters referred to in paragraph (g) of this
Section 7 delivered on the Closing Date from the letter delivered at the Execution Time
or (ii) any change in the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and the Adviser, whether or not arising from
transactions in the ordinary course of business except as set forth in or contemplated
in the Disclosure Package and the Final Prospectus (exclusive of any supplement
thereto), the effect of which, in any case referred to in clause (i) or (ii) above, is,
in the sole judgment of the Underwriters, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any amendment thereof), the
Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).
(i) The Company shall have made an application to list the Securities on the NYSE,
and satisfactory evidence of such actions shall have been provided to the Underwriters.
(j) The Company shall have furnished to the Underwriters a report showing
compliance with the asset coverage requirements of the 1940 Act and the Series E MRP
Shares Asset Coverage (as defined in the Registration Statement), dated the Closing
Date and in form and substance satisfactory to the Underwriters. Such report shall
assume the receipt of the net proceeds from the sale of the Securities and may use
portfolio holdings and valuations as of the close of business of any day not more than
six business days preceding the Closing Date, provided, however, that the Company
represents in such report that its total net assets as of the Closing Date have not
declined by 5% or more from such valuation date.
(k) On or prior to the Closing Date, the Underwriters shall have received lock-up
agreements substantially in the form of Exhibit A hereto (the “Lock-up
Agreements”) from (i) the Company’s directors listed on Schedule II hereof,
(ii) certain officers of the Adviser and KACALP (including all of the officers of the
Company) listed on Schedule II hereof.
(l) Prior to the Closing Date, the Company and the Adviser shall have furnished to
the Underwriters such further information, certificates and documents as the
Underwriters may reasonably request.
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(m) Subsequent to the Execution Time, there shall not have been any decrease in
the rating of any of the Company’s securities by any “nationally recognized statistical
rating organization” (as defined in Section 3(a)(62) of the Exchange Act) or any notice
given of any intended or potential decrease in any such rating or of a possible change
in any such rating that does not indicate the direction of the possible change.
If any of the conditions specified in this Section 7 shall not have been fulfilled when and as
provided for in this Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the
Underwriters and counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the
Underwriters (unless any such conditions have been waived in writing by the Underwriters on or
prior to such respective dates). Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 7 shall be delivered at the office of
Sidley Austin llp, counsel for the Underwriters, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., on the Closing Date.
8. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because of any termination pursuant to Section 11
hereof or because of any refusal, inability or failure on the part of the Company or the Adviser to
perform any agreement herein or comply with any provision hereof other than by reason of a default
by the Underwriters, the Company will reimburse the Underwriters severally through ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated on demand for all out-of-pocket expenses (including reasonable
and documented fees and disbursements of counsel) that shall have been incurred by the Underwriters
in connection with the proposed purchase and sale of the Securities.
9. Indemnification and Contribution.
(a) The Company, KACALP and the Adviser, jointly and severally, agree to indemnify
and hold harmless each Underwriter, the directors, officers, employees and agents of
each Underwriter, each person who controls any Underwriter within the meaning of either
the 1933 Act or the Exchange Act and any “affiliate” (within the meaning of Rule 405
under the ▇▇▇▇ ▇▇▇) of any such Underwriter that sells Securities on behalf of such
Underwriter against any and all losses, claims, damages or liabilities, joint or
several (including reasonable costs of investigation), to which they or any of them may
become subject under the 1933 Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the Securities as
-29-
originally filed or in
any amendment thereof (and including any post-effective amendment and any Rule 462(b)
Registration Statement), or in the Base Prospectus, the Final Prospectus, any
Preliminary Final Prospectus, or the Disclosure Package (or any amendment or supplement
to any of the foregoing), or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading,
and subject to the provisions hereof, agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company, KACALP and the Adviser will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company, KACALP and the Adviser by or on behalf of any
Underwriter specifically for inclusion therein, it being understood that the only
information furnished by or on behalf of any Underwriter consists of the information
described as such in the last sentence of Section 9(b). This indemnity agreement will
be in addition to any liability which the Company, KACALP and the Adviser may otherwise
have to the indemnified parties to the indemnified parties.
(b) Each Underwriter, severally and not jointly, agrees to indemnify and hold
harmless each of the Company, KACALP and the Adviser, each of its directors, each of
its officers who signs the Registration Statement, and each person who controls the
Company, KACALP or the Adviser within the meaning of either the 1933 Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company, KACALP
and the Adviser to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Company, KACALP or the Adviser by or on
behalf of such Underwriter specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have to the Company, KACALP and the Adviser. The
Company, KACALP and the Adviser acknowledge that the statements set forth in the last
paragraph of the cover page regarding delivery of the Securities and, under the heading
“Underwriting”, (i) the list of Underwriters and their respective participation in the
sale of the Securities, (ii) the sentences related to concessions and reallowances, and
(iii) the paragraphs related to stabilization, syndicate covering transactions and
penalty bids, in any Preliminary Final Prospectus and the Final Prospectus constitute
the only information furnished in writing
by or on behalf of the several Underwriters for inclusion in any Preliminary Final
Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 9 of notice
of the commencement of any action, such indemnified party will, if a
-30-
claim in respect
thereof is to be made against the indemnifying party under this Section 9, notify the
indemnifying party in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve the indemnifying party from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The indemnifying
party shall be entitled to appoint counsel of the indemnifying party’s choice at the
indemnifying party’s expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below) and to control such action;
provided, however, that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall bear the
reasonable and documented fees, costs and expenses of such separate counsel if (A) the
use of counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (B) the actual or potential
defendants in, or targets of, any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, (C) the
indemnifying party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time after
notice of the institution of such action or (D) the indemnifying party shall authorize
the indemnified party to employ separate counsel at the expense of the indemnifying
party.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this
Section 9 is unavailable to or insufficient to hold harmless an indemnified party for
any reason, the Company, KACALP, the Adviser and the Underwriters severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending same)
(collectively “Losses”) to which the Company, KACALP, the Adviser and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company, KACALP and the Adviser, on the
one hand (treated jointly for this purpose as one person), and by the
Underwriters, on the other, from the offering of the Securities; provided, however,
that in no case shall any Underwriter (except as may be provided in any agreement among
Underwriters relating to the offer of the Securities) be responsible for any amount in
excess of the underwriting discount or
-31-
commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company, KACALP, the Adviser and
the Underwriters severally shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the Company,
KACALP and the Adviser, on the one hand (treated jointly for this purpose as one
person), and of the Underwriters, on the other, in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company, KACALP, and the Adviser (treated
jointly for this purpose as one person) shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by it, and benefits
received by the Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of the Final
Prospectus. Relative fault of the parties shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
provided by the Company, KACALP and the Adviser, on the one hand (treated jointly for
this purpose as one person), or the Underwriters, on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company, KACALP, the Adviser and the
Underwriters agree that it would not be just and equitable if contribution pursuant to
this Section 9 were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each person who controls an
Underwriter within the meaning of either the 1933 Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person who controls the Company, KACALP or
the Adviser within the meaning of either the 1933 Act or the Exchange Act, each officer
of the Company, KACALP and the Adviser who shall have signed the Registration Statement
and each director of the Company, KACALP and the Adviser shall have the same rights to
contribution as the Company, KACALP and the Adviser, subject in each case to the
applicable terms and conditions of this paragraph (d). The Underwriters’ obligations to
contribute pursuant to this Section 9 are several in proportion to the respective
number of Securities set
forth opposite their names in Schedule I hereof (or such numbers of
Securities increased as set forth in Section 10 hereof) and not joint.
(e) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by
-32-
such indemnified party, unless such
settlement (i) includes an unconditional release of such indemnified party from all
liability from claimants on claims that are the subject matter of such action, suit or
proceeding 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. Subject to
the following sentence, an indemnifying party shall not be liable to an indemnified
party under this Section 9 for any settlement of any claim or action effected without
the prior written consent of such indemnifying party, which shall not be unreasonably
withheld. 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 this Section 9 effected without its written consent if (A) such
settlement is entered into more than 45 days after receipt by such indemnifying party
of the aforesaid request, (B) 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 (C) such indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(f) Any losses, claims, damages, liabilities or expenses for which an indemnified
party is entitled to indemnification or contribution under this Section 9 shall be paid
by the indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred. The indemnity and contribution agreements
contained in this Section 9 and the representations and warranties of the Company,
KACALP and the Adviser set forth in this Agreement shall remain operative and in full
force and effect, regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Company, KACALP, the Adviser
or their shareholders, trustees, directors, managers, members or officers or any person
controlling the Company, KACALP or the Adviser (control to be determined within the
meaning of the 1933 Act or the Exchange Act), (ii) acceptance of any Securities and
payment therefor hereunder and (iii) any termination or cancellation of this Agreement.
A successor to any Underwriter or to the Company, KACALP, the Adviser or their
shareholders, trustees, directors, managers, members or officers or any person
controlling any Underwriter, the Company, KACALP or the Adviser shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements contained in
this Section 9.
10. Default by an Underwriter. If any one or more Underwriters shall fail to purchase
and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be obligated severally to
take up and pay for (in the respective proportions which the number of Securities set forth
opposite their names in Schedule I hereto bears to the aggregate number of Securities set
forth opposite the names of all the remaining Underwriters or in such other proportion as ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated may specify in accordance with the Merrill
-33-
Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated Master Agreement Among Underwriters) the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in
the event that the aggregate number of Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate number of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter, the Company or the Adviser. In the event of a default by any
Underwriter as set forth in this Section 10, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Underwriters shall determine in order that the required
changes in the Final Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder. The
term “Underwriter” as used in this Agreement includes, for all purposes of this Agreement, any
party not listed in Schedule I hereto who, with your approval and the approval of the
Company, purchases Securities which a defaulting Underwriter agreed, but failed or refused, to
purchase.
11. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Underwriters, without liability on the part of the Underwriters to the Company or
the Adviser, by notice given to the Company or the Adviser prior to delivery of and payment for the
Securities, if at any time prior to such time (i) there has been, since the Execution Time, or
since the respective dates as of which information is given in the Disclosure Package and the Final
Prospectus, any material adverse change in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company or the Adviser, whether or not arising in the
ordinary course of business, (ii) trading in the Company’s Common Stock or in any of its
affiliates’ (within the meaning of Rule 405 under the ▇▇▇▇ ▇▇▇) common stock (including for this
purpose ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Energy Development Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Energy Total Return Fund, Inc.
and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Midstream/Energy Fund, Inc.) shall have been suspended by the Commission or the
NYSE or trading in securities generally on the NYSE shall have been suspended or limited or minimum
prices shall have been established on the NYSE, (iii) a banking moratorium shall have been declared
either by federal or New York State authorities, (iv) a material disruption has occurred in
securities settlement or securities clearance in the United States, or (v) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United States of a national
emergency or war, or other calamity or crisis the effect of which on financial markets is such as
to make it, in the sole judgment of the Underwriters, impractical or inadvisable to proceed with
the offering or delivery of the Securities as contemplated by the Preliminary Final Prospectus or
the Final Prospectus (exclusive of any supplement thereto).
12. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of each of the Company, KACALP and
the Adviser or its officers and of the Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company, KACALP or the Adviser or any of the officers, trustees, directors,
employees, agents or controlling persons referred to in Section 9
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hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 8 and 9 hereof shall survive the
termination or cancellation of this Agreement.
13. No Fiduciary Duty. The Company hereby acknowledges and agrees that (a) the
purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial
transaction between the Company, on the one hand, and the Underwriters and any affiliate through
which it may be acting, on the other, (b) the Underwriters are acting as principal and not as an
agent or fiduciary of the Company and (c) the Company’s engagement of the Underwriters in
connection with the offering and the process leading up to the offering is as independent
contractors and not in any other capacity. Furthermore, the Company agrees that it is solely
responsible for making its own judgments in connection with the offering (irrespective of whether
any of the Underwriters has advised or is currently advising the Company on related or other
matters). The Company agrees that it will not claim that the Underwriters have rendered advisory
services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in
connection with such transaction or the process leading thereto.
14. Integration. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company, the Adviser and the Underwriters, or any of them,
with respect to the subject matter hereof.
15. Notices. All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Underwriters will be mailed, delivered or telefaxed to ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
High Grade Transaction Management/Legal (fax no.: ▇▇▇-▇▇▇-▇▇▇▇); or, if sent to the Company, KACALP
or the Adviser, will be mailed, delivered or telefaxed to KA Fund Advisors, LLC General Counsel
(fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to it at c/o KA Fund Advisors, LLC, 1800 Avenue of the
Stars, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
16. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, trustees, directors, employees,
agents and controlling persons referred to in Section 9 hereof, and no other person will have any
right or obligation hereunder.
17. Applicable Law; Waiver of Jury Trial. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to contracts made and to
be performed within the State of New York. The parties hereby waive any right to trial by jury in
any action, proceeding or counterclaim arising out of or relating to this Agreement or the
transactions contemplated hereby.
18. Counterparts. This Agreement may be signed in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute one and the same
agreement.
19. Headings. The section headings used herein are for convenience only and shall not
affect the construction hereof.
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20. Definitions. The terms which follow, when used in this Agreement, shall have the
meanings indicated.
“1933 Act” shall mean the Securities Act of 1933, as amended.
“1933 Act Rules and Regulations” shall mean the rules and regulations of the
Commission under the 1933 Act.
“1940 Act” shall mean the Investment Company Act of 1940, as amended.
“1940 Act Notification” shall mean a notification of registration of the Company as an
investment company under the 1940 Act on Form N-8A, as the 1940 Act Notification may be
amended from time to time.
“1940 Act Rules and Regulations” shall mean the rules and regulations of the
Commission under the 1940 Act.
“Acts” shall mean, collectively, the 1933 Act and the 1940 Act.
“Advisers Act” shall mean the Investment Advisers Act of 1940, as amended.
“Advisers Act Rules and Regulations” shall mean the rules and regulations of the
Commission under the Advisers Act.
“Base Prospectus” shall mean the base prospectus referred to in Section 1(a) above
contained in the Registration Statement.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday
or a day on which banking institutions or trust companies are authorized or obligated by
law to close in New York City.
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder.
“Commission” shall mean the Securities and Exchange Commission.
“Common Stock” shall mean the shares of stock of the Company, as defined in the
Charter.
“Disclosure Package” shall mean the Preliminary Final Prospectus, dated March 14,
2012, relating to the Securities together with the written information set forth in the
Oral Pricing Script attached hereto as Exhibit B.
“Effective Date” shall mean each date and time that the Registration Statement, any
post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement
became or become effective.
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“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Exchange Act Rules and Regulations” shall mean the rules and regulations of the
Commission under the Exchange Act.
“Execution Time” shall mean the date and time that this Agreement is executed and
delivered by the parties hereto.
“FCPA” means Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.
“Final Prospectus” shall mean the final prospectus and any amendment or supplement
thereto (including the Base Prospectus, the statement of additional information
incorporated by reference therein, and the final prospectus supplement thereto) relating to
the Securities that is first filed pursuant to Rule 497 after the Execution Time.
“FINRA” means the Financial Industry Regulatory Authority, Inc.
“NYSE” means the New York Stock Exchange, Inc.
“Preliminary Final Prospectus” shall mean any preliminary final prospectus (including
the Base Prospectus, the statement of additional information incorporated by reference
therein, and the preliminary final prospectus supplement thereto) referred to in Section
1(a) above and any preliminary final prospectus (including the Base Prospectus, the
statement of additional information incorporated by reference therein, and the preliminary
final prospectus supplement thereto) included in the Registration Statement at the
Effective Date.
“Registration Statement” shall mean the registration statement referred to in Section
1(a) above, including exhibits and financial statements and any final prospectus supplement
relating to the Securities that is filed with the Commission pursuant to Rule 497 and
deemed part of such registration statement pursuant to Rule 430B, as amended at the
Execution Time and, in the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration Statement, as the
case may be.
“Rule 158”, “Rule 405”, “Rule 415”, “Rule 430B”, “Rule 430A”, “Rule 462”, “Rule 497”
and “Rule 501(b)” refer to such rules under the 1933 Act.
“Rule 462(b) Registration Statement” shall mean a registration statement and any
amendments thereto filed pursuant to Rule 462(b) relating to the offering covered by the
registration statement referred to in Section 1(a) hereof.
“Rules and Regulations” shall mean, collectively, the 1933 Act Rules and Regulations
and the 1940 Act Rules and Regulations.
-37-
“Time of Sale” shall mean 3:55 PM, Eastern Standard Time, on March 14, 2012.
-38-
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company, the Adviser, KACALP and the several Underwriters.
| Very truly yours, | ||||||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ MLP INVESTMENT COMPANY | ||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||
| Title: Chief Executive Officer and President | ||||||
| KA FUND ADVISORS, LLC | ||||||
| By: | ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Capital Advisors,. L.P. | |||||
| its Manager | ||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||
| Title: Senior Managing Director | ||||||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ CAPITAL ADVISORS, L.P. | ||||||
| (Solely with respect to Section 2(b), Section 2(e), | ||||||
| Section 7(k), Section 9 and Section 12) | ||||||
| By: | ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Investment Management, Inc., | |||||
| its General Partner | ||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||
| Title: Senior Managing Director | ||||||
The foregoing Agreement is hereby confirmed and accepted as of the date first above written.
| ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ | ||
| INCORPORATED | ||
| /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Title: Managing Director | ||
| CITIGROUP GLOBAL MARKETS INC. | ||
| /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇. | ||
| Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇. | ||
| Title: Managing Director | ||
| ▇▇▇▇▇ FARGO SECURITIES, LLC | ||
| /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Title: Director |
For themselves and the other several Underwriters named in Schedule I to the foregoing
Agreement.
SCHEDULE I
| Number of | ||||
| Name of Underwriters | Securities | |||
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated |
1,600,000 | |||
Citigroup Global Markets Inc. |
1,600,000 | |||
▇▇▇▇▇ Fargo Securities, LLC |
1,600,000 | |||
Total |
4,800,000 | |||
SCHEDULE II
List of (i) directors of the Company, and (ii) certain officers of Adviser and KACALP (including
all of the officers of the Company, who will execute Lock-up Agreements.
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇.▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. Good
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇.▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. Good
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EXHIBIT A
Form of Lock-up Agreement
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ MLP Investment Company
Public Offering of Mandatory Redeemable Preferred Shares
Public Offering of Mandatory Redeemable Preferred Shares
March [•], 2012
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Citigroup Global Markets Inc.
▇▇▇▇▇ Fargo Securities, LLC
Incorporated
Citigroup Global Markets Inc.
▇▇▇▇▇ Fargo Securities, LLC
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed Underwriting
Agreement (the “Underwriting Agreement”), among ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ MLP Investment Company, a
Maryland corporation (the “Company”), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Capital Advisors, L.P., a California
limited partnership (“KACALP”) (solely with respect to Section 2(b), Section 2(e), Section
7(k), Section 9 and Section 12 thereof), KA Fund Advisors, LLC, a Delaware limited liability
company (the “Adviser”), and you as underwriters (the “Underwriters”), relating to an
underwritten public offering (the “Public Offering”) of Series E Mandatory Redeemable
Preferred Shares, par value $0.001 per share, with a liquidation preference of $25.00 per
share (the “Series E Preferred Stock”) of the Company.
In order to induce you to enter into the Underwriting Agreement, the undersigned will
not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
any preferred stock (as defined in the Company’s Charter) or any securities convertible
into, or exchangeable or exercisable for preferred stock, enter into a transaction that
would have the same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of ownership of Series E
Preferred Stock, whether any of these transactions are to be settled by delivery of Series E
Preferred Stock or other securities, in cash or otherwise, or publicly disclose the
intention to make any offer, sale, pledge or disposition, or to enter into any transaction,
swap, hedge or other arrangement, without, in each case, the prior written consent of each
of the Underwriters for a period of 30 days after the date of the Final Prospectus (as
defined in the Underwriting Agreement) (such period, the “Lock-Up Period”). The
Underwriters in their sole discretion may release any of the securities subject to lock-up
agreements at any time without notice. In the event that either (x)
Exhibit A-1
during the last 17 days of the Lock-Up Period, the Company issues an earnings release
or (y) prior to the expiration of the Lock-Up Period, the Company announces that the Company
will release earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions described above shall continue to apply until the
expiration of the 18-day period beginning on the date of the earnings release.
Notwithstanding the foregoing, the undersigned may transfer any shares of preferred
stock owned by him or her or any interest therein (i) for estate-planning purposes to (x) a
trust under which the distribution of the shares of preferred stock transferred thereto may
be made only to beneficiaries who are the undersigned, his or her spouse, his or her
parents, members of his or her immediate family or his or her lineal descendants
(collectively, “Permitted Family Members”), (y) a corporation the shareholders of which are
only the undersigned or Permitted Family Members or (z) a partnership the partners of which
are only the undersigned or Permitted Family Members or (ii) in case of the death of the
undersigned, by will or by the laws of intestate succession, to his or her executors,
administrators, testamentary trustees, legatees or beneficiaries (each such person to which
a transfer is permitted pursuant to clauses (i) and (ii) immediately above is hereinafter
referred to as a “Permitted Transferee”); provided, however, that in each such case, the
shares of preferred stock transferred shall be subject to all provisions of this agreement
as though the undersigned were still the holder of such shares of preferred stock; and
provided further, that the Permitted Transferee must execute and deliver to each of the
Underwriters an agreement stating that the Permitted Transferee is receiving and holding
such shares of preferred stock in the same manner as the person making the transfer.
Exhibit A-2
If for any reason the Underwriting Agreement shall be terminated prior to the
Closing Date (as defined in the Underwriting Agreement), the agreement set forth
above shall likewise automatically be terminated.
| Yours very truly, |
| Signature: _______________________ |
| Print Name: _____________________ |
EXHIBIT B
Oral Pricing Script
Issuer:
|
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ MLP Investment Company | |||
Securities Offered:
|
4,800,000 shares of Series E Mandatory Redeemable Preferred Shares, par value $0.001 per share, with a liquidation preference of $25.00 per share | |||
Pricing Date:
|
March 14, 2012 | |||
Settlement Date:
|
March 21, 2012; T + 5 | |||
Issue Price to Public:
|
$25.00 | |||
Dividend Rate:
|
4.25% per annum | |||
Commencement of Initial Dividend Period: |
March 21, 2012 | |||
Series E MRP Shares Asset Coverage: |
284% | |||
CUSIP
|
486606 502 | |||
Exhibit B-1