Exhibit A
---------
AGREEMENT AND DECLARATION OF TRUST
OF
RESTORATION OPPORTUNITIES FUND,
a Delaware Statutory Trust
Dated as of May 16, 2005
TABLE OF CONTENTS
Page
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SECTION 1. DEFINED TERMS..........................................................................................1
SECTION 2. FORMATION AND IDENTIFICATION...........................................................................6
2.1 Formation...........................................................................................6
2.2 Name and Place of Business..........................................................................6
2.3 Records of Shareholders.............................................................................6
2.4 Statutory Trust.....................................................................................7
SECTION 3. PURPOSE, NATURE OF BUSINESS AND POWERS.................................................................7
SECTION 4. TERM...................................................................................................8
SECTION 5. SHARES OF BENEFICIAL INTEREST..........................................................................8
5.1 Beneficial Interest.................................................................................8
5.2 Classes and Series..................................................................................8
5.3 Issuance of Shares..................................................................................9
5.4 Rights of Shareholders..............................................................................9
SECTION 6. REGISTERED OFFICE AND AGENT FOR SERVICE OF PROCESS....................................................10
SECTION 7. CAPITAL CONTRIBUTIONS.................................................................................10
7.1 Capital Contributions of Shareholders..............................................................10
7.2 Contribution of the Special Shareholder............................................................14
7.3 Withdrawal of Capital..............................................................................14
SECTION 8. DISTRIBUTIONS.........................................................................................14
8.1 Distributions......................................................................................14
SECTION 9. MANAGEMENT AND BOARD OF TRUSTEES......................................................................15
9.1 Management Generally...............................................................................15
9.2 Board of Trustees..................................................................................16
9.3 Expenses of the Company............................................................................19
9.4 Shareholders' Consent..............................................................................19
9.5 Exculpation........................................................................................19
9.6 Indemnification; No Duty of Investigation; Reliance on Experts.....................................20
9.7 Trustee Limited Liability..........................................................................21
9.8 Certain Other Activities...........................................................................22
SECTION 10. SHAREHOLDERS.........................................................................................22
10.1 Identity, Contributions and Common Share Commitments...............................................22
10.2 No Management Power or Liability...................................................................22
10.3 Amendments.........................................................................................23
10.4 Merger, Consolidation, Liquidation.................................................................24
10.5 Limitations........................................................................................24
10.6 Meetings...........................................................................................25
10.7 Action Without a Meeting...........................................................................25
10.8 Procedures.........................................................................................25
10.9 Voting.............................................................................................26
SECTION 11. ASSIGNMENTS OR TRANSFERS OF SHARES...................................................................28
11.1 Assignments or Transfers of Shares.................................................................28
SECTION 12. BOOKS, RECORDS AND REPORTS...........................................................................29
12.1 Books..............................................................................................29
12.2 Reports............................................................................................30
SECTION 13. VALUATION OF INTERESTS...............................................................................31
SECTION 14. BANK ACCOUNTS; CUSTODIAN.............................................................................31
14.1 Bank Accounts Generally............................................................................31
14.2 Custodian..........................................................................................31
SECTION 15. DISSOLUTION AND TERMINATION OF THE COMPANY...........................................................32
15.1 Dissolution Generally..............................................................................32
15.2 Continuation of Company............................................................................32
15.3 Events Causing Dissolution.........................................................................32
15.4 Distribution of Assets on Liquidation..............................................................32
15.5 Liquidation Statement..............................................................................33
15.6 Trustee's Liability Upon Dissolution or Removal....................................................33
SECTION 16. GENERAL PROVISIONS...................................................................................34
16.1 Notices and Distributions..........................................................................34
16.2 Survival of Rights.................................................................................34
16.3 Construction.......................................................................................34
16.4 Section Headings...................................................................................34
16.5 Agreement in Counterparts..........................................................................35
16.6 Governing Law......................................................................................35
16.7 Additional Documents...............................................................................35
16.8 Severability.......................................................................................35
16.9 Pronouns...........................................................................................35
16.10 Entire Agreement...................................................................................35
16.11 Arbitration........................................................................................36
16.12 Waiver of Partition................................................................................36
16.13 Filing.............................................................................................36
APPENDIX A Statement of Preferences of Series S Preferred Share................................................A-1
APPENDIX B Statement of Preferences of Series P Preferred Shares...............................................B-1
APPENDIX C Form of Notice of Transfer..........................................................................C-1
RESTORATION OPPORTUNITIES FUND,
a Delaware Statutory Trust
AGREEMENT AND DECLARATION OF TRUST
This Agreement and Declaration of Trust, made as of May 16,
2005 (this "Agreement"), by the undersigned; ---------
WITNESSETH:
WHEREAS, Restoration Opportunities Fund (the "Company") has
been formed to carry on the business of an investment fund as set forth more
particularly hereinafter; and
WHEREAS, the Company is authorized to issue an unlimited
number of its shares of beneficial interest in accordance with the provisions
hereinafter set forth; and
WHEREAS, the Trustees (as hereinafter defined) have agreed
to manage all property coming into their hands as trustees of a Delaware
statutory trust in accordance with the provisions hereinafter set forth; and
WHEREAS, the parties hereto intend that the Company created
by this Agreement and the Certificate of Trust filed with the Secretary of
State of the State of Delaware on April 12, 2005 shall constitute a statutory
trust under the Delaware Statutory Trust Act and that this Agreement shall
constitute the governing instrument of such statutory trust.
NOW, THEREFORE, the Trustees hereby declare that all money
and property contributed to the trust established hereunder shall be held and
managed under this Agreement for the benefit of the holders, from time to
time, of the shares of beneficial interest to be issued hereunder and subject
to the provisions set forth below.
Upon the terms and subject to the conditions described
below, the parties to this Agreement agree as follows:
SECTION 1.
DEFINED TERMS
The terms set forth below shall have the indicated meanings.
"Advisers Act" means the Investment Advisers Act of 1940 and
the rules and regulations promulgated thereunder and applicable exemptions
granted therefrom, as amended from time to time.
"Affiliated Person" has the meaning set forth in the
Investment Company Act.
"Aggregate Capital Contributions" means, with respect to any
Shareholder as of any date, the aggregate amount of all Capital Contributions
made by such Shareholder on or prior to such date.
"Agreement" means this Agreement and Declaration of Trust,
as originally executed and as amended from time to time.
"Assets" means all cash, Cash Equivalents, securities,
investments and other property and assets of any type of the Company.
"Base Rate" means, on any date, a variable rate per annum
equal to the rate of interest published from time to time by The Wall Street
Journal as the "prime rate" at large U.S. money center banks.
"Board of Trustees" means the board of trustees of the
Company.
"Business Day" means any day other than a Saturday, Sunday
or any other day on which the New York Stock Exchange is closed, or banks in
New York, New York or Los Angeles, California are required by law to be
closed. All references to Business Day herein shall be based on the time in
New York, New York.
"By-Laws" has the meaning set forth in Section 9.2(g).
"Capital Contribution" means a contribution to the Company
in cash by a Shareholder or by any predecessor holder of the Shares held by
such Shareholder.
"Cash Equivalents" has the meaning assigned to such term in
the relevant Statement of Preferences (or if the Statement of Preferences has
been terminated, those provisions in effect on the date of such termination).
"Certificate" means the Certificate of Trust of the Company,
filed with the Secretary of State on April 12, 2005, and any and all
amendments thereto and restatements thereof filed with the Secretary of State.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
"Common Share Commitment" means, when referring to a dollar
amount, an amount committed by a Common Shareholder or prospective Common
Shareholder for investment in the Common Shares of the Company pursuant to (a)
a Subscription Agreement and (b) an assumption by such Shareholder of any
Common Share Commitment of a Defaulting Shareholder pursuant to Section 7.1(d)
or of a transferring Shareholder.
"Common Shareholder" means a Person holding Common Shares of
the Company in accordance with the terms of this Agreement at the time of
reference thereto.
"Common Shares" means the common Shares of beneficial
interests of the Company having the rights and other terms set forth in this
Agreement.
"Company" means Restoration Opportunities Fund, a Delaware
statutory trust, as it may from time to time be constituted.
"Custodial Account" means one or more segregated trust
accounts maintained pursuant to the requirements of the Investment Company Act
and other applicable law to hold the Assets.
"Custodian" means an entity which maintains the Custodial
Account pursuant to the requirements of the Investment Company Act and other
applicable law.
"Defaulted Commitment" shall have the meaning assigned to
such term in Section 7.1(d)(v).
"Defaulting Shareholder" shall have the meaning assigned to
such term in Section 7.1(d).
"Delaware Statutory Trust Act" shall mean the Delaware
Statutory Trust Act, 12 Del. C. ss.3801, et. seq., as such act may be
amended from time to time.
"Disabling Conduct" shall have the meaning set forth in
Section 9.5.
"Disinterested Non-Party Trustees" shall have the meaning
set forth in Section 9.6.
"Drawdown Date" means each date that the Company draws down
Common Share Commitments.
"Fiscal Quarter" means a three calendar month period ending
March 31, June 30, September 30 or December 31 of a Fiscal Year.
"Fiscal Year" means the Company's fiscal year, which shall
end on each December 31 unless otherwise determined by the Board of Trustees.
"Incapacity" or "Incapacitated" means, as to any Person, the
bankruptcy, insolvency, death, disability, adjudication of incompetence or
insanity, dissolution or termination, as the case may be, of such Person.
"Indemnified Person" shall have the meaning assigned to such
term in Section 9.6.
"Independent Trustee" means a Trustee that is not an
Interested Person.
"Initial Drawdown Date" means the date on which the first
Capital Contributions in respect of the Common Share Commitments are made with
respect to the Common Shares.
"Interested Person" has the meaning given to such term in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940 and the rules and regulations promulgated thereunder and applicable
exemptions granted therefrom, as amended from time to time.
"Investment Management Agreement" means the Investment
Management Agreement between the Company and the Investment Manager, dated on
or about May 16, 2005, as such agreement may be amended, modified, revised or
restated, from time to time, in accordance with the terms hereof and thereof,
and any substantially similar agreement with a successor Investment Manager
permitted by the terms hereof.
"Investment Manager" means Highland Capital Management,
L.P., a Delaware limited partnership, in its capacity as investment manager to
the Company, and any successor thereto selected in accordance with the
Investment Company Act.
"Manager Affiliate" shall have the meaning set forth in
Section 9.8.
"Net Asset Value" means the value of the Assets less the
liabilities of the Company, calculated pursuant to Section 14 in accordance
with generally accepted accounting principles and in compliance with the
Investment Company Act.
"Offering Memorandum" means the Confidential Private
Offering Memorandum, dated May, 2005, relating to the Common Shares, as
amended or supplemented from time to time.
"Other Accounts" shall have the meaning set forth in Section
9.8.
"Person" means any human being, partnership, limited
liability company, corporation, trust or other entity.
"Preferred Shareholder" means a Shareholder holding
Preferred Shares of the Company.
"Preferred Shares" means the preferred Shares of beneficial
interests of the Company having the rights and other terms set forth in the
Statement of Preferences for the applicable series thereof, including without
limitation any Series S Preferred Shares and any Series P Preferred Shares.
"Secretary of State" means the Secretary of State of the
State of Delaware.
"Securities Act" means the Securities Act of 1933 and the
rules and regulations promulgated thereunder and applicable exemptions granted
therefrom, as amended from time to time.
"Shareholder" means any Person that is admitted as a Common
Shareholder, Preferred Shareholder or Special Shareholder of the Company in
accordance with the terms of this Agreement at the time of reference thereto.
"Shares" means the units of beneficial interest of the
Company which shall be divided from time to time and includes fractions of
Shares as well as whole Shares.
"Special Share" means the Series S Preferred Share provided
for pursuant to Section 7.2.
"Special Shareholder" means Highland Capital Management,
L.P., a Delaware limited partnership, in its capacity as the Special
Shareholder of the Company, or any successor thereto in accordance with this
Agreement.
"Statement of Preferences" means the statement of
preferences setting forth the rights and other terms of any Preferred Shares
issued by the Company.
"Subscription Agreement" means each subscription agreement
and any related supplemental subscription agreement executed by any existing
or prospective Shareholder relating to such Shareholder's investment in the
Company.
"Subsequent Drawdown Date" has the meaning assigned to such
term in Section 7.1(b).
"Substituted Shareholder" means any Person admitted as a
Shareholder pursuant to Section 11.2(b).
"Substituted Special Shareholder" means any Person admitted
as the Special Shareholder pursuant to Section 11.2(b).
"Transfer" or "Transferred" means, with respect to any legal
or beneficial interest in the Company, a direct or indirect sale, transfer,
assignment, gift, pledge, hypothecation or other disposition or encumbrance of
any nature of or on such interest, whether by operation of law or otherwise
(including a transfer as a result of a merger or consolidation involving a
Shareholder or a sale of all or substantially all of a Shareholder's assets).
"Transferee" means, with respect to any legal or beneficial
interest in the Company, the Person to whom the Transferor of such interest
desires to Transfer or has Transferred such interest.
"Transferor" means, with respect to any legal or beneficial
interest in the Company, the Shareholder or other Person desiring to Transfer
such interest.
"Trustee" means each trustee of the Company who at the time
in question has been duly elected or appointed and has qualified as a trustee
in accordance with the provision hereof and is then in office.
"Unfunded Commitment" means, with respect to any Common
Shareholder as of any date, the amount of such Common Shareholder's Common
Share Commitment minus such Common Shareholder's Aggregate Capital
Contributions previously made and not yet returned. For this purpose any
realized gains and other income shall be deducted from any distributions for
the purpose of determining whether a Capital Contribution has been made.
"Valuation Date" means any date selected by the Company
within 48 hours prior to each sale date determined therefore by the Investment
Manager or the Board of Trustees.
SECTION 2.
FORMATION AND IDENTIFICATION
2.1 Formation
The Company has been formed as a statutory trust pursuant to
the laws of the State of Delaware.
2.2 Name and Place of Business
The name of the Company shall be "Restoration Opportunities
Fund" or such other name or names as may be selected by the Investment Manager
from time to time with written notice given to the Shareholders of such
change. The principal office of the Company shall be at the principal place of
business of the Investment Manager at Two Galleria Tower, 00000 Xxxx Xxxx,
Xxxxx 0000, Xxxxxx, Xxxxx 00000, or other or additional places of business as
may be selected from time to time by the Company.
2.3 Records of Shareholders
The addresses and schedules of capital accounts and other
matters related to the Shareholders shall be those set forth in the Company
records. A Shareholder may change its address by written notice to the
Company, in care of the Investment Manager, at the address set forth in
Section 2.2.
2.4 Statutory Trust
The Company has been formed as a statutory trust under and
pursuant to the laws of the state of Delaware. The Board of Trustees and the
Shareholders specifically intend and agree that the Company shall, for purposes
of the Code and state tax laws, be classified as an association. No Shareholder
shall be construed to be a partner in the Company or a partner of any
Shareholder or other Person in the Company, and this Agreement and the
relationships created thereby and arising therefrom shall not be construed to
suggest otherwise.
SECTION 3.
PURPOSE, NATURE OF BUSINESS AND POWERS
(a) The purposes of the Company and the business to be carried on by
it, subject to the limitations contained elsewhere in this Agreement, are to
engage in any business lawful for a corporation or partnership formed under
the laws of the State of Delaware, including to act as an investment company.
(b) Subject to the limitations set forth in Section 2.4 and 3(a) of
this Agreement, the Company shall have the power to do any and all acts
necessary, appropriate, proper, advisable, incidental or convenient to or for
the furtherance of the purposes and business described herein and for the
protection and benefit of the Company, and shall have, without limitation, any
and all of the powers of a statutory trust organized under the laws of the
State of Delaware.
(c) Legal title to all the Assets shall be vested in the name of the
Company except that the Trustees shall have power to cause legal title to any
Assets to be held by or in the name of one or more of the Trustees, or in the
name of the Trustees as joint tenants, or in the name of any other Person as
nominee, custodian or pledgee, on such terms as the Trustees may determine,
provided that the interest of the Company therein is appropriately protected.
Any right, title and interest of the Trustees in the Assets
shall vest automatically in each person who may hereafter become a Trustee
upon his due election and qualification. Upon the ceasing of any person to be
a Trustee for any reason, such person shall automatically cease to have any
right, title or interest in any of the Assets, and any right, title and
interest of such Trustee in the Assets shall vest automatically in the
remaining Trustees. Any such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
(d) No purchaser, lender or other Person dealing with the Trustees or
any officer, employee or agent of the Trust or shall be bound to make any
inquiry concerning the validity of any transaction purporting to be made by
the Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security or undertaking of the
Company and every other act or thing whatsoever executed in connection with
the Company shall be conclusively presumed to have been executed or done by
the executors thereof only in their capacity as Trustees under this Agreement
or in their capacity as officers, employees or agents of the Company. Every
written obligation, contract, instrument, certificate, Share, other security
or undertaking of the Company may recite that the same is executed or made by
them not individually, but as Trustees under this Agreement, and that the
obligations of the Company under any such instrument are not binding upon any
of the Trustees or Shareholders individually, but bind only the Assets, and
may contain any further recital which they may deem appropriate, but the
omission of any such recital shall not operate to bind the Trustees or
Shareholders individually.
SECTION 4.
TERM
The existence of the Company commenced on the date the
Certificate was filed in the Office of the Secretary of State, and the Company
shall have perpetual existence unless terminated by a vote of at least a
majority of the outstanding Shares.
SECTION 5.
SHARES OF BENEFICIAL INTEREST
5.1 Beneficial Interest
The interest of the Shareholders in the Company hereunder
shall be divided into an unlimited number of shares of beneficial interest,
par value $.001 per share. All Shares issued in accordance with the terms
hereof, including, without limitation, Shares issued in connection with a
dividend in Shares or a split of Shares, shall be fully paid and nonassessable
when the consideration determined by the Company (if any) therefor shall have
been received by the Company.
5.2 Classes and Series
Upon the affirmative vote of at least a majority of the
outstanding Shares, the Trustees shall have the authority to classify and
reclassify issued and unissued Shares into one or more classes and one or more
series of any or all of such classes, each of which classes and series thereof
shall have such designations, powers, preferences, voting, conversion and
other rights, limitations, qualifications and terms and conditions as the
Trustees, upon the affirmative vote of at least a majority of the outstanding
Shares, shall determine from time to time with respect to each such class or
series; provided, however, that no reclassification of any issued and
outstanding Shares and no modifications of any of the designations, powers,
preferences, voting, conversion or other rights, limitations, qualifications
and terms and conditions of any issued and outstanding Shares may be made by
the Trustees without the affirmative vote of the Shares specified in Section
10.3 to the extent required thereby and the satisfaction of any conditions to
such reclassification as set forth in the applicable Statement of Preferences.
5.3 Issuance of Shares
Upon the affirmative vote of at least a majority of the
outstanding Shares, the Trustees shall have the authority to issue Shares of
any class or any series of any such class to such Person or Persons and for
such amount and type of consideration, including cash or property, at such
time or times, and on such terms as the Trustees, upon the affirmative vote of
at least a majority of the outstanding Shares, may determine, and may in such
manner acquire other assets (including the acquisition of assets subject to,
and in connection with the assumption of, liabilities) and businesses. The
Trustees may from time to time divide or combine the Shares of any class or
any series of any such class into a greater or lesser number without thereby
changing the proportionate beneficial interest in such Shares. Issuances and
repurchases of Shares may be made in whole Shares and/or fractions as the
Trustees may determine.
5.4 Rights of Shareholders
The Shares shall be personal property giving only the rights
in this Agreement specifically set forth. The ownership of the Assets of every
description is vested in the Trustees as set forth in Section 3(c). The right
to conduct and supervise the conduct of the business of the Company is vested
exclusively in the Trustees (subject to the right of the Board of Trustees to
delegate all or any part of authority to any person or group of persons,
including, without limitation, the Investment Manager), and the Shareholders
shall have no interest therein other than the beneficial interest conferred by
their Shares, and they shall have no right to call for any partition or
division of any property, profits, rights or interests of the Company nor can
they be called upon to share or assume any losses of the Company or suffer an
assessment of any kind by virtue of their ownership of Shares. No Shares of
any class or series shall entitle the holder to preference, preemptive,
appraisal, conversion or exchange rights (except as otherwise specified in
this Agreement or as specified by the Trustees in the designation or
redesignation of any such class or series).
SECTION 6.
REGISTERED OFFICE AND AGENT FOR SERVICE OF PROCESS
The Corporation Trust Company is hereby designated, subject
to change by the Investment Manager, as the registered office of the Company
and as the agent upon whom process issued by authority of or under any law of
the State of Delaware may be served.
SECTION 7.
CAPITAL CONTRIBUTIONS
7.1 Capital Contributions of Shareholders
(a) Each prospective initial Common Shareholder, to be admitted as a
Shareholder of the Company at the Initial Drawdown Date, must deliver to the
Investment Manager a completed, executed Subscription Agreement, which must be
satisfactory to the Investment Manager, and in which, among other things, such
prospective Common Shareholder represents that it is an "accredited investor"
as defined in Rule 501(a) under the Securities Act and a "qualified client"
within the meaning of Rule 205-3 of the Advisers Act. The minimum Common Share
Commitment to which a Common Shareholder may subscribe shall be $25,000;
provided, however, that the Investment Manager may, in its sole discretion,
waive this requirement. On the Initial Drawdown Date, each initial prospective
Common Shareholder shall contribute to the Company such proportion of its
Common Share Commitment as shall have been set forth in the notice therefor.
On the date of original issuance of each series of Preferred Shares, each
Person who is admitted as a Shareholder holding Preferred Shares of such
series in accordance with the applicable Statement of Preferences shall, in
connection therewith, contribute to the Company an amount in cash equal to the
purchase price for such Preferred Shares.
(b) Subsequent to the Initial Drawdown Date, the Company will draw
down Common Share Commitments on multiple Drawdown Dates (each, a "Subsequent
Drawdown Date"). On each Drawdown Date, the Company will issue Common Shares
at Net Asset Value per Common Share as calculated within 48 hours prior to the
date of the notice of call (exclusive of Sundays and holidays) in an aggregate
amount equal to the dollar amount of the Common Share Commitments drawn down
and paid for pursuant to such call.
(c) Unfunded Commitments may be called by the Company at any time on
not less than 15 days prior written notice to the Common Shareholders;
provided, however, that (i) all Capital Contributions for Common Shares shall
be on a pro rata basis in proportion to each Common Shareholder's respective
Unfunded Commitment and (ii) the aggregate amount of Capital Contributions
required on each Subsequent Drawdown Date shall be at least 10% of the
aggregate Common Share Commitments (or, with respect to the last Subsequent
Drawdown Date, any amount left undrawn).
(d) If any Common Shareholder fails to make full payment of any
portion of its Common Share Commitment or any other payment required hereunder
when due (a "Defaulting Shareholder"), the Company shall give such Defaulting
Shareholder written notice of its default in payment and in the event such
default shall continue beyond the tenth calendar day following such notice,
the Company may, in its sole discretion, take any one or more of the following
actions:
(i) The Company may assist the Defaulting Shareholder in finding
a buyer for the Defaulting Shareholder's Common Shares which buyer will
assume the Defaulting Shareholder's obligations hereunder, subject to the
restrictions on transfer contained in Section 11.1 (in which case such
Person shall, as a condition of purchasing such Common Shares, become a
party to this Agreement and assume such Defaulting Shareholder's
obligation to make both defaulted and future Capital Contributions).
(ii) The Investment Manager on behalf of the trust may pursue
and enforce all rights and remedies the Company may have against the
Defaulting Shareholder, including a lawsuit to collect the overdue
amount, with interest calculated thereon at a rate equal to the Base Rate
plus six percent (6%) per annum or, if greater, the annualized rate of
total return per Common Share over the prior four fiscal quarters (or
since commencement of operations if less than four fiscal quarters) (but
not in excess of the highest rate per annum permitted by applicable law).
(iii) The Company may offer a Defaulting Shareholder's Common
Shares to the Common Shareholders (other than any Defaulting
Shareholder), which offer shall be made pro rata in accordance with the
non-defaulting Shareholders' respective Common Share Commitments, at a
discount to the Net Asset Value of such Common Shares. The purchase price
for such Common Shares will be determined in the sole discretion of the
Investment Manager; provided, however, that such Defaulting Shareholder
shall receive not less than 66% of the most recently determined Net Asset
Value of such Common Shares. If a non-defaulting Shareholder elects not
to purchase all of the Common Shares offered to it, such unpurchased
Common Shares shall be reoffered pro rata to the non-defaulting
Shareholders who have purchased all of the Common Shares offered to them
until either all of such Common Shares are acquired or no non-defaulting
Shareholder wishes to make a further investment. At the closing of such
purchase (on a date and at a place designated by the Company), each
purchasing Shareholder shall, as payment in full for the Defaulting
Shareholder's Common Shares being purchased, (A) pay to such Defaulting
Shareholder cash in an amount equal to the purchase price of the portion
of the Defaulting Shareholder's Common Shares being purchased by such
Shareholder, and (B) assume the portion of the Defaulting Shareholder's
obligation to make both defaulted and future Capital Contributions and
other payments pursuant to its Common Share Commitment and this Agreement
which are commensurate with the portion of the Defaulting Shareholder's
Common Shares being purchased by such Shareholder. Upon the closing of
such purchase, each purchasing Shareholder shall make a Capital
Contribution in an aggregate amount equal to that portion of the assumed
Common Share Commitment representing the defaulted Common Share
Commitment of the Defaulting Shareholder, and the balance of the assumed
Common Share Commitment shall be added to such purchasing Shareholder's
Common Share Commitment for all purposes under this Agreement. The
Company shall specify the procedures for making and accepting the offers
contemplated by this subparagraph and shall, in its discretion, set time
limits for acceptance. All Capital Contributions made by the purchasing
Shareholders shall be "Capital Contributions" made under this Agreement
and Common Shares shall be issued to such Shareholders accordingly. If
all of the Defaulting Shareholder's Common Shares are not purchased
pursuant to the immediately preceding provisions, the Company may offer
any remaining Common Shares to any other Person on the same terms as
originally offered to the Shareholders pursuant to such provisions,
subject to the restrictions on transfer contained in Section 11.1 (in
which case such Person shall, as a condition of purchasing such Common
Shares, become a Shareholder party to this Agreement and assume such
Defaulting Shareholder's obligation to make both defaulted and future
Capital Contributions).
(iv) The Company may repurchase, retire and cancel such
Defaulting Shareholder's Common Shares at a discount to the Net Asset
Value of such Common Shares. The consideration to be paid to such
Defaulting Shareholder upon any repurchase, retirement or cancellation of
such Common Shares will be determined in the sole discretion of a
majority of the Independent Trustees; provided, however, that such
Defaulting Shareholder shall receive not less than 66% of the Net Asset
Value of such Common Shares.
(v) The Company may offer to the Common Shareholders (other than
such Defaulting Shareholder) for assumption by the non-defaulting
Shareholders such Defaulting Shareholder's Common Share Commitment to
make its Capital Contribution which was not made ("Defaulted
Commitment"), which offer shall be made pro rata in accordance with the
non-defaulting Shareholders' -------------------- respective Common
Shares. If a non-defaulting Shareholder elects not to assume the entire
portion of the Defaulted Commitment offered to it, such unassumed
Defaulted Commitment shall be reoffered pro rata to the non-defaulting
Shareholders who have elected to assume the entire portion of the
Defaulted Commitment offered to them until either all of such Defaulted
Commitment is assumed or no non-defaulting Shareholder wishes to make a
further assumption of the Defaulted Commitment. At the closing of such
offer (on a date and at a place designated by the Investment Manager),
each assuming Shareholder shall make a Capital Contribution in an amount
equal to that portion of the Defaulted Commitment assumed by it in
accordance with the provisions of this subparagraph which is then due or
past due. The Investment Manager shall specify the procedures for making
and accepting the offers contemplated by this subparagraph and shall, in
its discretion, set time limits for acceptance. If the entire Defaulted
Commitment is not assumed pursuant to the preceding provisions, the
Investment Manager may offer to any other Person for assumption any
remaining portion of the Defaulted Commitment, subject to the
restrictions on transfer contained in Section 11.1 (in which case such
third party or parties shall become a party to this Agreement). All
Capital Contributions made by the non-defaulting Shareholders and other
Persons pursuant to this subparagraph (v) shall be "Capital
Contributions" made under this Agreement, and the Common Shares of each
of such Shareholders and other Persons shall be adjusted accordingly.
Such Defaulting Shareholder's Common Share Commitment shall be reduced by
the aggregate amount of Defaulted Commitment assumed by the
non-defaulting Shareholders and such other Persons and for which payments
have been actually received by the Company.
(vi) The Company may reduce (effective on the date of the
default) the Defaulting Shareholder's Common Share Commitment (to the
extent it has not been assumed by another Shareholder or Person) to the
amount of Capital Contributions actually made by such Defaulting
Shareholder (net of distributions pursuant to Section 8.1), and the
aggregate Common Share Commitment of such Defaulting Shareholder shall be
commensurately reduced; provided, however, that the Common Share
Commitments of the non-defaulting Shareholders shall not be reduced.
(vii) If the Defaulting Shareholder is an entity formed for the
purpose of investing in the Company and such Defaulting Shareholder's
failure to make any portion of a Capital Contribution when required is
caused by the failure of one or more of such Defaulting Shareholder's
investors to either (i) make an equity contribution or (ii) deliver
payment in exchange for any notes issued to such investor, to such
Defaulting Shareholder, the Investment Manager may, in its sole
discretion, apply the provisions of this Section 7.1(d) to such
Defaulting Shareholder's Common Shares and/or Common Share Commitments on
a pro rata basis to appropriately reflect the effect of the failure of
such Defaulting Shareholder's defaulting equity investors in a manner
which is equitable to such Defaulting Shareholder's non-defaulting equity
investors.
(e) No consent of any Shareholder shall be required as a condition
precedent to any transfer, assignment, assumption or other disposition of a
Defaulting Shareholder's Common Shares or Common Share Commitment, as the case
may be, pursuant to Section 7.1(d). If all of the Defaulting Shareholder's
Common Shares and its Common Share Commitments are purchased in the manner set
forth in Section 7.1(d), such Defaulting Shareholder shall cease to be a
Common Shareholder in the Company and shall cease to have the power to
exercise any rights or powers of a Common Shareholder.
7.2 Contribution of the Special Shareholder
After the Board of Trustees determines it is permissible to
pay the Carried Interest as a dividend on a special share, the Special
Shareholder shall be entitled to acquire from the Company one Special Share in
exchange for its contribution of $1,000.00. The Special Share shall have the
designations, powers, preferences, voting and other rights, limitations,
qualifications and terms and conditions set forth in the Statement of
Preferences therefor attached hereto as Appendix A together with any changes
as shall be acceptable to the Board of Trustees and the Investment Manager.
7.3 Withdrawal of Capital
No Shareholder shall have any right to withdraw from the
Company except in connection with the admission of one or more Transferees of
all of such Shareholder's Shares in the Company. No Shareholder shall have any
right to require the Company to repurchase or redeem all or any portion of its
Shares except as provided in or pursuant to any Statement of Preferences or
agreement between such Shareholder and the Company.
SECTION 8.
DISTRIBUTIONS
8.1 Distributions
(a) The Company shall from time to time distribute among the Shares
(or one or more classes or series thereof) such portion of the net profits,
surplus (including paid-in surplus), capital, or assets held by the Company as
the Trustees may deem proper or as may otherwise be determined pursuant to
this Agreement or the Statement of Preferences therefor, which need not be
ratable with respect to distributions in respect of Shares of any other class
or series thereof of the Company, but must be ratable within each class or
series of Shares. The Preferred Shares shall not be entitled to receive, and
the Trustees shall be prohibited from declaring or distributing in respect of
any of the Preferred Shares, any amount in excess of the distributions
specified for such Preferred Shares in the applicable Statement of Preferences
therefor. Such distributions may be made in cash or property (including
without limitation any type of obligations of the Company or any assets
thereof) or any combination thereof.
(b) Distributions may be made to the holders of record of the Shares
entitled to such distribution at the time such distribution is declared or at
such later date as shall be determined by the Company prior to the date of
payment.
(c) The Trustees may always retain from any source such amount as
they may deem necessary to pay the debts or expenses of the Company, to redeem
Shares pursuant to the terms of this agreement, or to meet obligations of the
Company, or as they otherwise may deem desirable to use in the conduct of its
affairs or to retain for future requirements or extensions of the business of
the Company.
(d) Any distribution by the Company pursuant to the terms of this
Section 8.1 or Section 16 to the Person shown on the Company's records as a
Shareholder or to its legal representatives, or to the assignee of the right
to receive such distributions as provided herein, shall relieve the Company,
the Trustees and the Investment Manager of all liability to any other Person
who may be interested in such distribution by reason of any Transfer of any
interest in any of such Shareholder's Shares (including a Transfer thereof by
operation of law or by reason of death, incompetence, bankruptcy or
liquidation of such Shareholder, as the case may be).
(e) Notwithstanding any provision to the contrary contained in this
Agreement, neither the Company, the Trustees nor the Investment Manager on
behalf of the Company shall make any distribution to a Shareholder on account
of its Shares if such distribution would violate applicable law.
(f) Notwithstanding any other provision of this Agreement, the
Company may set aside reasonable reserves for anticipated liabilities,
obligations or commitments of the Company which it determines to be reasonably
necessary or desirable, in its sole judgment, including any amounts that are
contributed to the Company by the Investment Manager for such anticipated
expenses, provided that any amounts so contributed that are not used by the
Company to pay expenses of the Company will be distributed to the Investment
Manager upon the liquidation of the Company, subject to provisions of Section
16 hereof.
SECTION 9.
MANAGEMENT AND BOARD OF TRUSTEES
9.1 Management Generally
(a) Subject to the voting rights of the Shares, the management of the
Company shall be vested exclusively in the Board of Trustees, which shall have
all of the power and authority to manage the Company, including the authority
to appoint officers and to authorize persons to act on behalf of the Company
and engage third parties to provide services to the Company and to perform any
permissible activity and is further authorized to delegate such power and
authority to such officers or authorized Persons as it determines to be
appropriate, subject to the requirements of the Investment Company Act. The
Board of Trustees may designate one or more committees each of which shall
have all or such lesser portion of the power and authority of the entire Board
of Trustees as the Trustees shall determine from time to time, except to the
extent that action by the entire Board of Trustees or particular Trustees is
required by the Investment Company Act.
(b) Except as expressly set forth herein, the Shareholders, in their
capacity as such, shall have no part in the management of the Company, and
shall have no authority or right to act on behalf of the Company in connection
with any matter. Employees, officers, authorized Persons and agents of the
Company shall have authority to act on behalf and in the name of the Company
to the extent authorized by the Board of Trustees or pursuant to authority
granted by it. It is contemplated that the Board of Trustees will delegate
substantially all of its power and authority with respect to the operations of
the Company to the Investment Manager and other authorized Persons.
9.2 Board of Trustees
(a) Subject to the terms of each Statement of Preferences, the number
of Trustees shall be such number, not less than three, as shall be approved
from time to time by a majority of Trustees then in office and a vote of at
least a majority of the outstanding Shares. No reduction in the number of
Trustees shall have the effect of removing any Trustee from office prior to
the expiration of his or her term. An individual nominated as a Trustee shall
be at least 21 years of age and not older than such age as shall be approved
from time to time by not less than two-thirds of the Trustees then in office
and shall not be under legal disability. Trustees need not own Shares and may
succeed themselves in office. The names and addresses of the Trustees shall be
set forth in the records of the Company.
(b) Any Trustee may resign as a Trustee (without need for prior or
subsequent accounting) by an instrument in writing signed by him and delivered
or mailed to the Chairman, if any, or the Secretary and such resignation shall
be effective upon such delivery, or at a later date provided in such
instrument. Subject to the rights of the Preferred Shares with respect to
Trustees elected solely by the Preferred Shares pursuant to the Investment
Company Act, any Trustee may be removed (provided that the aggregate number of
Trustees after such removal shall not be less than the minimum number
specified in Section 9.2(a) hereof) for cause at any time by the act of a
majority of the remaining Trustees, specifying the date when such removal
shall become effective. Subject to the rights of the Preferred Shares with
respect to Trustees elected solely by the Preferred Shares pursuant to the
Investment Company Act, any Independent Trustee may be removed (provided that
the aggregate number of Trustees after such removal shall not be less than the
minimum number specified in Section 9.2(a) hereof without cause at any time by
the act of two-thirds of the remaining Trustees, and any Trustee can be
removed without cause by vote of not less than a majority of the aggregate
number of Shares entitled to vote in the election of such Trustee, specifying
the date when such removal shall become effective.
(c) The term of office of a Trustee shall terminate and a vacancy
shall occur in the event of the removal, resignation, incompetence or other
incapacity to perform the duties of the office, or death, of a Trustee.
Subject to the rights of the Preferred Shares with respect to Trustees elected
solely by the Preferred Shares pursuant to the Investment Company Act and
pursuant to any Statement of Preferences, whenever a vacancy in the Board of
Trustees shall occur, the remaining Trustees may fill such vacancy by
appointing an individual having the qualifications described in this Agreement
by a written instrument signed or adopted by a majority of the Trustees then
in office or by election of the holders of Shares, or may leave such vacancy
unfilled, or may reduce the number of Trustees (provided that the aggregate
number of Trustees after such removal shall not be less than the minimum
number specified in Section 9.2(a) hereof). Any vacancy created by an increase
in Trustees may be filled by the appointment of an individual having the
qualifications described in this Agreement by a majority of the Trustees then
in office or by election of the holders of Shares. No vacancy shall operate to
annul this Agreement or to revoke any existing agency created pursuant to the
terms of this Agreement. Whenever a vacancy in the number of Trustees shall
occur, until such vacancy is filled as provided herein, the Trustees in
office, regardless of their number, shall have all the powers granted to the
Trustees and shall discharge all the duties imposed upon the Trustees by this
Agreement.
(d) Meetings of the Trustees shall be held from time to time upon the
call of the Chairman, if any, the Secretary or any two Trustees. Regular
meetings of the Trustees may be held without call or notice at a time and
place fixed by resolution of the Trustees. Notice of any other meeting shall
be mailed via overnight courier not less than 48 hours before the meeting or
otherwise actually delivered orally or in writing not less than 24 hours
before the meeting, but may be waived in writing by any Trustee either before
or after such meeting. The attendance of a Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Trustee attends a
meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting has not been lawfully called or
convened. The Trustees may act with or without a meeting. A quorum for all
meetings of the Trustees shall be one-third of the Trustees then in office.
Unless provided otherwise in this Agreement, any action of the Trustees may be
taken at a meeting by vote of a majority of the Trustees present (a quorum
being present) or without a meeting by written consent of a majority of the
Trustees or such other proportion as shall be specified herein for action at a
meeting at which all Trustees then in office are present.
(i) Any committee of the Trustees may act with or without a
meeting. A quorum for all meetings of any such committee shall be one
third of the members thereof. Unless provided otherwise in this
Agreement, any action of any such committee may be taken at a meeting by
vote of a majority of the members of such committee present (a quorum
being present) or without a meeting by written consent of a majority of
the members of such committee or such other proportion as shall be
specified herein for action at a meeting at which all committee members
are present.
(ii) With respect to actions of the Trustees and any committee
of the Trustees, Trustees who are Interested Persons in any action to be
taken may be counted for quorum purposes under this Section and shall be
entitled to vote to the extent not prohibited by applicable law.
(iii) All or any one or more Trustees may participate in a
meeting of the Trustees or any committee thereof by means of a conference
telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other; participation
in a meeting pursuant to any such communications system shall constitute
presence in person at such meeting except as otherwise provided by
applicable law.
(iv) The Trustees may, but shall not be required to, elect a
Chairman of the Board of Trustees, who shall not, in his or her capacity
as such, be an officer of the Company and who shall serve at the pleasure
of the Board of Trustees. Any Chairman of the Board of Trustees elected
by the Trustees need not be an Independent Trustee, unless otherwise
required by applicable law.
(e) The Trustees shall elect a Chief Executive Officer, a Secretary
and a Chief Financial Officer and any other authorized persons who shall serve
at the pleasure of the Board of Trustees or until their successors are
elected. The Trustees may elect or appoint or may authorize the Chairman, if
any, or Chief Executive Officer to appoint such other officers or agents or
other authorized persons with such other titles and powers as the Board of
Trustees may deem to be advisable. Any Chairman shall, and the Chief Executive
Officer, Secretary and Chief Financial Officer may, but need not, be a
Trustee.
(f) The Trustees and officers shall owe to the Company and the
holders of Shares the same fiduciary duties as owed by officers of
corporations to such corporations and their stockholders under the general
corporation law of the State of Delaware. Trustees elected by the holders of
Preferred Shares shall have no special duties to the holders of Preferred
Shares. The Trustees shall have exclusive and absolute control over the Assets
and over the business of the Company to the same extent as if the Trustees
were the sole owners of the property and business in their own right, but with
such powers of delegation as may be permitted by this Agreement. The Trustees
shall have power to engage in any activity not prohibited by Delaware law. The
enumeration of any specific power herein shall not be construed as limiting
the aforesaid power. The Trustees may perform such acts as in their sole
discretion are proper for conducting the business of the Company. The powers
of the Trustees may be exercised without order of or resort to any court. No
Trustee shall be obligated to give any bond or other security for the
performance of any of his duties or powers hereunder.
(g) Upon the affirmative vote of at least a majority of the
outstanding Shares, the Board of Trustees may adopt and from time to time
amend or repeal By-Laws ("By-Laws") for the conduct of the business of the
Company. Such By-Laws shall be binding on the Company unless inconsistent with
the provisions of this Agreement.
(h) Any determination as to what is in the interests of the Company
made by the Trustees in good faith shall be conclusive. In construing the
provisions of this Agreement, the presumption shall be in favor of a grant of
power to the Trustees.
9.3 Expenses of the Company
(a) The Company shall have power to incur and pay out of the Assets
or income of the Company any expenses necessary or appropriate to carry out
any of the purposes of this Agreement, and the business of the Company. The
Trustees may pay themselves such compensation as they in good faith may deem
reasonable and the Trustees may be reimbursed for expenses reasonably incurred
by themselves on behalf of the Company.
(b) The Company shall pay all, and shall reimburse the Investment
Manager and its respective Affiliates for, any costs and expenses that, in the
good faith judgment of the Investment Manager, are incurred in the formation,
financing or operation of the Company and are not obligated to be paid for by
the Investment Manager pursuant to its agreements with the Company.
(c) The Company shall pay, and shall reimburse the Investment Manager
and each of its Affiliates for, all legal, tax, accounting and other expenses
(including organizational expenses) incurred in connection with the offering
and issuance of any of the Company's securities or indebtedness.
9.4 Shareholders' Consent
To the fullest extent permitted by law, each Shareholder
hereby consents to the exercise by the Board of Trustees and the Investment
Manager of the powers conferred on them by this Agreement.
9.5 Exculpation
The Investment Manager shall not be liable, responsible or
accountable in damages or otherwise to the Company or any shareholder for any
loss, liability, damage, settlement, costs, or other expense (including
reasonable attorneys' fees) incurred by reason of any act or omission or any
alleged act or omission performed or omitted by the Investment Manager and its
employees, partners and affiliates, in connection with the establishment,
management or operations of the Company or its investments (including in
connection with serving on creditors' committees and boards of directors for
companies in the Company's portfolio) unless such act or failure to act arises
out of the bad faith, willful misfeasance, gross negligence or reckless
disregard of the Investment Manager's duty to the Company or its shareholders,
as the case may be (such conduct, "Disabling Conduct"). Subject to the
foregoing, all such Persons shall look solely to the Assets (including,
without limitation, the Unfunded Commitments) for satisfaction of claims of
any nature arising in connection with the affairs of the Company. If any
indemnitee is made a party to any suit or proceeding to enforce any such
liability, subject to the foregoing exception, such indemnitee shall not, on
account thereof, be held to any personal liability.
9.6 Indemnification; No Duty of Investigation; Reliance on Experts
(a) The Company will indemnify the Trustees, officers and
the Investment Manager and any officer, director, member, manager, employee,
stockholder, assign, representative, agent or affiliate of any such person
with respect to any act or omission as long as (i) such person's activities do
not constitute Disabling Conduct and (ii) there has been a determination (a)
by a final decision on the merits by a court or other body of competent
jurisdiction before whom the issue of entitlement to indemnification was
brought that such indemnitee is entitled to indemnification or, (b) in the
absence of such a decision, by (1) a majority vote of a quorum of those
Trustees who are neither "interested persons" of the Company (as defined in
Section 2(a)(19) of the Investment Company Act) nor parties to the proceeding,
that the indemnitee is entitled to indemnification (the "Disinterested
Non-Party Trustees"), or (2) if such quorum is not obtainable or even if
obtainable, if such majority so directs, independent legal counsel in a
written opinion concludes that the indemnitee should be entitled to
indemnification (each an "Indemnified Person," and collectively, the
"Indemnified Persons"). Notwithstanding the foregoing, with respect to any
action, suit or other proceeding voluntarily prosecuted by any Indemnified
Person as plaintiff, indemnification shall be mandatory only if the
prosecution of such action, suit or other proceeding by such Indemnified
Person was authorized by a majority of the Trustees. All determinations to
make advance payments in connection with the expense of defending any
proceeding shall be authorized and made in accordance with the immediately
succeeding paragraph (b) below.
(b) The Company shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might
be sought hereunder if the Company receives a written affirmation by the
Indemnified Person of the Indemnified Person's good faith belief that the
standards of conduct necessary for indemnification have been met and a written
undertaking to reimburse the Company unless it is subsequently determined that
he is entitled to such indemnification and if a majority of the Trustees
determine that the applicable standards of conduct necessary for
indemnification appear to have been met. In addition, at least one of the
following conditions must be met: (1) the Indemnified Person shall provide
adequate security for his undertaking, (2) the Company shall be insured
against losses arising by reason of any lawful advances, (3) a majority of a
quorum of the Disinterested Non-Party Trustees, or if such quorum is not
obtainable or even if obtainable, if such majority so directs, independent
legal counsel, shall conclude, based on a review of readily available facts
(as opposed to a full trial-type inquiry), that there is substantial reason to
believe that the Indemnified Person ultimately will be found entitled to
indemnification or (4) if there is not a Disinterested Non-Party Trustee, the
Indemnified Person provides the written affirmation referred to above.
(c) The rights accruing to any Indemnified Person under these
provisions shall not exclude any other right to which he may be lawfully
entitled.
(d) Notwithstanding the foregoing, subject to any limitations
provided by the Investment Company Act and this Agreement, the Company shall
have the power and authority to indemnify Persons providing services to the
Company to the full extent provided by law as if the Company were a
corporation organized under the Delaware General Corporation Law, provided
that such indemnification has been approved by a majority of the Trustees or,
with respect to agreements to which the Investment Manager is not a party, by
the Investment Manager.
(e) No purchaser, lender, transfer agent or other person dealing with
the Trustees or with any officer, employee or agent of the Company shall be
bound to make any inquiry concerning the validity of any transaction
purporting to be made by the Trustees or by said officer, employee or agent or
be liable for the application of money or property paid, loaned, or delivered
to or on the order of the Trustees or of said officer, employee or agent.
Every obligation, contract, undertaking, instrument, certificate, Share and
other security of the Company, and every other act or thing whatsoever
executed in connection with the Company shall be conclusively taken to have
been executed or done by the executors thereof only in their capacity as
Trustees under this Agreement or in their capacity as officers, employees or
agents of the Company. The Company may maintain insurance for the protection
of the Assets, its Shareholders, Trustees, officers, employees or agents in
such amounts as the Trustees shall deem adequate to cover possible liability,
and such other insurance as the Trustees in their sole judgment shall deem
advisable or is required by the Investment Company Act.
(f) Each Indemnified Person shall, in the performance of its duties,
be fully and completely justified and protected with regard to any act or any
failure to act resulting from reliance in good faith upon the books of account
or other records of the Company, upon an opinion of counsel, or upon reports
made to the Company by any of the Company's officers or employees or by any
advisor, administrator, manager, distributor, selected dealer, accountant,
appraiser or other expert or consultant selected with reasonable care by the
Trustees, officers or employees of the Company, regardless of whether such
counsel or other person may also be a Trustee.
9.7 Trustee Limited Liability
Except as otherwise provided by law, the Trustees shall not
be obligated personally for any debt, obligation or liability of the Company
solely by reason of being a Trustee of the Company, and the debt, obligations
and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company.
9.8 Certain Other Activities
The Investment Manager and its respective Affiliated
Persons, employees and associates (collectively, including the Investment
Manager, the "Manager Affiliates") may manage funds and accounts other than
the Assets ("Other Accounts") that invest in assets eligible for purchase by
the Company. The Manager Affiliates are in no way prohibited from spending,
and may spend, substantial business time in connection with other businesses
or activities, including, but not limited to, managing Other Accounts,
managing investments, advising or managing entities whose investment
objectives are the same as or overlap with those of the Company, participating
in actual or potential investments of the Company or any Shareholder,
providing consulting, merger and acquisition, structuring or financial
advisory services, including with respect to actual, contemplated or potential
investments of the Company, or acting as a trustee, officer, manager,
shareholder or creditors' committee member of, or adviser to, or participant
in, any corporation, company, limited liability company, trust or other
Person. The Manager Affiliates are in no way prohibited from receiving, and
may receive, fees or other compensation from third parties for any of these
activities, which fees will be for their own account and not for the account
of the Company. Such fees may relate to actual, contemplated or potential
investments of the Company and may be payable by entities in which the Company
directly or indirectly has invested or contemplates investing. Neither the
Company nor any Shareholder shall, by virtue of this Agreement, have any
right, title or interest in or to the businesses or activities permitted by
this Section 9.8 or in or to any fees or consideration derived therefrom.
Allocation of investments or opportunities among the Company and Other
Accounts will be made as described in the Offering Memorandum or as otherwise
approved by the Board of Trustees.
SECTION 10.
SHAREHOLDERS
10.1 Identity, Contributions and Common Share Commitments
The names and addresses of the Shareholders, the Shares
owned by each Shareholder and the Capital Contributions, Common Share
Commitments and Unfunded Commitments of each will be set forth in the
Company's records.
10.2 No Management Power or Liability
Except as otherwise provided herein, the Shareholders as
such shall have no right or power to, and shall not, take part in the
management of or transact any business for the Company, including but not
limited to, any acts or decisions relating to investment activities of the
Company, and shall have no power to sign for or bind the Company. Except as
otherwise required by law, no Shareholder, in its capacity as such, shall be
personally liable for any debt, loss, obligation or liability of the Company
in excess of its Unfunded Commitment (if applicable). Except to the extent
expressly provided in the preceding sentence, the Company shall indemnify and
hold harmless each Shareholder (in its capacity as such) in the event such
Shareholder becomes liable for any debt, loss, obligation or liability of the
Company unless such Shareholder has engaged in fraud, willful misconduct,
gross negligence or criminal conduct constituting a felony with respect to
such debt, loss, obligation or liability.
10.3 Amendments
(a) If a vote of the holders of Shares is required by applicable law
or this Agreement to amend this Agreement, or if the Trustees determine to
submit an amendment to a vote of the holders of Shares, then, other than with
respect to Sections of this Agreement where a different affirmative vote is
specifically required, this Agreement may be amended, after a majority of the
Trustees then in office have approved a resolution therefor, by the
affirmative vote set forth in Section 10.9. Notwithstanding the foregoing,
without the unanimous approval of all of the Shareholders affected thereby, no
such amendment may:
(i) require any Common Shareholder to make Capital Contributions
in excess of its Common Share Commitment, require any Shareholder
that is not a Common Shareholder to make additional Capital
Contributions in excess of its contractual commitment or otherwise
increase the liability of any Shareholder hereunder; or
(ii) adversely affect distributions to such Shareholder; or
(iii) modify this Section 10.3(a).
(b) Subject to the requirements of applicable law, notwithstanding
the foregoing provisions of this Section 10.3, the Board of Trustees may amend
this Agreement, without the consent of any Shareholder, (i) to change the name
of the Company or any class or series of Shares, (ii) to make any change that
does not materially adversely affect the relative rights or preferences of any
class or series of Shares, (iii) to conform this Agreement to the requirements
of applicable law; (iv) in connection with qualifying the Company to permit
limited liability under the laws of any state; (v) to prevent any material and
adverse effect to any Shareholder or the Company arising from the application
of legal restrictions to any Shareholder, the Investment Manager or the
Company, subject to the requirement that the Shareholders not be materially
and adversely affected; (vi) to make any change that is necessary or desirable
to cure any ambiguity or inconsistency, subject to the requirement that the
Shareholders not be materially and adversely affected; (vii) to make any other
changes similar to the foregoing, subject to the requirement that the
Shareholders not be materially and adversely affected; provided that the Board
of Trustees shall not be liable for failing to do so. The Company may reflect
in its records changes made in the composition of the Shareholders and their
respective Capital Contributions and Shares in accordance with the provisions
of this Agreement without the consent of the Shareholders.
(c) After any amendment to this Agreement becomes effective, the
Company shall promptly provide to the Shareholders notice of such amendment.
(d) Nothing contained in this Agreement shall permit the amendment of
this Agreement (i) to impair the exemption from personal liability of the
Shareholders, Trustees, officers, employees and agents of the Company and
their respective Affiliates, to permit assessments upon Shareholders in excess
of their Unfunded Commitments or (ii) such that the proposed amendment, if
adopted, would contradict any provision in any agreement between the Company
and a Shareholder unless such Shareholder has consented in writing to such
amendment.
(e) An amendment duly adopted by the requisite vote of the Board of
Trustees and, if required, Shareholders as aforesaid, shall become effective
at the time of such adoption or at such other time as may be designated by the
Board of Trustees or Shareholders, as the case may be. A certification signed
by a majority of the Trustees or the Secretary setting forth an amendment and
reciting that it was duly adopted by the Trustees and, if required,
Shareholders as aforesaid, or a copy of the Agreement, as amended, and
executed by a majority of the Trustees or the Secretary, shall be conclusive
evidence of such amendment when lodged among the records of the Company or at
such other time designated by the Trustees.
(f) Notwithstanding any other provision hereof, until such time as
Shares are issued and outstanding, this Agreement may be terminated or amended
in any respect by the affirmative vote of a majority of the Trustees or by an
instrument signed by a majority of the Trustees then in office.
(g) Notwithstanding anything to the contrary contained herein, no
holder of Shares of any class or series, other than to the extent expressly
determined by the Trustees with respect to Shares qualifying as preferred
stock pursuant to Section 18(a) of the Investment Company Act, shall have any
right under this Agreement by reason of holding such Shares, to require the
Company or any person controlled by the Company to purchase any of such
holder's Shares. Notwithstanding the foregoing, the Company may, through
tender offers, repurchase programs or otherwise, agree from time to time to
repurchase Shares of the Company.
10.4 Merger, Consolidation, Liquidation
Subject to the provisions of applicable law, the Company may
merge or consolidate with any other entity, or sell, lease or exchange all or
substantially all of the Assets upon approval by a majority of the Trustees
then in office and the affirmative vote of not less than a majority of the
outstanding Shares.
10.5 Limitations
No Shareholder shall have the right or power to (i) bring an
action for partition against the Company; (ii) cause the termination or
dissolution of the Company, except as set forth in this Agreement; or (iii)
demand property other than cash with respect to any distribution and then only
in accordance with the terms of this Agreement. Except to the extent required
for a Delaware business corporation, the Shareholders shall have no power to
vote as to whether or not a court action, legal proceeding or claim should or
should not be brought or maintained derivatively or as a class action on
behalf of the Company or the Shareholders.
10.6 Meetings
(a) The Company may, but shall not be required to, hold annual
meetings of the holders of any class or series of Shares. A meeting of
Shareholders may be called at any time by the Trustees. The Trustees shall
call a Special Meeting of Shareholders of the Company at the request of not
less than two Common Shareholders who, in the aggregate, beneficially own
Common Shares representing at least 5% of the issued and outstanding Common
Shares of the Company. Any meeting of Shareholders shall be held within or
without the state of Delaware on such day and at such time as the Trustees
shall designate.
(b) Notice of all meetings of Shareholders, stating the time, place
and purposes of the meeting, shall be given by the Trustees by mail to each
Shareholder of record entitled to vote thereat at its registered address,
mailed at least 10 days before the meeting or otherwise in compliance with
applicable law. Only the business stated in the notice of the meeting shall be
considered at such meeting. Any adjourned meeting may be held as adjourned one
or more times without further notice not later than 130 days after the record
date. For the purposes of determining the Shareholders who are entitled to
notice of and to vote at any meeting the Trustees may, without closing the
transfer books, fix a date not more than 100 days prior to the date of initial
convening of such meeting of Shareholders as a record date for the
determination of the Persons to be treated as Shareholders of record for such
purposes.
10.7 Action Without a Meeting
So long as the Company has not made a public offering or
registered it on an exchange, any action that may be taken at a meeting of the
Shareholders may be taken without a meeting if a consent in writing setting
forth the action to be taken is signed by Shareholders owning not less than
the minimum percentage of the Shares of the Shareholders that would be
necessary to authorize or take such action at a meeting at which all the
Shareholders were present and voted, and notice of the action taken is
provided to each Shareholder. Any such written consent must be filed with the
records of the meetings of the Shareholders.
10.8 Procedures
A Shareholder shall be entitled to cast votes at a meeting,
in person, or by written proxy or other writing authenticated by such
Shareholder in a manner acceptable to the Company directing the manner in
which its vote is to be cast, which writing must be received by the Company at
or prior to the taking of the vote. Except as otherwise herein specifically
provided, all procedural matters relating to the holding of meetings of
Shareholders or taking action by written consent, whether noticed or solicited
by the Company or others, including, without limitation, matters relating to
the date for the meeting, the time period during which written consents may be
solicited, minimum or maximum notice periods, record dates, proxy requirements
and rules relating to the conduct of meetings or the tabulation of votes,
shall be as reasonably established by the Trustees. To the extent not
otherwise provided by the Board of Trustees, the laws of the State of Delaware
pertaining to the validity and use of proxies regarding the shares of business
corporations shall govern the validity and use of proxies given by
Shareholders.
10.9 Voting
(a) Shareholders shall have no power to vote on any matter except
matters on which a vote of Shares is required by or pursuant to a Statement of
Preferences, this Agreement, the By-Laws or any resolution of the Trustees.
Any matter required to be submitted for approval of any of the Shares and
affecting one or more classes or series shall require approval by the required
vote of Shares of the affected class or classes and series voting together as
a single class and, if such matter affects one or more classes or series
thereof differently from one or more other classes or series thereof or from
one or more series of the same class, approval by the required vote of Shares
of such other class or classes or series or series voting as a separate class
shall be required in order to be approved with respect to such other class or
classes or series or series; provided, however, that except to the extent
required by any Statement of Preferences, there shall be no separate class
votes on the election or removal of Trustees or the selection of auditors for
the Company. Shareholders of a particular class or series thereof shall not be
entitled to vote on any matter that affects the rights or interests of only
one or more other classes or series of such other class or classes or only one
or more other series of the same class. There shall be no cumulative voting in
the election or removal of Trustees.
(b) The holders of one-third of the outstanding Shares of the Company
on the record date present in person or by proxy shall constitute a quorum at
any meeting of the holders for purposes of conducting business on which a vote
of all Shareholders of the Company is being taken. The holders of one-third of
the outstanding Shares of a class or classes on the record date present in
person or by proxy shall constitute a quorum at any meeting of the holders of
such class or classes for purposes of conducting business on which a vote of
holders of such class or classes is being taken. The holders of one-third of
the outstanding Shares of a series or series on the record date present in
person or by proxy shall constitute a quorum at any meeting of the holders of
such series or series for purposes of conducting business on which a vote of
holders of such series or series is being taken. Shares underlying a proxy as
to which a broker or other intermediary states its absence of authority to
vote with respect to one or more matters shall be treated as present for
purposes of establishing a quorum for taking action on any such matter only to
the extent so determined by the Trustees at or prior to the meeting of holders
of Shares at which such matter is to be considered and shall not be treated as
present for purposes of voting or any other purpose except as determined by
the Trustees.
(c) Subject to any provision of any Statement of Preferences or this
Agreement specifying or requiring a greater or lesser vote requirement for the
transaction of any matter of business at any meeting of Shareholders or, in
the absence of any such provision of any Statement of Preferences or this
Agreement, subject to any provision of the By-Laws, (i) the affirmative vote
of a plurality (or, if provided by the By-Laws, a majority) of the Shares
present in person or represented by proxy and entitled to vote for the
election of any Trustee or Trustees shall be the act of such Shareholders with
respect to the election of such Trustee or Trustees, (ii) the affirmative vote
of a majority of the Shares present in person or represented by proxy and
entitled or requested by the Trustees to vote on any other matter who vote on
such matter shall be the act of the Shareholders with respect to such matter,
and (iii) where a separate vote of one or more classes or series is required
on any matter, the affirmative vote of a majority of the Shares of such class
or classes or series or series present in person or represented by proxy and
entitled or requested by the Trustees to vote on such matter who vote on such
matter shall be the act of the Shareholders of such class or classes or series
or series with respect to such matter.
(d) At any meeting of Shareholders, any holder of Shares entitled to
vote thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Secretary, or with
such other officer or agent of the Company as the Secretary may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to
a resolution of a majority of the Trustees, proxies may be solicited in the
name of one or more Trustees or one or more of the officers or employees of
the Company. Only Shareholders of record shall be entitled to vote. Each full
Share shall be entitled to one vote and each fractional Share shall be
entitled to a vote equal to its fraction of a full Share. When any Share is
held jointly by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Share, but if more than one of them
shall be present at such meeting in person or by proxy, and such joint owners
or their proxies so present disagree as to any vote to be cast, such vote
shall not be received in respect of such Share. A proxy purporting to be given
by or on behalf of a Shareholder of record on the record date for a meeting
shall be deemed valid unless challenged at or prior to its exercise, and the
burden of proving invalidity shall rest on the challenger. If the holder of
any such Share is a minor or a person of unsound mind, and subject to
guardianship or to the legal control of any other person as regards the charge
or management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy. The Trustees shall have the authority to make and modify from time to
time regulations regarding the validity of proxies. In addition to signed
proxies, such regulations may authorize facsimile, telephonic, Internet and
other methods of appointing a proxy that are subject to such supervision by or
under the direction of the Trustees as the Trustees shall determine.
SECTION 11.
ASSIGNMENTS OR TRANSFERS OF SHARES
11.1 Assignments or Transfers of Shares
(a) In no event shall all or any part of a Shareholder's Preferred
Shares be Transferred, and any such purported Transfer shall be void and shall
not be recognized by the Company, unless all of the conditions set forth in
the applicable Statement of Preferences with respect thereto have been
satisfied. In no event shall all or any part of a Shareholder's Common Shares
be Transferred, and any such purported Transfer shall be void and shall not be
recognized by the Company or the Shareholders, unless all of the following
conditions are satisfied with respect to Shares that are not freely
transferable by the holder thereof under the federal securities laws or, in
the case of Shares that are freely transferable by the holder under the
federal securities laws, each of conditions (ii) and (iii) below are
satisfied:
(i) The Transferor, if requested by the Company in its sole
discretion, has delivered to the Company an opinion of counsel reasonably
acceptable to the Company that such Transfer (A) would not violate the
Securities Act or any state blue sky laws (including any investor
suitability standards) and, (B) would not result in the breach of any
agreement to which the Company is a party or by which it or any of the
Assets is bound;
(ii) The Transferor has demonstrated to the reasonable
satisfaction of the Company that the Transferee is both an "accredited
investor" as defined in Rule 501(a) under the Securities Act and a
"qualified client" within the meaning of Rule 205-3 of the Advisers Act,
unless such requirements have been waived by the Investment Manager, in
its sole discretion;
(iii) The Company has received a notice of Transfer signed by
both the Transferor and Transferee, such notice to be substantially in
the form of Appendix C attached hereto as the same may be modified from
time to time by the Trustees (or such other document specified in the
applicable Statement of Preferences); and
(iv) the Company consents in writing to such Transfer (which
consent may be withheld in the Company's reasonable discretion).
The Company may impose on certificates or other evidences of
ownership of Shares, any stop transfer legend consistent with the foregoing
requirements.
(b) A Transferee, legal representative or successor in interest of a
Shareholder shall be subject to all of the restrictions upon a Shareholder
provided in this Agreement.
(c) Upon the Incapacity of an individual Shareholder, such
Shareholder's personal representative or other successor in interest shall
have such rights as the Incapacitated Shareholder possessed to constitute a
successor as a Transferee of its Shares or Common Share Commitment and to join
with such Transferee in making application to substitute such Transferee as a
Shareholder, all as provided in Section 11.1(a).
(d) Upon the Incapacity of a Shareholder other than an individual,
the authorized representative of such entity shall have such rights as such
entity possessed to constitute a successor as a Transferee of its Shares or
Common Share Commitment and to join with such Transferee in making application
to substitute such Transferee as a Shareholder, all as provided in Section
11.1(a).
SECTION 12.
BOOKS, RECORDS AND REPORTS
12.1 Books
(a) The Company shall maintain books and records required by law for
the Company at its principal office, which shall be in the United States, and
each Shareholder shall have the right to inspect, examine and copy such books
and records for any proper business purpose relevant to its status as a
Shareholder at reasonable times and upon reasonable notice as authorized by
the Trustees or their delegate. Notwithstanding the foregoing inspection
rights or any other provision of this Section 12, the Company shall be
entitled to keep confidential from the Shareholders certain information as and
to the extent permitted by applicable law.
(b) A register shall be kept at the Company or any transfer agent
duly appointed by or under the direction of the Trustees which shall contain
the names and addresses of the Shareholders and the number of Shares held by
them respectively and a record of all transfers thereof. Separate registers
shall be established and maintained for each class and each series of each
class. Each such register shall be conclusive as to who are the holders of the
Shares of the applicable class and series and who shall be entitled to receive
dividends or distributions or otherwise to exercise or enjoy the rights of
Shareholders. No Shareholder shall be entitled to receive payment of any
dividend or distribution, nor to have notice given to him as herein provided,
until he has given his address to a transfer agent or such other officer or
agent of the Trustees as shall keep the register for entry thereon. Except as
otherwise provided in any Statement of Preferences, it is not contemplated
that certificates will be issued for the Shares; however, the Company may
authorize the issuance of share certificates and promulgate appropriate fees
therefore and rules and regulations as to their use.
(c) The Company shall have power to employ a transfer agent or
transfer agents, and a registrar or registrars, with respect to the Shares.
The transfer agent or transfer agents may keep the applicable register and
record therein, the original issues and transfers, if any, of the said Shares.
(d) Shares shall be transferable on the records of the Company only
by the record holder thereof or by its agent thereto duly authorized in
writing, upon compliance with the provisions herein and upon delivery to the
Company or a transfer agent of the Company of a duly executed instrument of
transfer, together with such evidence of the genuineness of each such
execution and authorization and of other matters as may reasonably be
required. Upon such delivery and completion of all other requirements the
transfer shall be recorded on the applicable register of the Company. Until
such record is made, the Shareholder of record shall be deemed to be the
holder of such Shares for all purposes hereof and neither the Trustees nor any
transfer agent or registrar nor any officer, employee or agent of the Company
shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of
the death, bankruptcy, or incompetence of any Shareholder, or otherwise by
operation of law, shall be recorded on the applicable register of Shares as
the holder of such Shares upon production of the proper evidence thereof to
the Trustees or a transfer agent of the Company, but until such record is
made, the Shareholder of record shall be deemed to be the holder of such for
all purposes hereof, and neither the Trustees nor any transfer agent or
registrar nor any officer or agent of the Company shall be affected by any
notice of such death, bankruptcy or incompetence, or other operation of law.
12.2 Reports
(a) The Company shall prepare and send to Shareholders to the extent
and in the form required by applicable law or any exchange on which Shares are
listed a report of operations containing financial statements of the Company
prepared in conformity with generally accepted accounting principles and
applicable law and a schedule setting forth the investments of the Company.
Common Shareholders shall receive quarterly reports of operations.
(b) Within 60 days (or such other time frame as may be required by
law) after the end of each Fiscal Year, the Company shall communicate in
writing to each Shareholder (i) such information as is necessary to complete
such Shareholder's United States federal and state income tax or information
returns and (ii) annual financial statements audited by an accounting firm of
national reputation.
(c) Further, the Trustees may, in their sole and absolute discretion,
cause to be prepared (i) such reports or other information as may be necessary
with respect to any Shareholder's qualification for the benefit of any income
tax treaty or provision of law reducing or eliminating any withholding or
other tax or governmental charge with respect to any Assets and (ii) such
other reports and financial statements of the Company as the Trustees deem
appropriate for informing the Shareholders about the operations of the
Company.
(d) To the extent that the Company has access thereto and in
recognition of the various Shareholders' obligations to comply with certain
regulatory requirements, the Company will also provide to each Shareholder,
with reasonable promptness, such other data and information concerning the
Company or Company activities in response to a request by any applicable
governmental or regulatory agency as from time to time a Shareholder may
reasonably request. If the Company is bound by confidentiality obligations
with respect to any information so requested, then the Company shall not be
obligated to provide such information. A Shareholder shall, at the request of
the Company, enter into a confidentiality agreement relating to such
information.
SECTION 13.
VALUATION OF INTERESTS
The net asset value of the Company will be calculated as of
the last business day of each month, in connection with each issuance of
Common Shares by the Company, as of each distribution declaration date (after
giving effect to the relevant declaration), and on such other dates as
determined by the Investment Manager or the Board of Trustees, in accordance
with the valuation policies and guidelines approved from time to time by the
Board of Trustees (each, a "Valuation Date").
SECTION 14.
BANK ACCOUNTS; CUSTODIAN
14.1 Bank Accounts Generally
All funds received by the Company may be deposited in one or
more Custodial Accounts in the name of the Company at any Custodian or
subcustodian appointed thereby. Subject to Section 14.2, disbursements
therefrom may be made by the Company in conformity with the purposes of this
Agreement. The Company may designate from time to time those Persons
authorized to execute checks and other items on the Company bank accounts. The
funds of the Company shall not be commingled with the funds of any other
Person except as permitted by law.
14.2 Custodian
(a) The Company shall appoint one or more Custodians to hold the
Assets of the Company in one or more separately identified Custodial Accounts
or multiparty arrangements in accordance with the Investment Management
Agreement, any Statement of Preferences and in compliance with the
requirements of applicable law. The Custodians shall at all times be
responsible for the physical custody of the Assets of the Company and for the
collection of interest, dividends and other income attributable to the Assets
of the Company. The Company will direct the Custodians to accept settlement
instructions issued by the Investment Manager and authorized Persons.
(b) Nothing contained in this Agreement shall be construed to
authorize or require the Board of Trustees or the Investment Manager to take
or receive physical possession of any Asset of the Company or to take any
action in violation of law, it being understood that the Custodians shall
solely be responsible for the safekeeping of the Assets and the consummation
of all such purchases, sales and deliveries of the Assets in accordance with
this Agreement and the Investment Management Agreement, any Statement of
Preferences and in compliance with the requirements of applicable law.
SECTION 15.
DISSOLUTION AND TERMINATION OF THE COMPANY
15.1 Dissolution Generally
Except as provided in this Agreement, no Shareholder shall
have the right to cause any dissolution of the Company before expiration of
its term.
15.2 Continuation of Company
The Company shall not be dissolved or terminated by the
Incapacity of any Shareholder as such, the Transfer by any Shareholder of any
of its Shares or the admission of a new or substituted Trustee or Shareholder,
and the existence and business of the Company shall be continued
notwithstanding the occurrence of any such event.
15.3 Events Causing Dissolution
The Company may be dissolved at any time after a majority of
the Trustees then in office have approved a resolution therefor, upon approval
by Shares having at least a majority of the votes of all of the Shares
outstanding on the record date for such action or meeting, voting as a single
class.
15.4 Distribution of Assets on Liquidation
(a) In liquidating the Company, the Company will make distributions
in cash, in kind, or partly in cash and partly in kind as the Investment
Manager, under the supervision of the Board of Trustees, may, in its sole
discretion, determine; provided, however, that any distribution made partly in
cash and partly in kind shall be pro rata among the Shareholders in proportion
to their interests to the extent reasonably practicable and if not reasonably
practicable, in such non-pro rata manner as is determined by the Investment
Manager, under the supervision of the Board of Trustees, to be fair and
equitable; provided, further, that the Investment Manager will use reasonable
efforts to make all distributions in kind, if any, in the form of freely
tradable securities. The Investment Manager need not distribute all of the
Assets at once, but may make partial distributions and shall not be required
to redeem the Preferred Shares prior to making any liquidating distribution in
respect of the Common Shares so long as the Company has set aside liquid
assets in excess of liabilities sufficient to pay the liquidation preference
and all accumulated and unpaid distributions of the Preferred Shares.
(b) In connection with the liquidation of the Company, the Assets
(after paying or otherwise providing for the claims of creditors of the
Company, claims by the Investment Manager or its respective Affiliated Persons
for expenses of the Company paid by any of them, any other liabilities of the
Company and reasonable reserves for any anticipated or contingent liabilities
or obligations and all accumulated and unpaid distributions on Preferred
Shares) shall be distributed to the Shareholders in accordance with Section
8.1; provided, however, that if the Special Share is outstanding the Special
Shareholder's original $1,000 contribution shall be returned to it, without
interest.
15.5 Liquidation Statement
(a) Upon compliance by the Company with all applicable requirements
for dissolution, the Shareholders shall cease to be such and the Company shall
execute, acknowledge and cause to be filed a Certificate of Cancellation of
the Company or other appropriate documents evidencing its dissolution and
winding up.
(b) Notwithstanding anything to the contrary contained herein, if the
Board of Trustees has been removed and the Company has been dissolved, any
Shareholder or other Person appointed by the Shareholders may act as
liquidating trustee for the Company during the winding up period, and receive
reasonable compensation for such activity, all as approved by the Shareholders
holding Shares that represent a majority of the outstanding Shares (which in
this case shall exclude any Shares held by the Investment Manager and its
Affiliated Persons).
15.6 Trustee's Liability Upon Dissolution or Removal
None of the Trustees shall be personally liable for the
return of all or any part of the contributions of the Shareholders to the
Company or for any other distributions to be made by the Company. Any such
return or distributions shall be made solely from the Assets.
SECTION 16.
GENERAL PROVISIONS
16.1 Notices and Distributions
Except as otherwise provided herein, any notice,
distribution, offer or other communication which may be given to any
Shareholder in connection with the Company or this Agreement shall be duly
given if reduced to writing and:
(a) if to any Shareholder, when personally delivered, or if sent by
mail, postage prepaid, overnight courier or facsimile transmission, when
actually received at the last address furnished by such Shareholder pursuant
to Section 2.3 for notice purposes at the time of such mailing, overnight
courier or facsimile transmission; and
(b) if to the Company or the Board of Trustees, sent to Two Galleria
Tower, 00000 Xxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Xxxxx
Xxxxxxxxx with a copy to the Investment Manager, Two Galleria Tower, 00000
Xxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: R. Xxxxxx Xxxxxxxxx,
personally delivered or if sent by mail, overnight courier or facsimile
transmission when actually received at the address of the Company or the Board
of Trustees, respectively, set forth above or at such other address as the
Company or the Board of Trustees, respectively, may then have specified
pursuant to the terms of this Agreement.
All distributions to the Shareholders shall be made by wire
transfer or as appropriate to the accounts specified by the Shareholders,
which accounts may be changed from time to time by written notice to the
Company.
16.2 Survival of Rights
This Agreement shall be binding upon and, as to permitted or
accepted successors, Transferees and assigns, inure to the benefit of the
Shareholders and the Company and their respective heirs, legatees, legal
representatives, successors, Transferees and permitted assigns, in all cases
whether by the laws of descent and distribution, merger, consolidation, sale
of assets, operation of law, or otherwise.
16.3 Construction
The language in all parts of this Agreement shall be in all
cases construed simply according to its fair meaning and not strictly for or
against any Person.
16.4 Section Headings
The captions of the sections in this Agreement are for
convenience only and shall not be used in construing or interpreting this
Agreement.
16.5 Agreement in Counterparts
This Agreement and any amendments hereto may be executed and
delivered by facsimile and in multiple counterparts, each of which shall be
deemed an original agreement and all of which shall constitute one and the
same agreement, notwithstanding the fact that all Shareholders are not
signatories to the original or the same counterpart.
16.6 Governing Law
This Agreement has been executed by or on authority of a
majority of the Trustees and the rights of all parties and the validity and
construction of every provision hereof shall be subject to and construed
according to the internal laws, and not the laws pertaining to choice or
conflict of laws, of the State of Delaware, and reference shall be
specifically made to the business corporation law of the State of Delaware as
to the construction of matters not specifically covered herein or as to which
an ambiguity exists, although such law shall not be viewed as limiting the
powers otherwise granted to the Trustees or the Investment Manager hereunder
and any ambiguity shall be viewed in favor of such powers.
16.7 Additional Documents
Each Shareholder, upon the request of the Company, agrees to
perform all further acts and execute, acknowledge and deliver all further
documents which may be reasonably necessary, appropriate or desirable to carry
out the provisions of this Agreement, including but not limited to,
acknowledging before a Notary Public any signature heretofore or hereafter
made by a Shareholder.
16.8 Severability
Should any portion or provision of this Agreement be
declared illegal, invalid or unenforceable in any jurisdiction, then such
portion or provision shall be deemed to be severable from this Agreement to
the extent practicable while preserving the economic intention of the parties
and, in any event, such illegality, invalidity or unenforceability shall not
affect the remainder hereof.
16.9 Pronouns
All pronouns and defined terms and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the Persons referred to may require.
16.10 Entire Agreement
This Agreement, the Statement of Preferences adopted
pursuant hereto and the Subscription Agreements executed and delivered by the
Shareholders (i) constitute the entire Agreement of the Shareholders with
respect to the Company and (ii) supersede all prior or contemporaneous written
or oral agreements, understandings or negotiations with respect to the
Company. The parties hereto acknowledge that the ability of the Shareholders
and of the Company to take certain of the actions contemplated hereby may be
limited by the terms of the Statement of Preferences to the extent provided
therein.
16.11 Arbitration
To the extent permitted by law, any dispute relating to this
Agreement or the Company which cannot be amicably resolved among the parties
to such dispute shall be resolved by binding arbitration conducted in Dallas,
Texas before a single arbitrator in accordance with the rules of the American
Arbitration Association then prevailing, and the decisions of the arbitrator
shall be final and binding on all the parties. The costs of the arbitration
(other than fees and expenses of counsel, which shall be the responsibility of
the parties retaining such counsel) shall be allocated among the parties as
determined by the arbitrator.
16.12 Waiver of Partition
Each Shareholder hereby irrevocably waives and forfeits any
and all rights that it may have, whether arising under contract or statute or
by operation of law, to maintain an action for partition of the Company or any
of the Assets.
16.13 Filing
This Agreement and any amendment (including any supplement)
hereto shall be filed in such places as may be required or as the Company deem
appropriate. Each amendment shall be accompanied by a certificate signed and
acknowledged by an authorized Person stating that such action was duly taken
in a manner provided herein, and shall, upon insertion in the Company's minute
book, be conclusive evidence of all amendments contained therein. A restated
Agreement, containing the original Agreement as amended by all amendments
theretofore made, may be executed from time to time by an authorized Person
and shall, upon insertion in the Company's minute book, be conclusive evidence
of all amendments contained therein and may thereafter be referred to in lieu
of the original Agreement and the various amendments thereto.
IN WITNESS WHEREOF, the Trustees of the Company have
hereunto set their hands as of the date first written above.
TRUSTEES:
/s/ R. Xxxxxx Xxxxxxxxx
------------------------------------
R. Xxxxxx Xxxxxxxxx,
Trustee
/s/ Xxxxxxx X. Xxx
------------------------------------
Xxxxxxx X. Xxx,
Trustee
/s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxxx,
Trustee
/s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx,
Trustee
/s/ Xxxxx X. Xxxx
------------------------------------
Xxxxx X. Xxxx,
Trustee
APPENDIX A
Statement of Preferences of Series S Preferred Share
APPENDIX B
Statement of Preferences of Series P Preferred Shares
APPENDIX C
Form of Notice of Transfer
[Date]
Restoration Opportunities Fund
Attn: R. Xxxxxx Xxxxxxxxx
Two Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Ladies and Gentlemen:
This is to advise you that [_______________] (the "Purchaser") will purchase
(contingent only upon the approval of such purchase by Restoration
Opportunities Fund, a Delaware statutory trust (the "Company")) in a private
resale (the "Purchase") from [ ] (the "Seller") [insert number or amount] of
Common Shares (the "Shares") issued pursuant to the Agreement and Declaration
of Trust of the Company (as amended, modified or supplemented from time to
time, the "Declaration of Trust"). Capitalized terms used herein and not
defined have the respective meanings assigned to them in the Declaration of
Trust, a copy of which has been provided to the undersigned by the Seller.
The undersigned hereby irrevocably agrees, represents and warrants on behalf
of the Purchaser that:
1. The Purchaser is an "accredited investor" within the meaning of
Regulation D promulgated under the Securities Act and as a "qualified
client" within the meaning of Rule 205-3 under the Investment
Advisers Act of 1940.
2. If the Purchaser resells or transfers all or any portion of the
Shares, the Purchaser will obtain from each purchaser or transferee a
letter containing the same representations and agreements as set
forth herein.
3. The Purchaser hereby agrees to be bound by all the terms of the
Declaration of Trust.
Very truly yours,
[Name of Purchaser]
Address:
By: _______________________________ _____________________________________
Name:
Title: _____________________________________
This Transfer Certificate shall constitute the notice of Transfer required
under subsection 11.1(a)(iv) of the Declaration of Trust.
[Name of Seller]
Address:
By: _______________________________ _____________________________________
Name:
Title: _____________________________________
The undersigned, on behalf of the Company, hereby acknowledges receipt of this
Transfer Certificate and acknowledges and agrees that this Transfer
Certificate shall constitute the notice of Transfer required under subsection
11.1(a)(iv) of the Declaration of Trust. The undersigned, on behalf of the
Company, hereby consents to the Transfer which is the subject of this notice
of Transfer pursuant to the Declaration of Trust. The proper authorized Person
of the Company will record on the books and records of the Company the
Purchaser as a Shareholder of the Company.
By:
By: ___________________________
Name:
Title:
