MVC CAPITAL, INC.
5,000,000 Shares of Common Stock
Par Value $0.01 Per Share
UNDERWRITING AGREEMENT
February 22, 2007
UNDERWRITING AGREEMENT
February 22, 2007
UBS Securities LLC
Bear, Xxxxxxx & Co. Inc.
As Representatives of the several Underwriters named in SCHEDULE A
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
MVC Capital, Inc., a corporation organized under the laws of the State
of Delaware (the "COMPANY"), proposes to issue and sell to the underwriters
named in SCHEDULE A annexed hereto (the "UNDERWRITERS"), for which UBS
Securities LLC ("UBS") and Bear, Xxxxxxx & Co. Inc. (together, the
"REPRESENTATIVES") are acting as Representatives, an aggregate of 5,000,000
shares of common stock (the "FIRM SHARES"), par value $0.01 per share (the
"COMMON STOCK"), of the Company. In addition, solely for the purpose of covering
over-allotments, the Company proposes to grant to the Underwriters the option to
purchase from the Company up to an additional 750,000 shares of Common Stock
(the "ADDITIONAL SHARES"). The Firm Shares and the Additional Shares are
hereinafter collectively sometimes referred to as the "SHARES." The Shares are
described in the Prospectus which is referred to below.
The Company has prepared and filed, in accordance with the provisions
of the Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the "ACT"), and in accordance with the provisions of
the Investment Company Act of 1940, as amended, and the rules and regulations
thereunder (collectively, the "INVESTMENT COMPANY ACT"), with the Securities and
Exchange Commission (the "COMMISSION") a registration statement on Form N-2
(File No. 333-125953) under the Act (the "REGISTRATION STATEMENT"), including a
prospectus relating to the Shares. Such registration statement has become
effective under the Act.
Except where the context otherwise requires, "REGISTRATION STATEMENT,"
as used herein, means the registration statement, as amended at the time of the
effectiveness of such registration statement, including any post-effective
amendment thereto, for purposes of Section 11 of the Act, as such section
applies to the respective Underwriters (the "EFFECTIVE TIME"), including (i) all
documents filed as a part thereof, (ii) any information contained in a
prospectus filed with the Commission pursuant to Rule 497 under the Act, to the
extent such information is deemed, pursuant to Rule 430A, Rule 430B or Rule 430C
under the Act, to be part of the registration statement at the Effective Time,
and (iii) any registration statement filed to register the offer and sale of
Shares pursuant to Rule 462(b) under the Act.
The Company has furnished to you, for use by the Underwriters and by
dealers named in a document provided to the Company (the "dealers") in
connection with the offering of the Shares, copies of one or more preliminary
prospectus supplements, relating to the Shares. Except where the context
otherwise requires, "PRE-PRICING PROSPECTUS," as used herein, means
each such preliminary prospectus supplement, in the form so furnished, including
any basic prospectus (whether or not in preliminary form) furnished to you by
the Company and attached to or used with such preliminary prospectus supplement.
Except where the context otherwise requires, "BASIC PROSPECTUS," as used herein,
means any such basic prospectus and any basic prospectus furnished to you by the
Company and attached to or used with the Prospectus Supplement (as defined
below).
Except where the context otherwise requires, "PROSPECTUS SUPPLEMENT,"
as used herein, means the final prospectus supplement, relating to the Shares,
filed by the Company with the Commission pursuant to Rule 497 under the Act on
or before the second business day after the date hereof (or such earlier time as
may be required under the Act), in the form furnished by the Company to you for
use by the Underwriters and by dealers in connection with the offering of the
Shares.
Except where the context otherwise requires, "PROSPECTUS," as used
herein, means the Prospectus Supplement together with the Basic Prospectus
attached to or used with the Prospectus Supplement.
"DISCLOSURE PACKAGE," as used herein, means any Pre-Pricing Prospectus
or Basic Prospectus, in either case used at or before the date of this
Agreement, if any, and the information set forth in Schedule B.
As used in this Agreement, "BUSINESS DAY" shall mean a day on which the
New York Stock Exchange (the "NYSE") is open for trading. The terms "herein,"
"hereof," "hereto," "hereinafter" and similar terms, as used in this Agreement,
shall in each case refer to this Agreement as a whole and not to any particular
section, paragraph, sentence or other subdivision of this Agreement. The term
"or," as used herein, is not exclusive.
The Xxxxxx Group Advisers LLC, a Delaware limited liability company
("TTG" or the "INVESTMENT ADVISER"), acts as the Company's investment adviser
pursuant to an Investment Advisory and Management Agreement by and between the
Company and the Investment Adviser, dated as of October 31, 2006 (the
"INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT"). U.S. Bank National Association
acts as the custodian (the "CUSTODIAN") of the Company's cash and portfolio
assets pursuant to a Custodian Agreement by and between the Company and the
Custodian, dated as of November 23, 2004 (the "CUSTODIAN AGREEMENT").
Computershare Ltd. (f/k/a EquiServe) acts as the Company's transfer agent,
registrar and dividend disbursing agent (the "TRANSFER AGENT") pursuant to a
Transfer Agency Letter Agreement by and between the Company and the Transfer
Agent, dated as of June 21, 2002 (the "TRANSFER AGENCY LETTER AGREEMENT"). U.S.
Bancorp Fund Services, LLC acts as the administrator of the Company (the
"ADMINISTRATOR") pursuant to a Fund Administration Servicing Agreement by and
among the Company, MVC Financial Services, Inc. ("MVCFS") and the Administrator,
dated as of February 21, 2006 (the "FUND ADMINISTRATION SERVICING AGREEMENT").
Guggenheim Corporate Funding, LLC acts as the Company's administrative agent
(the "ADMINISTRATIVE AGENT") pursuant to a Credit Agreement by and among the
Company, MVCFS and the Administrative Agent, dated as of April 27, 2006 (the
"CREDIT AGREEMENT"). In addition, the Company has adopted
a dividend reinvestment plan (the "DIVIDEND REINVESTMENT
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PLAN") pursuant to which holders of Shares have their dividends automatically
reinvested in additional shares of Common Stock of the Company, unless such
holders elect otherwise.
On December 7, 1999, Form N-54A Notification of Election to be Subject
to Sections 55 through 65 of the Investment Company Act of 1940 (File No.
814-00201) (the "NOTIFICATION OF ELECTION") was filed with the Commission under
the Investment Company Act, pursuant to which the Company elected to be treated
as a business development company ("BDC"). Commencing with its taxable year
ended October 31, 2000, the Company has elected to be treated, and, to its
knowledge, has qualified to be treated, as a regulated investment company
("RIC") (within the meaning of Section 851(a) of the Internal Revenue Code of
1986, as amended (the "CODE")).
The Company, the Investment Adviser and the Underwriters agree as
follows:
1. SALE AND PURCHASE. Upon the basis of the representations and warranties
and subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the number of
Firm Shares set forth opposite the name of such Underwriter in SCHEDULE A
attached hereto, subject to adjustment in accordance with Section 9 hereof, in
each case at a purchase price of $16.25 per Share (the "PURCHASE PRICE"). The
Company is advised that the Underwriters intend (i) to make a public offering of
their respective portions of the Firm Shares as soon after the effective date of
the Registration Statement as is advisable and (ii) initially to offer the Firm
Shares upon the terms set forth in the Prospectus.
In addition, the Company hereby grants to the several Underwriters the
option (the "OVER-ALLOTMENT OPTION") to purchase, and upon the basis of the
representations and warranties and subject to the terms and conditions herein
set forth, the Underwriters shall have the right to purchase, severally and not
jointly, from the Company, ratably in accordance with the number of Firm Shares
to be purchased by each of them, all or a portion of the Additional Shares as
may be necessary to cover over-allotments made in connection with the offering
of the Firm Shares, at the Purchase Price to be paid by the Underwriters to the
Company for the Firm Shares. The Over-Allotment Option may be exercised by the
Representatives on behalf of the several Underwriters at any time and from time
to time on or before the thirtieth day following the date of the Prospectus
Supplement, by written notice to the Company. Such notice shall set forth the
aggregate number of Additional Shares as to which the Over-Allotment Option is
being exercised, and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the "ADDITIONAL TIME
OF PURCHASE"); PROVIDED, HOWEVER, that the Additional Time of Purchase shall not
be earlier than the Time of Purchase (as defined below) nor earlier than the
second business day after the date on which the Over-Allotment Option shall have
been exercised nor later than the tenth business day after the date on which the
Over-Allotment Option shall have been exercised. The number of Additional Shares
to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
SCHEDULE A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as the Representatives may determine to eliminate
fractional shares), subject to adjustment in accordance with Section 9 hereof.
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2. PAYMENT AND DELIVERY. Payment of the Purchase Price for the Firm Shares
shall be made by the Underwriters to the Company by a Federal Funds wire
transfer against delivery of such Firm Shares or certificates for the Firm
Shares, if any, to UBS through the facilities of The Depository Trust Company
("DTC") for the respective accounts of the Underwriters. Such payment and
delivery shall be made at 10:00 A.M., New York City time, on the third business
day following the date of this Agreement (unless another date shall be agreed to
by the Representatives and the Company or unless terminated in accordance with
the provisions of Section 8 hereof). The time at which such payment and delivery
are actually made is hereinafter sometimes called the "TIME OF PURCHASE."
Electronic transfer of the Firm Shares shall be made to you at the Time of
Purchase in such names and in such denominations as you shall specify.
Payment of the Purchase Price for the Additional Shares shall be made
at the Additional Time of Purchase in the same manner and at the same office as
the payment for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the Additional Time of Purchase in such names and in
such denominations as you shall specify.
Deliveries of the documents described in Section 7 hereof with respect
to the purchase of the Shares shall be made at the offices of Xxxxxxxx Chance US
LLP at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE INVESTMENT
ADVISER. Each of the Company and the Investment Adviser jointly and severally
represents and warrants to each Underwriter as follows:
(a) the Registration Statement has heretofore become effective under
the Act or, with respect to any registration statement to be filed to
register the offer and sale of Shares pursuant to Rule 462(b) under the
Act, will be filed with the Commission and become effective under the Act
no later than 10:00 P.M., New York City time, on the date of determination
of the public offering price for the Shares; no stop order of the
Commission preventing or suspending the use of any Basic Prospectus, any
Pre-Pricing Prospectus, the Prospectus or the Prospectus Supplement, or
the effectiveness of the Registration Statement, has been issued, and no
proceedings for such purpose have been instituted or, to the Company's
knowledge, are contemplated by the Commission;
(b) the Registration Statement complied when it became effective,
complies as of the date hereof and, as amended or supplemented, at the
Time of Purchase, each Additional Time of Purchase, if any, and at all
times during which a prospectus is required by the Act to be delivered in
connection with any sale of Shares, will comply, in all material respects,
with the requirements of the Act and the Investment Company Act; the
conditions to the use of Form N-2 in connection with the offering and sale
of the Shares as contemplated hereby have been satisfied; the Registration
Statement did not, as of the Effective Time, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; each
Pre-Pricing Prospectus complied, at the time it was filed with the
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Commission, and complies as of the date hereof, in all material respects
with the requirements of the Act and the Investment Company Act; at no
time during the period that begins on the earlier of the date of such
Pre-Pricing Prospectus and the date such Pre-Pricing Prospectus was filed
with the Commission and ends at the Time of Purchase did or will any
Pre-Pricing Prospectus, as then amended or supplemented, include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and at no time during such
period did or will any Pre-Pricing Prospectus, as then amended or
supplemented, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; each Basic Prospectus complied or will comply, as of its date
and the date it was or will be filed with the Commission, complies as of
the date hereof (if filed with the Commission on or prior to the date
hereof) and, at the Time of Purchase, each Additional Time of Purchase, if
any, and at all times during which a prospectus is required by the Act to
be delivered in connection with any sale of Shares, will comply, in all
material respects, with the requirements of the Act; at no time during the
period that begins on the earlier of the date of such Basic Prospectus and
the date such Basic Prospectus was filed with the Commission and ends at
the Time of Purchase did or will any Basic Prospectus, as then amended or
supplemented, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and at no time during such period did or will any Basic
Prospectus, as then amended or supplemented, include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; each of the Prospectus Supplement and the
Prospectus will comply, as of the date that it is filed with the
Commission, the date of the Prospectus Supplement, the Time of Purchase,
each Additional Time of Purchase, if any, and at all times during which a
prospectus is required by the Act to be delivered in connection with any
sale of Shares, in all material respects, with the requirements of the Act
(in the case of the Prospectus, including, without limitation, Section
10(a) of the Act); at no time during the period that begins on the earlier
of the date of the Prospectus Supplement and the date the Prospectus
Supplement is filed with the Commission and ends at the later of the Time
of Purchase, the latest Additional Time of Purchase, if any, and the end
of the period during which a prospectus is required by the Act to be
delivered in connection with any sale of Shares did or will any Prospectus
Supplement or the Prospectus, as then amended or supplemented, include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representation or warranty with respect
to any statement contained in the Registration Statement, any Pre-Pricing
Prospectus, or the Prospectus in reliance upon and in conformity with
information concerning an Underwriter and furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in
the Registration Statement, such Pre-Pricing Prospectus, or the
Prospectus;
(c) as of the date of this Agreement, the Company has an authorized
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and outstanding capitalization as set forth in the section of the
Registration Statement, the Pre-Pricing Prospectuses and the Prospectus
entitled "Description of Securities" and as set forth in the section of
the Prospectus Supplement entitled "Capitalization," and, as of the Time
of Purchase and any Additional Time of Purchase, as the case may be, the
Company shall have an authorized and outstanding capitalization as set
forth in the section of the Registration Statement, the Pre-Pricing
Prospectuses and the Prospectus entitled "Description of Securities" and
as set forth in the section of the Prospectus Supplement entitled
"Capitalization"; all of the issued and outstanding shares of capital
stock, including the Common Stock, of the Company have been duly
authorized and validly issued and are fully paid and non-assessable, have
been issued in compliance with all applicable securities laws and were not
issued in violation of any preemptive right, resale right, right of first
refusal or similar right; the Shares are duly listed, and admitted and
authorized for trading, subject to official notice of issuance, on the
NYSE;
(d) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement, the Pre-Pricing Prospectuses, and the Prospectus, to execute
and deliver this Agreement and to issue, sell and deliver the Shares as
contemplated herein;
(e) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, either
(i) have a material adverse effect on the business, properties, financial
condition, results of operations or prospects of the Company and the
Subsidiaries (as defined below) taken as a whole, (ii) prevent or
materially interfere with consummation of the transactions contemplated
hereby or (iii) result in the delisting of shares of Common Stock from the
NYSE (the occurrence of any such effect or any such prevention or
interference or any such result described in the foregoing clauses (i),
(ii) and (iii) being herein referred to as a "MATERIAL ADVERSE EFFECT");
(f) the Company has no subsidiaries other than MVCFS, MVC Partners
LLC, MVC Global LLC and MVC Europe LLC (collectively, the "SUBSIDIARIES");
accordingly, entities of which the Company holds equity and debt
investments in its investment portfolio are not Subsidiaries; the Company
owns all of the issued and outstanding ownership interests of each of the
Subsidiaries; complete and correct copies of the certificates of
incorporation or formation, bylaws or other organizational documents of
the Company and each Subsidiary and all amendments thereto have been
delivered to you, and no changes therein will be made on or after the date
hereof through and including the Time of Purchase or, if later, any
Additional Time of Purchase; each Subsidiary has been duly formed or
incorporated and is validly existing in good standing under the laws of
the jurisdiction of its formation, with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Registration Statement, the Pre-Pricing Prospectuses, and
the Prospectus; each Subsidiary is duly qualified to do business as
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a foreign corporation or limited liability company and is in good standing
in each jurisdiction where the ownership or leasing of its properties or
the conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not, individually or
in the aggregate, have a Material Adverse Effect; all of the outstanding
ownership interests of the Subsidiaries have been duly authorized and
validly issued, and, if corporate entities, are fully paid and
non-assessable, have been issued in compliance with all applicable
securities laws, were not issued in violation of any preemptive right,
resale right, right of first refusal or similar right and are owned by the
Company subject to no security interest, other encumbrance or adverse
claims; and no options, warrants or other rights to purchase, agreements
or other obligations to issue or other rights to convert any obligation
into shares of capital stock or ownership interests in the Subsidiaries
are outstanding;
(g) the Shares have been duly and validly authorized and, when issued
and delivered against payment therefor by the Underwriters as provided
herein, will be duly and validly issued, fully paid and non-assessable and
free of statutory and contractual preemptive rights, resale rights, rights
of first refusal and similar rights; the Shares, when issued and delivered
against payment therefor by the Underwriters as provided herein, will be
free of any restriction upon the voting or transfer thereof pursuant to
the Company's certificate of incorporation or bylaws or any agreement or
other instrument to which the Company is a party;
(h) the capital stock of the Company, including the Shares, conforms
in all material respects to each description thereof contained or
incorporated by reference in the Registration Statement, the Pre-Pricing
Prospectuses, and the Prospectus; and the certificates for the Shares, if
any, are in due and proper form;
(i) this Agreement has been duly authorized, executed and delivered by
the Company;
(j) neither the Company nor any of the Subsidiaries is in breach or
violation of or in default under (nor has any event occurred which, with
notice, lapse of time or both, would result in any breach or violation of,
constitute a default under or give the holder of any indebtedness (or a
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness
under) (A) its certificate of incorporation or bylaws or certificate of
formation or limited liability company agreement, as applicable, or (B)
any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound or affected, or (C) any federal, state, local
or foreign law, regulation or rule, or (D) any rule or regulation of any
self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the rules and regulations of the
NYSE), or (E) any decree, judgment or order applicable to it or any of its
properties, except with respect to clause (C), to the extent such
violations, individually or in the aggregate, would not have a Material
Adverse Effect;
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(k) the execution, delivery and performance of this Agreement, the
issuance and sale of the Shares and the consummation of the transactions
contemplated hereby will not conflict with, result in any breach or
violation of or constitute a default under (nor constitute any event
which, with notice, lapse of time or both, would result in any breach or
violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a part of such
indebtedness under) (or result in the creation or imposition of a lien,
charge or encumbrance on any property or assets of the Company or any
Subsidiary pursuant to) (A) the certificate of incorporation or bylaws or
certificate of formation or limited liability company agreement, as
applicable, of the Company or any of the Subsidiaries, or (B) any
indenture, mortgage, deed of trust, bank loan or other loan or other
evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or any of the Subsidiaries is
a party or by which any of them or any of their respective properties may
be bound or affected, or (C) any federal, state, local or foreign law,
regulation or rule, or (D) any rule or regulation of any self-regulatory
organization or other non-governmental regulatory authority (including,
without limitation, the rules and regulations of the NYSE), or (E) any
decree, judgment or order applicable to the Company or any of the
Subsidiaries or any of their respective properties;
(l) no approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, or of or with any self-regulatory
organization or other non-governmental regulatory authority (including,
without limitation, the NYSE), or approval of the stockholders of the
Company, is required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transactions contemplated
hereby, other than (i) registration of the Shares under the Act, which has
been effected (or, with respect to any registration statement to be filed
hereunder pursuant to Rule 462(b) under the Act, will be effected in
accordance herewith), (ii) any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters or (iii) under the Conduct
Rules of the National Association of Securities Dealers, Inc. (the
"NASD");
(m) except as described in the Registration Statement (excluding the
exhibits thereto), each Pre-Pricing Prospectus and the Prospectus, (i) no
person has the right, contractual or otherwise, to cause the Company to
issue or sell to it any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, (ii) no person has
any preemptive rights, resale rights, rights of first refusal or other
rights to purchase any shares of Common Stock or shares of any other
capital stock of or other equity interests in the Company and (iii) no
person has the right to act as an underwriter or as a financial advisor to
the Company in connection with the offer and sale of the Shares; no person
has the right, contractual or otherwise, to cause the Company to register
under the Act any shares of Common Stock or shares of any other capital
stock of or other equity interests in the Company, or to include any such
shares or interests in the Registration Statement or the offering
contemplated thereby;
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(n) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all
necessary filings required under any applicable law, regulation or rule,
and has obtained all necessary licenses, authorizations, consents and
approvals from other persons, in order to conduct their respective
businesses, except where the failure to do so would not have a Material
Adverse Effect; neither the Company nor any of the Subsidiaries is in
violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, except where such violation, default,
revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect;
(o) there are no actions, suits, claims, investigations or proceedings
pending or, to the Company's knowledge, threatened or contemplated to
which the Company or any of the Subsidiaries or any of their respective
directors or officers is or would be a party or of which any of their
respective properties is or would be subject at law or in equity, before
or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or before or by any
self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the NYSE), except any such
action, suit, claim, investigation or proceeding which, if resolved
adversely to the Company or any Subsidiary, would not, individually or in
the aggregate, have a Material Adverse Effect;
(p) Ernst & Young, whose report on the consolidated financial
statements of the Company and the Subsidiaries is included in the
Registration Statement, the Pre-Pricing Prospectuses and the Prospectus,
are independent registered public accountants as required by the Act and
by the rules of the Public Company Accounting Oversight Board;
(q) the consolidated financial statements included or incorporated by
reference in the Registration Statement, the Pre-Pricing Prospectuses, and
the Prospectus, together with the related notes and schedules, present
fairly the consolidated financial position and the investments of the
Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations, cash flows and changes in
stockholders' equity and net assets of the Company for the periods
specified and have been prepared in compliance with the requirements of
the Act in all material respects, and in conformity with U.S. generally
accepted accounting principles applied on a consistent basis during the
periods involved; the other financial and statistical data contained or
incorporated by reference in the Registration Statement, the Pre-Pricing
Prospectuses, and the Prospectus are accurately and fairly presented and
prepared on a basis consistent with the financial statements and books and
records of the Company; there are no financial statements that are
required to be included or incorporated by reference in the Registration
Statement, any Pre-Pricing Prospectus or the Prospectus that are not
included or incorporated by reference as required; the Company and the
Subsidiaries do not have any material liabilities or obligations, direct
or contingent (including any off-balance sheet obligations), not described
in the Registration Statement (excluding the exhibits thereto), each
Pre-Pricing Prospectus and the Prospectus; and all disclosures
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contained in the Registration Statement, the Pre-Pricing Prospectuses,
and the Prospectus, regarding "non-GAAP financial measures" (as such term
is defined by the rules and regulations of the Commission), if any, comply
with Regulation G of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT") and Item 10 of Regulation S-K under the Act, to the extent
applicable;
(r) subsequent to the respective dates as of which information is
given in the Registration Statement, the Pre-Pricing Prospectuses, and the
Prospectus, in each case excluding any amendments or supplements to the
foregoing made after the execution of this Agreement, there has not been,
except as otherwise disclosed in the Pre-Pricing Prospectus, (i) any
material adverse change, or any development involving a prospective
material adverse change, in the business, properties, management,
financial condition or results of operations of the Company and the
Subsidiaries taken as a whole, (ii) any transaction which is material to
the Company and the Subsidiaries taken as a whole, (iii) any obligation or
liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or any Subsidiary, which is material
to the Company and the Subsidiaries taken as a whole, (iv) any change in
the capital stock or outstanding indebtedness of the Company or any
Subsidiaries or (v) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company or any Subsidiary;
(s) the Company has obtained for the benefit of the Underwriters the
agreement (a "LOCK-UP AGREEMENT"), in the form set forth as EXHIBIT A
hereto, of each of its directors and "OFFICERS" (within the meaning of
Rule 16a-1(f) under the Exchange Act) and each stockholder named in
EXHIBIT A-1 hereto;
(t) the Company and each of the Subsidiaries owns each of its
portfolio investments described in the Registration Statement, the
Pre-Pricing Prospectuses, and the Prospectus, as being owned by any of
them, free and clear of all liens, claims, security interests or other
encumbrances, other than those described in the Registration Statement,
the Pre-Pricing Prospectuses, and the Prospectus, except where such liens,
claims, security interests or other encumbrances, individually or in the
aggregate, would not have a Material Adverse Effect;
(u) each of the Company and the Subsidiaries owns or possesses all
inventions, patent applications, patents, trademarks (both registered and
unregistered), tradenames, service names, copyrights, trade secrets and
other proprietary information described in the Registration Statement, the
Pre-Pricing Prospectuses, and the Prospectus, as being owned or licensed
by it or which is necessary for the conduct of, or material to, its
businesses (collectively, the "INTELLECTUAL PROPERTY"), and the Company is
unaware of any claim to the contrary or any challenge by any other person
to the rights of the Company or any of the Subsidiaries with respect to
the Intellectual Property; neither the Company nor any of the Subsidiaries
has infringed or is infringing the intellectual property of a third party,
and neither the Company nor any Subsidiary has received notice of a claim
by a third party to the contrary;
-10-
(v) neither the Company nor any of the Subsidiaries is engaged in any
unfair labor practice; except for matters which would not, individually or
in the aggregate, have a Material Adverse Effect, (i) there is (A) no
unfair labor practice complaint pending or, to the Company's knowledge,
threatened against the Company or any of the Subsidiaries before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements is pending or, to
the Company's knowledge, threatened, (B) no strike, labor dispute,
slowdown or stoppage pending or, to the Company's knowledge, threatened
against the Company or any of the Subsidiaries and (C) no union
representation dispute currently existing concerning the employees of the
Company or any of the Subsidiaries, (ii) to the Company's knowledge, no
union organizing activities are currently taking place concerning the
employees of the Company or any of the Subsidiaries and (iii) there has
been no violation of any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees, any
applicable wage or hour laws or any provision of the Employee Retirement
Income Security Act of 1974 ("ERISA") or the rules and regulations
promulgated thereunder concerning the employees of the Company or any of
the Subsidiaries;
(w) the Company and the Subsidiaries and their respective properties,
assets and operations are in compliance with, and the Company and each of
the Subsidiaries hold all permits, authorizations and approvals required
under, Environmental Laws (as defined below), except to the extent that
failure to so comply or to hold such permits, authorizations or approvals
would not, individually or in the aggregate, have a Material Adverse
Effect; there are no past, present or, to the Company's knowledge,
reasonably anticipated future events, conditions, circumstances,
activities, practices, actions, omissions or plans that could reasonably
be expected to give rise to any material costs or liabilities to the
Company or any Subsidiary under, or to interfere with or prevent
compliance by the Company or any Subsidiary with, Environmental Laws;
except as would not, individually or in the aggregate, have a Material
Adverse Effect, neither the Company nor any of the Subsidiaries (i) is the
subject of any investigation, (ii) has received any notice or claim, (iii)
is a party to or affected by any pending or, to the Company's knowledge,
threatened action, suit or proceeding, (iv) is bound by any judgment,
decree or order or (v) has entered into any agreement, in each case
relating to any alleged violation of any Environmental Law or any actual
or alleged release or threatened release or cleanup at any location of any
Hazardous Materials (as defined below) (as used herein, "ENVIRONMENTAL
LAW" means any federal, state, local or foreign law, statute, ordinance,
rule, regulation, order, decree, judgment, injunction, permit, license,
authorization or other binding requirement, or common law, relating to
health, safety or the protection, cleanup or restoration of the
environment or natural resources, including those relating to the
distribution, processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of
Hazardous Materials, and "HAZARDOUS MATERIALS" means any material
(including, without limitation, pollutants, contaminants, hazardous or
toxic substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law);
(x) the Company and each of its Subsidiaries have
filed on a timely basis (including all valid extensions) all material
tax returns required to be filed through the
-11-
date hereof, and all such tax returns are true, correct and complete
in all material respects; the Company and each of its Subsidiaries have
paid all material taxes required to be paid, and have properly provided
for all taxes not yet due or payable on the consolidated books of the
Company; no tax deficiency has been determined adversely to the Company or
any of its Subsidiaries, nor does the Company or any of its Subsidiaries
have any knowledge of any tax deficiencies that would have a Material
Adverse Effect; the Company's ability to use its capital loss carryovers
(within the meaning of Section 1212 of the Code) is not currently limited
by the provisions of Sections 382 or 383 of the Code, and the Company's
ability to use its capital loss carryovers will not be limited by the
provisions of Sections 382 or 383 of the Code as a result of the Company's
issuance of the Shares pursuant to this Agreement;
(y) the Company and each of the Subsidiaries maintain insurance
covering their respective properties, operations, personnel and businesses
as the Company reasonably deems adequate; such insurance insures against
such losses and risks to an extent which is adequate in accordance with
customary industry practice to protect the Company and the Subsidiaries
and their respective businesses; all such insurance is fully in force on
the date hereof and will be fully in force at the Time of Purchase and
each Additional Time of Purchase, if any; neither the Company nor any
Subsidiary has reason to believe that it will not be able to renew any
such insurance, or obtain comparable coverage, as and when such insurance
expires;
(z) neither the Company nor any Subsidiary has sent or received any
communication regarding termination of, or intent not to renew, any of the
contracts or agreements referred to or described in any Pre-Pricing
Prospectus, and the Prospectus, or referred to or described in, or filed
as an exhibit to, the Registration Statement, and no such termination or
non-renewal has been threatened by the Company or any Subsidiary or, to
the Company's knowledge, any other party to any such contract or
agreement;
(aa) the Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(bb) the Company has established and maintains and evaluates
"disclosure controls and procedures" (as such term is defined in Rule
13a-15 and 15d-15 under the Exchange Act) and "internal control over
financial reporting" (as such term is defined in Rule 13a-15 and 15d-15
under the Exchange Act); such disclosure controls and procedures are
designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made
known to the individual who performs the functions
-12-
of a principal executive officer and the individual who performs the
functions of a principal financial officer, and such disclosure controls
and procedures are effective to perform the functions for which they were
established; the Company's independent auditors and the Audit Committee of
the Board of Directors of the Company have been advised of: (i) all
significant deficiencies, if any, in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize and report financial data; and (ii) all fraud, if any,
whether or not material, that involves management or other employees who
have a role in the Company's internal controls; all material weaknesses,
if any, in internal controls have been identified to the Company's
independent auditors; since the date of the most recent evaluation of such
disclosure controls and procedures and internal controls, there have been
no significant changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective actions
with regard to significant deficiencies and material weaknesses; the
individual who performs the functions of a principal executive officer and
the individual who performs the functions of a principal financial officer
of the Company have made all certifications required by the Xxxxxxxx-Xxxxx
Act of 2002 (the "XXXXXXXX-XXXXX ACT") and any related rules and
regulations promulgated by the Commission, and the statements contained in
each such certification are complete and correct; the Company, the
Subsidiaries and the Company's directors and officers, in their capacity
as directors and officers, are each in compliance in all material respects
with all applicable effective provisions of the Xxxxxxxx-Xxxxx Act and the
rules and regulations of the Commission and the NYSE promulgated
thereunder;
(cc) all statistical or market-related data included or incorporated
by reference in the Registration Statement, the Pre-Pricing Prospectuses,
and the Prospectus, are based on or derived from sources that the Company
reasonably believes to be reliable and accurate, and the Company has
obtained the written consent to the use of such data from such sources to
the extent required;
(dd) neither the Company nor any of the Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of the Subsidiaries has made any unlawful
payment in violation of the Foreign Corrupt Practices Act of 1977, as
amended (the "FOREIGN CORRUPT PRACTICES ACT"), to the extent applicable to
the Company and its Subsidiaries;
(ee) the operations of the Company and the Subsidiaries are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the
"MONEY LAUNDERING LAWS"), to the extent such requirements, statutes,
rules, regulations and guidelines are, with respect to the Money
Laundering Laws, applicable to the Company and its Subsidiaries; and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator or non-governmental authority to which
the Company or any of the Subsidiaries is a party, to the Company's
knowledge, is pending or threatened;
-13-
(ff) neither the Company nor any of the Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of the Subsidiaries is a prohibited person
or entity under any U.S. sanctions programs administered by the Office of
Foreign Assets Control of the U.S. Treasury Department ("OFAC"), to the
extent applicable to the Company and its Subsidiaries; and the Company
will not knowingly directly or indirectly use the proceeds of the offering
of the Shares contemplated hereby, or lend, contribute or otherwise make
available such proceeds to any Subsidiary, joint venture partner or other
person or entity in a manner that would violate any U.S. sanctions
programs administered by OFAC;
(gg) no Subsidiary is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other
distribution on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the Company or
any other Subsidiary of the Company, except as described in the
Registration Statement (excluding the exhibits thereto), each Pre-Pricing
Prospectus and the Prospectus;
(hh) the issuance and sale of the Shares as contemplated hereby will
not cause any holder of any shares of capital stock, securities
convertible into or exchangeable or exercisable for capital stock or
options, warrants or other rights to purchase capital stock or any other
securities of the Company to have any right to acquire any shares of the
Company;
(ii) the Company has not received any notice from the NYSE regarding
the delisting of the Common Stock from the NYSE;
(jj) neither the Company nor any of the Subsidiaries has taken,
directly or indirectly, any action designed, or which has constituted or
would cause or result in the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Shares; to the best of the Company's knowledge, neither the directors,
officers, affiliates (as defined in the Act) or control persons (as
defined in the Act) of the Company and its Subsidiaries has taken,
directly or indirectly, any action designed, or which has constituted or
would cause or result in the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Shares;
(kk) to the Company's knowledge, there are no affiliations or
associations between (i) any member of the NASD and (ii) the Company or
any of the Company's officers, directors or 5% or greater security holders
or any beneficial owner of the Company's unregistered equity securities
that were acquired at any time on or after the 180th day immediately
preceding the date the Registration Statement was initially filed with the
Commission, except as disclosed in the Registration Statement (excluding
the exhibits thereto), the Pre-Pricing Prospectuses and the Prospectus;
-14-
(ll) (A) the Company has duly elected to be regulated by the
Commission as a BDC under the Investment Company Act, and no order of
suspension or revocation has been issued or proceedings therefor initiated
or, to the knowledge of the Company, threatened by the Commission; such
election is effective; (B) the provisions of the Company's certificate of
incorporation and bylaws and the investment objectives, policies and
restrictions described in the most recent Pre-Pricing Prospectus and the
Prospectus, assuming they are implemented as described, will comply in all
material respects with the requirements of the Investment Company Act; and
(C) the Company is operated in a manner so as to be compliant in all
material respects with the provisions of the Investment Company Act
applicable to BDCs;
(mm) to the best of the Company's knowledge, when the Notification of
Election was filed with the Commission, it (a) contained all statements
required to be stated therein in accordance with, and complied in all
material respects with the requirements of the Investment Company Act and
(b) did not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein,
in light of the circumstances in which they were made, not misleading;
(nn) the Custodian Agreement, the Transfer Agency Letter Agreement and
the Fund Administration Servicing Agreement have been duly and validly
authorized, executed and delivered by the Company and none of such
agreements violate any of the applicable provisions of the Investment
Company Act or the Investment Advisers Act of 1940, as amended (the
"ADVISERS ACT"); and
(oo) the Company elected to be treated as a RIC under the Code
commencing with its taxable year ended October 31, 2000, and its proposed
method of operations as described in the Pre-Pricing Prospectus and the
Prospectus, to the Company's knowledge, will enable the Company to
continue to qualify as a RIC under the Code; the Company intends to direct
the proceeds of the sale of the Shares in such a manner as to enable the
Company to qualify as a RIC under the Code.
In addition, any certificate signed by any officer of the Company or
any of the Subsidiaries and delivered to the Underwriters or counsel for the
Underwriters in connection with the offering of the Shares shall be deemed to be
a representation and warranty by the Company, as to matters covered thereby, to
each Underwriter.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTMENT ADVISER. The
Investment Adviser represents and warrants to each of the Underwriters that:
(a) the Investment Adviser has been duly organized and is validly
existing as a limited liability company under the laws of the State of
Delaware, with full power and authority to conduct all of the activities
conducted by it, to own, lease or operate its properties and conduct its
business as described in the Registration Statement, the Pre-Pricing
Prospectuses and the Prospectus;
(b) the Investment Adviser is duly qualified to do business and in
-15-
good standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified and in good standing would
not, individually or in the aggregate, result in a Material Adverse
Effect;
(c) the Investment Adviser is (i) duly registered as an investment
adviser under the Advisers Act, and (ii) not prohibited by the Advisers
Act or the Investment Company Act from acting as the investment adviser
for the Company as contemplated by the Investment Advisory and Management
Agreement, the Registration Statement, the Pre-Pricing Prospectuses and
the Prospectus;
(d) this Agreement and the Investment Advisory and Management
Agreement have been duly and validly authorized, executed and delivered by
the Investment Adviser; this Agreement and the Investment Advisory and
Management Agreement do not violate any of the applicable provisions of
the Investment Company Act or the Advisers Act;
(e) neither (i) the execution and delivery by the Investment Adviser
of this Agreement or the Investment Advisory and Management Agreement nor
(ii) the consummation by the Investment Adviser of the transactions
contemplated by, or the performance of its obligations herein or therein
will conflict with, result in any breach or violation of or constitute a
default under (or constitute any event which, with notice, lapse of time
or both, would reasonably be expected to result in any breach or violation
of, constitute a default under or give the holder of any indebtedness (or
a person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness
under) (or result in the creation or imposition of a lien, charge or
encumbrance on any property or assets of the Investment Adviser pursuant
to) (A) the organizational documents of the Investment Adviser, (B) any
material agreement to which it is a party or by which any of its
properties may be bound or affected, or (C) any federal, state, local or
foreign law, regulation or rule, or (D) any rule or regulation of any
self-regulatory organization or other non-governmental regulatory
authority, or (E) any decree, judgment or order applicable to the
Investment Adviser or its properties;
(f) no approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, or of or with any self-regulatory
organization or other non-governmental regulatory authority is required
for the consummation of the transactions contemplated in, or the
performance by the Investment Adviser of its obligations under this
Agreement or the Investment Advisory and Management Agreement, except (i)
such as have been obtained under the Act, the Investment Company Act, or
the Advisers Act, (ii) such as may be required by the NYSE or under state
securities or blue sky laws, and (iii) to the extent such failures to
procure such approval, authorization, consent or order, individually or in
the aggregate, would not have a Material Adverse Effect;
(g) the description of the Investment Adviser and its
business and the statements attributable to the Investment
Adviser in the Registration Statement, the Pre-
-16-
Pricing Prospectuses and the Prospectus comply with the requirements
of the Act and the Investment Company Act and do not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein
not misleading;
(h) except as disclosed in the Registration Statement, the Pre-Pricing
Prospectuses and the Prospectus, there is no action, suit or proceeding
before or by any court, commission, regulatory body, administrative agency
or other governmental agency or body, foreign or domestic, now pending or
threatened against or affecting the Investment Adviser of a nature
required to be disclosed in the Registration Statement, the Pre-Pricing
Prospectuses or Prospectus or that might result in any Material Adverse
Effect or affect the ability of the Investment Adviser to fulfill its
obligations under the Investment Advisory and Management Agreement; and
(i) except for stabilization activities conducted by the Underwriters,
Share repurchases and the issuance or purchase of Shares pursuant to the
Company's Dividend Reinvestment Plan effected following the date on which
the distribution of the Shares is completed in accordance with the
policies of the Company as set forth in the Prospectus, the Investment
Adviser has not taken and will not take, directly or indirectly, any
action designed, or which might reasonably be expected to cause or result
in, or which will constitute, stabilization or manipulation of the price
of the shares of Common Stock in violation of applicable federal
securities laws.
In addition, any certificate signed by any officer of the Investment
Adviser and delivered to the Underwriters or counsel for the Underwriters in
connection with the offering of the Shares shall be deemed to be a
representation and warranty by the Investment Adviser, as to matters covered
thereby, to each Underwriter.
5. CERTAIN COVENANTS OF THE COMPANY AND THE INVESTMENT ADVISER. The
Company and the Investment Adviser hereby agree as follows; provided, however,
that Section 5(l) shall be the sole obligation of the Company:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale (i) under U.S.
federal securities laws and to maintain such qualifications in effect so
long as you may request for the distribution of the Shares and (ii) under
the securities laws of such other jurisdictions as you may reasonably
designate and to use our best efforts to maintain such qualifications in
effect so long as you may request for the distribution of the Shares;
PROVIDED, HOWEVER, that the Company shall not be required to qualify as a
foreign corporation or to consent to the service of process under the laws
of any such jurisdiction (except service of process with respect to the
offering and sale of the Shares); and to promptly advise you of the
receipt by the Company of any notification with respect to the suspension
of the qualification of the Shares for offer or sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon as
-17-
reasonably practicable after this Agreement becomes effective, and
thereafter from time to time to furnish to the Underwriters as many copies
of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may
reasonably request for the purposes contemplated by the Act; in case any
Underwriter is required to deliver in connection with the sale of the
Shares, a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act, or after the time a post-effective amendment to the
Registration Statement is required pursuant to Item 512(a) of Regulation
S-K under the Act, the Company will prepare, at its expense, promptly upon
request such amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the requirements
of Section 10(a)(3) of the Act or Item 512(a) of Regulation S-K under the
Act, as the case may be;
(c) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement, or
a Registration Statement under Rule 462(b) under the Act, to be filed with
the Commission and become effective before the Shares may be sold, the
Company will use its best efforts to cause such post-effective amendment
or such Registration Statement to be filed and become effective, and will
pay any applicable fees in accordance with the Act, as soon as possible;
and the Company will advise you promptly and, if requested by you, will
confirm such advice in writing or by electronic communication, (i) when
such post-effective amendment or such Registration Statement has become
effective, and (ii) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 497 under the Act
(which the Company agrees to file in a timely manner in accordance with
such Rules);
(d) if, at any time during the period when a prospectus is required by
the Act to be delivered in connection with any sale of Shares, the
Registration Statement shall cease to comply with the requirements of the
Act with respect to eligibility for the use of the form on which the
Registration Statement was filed with the Commission, to (i) promptly
notify you, (ii) as soon as reasonably practicable to file with the
Commission a new registration statement under the Act, relating to the
Shares, or a post-effective amendment to the Registration Statement, which
new registration statement or post-effective amendment shall comply with
the requirements of the Act, and to provide you and Underwriters' counsel
copies of any such documents for review and comment a reasonable amount of
time prior to any proposed filing and to file no such registration
statement or post-effective amendment to which you shall reasonably object
in writing, (iii) use its best efforts to cause such new registration
statement or post-effective amendment to become effective under the Act as
soon as practicable, (iv) promptly notify you of such effectiveness and
(v) take all other action necessary or appropriate to permit the public
offering and sale of the Shares to continue as contemplated in the
Prospectus;
(e) if, at any time during the period when a prospectus is required by
the Act to be delivered in connection with any sale of Shares, to advise
you promptly, and, if requested, confirming such advice in writing or
by electronic communication, of any request by the
Commission for amendments or supplements to the Registration
-18-
Statement, any Pre-Pricing Prospectus, or the Prospectus or for
additional information with respect thereto, or of notice of institution
of proceedings for, or the entry of a stop order, suspending the
effectiveness of the Registration Statement and, if the Commission should
enter a stop order suspending the effectiveness of the Registration
Statement, to use its best efforts to obtain the lifting or removal of
such order as soon as possible; to advise you promptly of any proposal to
amend or supplement the Registration Statement, any Pre-Pricing Prospectus
or the Prospectus, and to provide you and Underwriters' counsel copies of
any such documents for review and comment a reasonable amount of time
prior to any proposed filing and to file no such amendment or supplement
to which you shall reasonably object in writing;
(f) subject to Section 5(e) hereof, to file promptly all reports and
documents and any preliminary or definitive proxy or information statement
required to be filed by the Company with the Commission in order to comply
with the Exchange Act for so long as a prospectus is required by the Act
to be delivered in connection with any sale of Shares;
(g) to advise the Underwriters promptly of the happening of any event
within the period during which a prospectus is required by the Act to be
delivered in connection with any sale of Shares, which event could require
the making of any change in the Prospectus then being used so that the
Prospectus would not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading, and to advise the Underwriters promptly if, during such
period, it shall become necessary to amend or supplement the Prospectus to
cause the Prospectus to comply with the requirements of the Act, and, in
each case, during such time, subject to Section 5(e) hereof, to prepare
and furnish, at the Company's expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be necessary to
reflect any such change or to effect such compliance;
(h) to make generally available to its security holders, and to
deliver to you upon your written request, an earning statement of the
Company (which will satisfy the provisions of Section 11(a) of the Act)
covering a period of twelve months beginning after the effective date of
the Registration Statement (as defined in Rule 158(c) under the Act) as
soon as is reasonably practicable after the termination of such
twelve-month period but in any case not later than 20 days after the
termination of such twelve-month period;
(i) to furnish to you one copy for each Representative and one copy
for Underwriters' counsel copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto) and sufficient copies of the foregoing
(other than exhibits) for distribution of a copy to each of the other
Underwriters;
(j) to furnish to you as early as practicable prior to the
Time of Purchase and any Additional Time of Purchase, as
the case may be, but not later than two business days
-19-
prior thereto, a copy of the latest available unaudited interim and
monthly consolidated financial statements, if any, of the Company and the
Subsidiaries which have been read by the Company's independent registered
public accountants, as stated in their letter to be furnished pursuant to
Section 7(b) hereof;
(k) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus
Supplement;
(l) to pay all costs, expenses, fees and taxes in connection with (i)
the preparation and filing of the Registration Statement, each Basic
Prospectus, each Pre-Pricing Prospectus, the Prospectus Supplement, the
Prospectus and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (ii) the registration, issue,
sale and delivery of the Shares including any stock or transfer taxes and
stamp or similar duties payable upon the sale, issuance or delivery of the
Shares to the Underwriters, (iii) the producing, word processing and/or
printing of this Agreement, any Agreement Among Underwriters, any dealer
agreements, any powers of attorney and any closing documents (including
compilations thereof) and the reproduction and/or printing and furnishing
of copies of each thereof to the Underwriters and (except closing
documents) to dealers (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state or foreign
laws and the determination of their eligibility for investment under state
or foreign law (including the reasonable legal fees and filing fees and
other reasonable disbursements of counsel for the Underwriters) and the
printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) any listing of
the Shares on the NYSE or any securities exchange and any registration
thereof under the Exchange Act, (vi) any filing for review of the public
offering of the Shares by the NASD, including the reasonable legal fees
and filing fees and other reasonable disbursements of counsel to the
Underwriters relating to NASD matters, (vii) the fees and disbursements of
the Custodian or of the Transfer Agent or registrar for the Shares, (viii)
the costs and expenses of the Company relating to presentations or
meetings undertaken in connection with the marketing of the offering and
sale of the Shares to prospective investors and the Underwriters' sales
forces, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations,
travel, lodging and other expenses incurred by the officers of the Company
and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (ix) the performance of the Company's
other obligations hereunder, PROVIDED THAT, except as provided in this
Section 5(l) and Section 6, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel and the
expenses of advertising any offering of the Shares made by the
Underwriters outside the public offering contemplated by Section 2 of this
Agreement;
(m) beginning on the date hereof and ending on, and including, the
date that is 180 days after the date of the Prospectus Supplement
(the "LOCK-UP PERIOD"), without the prior written consent of UBS
and Bear, Xxxxxxx & Co. Inc., not to (i) issue, sell, offer to
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sell, contract or agree to sell, hypothecate, pledge, grant any option
to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, with respect to, any Common Stock or
any other securities of the Company issued by the Company, or any
securities convertible into or exchangeable or exercisable for, or any
warrants or other rights to purchase, the foregoing, (ii) file or cause to
become effective a registration statement under the Act relating to the
offer and sale of any Common Stock or any other securities of the Company
that are substantially similar to Common Stock, or any securities
convertible into or exchangeable or exercisable for, or any warrants or
other rights to purchase, the foregoing, (iii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of Common Stock or any other
securities of the Company that are substantially similar to Common Stock,
or any securities convertible into or exchangeable or exercisable for, or
any warrants or other rights to purchase, the foregoing, whether any such
transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise or (iv) publicly announce an intention to
effect any transaction specified in clause (i), (ii) or (iii), except, in
each case, for (A) the registration of the offer and sale of the Shares as
contemplated by this Agreement, (B) issuances of Common Stock upon the
exercise of options or warrants disclosed as outstanding in the
Registration Statement (excluding the exhibits thereto), each Pre-Pricing
Prospectus and the Prospectus, and (C) the issuance of employee stock
options not exercisable during the Lock-Up Period pursuant to stock option
plans described in the Registration Statement (excluding the exhibits
thereto), each Pre-Pricing Prospectus and the Prospectus; PROVIDED,
HOWEVER, that if (a) during the period that begins on the date that is
fifteen (15) calendar days plus three (3) business days before the last
day of the Lock-Up Period and ends on the last day of the Lock-Up Period,
the Company issues an earnings release or material news or a material
event relating to the Company occurs; or (b) prior to the expiration of
the Lock-Up Period, the Company announces that it will release earnings
results during the sixteen (16) day period beginning on the last day of
the Lock-Up Period, then the restrictions imposed by this Section 5(m)
shall continue to apply until the expiration of the date that is fifteen
(15) calendar days plus three (3) business days after the date on which
the issuance of the earnings release or the material news or material
event occurs;
(n) prior to the Time of Purchase or any Additional Time of Purchase,
as the case may be, to issue no press release or other communication
directly or indirectly and hold no press conferences with respect to the
Company or any Subsidiary, the financial condition, results of operations,
business, properties, assets, or liabilities of the Company or any
Subsidiary, or the offering of the Shares, (i) without your prior consent,
which consent shall not be unreasonably withheld in the case of such
communications that are subject to Rule 482 of the Act, and (ii) without
your prior review in the case of all other communications that are not
subject to Rule 482 of the Act;
(o) not, at any time during the period when a
prospectus is required by the Act to be delivered in connection
with the sale of Shares, to, directly or indirectly, offer or
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sell any Shares by means of any "prospectus" (within the meaning of
the Act), or use any "prospectus" (within the meaning of the Act) in
connection with the offer or sale of the Shares, in each case other than
the Prospectus;
(p) not to, and to cause the Subsidiaries not to, take, directly or
indirectly, any action designed, or which will constitute, or has
constituted, or might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares;
(q) to use its best efforts to cause the Shares to be listed on the
NYSE;
(r) if, at any time during the period when a prospectus is required by
the Act to be delivered in connection with the sale of Shares, to maintain
a custodian and an administrative agent, which may include the Company
and/or the Adviser, for the Company and a transfer agent and, if
necessary, a registrar for the Common Stock;
(s) to use its commercially reasonable efforts to maintain its status
as a BDC under the Investment Company Act; PROVIDED, HOWEVER, (i) the
Company may cease to be, or withdraw its election as a BDC under the
Investment Company Act, with the approval of its board of directors and a
vote of its stockholders as required by Section 58 of the Investment
Company Act, or a successor provision and (ii) the Company may spin-off
one or more Subsidiaries that would not operate as BDCs; and
(t) to operate in a manner so as to enable the Company to qualify as a
RIC under the Code for each taxable year during which it elects to be
treated as a BDC under the Investment Company Act; PROVIDED, HOWEVER, one
or more Subsidiaries may not operate in a manner so as to enable them to
qualify as a RIC.
6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the fifth paragraph of Section 9 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 5(l) hereof,
reimburse the Underwriters for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of their counsel incurred in
connection with this Agreement.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof, at the Time of
Purchase and, if applicable, at the Additional Time of Purchase, the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Company shall furnish to you at the Time of Purchase and,
if applicable, at the Additional Time of Purchase, opinions of Xxxxxxx,
Xxxx & Xxxxx LLP and Wildman, Harrold, Xxxxx & Xxxxx LLP, counsel
for the Company, addressed to the Underwriters, and dated
the Time of Purchase or the Additional Time of Purchase, as the
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case may be, with reproduced copies for each of the other
Underwriters, and in form and substance satisfactory to the counsel to the
Representatives, in substantially the form set forth in EXHIBIT B hereto.
(b) You shall have received from Ernst & Young letters dated the date
of this Agreement, the date of the Prospectus Supplement, the Time of
Purchase and, if applicable, the Additional Time of Purchase, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in the forms satisfactory to the Representatives, which
letters shall cover, without limitation, the various financial disclosures
contained in the Registration Statement, the Pre-Pricing Prospectuses, and
the Prospectus.
(c) You shall have received at the Time of Purchase and, if
applicable, at the Additional Time of Purchase, the favorable opinion of
Xxxxxxxx Chance US LLP, counsel for the Underwriters, dated the Time of
Purchase or the Additional Time of Purchase, as the case may be.
(d) No Prospectus or amendment or supplement to the Registration
Statement or the Prospectus shall have been filed to which you shall have
reasonably objected in writing.
(e) The Registration Statement and any registration statement required
to be filed, prior to the sale of the Shares, under the Act pursuant to
Rule 462(b) shall have been filed and shall have become effective under
the Act. The Prospectus Supplement shall have been filed with the
Commission pursuant to Rule 497 under the Act at or before 5:30 P.M., New
York City time, on the second full business day after the date of this
Agreement (or such earlier time as may be required under the Act).
(f) Prior to and at the Time of Purchase, and, if applicable, the
Additional Time of Purchase, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under
the Act or proceedings initiated under Section 8(d) or 8(e) of the Act;
(ii) the Registration Statement and all amendments thereto shall not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; (iii) none of the Pre-Pricing Prospectuses or the
Prospectus, and no amendment or supplement thereto, shall include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; and (iv) no
Disclosure Package, and no amendment or supplement thereto, shall include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(g) The Company will, at the Time of Purchase and, if applicable, at
the Additional Time of Purchase, deliver to you a certificate of its
principal executive and financial officers, dated the Time of Purchase or
the Additional Time of Purchase, as the case may be, in the form attached
as EXHIBIT C hereto.
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(h) You shall have received each of the signed Lock-Up Agreements
referred to in Section 5(m) hereof, and each such Lock-Up Agreement shall
be in full force and effect at the Time of Purchase and the Additional
Time of Purchase, as the case may be.
(i) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement, any Pre-Pricing Prospectus, and the Prospectus as
of the Time of Purchase and, if applicable, the Additional Time of
Purchase, as you may reasonably request.
(j) The Shares shall have been approved for listing on the NYSE,
subject only to notice of issuance at or prior to the Time of Purchase or
the Additional Time of Purchase, as the case may be.
(k) The NASD shall not have raised any objection with respect to the
fairness or reasonableness of the underwriting terms and arrangements,
contemplated hereby.
8. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall become
effective when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of the Representatives, if (1) since
the time of execution of this Agreement or the earlier respective dates as of
which information is given in the Registration Statement, the Pre-Pricing
Prospectuses, and the Prospectus, there has been any change or any development
involving a prospective change in the business, properties, management,
financial condition or results of operations of the Company and the Subsidiaries
taken as a whole, the effect of which change or development is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the public offering or the delivery
of the Shares on the terms and in the manner contemplated in the Registration
Statement, the Pre-Pricing Prospectuses, and the Prospectus, or (2) since the
time of execution of this Agreement, there shall have occurred: (A) a suspension
or material limitation in trading in securities generally on the NYSE, the
American Stock Exchange or the NASDAQ Stock Market; (B) a suspension or material
limitation in trading in the Company's securities on the NYSE; (C) a general
moratorium on commercial banking activities declared by either federal or New
York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (D) an
outbreak or escalation of hostilities or acts of terrorism involving the United
States or a declaration by the United States of a national emergency or war; or
(E) any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of any such
event specified in clause (D) or (E), in the sole judgment of the
Representatives, makes it impractical or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement, the Pre-Pricing Prospectuses, and
the Prospectus, or (3) since the time of execution of this Agreement, there
shall have occurred any downgrading, or any notice or announcement shall have
been given or made of: (A) any intended or potential downgrading or (B) any
watch, review or possible change that does not indicate an affirmation or
improvement in the rating accorded any securities of or guaranteed by the
-24-
Company or any Subsidiary by any "nationally recognized statistical rating
organization," as that term is defined in Rule 436(g)(2) under the Act.
If the Representatives elect to terminate this Agreement as provided in
this Section 8, the Company and each other Underwriter shall be notified
promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement, or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 5(l), 6 and 10 hereunder).
9. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections 7 and 8
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 7 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 8
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters (including the
Underwriters, if any, substituted in the manner set forth below) shall take up
and pay for (in addition to the aggregate number of Firm Shares they are
obligated to purchase pursuant to Section 1 hereof) the number of Firm Shares
agreed to be purchased by all such defaulting Underwriters, as hereinafter
provided. Such Shares shall be taken up and paid for by such non-defaulting
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set forth opposite
the names of such non-defaulting Underwriters in SCHEDULE A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the Time of Purchase for a period not exceeding five business days
in order that any required changes, if any, to the Registration Statement and
the Prospectus and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 9 with like effect as if
such substituted Underwriter had originally been named in SCHEDULE A hereto.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of
the total number of Firm Shares which all
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Underwriters agreed to purchase hereunder, and if neither the
non-defaulting Underwriters nor the Company shall make arrangements within the
five business day period stated above for the purchase of all the Firm Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall terminate without further act or deed and without any
liability on the part of the Company to any Underwriter and without any
liability on the part of any non-defaulting Underwriter to the Company. Nothing
in this paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. INDEMNITY AND CONTRIBUTION.
(a) Each of the Company and the Investment Adviser agrees jointly and
severally, to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, and any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, and the successors and assigns of all of the foregoing
persons, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of any investigation incurred in connection
therewith) which, jointly or severally, any such Underwriter or any such
person may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or
in the Registration Statement as amended by any post-effective amendment
thereof by the Company) or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
any such loss, damage, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a material
fact contained in, and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in, the Registration
Statement or arises out of or is based upon any omission or alleged
omission to state a material fact in the Registration Statement in
connection with such information, which material fact was not contained in
such information and which material fact was required to be stated in such
Registration Statement or was necessary to make such information not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact included in any Prospectus (the term Prospectus for the
purpose of this Section 10 being deemed to include any Basic Prospectus,
any Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus and
any amendments or supplements to the foregoing), or arises out of or is
based upon any omission or alleged omission to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except, with
respect to such Prospectus, insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in, and in
conformity with information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company
expressly for use in, such Prospectus or arises out of or is
based upon any omission or alleged omission to state a
material fact in such Prospectus in connection with such
information, which material fact was not contained in
-26-
such information and which material fact was necessary in order to
make the statements in such information, in the light of the circumstances
under which they were made, not misleading; provided, however, that,
subject to applicable provisions of the Investment Company Act, if any,
the Company shall not be responsible under this Section 10 for any loss,
damage, expense, liability or claim that is finally judicially determined
to have resulted from the bad faith, gross negligence or willful
misconduct of the Underwriter in the performance of its duties or by
reason of its reckless disregard of its duties and obligations under this
Agreement.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, the Investment Adviser, their respective directors
and officers, and any person who controls the Company or the Investment
Adviser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing
persons, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of any investigation incurred in connection
therewith) which, jointly or severally, the Company or the Investment
Adviser or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability
or claim arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in, and in
conformity with information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company
expressly for use in, the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company), or arises out of or is based upon any omission or alleged
omission to state a material fact in such Registration Statement in
connection with such information, which material fact was not contained in
such information and which material fact was required to be stated in such
Registration Statement or was necessary to make such information not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in, and in conformity with information concerning
such Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in, a Prospectus, or arises
out of or is based upon any omission or alleged omission to state a
material fact in such Prospectus in connection with such information,
which material fact was not contained in such information and which
material fact was necessary in order to make the statements in such
information, in the light of the circumstances under which they were made,
not misleading.
(c) If any action, suit or proceeding (each, a "PROCEEDING") is
brought against a person (an "INDEMNIFIED PARTY") in respect of
which indemnity may be sought against the Company, the Investment
Adviser or an Underwriter (as applicable, the "INDEMNIFYING
PARTY") pursuant to subsection (a) or (b), respectively, of this
Section 10, such indemnified party shall promptly notify such
indemnifying party in writing of the institution of such Proceeding
and such indemnifying party shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses; PROVIDED,
HOWEVER, that the omission to so notify such indemnifying party
shall not relieve such indemnifying party from any liability which
such indemnifying party may have to any indemnified party or
-27-
otherwise. The indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
or parties unless the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the
defense of such Proceeding or the indemnifying party shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to defend such Proceeding or such indemnified party or parties
shall have reasonably concluded that there may be defenses available to it
or them which are different from, additional to or in conflict with those
available to such indemnifying party (in which case such indemnifying
party shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties), in any of which events such
fees and expenses shall be borne by such indemnifying party and paid as
incurred (it being understood, however, that such indemnifying party shall
not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties
who are parties to such Proceeding). The indemnifying party shall not be
liable for any settlement of any Proceeding effected without its written
consent but, if settled with its written consent, such indemnifying party
agrees to indemnify and hold harmless the indemnified party or parties
from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the
second sentence of this Section 10(c), then the indemnifying party agrees
that it shall be liable for any settlement of any Proceeding effected
without its written consent if (i) such settlement is entered into more
than 60 business days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have fully
reimbursed the indemnified party in accordance with such request prior to
the date of such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not include
an admission of fault or culpability or a failure to act by or on behalf
of such indemnified party.
(d) If the indemnification provided for in this Section 10 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 10 or insufficient to hold an indemnified party harmless in
respect of any losses, damages, expenses, liabilities or claims referred
to therein, then each applicable indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
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Company and the Investment Adviser on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted
in such losses, damages, expenses, liabilities or claims, as well as any
other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same respective proportions as the total proceeds from
the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company, and the total underwriting
discounts and commissions received by the Underwriters, bear to the
aggregate public offering price of the Shares. The relative fault of the
Company and the Investment Adviser on the one hand and of the Underwriters
on the other shall be determined by reference to, among other things,
whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by
the Company and/or the Investment Adviser or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
party in connection with investigating, preparing to defend or defending
any Proceeding.
(e) The Company, the Investment Adviser and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 10 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable
considerations referred to in subsection (d) above. Notwithstanding the
provisions of this Section 10, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by such Underwriter and distributed to the
public were offered to the public exceeds the amount of any damage which
such Underwriter has otherwise been required to pay by reason of such
untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute pursuant to this Section 10
are several in proportion to their respective underwriting commitments and
not joint.
(f) The indemnity and contribution agreements contained in this
Section 10 and the covenants, warranties and representations of the
Company and the Investment Adviser contained in this Agreement shall
remain in full force and effect regardless of any investigation made by or
on behalf of any Underwriter, its partners, directors or officers or any
person (including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or by or on behalf of the Company or the
Investment Adviser, or their directors, officers, managers or members or
any person who controls them within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, and shall survive any termination of
this Agreement or the issuance and delivery of the Shares. The Company and
the Investment Adviser (on the one hand) and each Underwriter (on the
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other) agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors or the Investment Adviser in connection
with the issuance and sale of the Shares, or in connection with the
Registration Statement, any Basic Prospectus, any Pre-Pricing Prospectus,
or the Prospectus.
11. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth in
a letter in the form attached hereto as Schedule C constitute the only
information furnished by or on behalf of the Underwriters, as such information
is referred to in Sections 3 and 10 hereof.
12. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram or facsimile
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to the Representatives, c/o UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx,
XX 00000-0000, Attention: Syndicate Department and, if to the Company, shall be
sufficient in all respects if delivered or sent to the Company at the offices of
the Company at 000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000, Attention: Xxxxxx
Xxxxxxx-Xxxxxxxxx, Vice President/Secretary.
13. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("CLAIM"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
14. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company and the
Investment Adviser consents to the jurisdiction of such courts and personal
service with respect thereto. The Company and the Investment Adviser hereby
consent to personal jurisdiction, service and venue in any court in which any
Claim arising out of or in any way relating to this Agreement is brought by any
third party against any Underwriter or any indemnified party. To the extent
permitted by law, each Underwriter, the Investment Adviser and the Company (on
its behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waive all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement. The Company and the
Investment Adviser agree that a final judgment in any such action, proceeding or
counterclaim brought in any such court shall be conclusive and binding upon the
Company and the Investment Adviser and may be enforced in any other courts to
the jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
15. PARTIES AT INTEREST. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 10 hereof the controlling persons, partners,
directors and officers referred to in such Section, and their respective
successors, assigns, heirs, personal representatives and executors and
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administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
16. NO FIDUCIARY RELATIONSHIP. The Company and the Investment Adviser
hereby acknowledge that the Underwriters are acting solely as underwriters in
connection with the purchase and sale of the Company's securities. The Company
and the Investment Adviser further acknowledge that the Underwriters are acting
pursuant to a contractual relationship created solely by this Agreement entered
into on an arm's length basis, and in no event do the parties intend that the
Underwriters act or be responsible as a fiduciary to the Company, its
management, stockholders or creditors or to the Investment Adviser or any other
person in connection with any activity that the Underwriters may undertake or
have undertaken in furtherance of the purchase and sale of the Company's
securities, either before or after the date hereof. To the extent permitted by
law, the Underwriters hereby expressly disclaim any fiduciary obligations to the
Company and the Investment Adviser, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and the Company and the Investment Adviser hereby confirm their understanding
and agreement to that effect. The Company the Investment Adviser and the
Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions and that any
opinions or views expressed by the Underwriters to the Company or the Investment
Adviser regarding such transactions, including, but not limited to, any opinions
or views with respect to the price or market for the Company's securities, do
not constitute advice or recommendations to the Company.
17. COUNTERPARTS. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
19. MISCELLANEOUS. UBS, an indirect, wholly owned subsidiary of UBS AG, is
not a bank and is separate from any affiliated bank, including any U.S. branch
or agency of UBS AG. Because UBS is a separately incorporated entity, it is
solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
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If the foregoing correctly sets forth the understanding the Company and
the several Underwriters, please so indicate in the space provided below for
that purpose, whereupon this Agreement and your acceptance shall constitute a
binding agreement between the Company, the Investment Adviser and the
Underwriters, severally.
Very truly yours,
MVC CAPITAL INC.
By:/s/ Xxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President and Secretary
THE XXXXXX GROUP ADVISERS LLC
By:/s/ Xxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Accepted and agreed to as of the date first above written, on behalf of
themselves and the other several Underwriters named in SCHEDULE A
UBS SECURITIES LLC
BEAR, XXXXXXX & CO. INC.
As Representatives of the several Underwriters named in Schedule A
By: UBS SECURITIES LLC
By:/s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
By:/s/ Xxxxxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxxxxx Xxxxxxx
Title: Executive Director
By: BEAR, XXXXXXX & CO. INC.
By:/s/ Xxxxxxx Parish
---------------------------------------
Name: Xxxxxxx Parish
Title: Senior Managing Director
SCHEDULE A
Number of Firm
Underwriter Shares
------------------------------------------------------- --------------
UBS Securities LLC..................................... 1,812,500
Bear, Xxxxxxx & Co. Inc................................ 1,812,500
RBC Capital Markets Corporation........................ 625,000
Imperial Capital, LLC.................................. 500,000
Xxxxxx Xxxxxx & Co. Inc................................ 250,000
-------------------
Total............................................. 5,000,000
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