EXHIBIT 25.2(h)(2)
PRIVATE PLACEMENT AGENCY AGREEMENT
among
YORK ENHANCED STRATEGIES FUND, LLC,
YORK ENHANCED STRATEGIES MANAGEMENT, LLC,
XXXXXX XXXXXXX & CO. INCORPORATED,
and
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
November 17, 2005
PRIVATE PLACEMENT AGENCY AGREEMENT
November 17, 2005
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Xxxxxx Xxxxxxx
Ladies and Gentlemen:
YORK ENHANCED STRATEGIES FUND, LLC (the "ISSUER") is a Delaware
limited liability company, which will be registered as a nondiversified,
closed-end management investment company under the U.S. Investment Company Act
of 1940, as amended, and the rules and regulations thereunder (collectively, the
"INVESTMENT COMPANY ACT"). York Enhanced Strategies Management, LLC is a
registered investment adviser under the U.S. Investment Advisers Act of 1940, as
amended, (along with the rules and regulations thereunder, the "ADVISERS ACT")
and along with certain of its affiliates will serve as the investment manager of
the Issuer (the "INVESTMENT MANAGER"). Capitalized terms used but not otherwise
defined herein have the respective meanings set forth in the Private Placement
Documents (as defined herein).
The Issuer is authorized to issue common shares (the "COMMON SHARES"),
preferred shares (the "PREFERRED SHARES", together with the Common Shares, the
"SHARES") and revolving notes (the "NOTES") under the Indenture to be entered
into by and between the Issuer and JPMorgan Chase, NA, as trustee (the Shares,
together with the Notes, the "SECURITIES"). It is currently anticipated that an
aggregate of $109.0 million of Preferred Shares will be issued by the Issuer in
the form of floating rate term cumulative preferred securities ("TERM PREFERRED
SHARES") with a liquidation preference and other terms authorized by the board
of directors of the Issuer at the time of issuance in conformity with the
Investment Company Act and pursuant to the related Preferred Share Purchase
Agreement, to be entered into by and among the Issuer and the holders of the
Term Preferred Shares (the "PREFERRED SHARE PURCHASE AGREEMENT"). In addition,
it is currently anticipated that the Issuer will issue an aggregate of $216.0
million of the Notes under the Indenture and pursuant to the related Note
Purchase Agreement, to be entered
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into by and among the Issuer, Deutsche Bank Trust Company Americas, as Note
agent, and the holders of the Notes (the "NOTE PURCHASE AGREEMENT").
The Issuer proposes to offer the Securities for sale solely to persons
that are "accredited investors" ("ACCREDITED INVESTORS") as defined by Rule
501(a) of Regulation D of the U.S. Securities Act of 1933, as amended (the
"SECURITIES ACT"), "qualified clients" ("QUALIFIED CLIENTS") within the meaning
of Rule 205-3 under the Advisers Act, "qualified purchasers" ("QUALIFIED
PURCHASERS") within the meaning of Section 2(a)(51)(A) under the Investment
Company Act and the regulations promulgated thereunder and "qualified
institutional buyers" (the "QUALIFIED INSTITUTIONAL BUYERS") as defined by Rule
144A of the Securities Act (collectively, the Accredited Investors, the
Qualified Clients, the Qualified Purchasers and the Qualified Institutional
Buyers are, the "QUALIFIED INVESTORS"). The Issuer desires to retain Xxxxxx
Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX") and Xxxxxx Xxxxxxx & Co.
International Limited ("MSIL") to act as its placement agents in connection with
the offer and sale of the Preferred Shares and the Notes by the Issuer. For the
avoidance of doubt, Xxxxxx Xxxxxxx and MSIL shall hereinafter be jointly
referred to as the "PLACEMENT AGENT."
The Preferred Shares will be issued pursuant to an operating
agreement, dated as of November 3, 2005, as amended through the date hereof,
(the "OA") among the initial Directors, York Enhanced Strategies Management,
LLC, as Initial Member (as defined in the OA); and those persons identified as
Members (as defined in the OA) in the books of the Issuer as of the date of the
OA, and the Statement of Preferences of Term Cumulative Preferred Shares (the
"Statement") dated November 17, 2005 which is attached to the Operating
Agreement as Appendix A and made a part thereof (the OA together with the
Statement, the "Operating Agreement"). The Operating Agreement and the
Certificate of Formation of the Issuer are referred to herein as the
"ORGANIZATIONAL DOCUMENTS." The Notes will be issued pursuant to the indenture,
dated as of November 17, 2005 (the "Indenture") by and between the Issuer and XX
Xxxxxx Chase, N.A., as trustee (the "Trustee").
The Securities will be offered and sold without being registered under
the Securities Act in compliance with the exemption from registration provided
by Section 4(2) and Regulation D thereof. In connection with the offer and sale
of the Preferred Shares and the Notes, the Issuer prepared and delivered to the
Placement Agent, for delivery to prospective investors in the Preferred Shares
and the Notes, the preliminary private placement memoranda dated October 6, 2005
(the "Preliminary PPM") and a final private placement memorandum dated November
16, 2005, as supplemented by the Private Placement Memorandum Supplement, dated
November 17, 2005 (the "FINAL PPM"). Such Preliminary PPM and Final PPM,
including (i) all amendments or supplements thereto, or revisions thereof; and
(ii) any accompanying exhibits are collectively referred to herein as the "PPM."
In connection with the offer and sale of the Common Shares, the Issuer prepared
and delivered to the placement agents for the Common Shares (the "COMMON SHARE
PLACEMENT AGENT"), for delivery to prospective investors of the Common Shares, a
preliminary private placement memorandum dated April 21, 2005 (the "PRELIMINARY
COMMON SHARE PPM"), and a final private placement memorandum dated November 2,
2005, as supplemented by the Private Placement Supplement, dated November 15,
2005 (the "FINAL COMMON SHARE PPM"). Such Preliminary Common Share PPM and Final
Common Share PPM, including (i) all amendments or supplements thereto, or
revisions thereof; and (ii) any accompanying exhibits are collectively referred
to herein as the "COMMON SHARE PPM"
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(together with the PPM, the "PRIVATE PLACEMENT Documents"). In addition, the
Issuer, the Investment Manager and the Common Share Placement Agent entered into
the Common Share Private Placement Agency Agreement as of November 17, 2005 (the
"COMMON SHARE PLACEMENT Agreement"). The Issuer has retained MSIL acting through
its Fixed Income Division ("FID") to act as its placement agent in connection
with the offer and sale of the Common Shares by the Issuer, shares of York
Enhanced Strategies Feeder Fund, a Delaware statutory trust (the "Delaware
Feeder Fund") and shares of York Enhanced Strategies Feeder Fund (Cayman) Ltd.,
a Cayman Islands company (together with the Delaware Feeder Fund, the "FEEDER
FUNDS") outside the United States. In addition, the Issuer has granted to MSIL
acting through its Private Wealth Management division ("PWM") the right to
distribute the Common Shares of the Issuer and shares of the Feeder Funds
outside the United States and PWM has agreed to act as distributor thereof
subject to Appendix A of the Common Share Placement Agreement. The Private
Placement Documents describe, among other things, the terms of the Common
Shares, the Preferred Shares, the Notes, the Issuer, the Investment Manager, the
Operating Agreement, the Indenture and certain risk factors.
The Issuer will file with the U.S. Securities and Exchange Commission
(the "SEC"), in accordance with the provisions of the Investment Company Act, a
registration statement on Form N-2 (the "REGISTRATION STATEMENT") and a
Notification of Registration on Form N-8A (the "NOTIFICATION") pursuant to
Section 8 of the Investment Company Act.
1. Representations and Warranties of the Issuer.
The Issuer represents and warrants to, and agrees with the Placement
Agent that, as of the date hereof and as of the Closing Date (as defined in
Section 4 hereof):
(i) Each of the Common Share PPM and the PPM (which, for
purposes of this sentence shall be deemed to include
additional materials provided to prospective
investors by or on behalf of the Issuer where such
materials: (a) have been reviewed and approved by the
Investment Manager or (b) were provided by the
Investment Manager to the Issuer, the Placement Agent
or to prospective investors) as of the date thereof
does not, and as of the Closing Date will not,
contain any untrue statement of a material fact or
omit any material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading, except
that the representations and warranties set forth in
this Section 1(i) do not apply to statements or
omissions in the Final Common Share PPM or the Final
PPM based upon information furnished in writing by
the Placement Agent regarding the Placement Agent
expressly for use therein. Such information provided
by the Placement Agent for the Final Common Share PPM
and the Final PPM shall be referred to herein as the
"PLACEMENT AGENT'S INFORMATION."
(ii) The Issuer has been duly organized, is validly
existing as a limited liability company in good
standing under the laws of the State of Delaware and
has the power and authority to own its assets, to
conduct its business as described in the Final PPM
and to execute, deliver and perform its
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obligations under this Agreement, the Operating
Agreement, the Common Share Placement Agreement, the
Custodial Agreement, the Special Custody and Pledge
Agreement, the Investment Management Agreement, the
Pledge and Intercreditor Agreement, the Indenture,
the Fee Letter (as defined below), any subscription
or purchase agreements relating to the Preferred
Shares between the Issuer and the purchasers named
therein; including the Preferred Share Purchase
Agreement and any purchase agreements relating to the
Notes between the Issuer and the purchasers named
therein; including the Note Purchase Agreement
(collectively, the "RELATED Agreements"), except to
the extent that the failure to be in good standing
would not have a material adverse effect on the
Issuer.
(iii) Each of this Agreement, the Operating Agreement and
the Related Agreements does not violate in any
material respect any of the applicable provisions of
the Investment Company Act or the Advisers Act.
(iv) On the Closing Date, the anticipated capital
structure of the Issuer is substantially as set forth
in the Final PPM and the Preferred Shares and the
Notes conform in all material respects to their
descriptions in the Final PPM and, when issued and
paid for pursuant to the terms of their respective
purchase agreements, the Preferred Shares and the
Notes will be fully paid and non-assessable, and the
issuance of such Preferred Shares and Notes will not
be subject to any preemptive or similar right. On
the Closing Date, the Preferred Shares and the Notes
will have been duly authorized by the Issuer and each
of the Related Agreements will have been duly
authorized by the Issuer and, when executed and
delivered by the Issuer and the other parties
thereto, will constitute a valid and legally binding
agreement of the Issuer enforceable against the
Issuer in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of
general applicability relating to or affecting
creditors' rights and to general equity principles,
and except as rights to indemnity thereunder may be
limited by federal or state securities laws.
(v) The execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under,
each of the Related Agreements does not and will not
contravene any provision of applicable law or the
Organizational Documents or any agreement or other
instrument binding upon the Issuer that is material
to the Issuer, or any judgment, order or decree of
any governmental body, agency or court having
jurisdiction over the Issuer, and no consent,
approval, authorization or order of, or
qualification with, any governmental body or agency
is required for the performance by the Issuer of its
obligations relating to the Preferred Shares or the
Notes or under any of the Related Agreements, except
such as may be required under foreign or state
securities or Blue Sky laws in any jurisdiction in
connection with the sale of the Preferred Shares and
the
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Notes, the Exemptive Order (as defined below) and
such other approvals as have been obtained and are in
full force and effect.
(vi) The Issuer owns, possesses or has obtained all
necessary consents, licenses, authorizations,
approvals, orders, certificates and permits of and
from, and has made all declarations and filings with,
all federal, state, local and other governmental
authorities, all self-regulatory organizations and
all courts and other tribunals, whether foreign or
domestic, required for the execution, delivery or
performance by the Issuer of this Agreement and to
own and use its assets and to conduct its business in
the manner described in the Final PPM, except for the
Exemptive Order.
(vii) There are no legal or governmental proceedings
pending or, to the Issuer's knowledge after due
inquiry, threatened to which the Issuer is a party or
to which any of the assets of the Issuer is subject.
(viii) Assuming that the representations, warranties and
covenants made by the Placement Agent in this
Agreement are true and correct and have been and will
be complied with, that the representations,
warranties and covenants made or deemed to be made by
holders of the Preferred Shares and the Notes in the
respective purchase agreements relating to such
Preferred Shares and the Notes are true and correct
and have been and will be complied with and that the
Preferred Shares and the Notes are offered and sold
by the Placement Agent in accordance with the Final
PPM, no registration of the Preferred Shares and the
Notes under the Securities Act is required for the
offer, sale and delivery of the Preferred Shares and
the Notes.
(ix) The Issuer has not taken, directly or indirectly, any
action prohibited by Rule 102 of Regulation M under
the U.S. Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT").
(x) Neither the Issuer nor any of its affiliates as
defined in Rule 501(b) of Regulation D under the
Securities Act (each, an "AFFILIATE") has directly,
or through any agent, (a) sold, offered for sale,
solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the
Securities Act) which is or will be integrated with
the sale of the Securities in a manner that would
require the registration under the Securities Act of
the Securities or (b) engaged in any form of general
solicitation or general advertising in connection
with the offering of Securities (as those terms are
used in Regulation D under the Securities Act) or
sold, offered for sale or solicited offers to buy
Securities in any manner involving a public offering
within the meaning of Section 4(2) of the Securities
Act.
(xi) The Final PPM complies in all material respects with
the applicable requirements of Regulation D under the
Securities Act.
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(xii) Based on the procedures set forth in the
Organizational Documents, the Issuer has a reasonable
belief that initial sales and subsequent transfers of
the Preferred Shares and the Notes will be limited to
persons who are Qualified Investors.
(xiii) The Issuer intends to elect and to qualify for the
special tax treatment afforded to registered
investment companies under Subchapter M of the
Internal Revenue Code of 1986, as amended (the
"CODE").
(xiv) On the Closing Date, the Issuer will have complied
and will continue to comply in all material respects
with all applicable statutes, rules, regulations and
orders, enforced or promulgated by the SEC.
(xv) 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 to the
knowledge of the Issuer, threatened against or
affecting the Issuer, which might result in any
material adverse change in the condition, financial
or otherwise, business affairs or business prospects
of the Issuer or might materially adversely affect
the properties or assets of the Issuer.
(xvi) When filed and at any time thereafter, the
Notification and the Registration Statement will not
contain any untrue statement of a material fact or
omit any material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading.
(xvii) Except for that certain exemptive relief requested
from the SEC by application, by the Issuer, the
Investment Manager and JGD Management Corp. ("JGD")
under Section 17(d) of the Investment Company Act
(the "Exemptive Order"), no other consent, approval,
exemptive order, authorization or order of any court,
governmental agency or body or securities exchange or
association, whether foreign or domestic, is required
for the consummation of the transactions contemplated
in, or the performance by the Issuer of its
obligations under, this Agreement, the Operating
Agreement or the Related Agreements, except such as
(a) have been obtained under the Securities Act, the
Investment Company Act, or the Advisers Act, and (b)
may be required under foreign or state securities or
Blue Sky laws, in connection with the placement of
the Preferred Shares and the Notes by the Placement
Agent pursuant to this Agreement.
(xviii) The Issuer represents that it has policies,
procedures and internal controls in place that are
reasonably designed to comply with all anti-money
laundering laws and regulations applicable to it,
including applicable provisions of the USA PATRIOT
Act of 2001 and the regulations administered by the
U.S. Department of the Treasury's Office of Foreign
Assets Control.
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2. Representations and Warranties of the Investment Manager.
The Investment Manager represents and warrants to, and agrees with,
the Placement Agent that, as of the date hereof and as of the Closing Date (as
defined in Section 4 hereof):
(i) The Investment Manager has been duly formed and is
validly existing as a limited liability company under
the laws of New York and has full power and authority
to conduct all of the activities to be conducted by
it, to own or lease all of the assets owned or leased
by it and to conduct its business as described in the
Final PPM, and is duly licensed and qualified to do
business and is in good standing in each jurisdiction
in which it is required to be so qualified, except to
the extent that failure to be so qualified or be in
good standing would not have a material adverse
affect on its ability to provide services to the
Issuer; and owns, possesses or has obtained (except
for the Exemptive Order) and currently maintains all
governmental licenses, permits, consents, orders,
approvals and other authorizations, whether foreign
or domestic, necessary to carry on its business as
contemplated in the Final PPM.
(ii) The Investment Manager has full power and authority
to enter into this Agreement and the Investment
Management Agreement (the "INVESTMENT MANAGEMENT
AGREEMENT") and to carry out all the terms and
provisions hereof and thereof to be carried out by
it; and this Agreement and the Investment Management
Agreement have been duly and validly authorized,
executed and delivered by the Investment Manager;
this Agreement and the Investment Management
Agreement do not violate in any material respect any
of the applicable provisions of the Investment
Company Act or the Advisers Act; and assuming due
authorization, execution and delivery by the other
parties thereto, this Agreement and the Investment
Management Agreement constitute legal, valid and
binding obligations of the Investment Manager,
enforceable in accordance with its terms, subject, as
to enforcement, to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights
generally and to general equitable principles
(regardless of whether enforcement is sought in a
proceeding in equity or at law) and except as rights
to indemnity thereunder may be limited by federal or
state securities laws.
(iii) (a) The Investment Manager is (I) 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 Issuer as contemplated by this Agreement, the
Investment Management Agreement or the Final PPM, and
(b) each of this Agreement and the Related Agreements
to which the Investment Manager is a party does not
violate in any material respect any of the applicable
provisions of the Investment Company Act or the Advisers
Act.
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(iv) Neither (a) the execution and delivery by the Investment
Manager of this Agreement or the Related Agreements to
which it is a party nor (b) the consummation by, the
Investment Manager of the transactions contemplated by,
or the performance of its obligations under this
Agreement or the Related Agreements to which it is a
party conflicts or will conflict with, or results or
will result in a breach of, the governing documents of
the Investment Manager or any agreement or instrument to
which the Investment Manager is a party or by which the
Investment Manager is bound, or any law, rule or
regulation, or order of any court, governmental
instrumentality, securities exchange or association or
arbitrator, whether foreign or domestic, applicable to
the Investment Manager.
(v) Except for the Exemptive Order, no other consent,
approval, exemptive order, authorization or order of any
court, governmental agency or body or securities
exchange or association, whether foreign or domestic, is
required for the consummation of the transactions
contemplated in, or the performance by the Investment
Manager of its obligations under, this Agreement or the
Investment Management Agreement, except such as (a) have
been obtained under the Securities Act, the Investment
Company Act, or the Advisers Act, and (b) may be
required under foreign or state securities or Blue Sky
laws, in connection with the placement of the Preferred
Shares and the Notes by the Placement Agent pursuant to
this Agreement.
(vi) The description of the Investment Manager and its
business and the statements attributable to the
Investment Manager in the Final PPM comply with the
requirements of 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, in
light of the circumstances under which they were made,
not misleading.
(vii) 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, to the knowledge of the
Investment Manager, threatened against or affecting the
Investment Manager of a nature required to be disclosed
in the Final PPM or that might reasonably be expected to
result in any material adverse change in the condition,
financial or otherwise, business affairs or business
prospects of the Investment Manager or the ability of
the Investment Manager to fulfill its obligations under
this Agreement or the Investment Management Agreement.
(viii) The Investment Manager is in compliance and will,
through the completion of the transactions contemplated
in this Agreement, continue to be in compliance with the
provisions of the Investment Company Act
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and the Advisers Act except to the extent that any
failure to so comply would not have a material adverse
effect on the Issuer or any holder of the Securities.
(ix) The Investment Manager represents that it has policies,
procedures and internal controls in place that are
reasonably designed to comply with all rules and
regulations of the Investment Company Act, the Advisers
Act and anti-money laundering laws and regulations
applicable to it, including applicable provisions of the
USA PATRIOT Act of 2001 and the regulations administered
by the U.S. Department of the Treasury's Office of
Foreign Assets Control.
3. Solicitation as Agent; Offers and Sales of Preferred Shares and Notes.
(a) It is agreed that the offering of the Preferred Shares
and Notes will be made on a private placement basis, and the
Placement Agent represents and agrees that it has not and will not
solicit offers for, or offer or sell, Preferred Shares or Notes by
any form of general solicitation or advertising or in any manner
involving a public offering within the meaning of Section 4(2) of
the Securities Act and Regulation D thereunder. The Issuer
authorizes the Placement Agent to use the PPM in connection with
the offer and sale of the Preferred Shares and the Notes.
(b) Each of the Investment Manager and the Issuer shall not,
and shall each cause each of its respective affiliates not to (i)
directly or indirectly solicit any person it knows to be a client
of the Placement Agent as a result of the activities of the
Placement Agent pursuant to this Agreement (A) to purchase an
interest in any investment entity sponsored or offered by the
Investment Manager or any of its affiliates (other than interests
with the consent of the Placement Agent), (B) to enter into an
agreement for the management of any assets of such client by the
Investment Manager or any of its affiliates or (C) to curtail or
cancel such client's business relationship with the Placement
Agent or (ii) permit any person introduced to the Investment
Manager or the Issuer by the Placement Agent as a result of its
activities pursuant to this Agreement to invest in the Issuer or
any related investment vehicle, without the consent of the
Placement Agent.
4. Purchase and Delivery, Closing; Placement Agent's Fee.
(a) The Preferred Shares and the Notes to be purchased by
the purchasers thereof shall be delivered in such manner agreed
upon by the Issuer and such purchasers.
(b) The Issuer covenants and agrees with the Placement Agent
that not later than November 17, 2005 or on such other date as
the Placement Agent and the Issuer may otherwise agree (such date
being herein called the "CLOSING DATE," the Issuer will pay or
cause to be paid in U.S. Dollars the fee set forth in a letter
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agreement, dated as of November 17, 2005 (the "FEE LETTER")
between the Issuer and the Placement Agent (the "PLACEMENT AGENT'S
FEE") to the Placement Agent.
5. Conditions to Closing.
(a) All actions and other legal matters incident to the
authorization, form and validity of this Agreement, the Operating
Agreement, the Related Agreements, the Common Shares, the
Preferred Shares, the Notes, the Final PPM, and all actions and
other legal matters relating to this Agreement and the
transactions contemplated hereby, shall be satisfactory in all
material respects to the Placement Agent and counsel for the
Placement Agent, and the Issuer shall have furnished to such
counsel all documents and information that such counsel may
reasonably request in connection with this Agreement, the
Operating Agreement, the Related Agreements and the transactions
contemplated hereby and thereby.
(b) Copies of the Final PPM (and any amendments or
supplements thereto) shall have been distributed to the Placement
Agent in accordance with this Agreement, and the sale of the
Preferred Shares and the Notes shall not have been suspended in
any jurisdiction and no suspension proceeding shall have been
commenced or shall be pending or threatened.
(c) The obligations of the Placement Agent under this
Agreement, as agent of the Issuer, to solicit offers to purchase
Securities will be subject to (i) the accuracy as of the date
hereof and the Closing Date (as if made at the Closing Date) of
(x) the representations and warranties on the part of the Issuer
and the Investment Manager and (y) the statements of the
authorized representatives of the Issuer and the Investment
Manager made in any certificates pursuant to the provisions
hereof, (ii) the performance by each of the Issuer and the
Investment Manager of its obligations hereunder and (iii) the
following additional conditions precedent.
(d) The Preferred Shares and the Notes to be issued under
the Indenture must have received a "AAA" rating from Xxxxx'x
Investors Service, Inc. ("MOODY'S") and a "AAA" rating from
Standard & Poor's Rating Services, a division of the XxXxxx-Xxxx
Companies, Inc. ("S&P").
(e) Closing Certificate. On the Closing Date, there shall
not have been, since the date hereof or since the respective
dates as of which information is given in the Final PPM (except
as otherwise stated therein), any material adverse change in the
condition, financial or otherwise, or in the business affairs or
business prospects of the Issuer or the Investment Manager, as
the case may be, whether or not arising in the ordinary course of
business, and the Placement Agent shall have received a
certificate of each of the Issuer and Investment Manager, dated
as of the Closing Date, to the effect that (i) there has been no
such material adverse change of the Issuer or the Investment
Manager, as applicable, (ii) the representations and warranties
made by the Issuer and the Investment Manager, as applicable, in
this Agreement and in the Related Agreements are true and correct
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with the same force and effect as though expressly made at and as
of the Closing Date (unless any such representation or warranty
specifically relates to an earlier time) and (iii) each of the
Issuer and the Investment Manager has complied with all agreements
and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date.
(f) Opinion of Counsel for the Investment Manager. The
Placement Agent shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxx LLP, counsel for the Investment
Manager, dated the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent and its counsel.
(g) Execution and Delivery of Indenture. On the Closing
Date, the Indenture, the Note Purchase Agreement and the Fee
Letter shall have been executed and delivered by the parties
thereto in form reasonably satisfactory to the Placement Agent
and its counsel; the Indenture and the Fee Letter shall be in
full force and effect.
(h) Commitments for Shares in Issuer. On the Closing Date,
$325.0 million commitments to purchase Common Shares of the
Issuer, $109.0 million commitments to purchase Preferred Shares
of the Issuer and $216.0 million commitments to purchase Notes of
the Issuer shall have been received by the Issuer.
(i) Execution and Delivery of Other Related Agreements. The
other Related Agreements shall have been executed and delivered
by the parties thereto in form reasonably satisfactory to the
Placement Agent and its counsel, executed versions of such other
Related Agreements shall have been delivered to the Placement
Agent and all of the Related Agreements shall be in full force
and effect.
(j) Additional Documents. On the Closing Date, counsel for
the Placement Agent shall have been furnished with such other
documents as they may reasonably request in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
actions taken by the Issuer in connection with the issuance and
sale of the Preferred Shares and the Notes as herein contemplated
shall be satisfactory in form and substance in all material
respects to the Placement Agent and counsel for the Placement
Agent.
(k) There shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Issuer or Investment Manager, taken as a
whole, that is material and adverse and that makes it, in the
Placement Agent's judgment, impracticable to market any of the
Preferred Shares or the Notes on the terms and in the manner
contemplated in this Agreement.
The Issuer will furnish the Placement Agent with such conformed copies
of such opinions, certificates, letters and documents as the Placement Agent may
reasonably request.
11
6. Covenants of the Issuer and the Investment Manager.
(a) In further consideration of the agreements of the
Placement Agent herein contained, each of the Issuer and
Investment Manager covenants as follows:
(i) To file (A) the Notification on or prior to the Closing
Date, (B) the Registration Statement on or prior to the
Closing Date and any amendments to the Registration
Statement as requested by the SEC and (C) any other
filings required pursuant to the Investment Company Act
or described in the Private Placement Documents
(including the Exemptive Order) or requested by the SEC
or any other regulatory or governing body; to use
reasonable efforts to cause the effectiveness of the
Registration Statement; and to distribute complete
copies of such filings to the Placement Agent and to
counsel for the Placement Agent in a prompt manner.
(ii) To cause the Registration Statement to comply in all
material respects with the applicable requirements of
the Advisers Act and the Investment Company Act during
the period commencing on the date it is filed and ending
when the Preferred Shares and the Notes have been fully
drawn or may no longer be drawn.
(iii) To advise the Placement Agent promptly of receipt by the
Issuer of any notice from the SEC pursuant to Section
8(e) of the Investment Company Act with respect to the
Notification, or any amendment or supplement thereto, or
the Registration Statement, or any amendment or
supplement thereto.
(iv) To maintain a compliance program reasonably designed to
prevent violations of the Federal Securities Laws as
defined in Rule 38a-l under the Investment Company Act
("FEDERAL SECURITIES LAWS").
(v) To maintain policies, procedures and internal controls
that are reasonably designed to comply with all rules
and regulations of the Investment Company Act, the
Advisers Act and anti-money laundering laws and
regulations, including applicable provisions of the USA
PATRIOT Act of 2001 and the regulations administered by
the U.S. Department of the Treasury's Office of Foreign
Assets Control.
(vi) To furnish the Placement Agent and its counsel, without
charge, for a reasonable period, as many copies of the
Final PPM and any supplements and amendments thereto as
the Placement Agent may reasonably request.
(vii) During the period mentioned in paragraph (viii) below,
before amending or supplementing the Final PPM, to
furnish the Placement Agent a copy of each such proposed
amendment or supplement.
12
(viii) If, during the period commencing on the date hereof and
ending when the Preferred Shares and the Notes have been
fully drawn or may no longer be drawn, any event shall
occur or condition shall exist that makes it necessary,
in the opinion of the counsel for the Placement Agent,
to amend or supplement the Final PPM (as then amended or
supplemented) in order to make the statements therein,
in the light of the circumstances under which such
document (as then amended or supplemented) is delivered
to a purchaser, not misleading, or if it is necessary to
amend or supplement the Final PPM to comply with law,
to, after discussing the same with the Placement Agent,
the Investment Manager and their counsel, prepare and
furnish, at its own expense (which shall not be
unreasonable), to the Placement Agent, either amendments
or supplements, as the case may be, so that the
statements in the Final PPM as so amended or
supplemented will not, in the light of the circumstances
when the Final PPM is delivered to a purchaser, be
misleading or so that the Final PPM will comply with
applicable law.
(ix) To provide each prospective investor with an opportunity
to inquire of the Issuer and the Investment Manager
about the terms and conditions of the offering and to
obtain any information such investor may reasonably
consider necessary for making an informed investment
decision.
(x) To supply to the Placement Agent (A) copies of all
materials provided by the Issuer to the holders of
Common Shares, Preferred Shares and Notes, (B) copies
of all SEC filings made by the Issuer and all
correspondences between the Issuer and the SEC, (C)
copies of the weekly collateral valuation schedule that
the Issuer makes available to any Rating Agency in
connection with the Preferred Shares and the Notes and
(D) to the extent permitted by applicable law, rule or
regulation, copies of any other correspondence or
information in connection with the Related Agreements
and the transactions contemplated by this Agreement and
the Related Agreements as the Placement Agent and the
Investment Manager shall agree from time to time.
(xi) To advise the Placement Agent, promptly after the Issuer
shall receive notice or obtain actual knowledge thereof,
of the suspension of the qualification of the Preferred
Shares and the Notes for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and, in the event of
the issuance of any order suspending any such
qualification, to use its best efforts to obtain its
withdrawal promptly.
(xii) Promptly to take such action as the Placement Agent
shall reasonably request to qualify the Preferred Shares
and the Notes for offer and sale under the securities
laws of such jurisdictions where the Placement Agent has
placed Preferred Shares and the Notes and to maintain
such qualifications in effect for so long as required
for the placement of the
13
Preferred Shares and the Notes by the Placement Agent,
except that the Issuer shall not be required in
connection therewith to qualify as a foreign corporation
or to execute a general consent to service of process in
any state.
(xiii) To hold the Placement Agent harmless against any
documentary, stamp or similar transfer or issue tax,
including any interest and penalties, on the issue, sale
and delivery of the Preferred Shares and the Notes in
accordance with the terms of this Agreement and on the
execution and delivery of the other Related Agreements
which are or may be required to be paid under the laws
of any jurisdiction or any political subdivision or
taxing authority thereof or therein. All payments to be
made by the Issuer hereunder and in respect of the
transactions contemplated hereunder and under the
Related Agreements shall be made pursuant to and in
accordance with the applicable Related Agreements in
U.S. Dollars, at such place as indicated by the
Placement Agent, without withholding or deduction for or
on account of any present or future taxes, duties or
governmental charges whatsoever, unless the Issuer shall
pay such additional amounts as may be necessary in order
that the net amounts after such withholding or deduction
shall equal the amounts that would have been payable if
no such withholding or deduction had been made, to the
extent required by the applicable Related Agreements.
(xiv) To cause the Investment Manager to provide information
reasonably necessary in connection with, and otherwise
reasonably cooperate in, the preparation of any of the
amendments, supplements or other documents prepared
pursuant to paragraphs (vii), (viii) and (xi) above.
(xv) So long as the Preferred Shares and the Notes are
outstanding, each of the Issuer and the Investment
Manager will use its reasonable best efforts to ensure
(A) the continued effectiveness with the SEC of the
Registration Statement, and amendments or supplements
thereto and (B) that the Registration Statement, and any
amendment or supplement thereto comply with all
requirements of 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 in the light of the circumstances under which
they were made. Each of the Issuer and the Investment
Manager will use its best efforts to comply with the
applicable provisions of the Investment Company Act and
will use its best efforts to continue to qualify for
the special tax treatment afforded to registered
investment companies under Subchapter M of the Code.
(xvi) Neither the Issuer nor any of its Affiliates will sell,
offer for sale or solicit offers to buy or otherwise
negotiate in respect of the Preferred Shares, the Notes
or any security (as defined in the Securities Act) which
(A) is or will be integrated with the sale of the
Preferred Shares or the Notes in a
14
manner which would require the registration of the
Preferred Shares or the Notes under the Securities Act,
or (B) would cause the offer and sale of the Preferred
Shares or the Notes pursuant to this Agreement to fail
to be entitled to the exemption from registration
afforded by Section 4(2) of the Securities Act.
(xvii) To not solicit any offer to buy, offer, sell, contract
to sell or otherwise dispose of Preferred Shares or the
Notes by means of any form of general solicitation or
general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of
Section 4(2) of the Securities Act, and in furtherance
of the foregoing to not publish or disseminate any
material naming or referring to the Placement Agent in
connection with any offering of the Preferred Shares or
the Notes unless the Placement Agent shall have
consented to the publication or use thereof.
(xviii) To make available appropriate officers and employees,
and, upon reasonable request to the Investment Manager,
access to consultants (e.g., independent accountants and
legal counsel) to respond to reasonable information
requests by the Placement Agent and to provide the
Placement Agent with such information as the Placement
Agent may reasonably request.
(xix) Until the Preferred Shares and the Notes have been fully
drawn or may no longer be drawn, not to, unless first
providing notice to the Placement Agent, (A) modify any
Related Agreement, (B) terminate the Investment Manager,
(C) appoint a replacement investment manager, or (D)
consent to the assignment of the Investment Management
Agreement.
(xx) The Issuer agrees that while any Preferred Shares or
Notes remain outstanding it will make available, upon
request, to any holder of the Preferred Shares or the
Notes the information specified in Rule 502(b) under the
Securities Act unless the Issuer is then subject to the
reporting requirement of Section 13 or Section 15(d) of
the Exchange Act.
(xxi) So long as the Issuer is registered under the Investment
Company Act, the Issuer and the Investment Manager shall
timely and promptly file all reports and forms (e.g.,
N-CSR, ADV) with the SEC as required by the Investment
Company Act and the Advisers Act and shall provide
shareholders and prospective shareholders with timely
reports as required by the Investment Company Act.
(b) In further consideration of the agreements of the
Placement Agent herein contained, the Issuer hereby agrees that
(i) on or prior to the Closing Date the Issuer will have filed
the Notification with the SEC under the Investment Company Act as
a nondiversified, closed-end management investment company and
all action under the Securities Act and the Investment Company
Act, as the
15
case may be, necessary to consummate the sale of the Preferred
Shares and the Notes as provided in this Agreement has or will
have been taken by the Issuer and (ii) the Issuer will be in
compliance with the terms and conditions of the Investment
Company Act at all times through the completion of the
transactions contemplated in this Agreement.
7. Fees and Expenses.
The Issuer covenants and agrees with the Placement Agent and any
purchasers of the Preferred Shares and the Notes who purchase Preferred Shares
or the Notes through the Placement Agent that the Issuer will pay, or cause to
be paid, whether or not any sale of the Preferred Shares or the Notes is
consummated, all expenses incident to the performance of the Issuer's
obligations under the Related Agreements, including: (i) the preparation and
printing of the Final PPM and all amendments and supplements thereto (except as
otherwise provided herein), (ii) all fees and expenses in connection with the
qualification of the Preferred Shares and the Notes for offering and sale under
applicable foreign and U.S. securities laws as provided herein, including any
Blue Sky and legal investment memoranda and any other agreement or documents in
connection with the offering, purchase, sale and delivery of the Preferred
Shares and the Notes, (iii) the fees and disbursements of Xxxxx Day, counsel for
the Issuer, the fees and disbursements for local counsel for the Issuer in
various non-US jurisdictions and the fees and disbursements of Xxxxxx & Xxxxxx
LLP, counsel for the Investment Manager, (iv) the fees and disbursements of
Xxxxx Day, counsel for the Placement Agent, (v) the fees and disbursements of
the Issuer's accountants, (vi) all fees and expenses incurred in connection with
the organization of the Issuer, (vii) all costs and expenses incurred in the
preparation, issuance, printing and delivery of the Preferred Shares and the
Notes, the Related Agreements and all other documents relating to the issuance,
purchase and sale of the Preferred Shares and the Notes, and (viii) all other
costs and expenses incident to the performance by the Issuer of its various
obligations hereunder which are not otherwise specifically provided for in this
Section 7. The Issuer will also pay or cause to be paid any transfer, stamp or
value-added taxes payable in connection with the placement of the Preferred
Shares and the Notes contemplated hereby. Such payments payable to the Placement
Agent shall be made promptly by wire transfer of immediately available funds to
an account specified by the Placement Agent.
8. Offering of Common Shares; Restrictions on Transfer: Certain Agreements
of the Placement Agent.
(a) The Placement Agent represents and agrees that it has
not and will not solicit any offer to buy, offer, sell, contract
to sell or otherwise dispose of Preferred Shares or Notes by
means of any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Securities
Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(b) The Placement Agent represents and warrants that it has
been duly organized, is validly existing and is in good standing
under the laws of the jurisdiction of its formation and has the
power and authority to own its assets, to conduct its business as
described in the Final PPM and to execute, deliver and
16
perform its obligations under this Agreement and the Fee Letter,
except to the extent that the failure to be in good standing
would not have a material adverse effect on the Placement Agent.
(c) The Placement Agent represents and warrants that the
execution and delivery by the Placement Agent of, and the
performance by the Placement Agent of its obligations under, this
Agreement and the Fee Letter does not and will not contravene any
provision of applicable law or the charter or any agreement or
other instrument binding upon the Placement Agent that is
material to the Placement Agent, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction
over the Placement Agent, and no consent, approval, authorization
or order of, or qualification with, any governmental body or
agency is required for the performance by the Placement Agent of
its obligations relating to the Preferred Shares and the Notes or
under this Agreement or the Fee Letter, except such as may be
required under foreign or state securities or Blue Sky laws in
any jurisdiction in connection with the sale of the Preferred
Shares and the Notes and such other approvals as have been
obtained and are in full force and effect.
(d) The Placement Agent represents and warrants that it
owns, possesses or has obtained all necessary consents,
licenses, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings
with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts
and other tribunals, whether foreign or domestic, required for
the execution, delivery or performance by the Placement Agent
of this Agreement and to own and use its assets and to conduct
its business in the manner described in the Final PPM.
(e) The Placement Agent represents, warrants and agrees that
(i) it has not offered, sold, delivered or placed and, prior
to the completion of the period of six months from the Closing
Date, will not offer, sell, deliver or place any Securities to
persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, as amended, (ii) it has
complied and will comply with all applicable provisions of the
Financial Services Act and Markets Act of 2000 (the "FSMA")
with respect to anything done by it in relation to the
Securities in, from or otherwise involving the United Kingdom
and (iii) it has only communicated or caused to be
communicated, and will only communicate or cause to be
communicated any invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the
FSMA) received by it in connection with the issue or sale of
the Securities in circumstances in which Section 21(1) of the
FSMA does not apply to the Issuer.
17
(f) The Placement Agent represents, warrants and agrees with
respect to offers and sales outside the United States that (i) it
understands that no action has been or will be taken in any
jurisdiction by the Placement Agent or the Issuer or the
Investment Manager that would permit a public offering of the
Preferred Shares or the Notes, or possession or distribution of
the PPM or any other offering or public material relating to the
Preferred Shares or the Notes in any country or jurisdiction
where action for that purpose is required; and (ii) the Placement
Agent has and will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers,
sells or delivers Preferred Shares or Notes or has in its
possession or distributes the PPM or any such other material, in
all cases at its own expense.
(g) The Placement Agent represents that it has policies,
procedures and internal controls in place that are reasonably
designed to comply with all anti-money laundering laws and
regulations applicable to it, including, in the case of Xxxxxx
Xxxxxxx, applicable provisions of the USA PATRIOT Act of 2001 and
the regulations administered by the U.S. Department of the
Treasury's Office of Foreign Assets Control.
(h) The Placement Agent agrees that the Investment Manager
may reject any potential investor if such investor is not a
Qualified Investor, and the Placement Agent will not receive any
fee with respect to any such potential rejected investor.
(i) The Placement Agent did not use any materials that
describe the Issuer, the Preferred Shares or the Notes other than
the PPM or other materials approved by the Investment Manager.
(j) Assuming that the representations, warranties and
covenants made by the Issuer and the Investment Manager in this
Agreement are true and correct and have been and will be complied
with, that the representations, warranties and covenants made or
deemed to be made by holders of the Preferred Shares and the
Notes in the respective purchase agreements relating to such
Preferred Shares and the Notes are true and correct and have been
and will be complied with and that the Preferred Shares and the
Notes are offered and sold by the Placement Agent in accordance
with the Final PPM, the Placement Agent represents and agrees
that it has not and will not sell Preferred Shares or the Notes
to persons who are not Qualified Investors.
9. Indemnification and Contribution.
(a) The Issuer agrees to indemnify and hold harmless the
Placement Agent and each person, if any, who controls the
Placement Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under
common control with, or is controlled by, the Placement Agent,
from and against any and all losses, claims, damages and
liabilities (or actions in respect thereof) ("Losses") (i)
relating to, arising out of or in connection with the placement
and sale of the Preferred Shares and the Notes contemplated by
this
18
Agreement or (ii) caused by any untrue statement or alleged
untrue statement of a material fact contained in any Offering
Materials (as defined below), or caused by any omission or
alleged omission in the Offering Materials of a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except,
in the case of clause (ii) above, insofar as such Losses are
caused by any such untrue statement or omission or alleged untrue
statement or omission based upon the Placement Agent's
Information or the calculations made by the Placement Agent
including in the Additional Materials (as defined below). With
respect to clause (i) above, the Issuer will not, however, be
responsible for any Losses that are finally judicially determined
to have resulted from the gross negligence, willful misconduct or
bad faith of the Placement Agent. The Issuer also agrees that
none of the Placement Agent or any controlling or affiliated
person shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Issuer for or in connection
with the transactions contemplated by this Agreement except for
any such liability for Losses with respect to clause (i) above
incurred by the Issuer that are finally judicially determined to
have resulted from the gross negligence, willful misconduct or
bad faith of the Placement Agent or controlling person or
affiliated person. "Offering Materials" means the Preferred
Shares and Notes PPM and any document incorporated by reference
therein or any amendment or supplement thereto, and any filings
with the SEC by the Issuer made prior to the Closing Date, and
any additional materials distributed by the Placement Agent to
prospective purchasers of the Preferred Shares or the Notes. Any
such additional materials referred to in the last clause of the
preceding sentence shall be limited to: (i) materials reviewed
and approved by the Investment Manager and (ii) materials
provided by the Investment Manager to the Issuer or the Placement
Agent (the "ADDITIONAL MATERIALS").
(b) The Placement Agent agrees to indemnify and hold
harmless the Issuer, its authorized representatives and each
person, if any, who controls the Issuer within the meaning of
either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all Losses, (i) relating
to, arising out of or in connection with the placement and sale
of the Preferred Shares and the Notes contemplated by this
Agreement or (ii) caused by any untrue statement or alleged
untrue statement of a material fact contained in any Offering
Materials with respect to the Placement Agent's Information, or
caused by any omission or alleged omission in the Offering
Materials of a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading with respect to the Placement Agent's
Information. With respect to clause (i) above the Placement
Agent will not, however, be responsible for any Losses that are
finally judicially determined to have resulted from the gross
negligence, willful misconduct or bad faith of the Issuer..
(c) In the event any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to either of
paragraph (a) or (b) above, such person (the "Indemnified Party")
shall promptly notify the person against whom such
19
indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party, upon request of the
Indemnified Party, shall retain counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party and
any others the Indemnifying Party may designate in such
proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and
the Indemnified Party shall have mutually agreed to the retention
of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnifying
Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. It is understood
that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such Indemnified
Parties and that all such fees and expenses shall be reimbursed
as they are incurred. Such firm shall be designated in writing
by Xxxxxx Xxxxxxx in the case of parties indemnified pursuant to
paragraph (a) above and by the Issuer in the case of parties
indemnified pursuant to paragraph (b) above. The Indemnifying
Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from
and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, provided that
written notice of a proposed settlement is provided to the
Indemnifying Party no less than ten business days prior to the
date of such proposed settlement, consent of the Indemnifying
Party to such settlement shall not be required by an Indemnified
Party if as of the date of any such notice to the Indemnifying
Party, the Indemnifying Party has not reimbursed the Indemnified
Party for fees and expenses of counsel as contemplated herein
within 30 days of request for such reimbursement by the
Indemnified Party. 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.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 9 is unavailable to any
Indemnified Party or insufficient in respect of any Losses, then
each Indemnifying Party under such paragraph, in lieu of
indemnifying such Indemnified Party thereunder, shall contribute
to the amount paid or payable by such Indemnified Party as a
result of such Losses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Issuer on the one
hand and the Placement Agent on the other hand from the offering
of the Preferred Shares and the Notes or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to
20
reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Issuer on the one hand
and the Placement Agent on the other hand in connection with the
statements or omissions that resulted in such Losses, as well as
any other relevant equitable considerations. The relative
benefits received by the Issuer on the one hand and the Placement
Agent on the other hand in connection with the offering of the
Preferred Shares and the Notes shall be deemed to be in the same
respective proportions as the net proceeds from the offering of
the Preferred Shares and the Notes (before deducting expenses)
received directly by the Issuer on the one hand and the total
discounts, commissions and placement agent fees received by the
Placement Agent in respect thereof on the other hand bear to the
aggregate offering price of the Preferred Shares and the Notes.
The relative fault of the Issuer on the one hand and of the
Placement Agent on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission of a material fact relates to information supplied by
the Issuer on the one hand or by the Placement Agent on the other
hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement
or omission.
(e) The Issuer and the Placement Agent agree that it would
not be just or equitable if contribution pursuant to this Section
9 were determined by pro rata allocation (even if the Placement
Agent 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 paragraph (d) above. The
amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages and liabilities referred to in paragraph
(d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred
by such Indemnified Party in connection with investigating or
defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Placement Agent shall be
required to contribute any amount in excess of the amount by
which the Placement Agent's Fee exceeds the amount of any damages
that the Placement Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution provisions contained in this Section 9
and the representations and warranties of the Issuer and the Investment Manager
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of the Placement Agent or any person controlling the Placement
Agent or under common control with or controlled by the Placement Agent or by or
on behalf of the Issuer, its authorized representatives or any person
controlling the Issuer or the Investment Manager or (iii) acceptance of any
payment for any of the Preferred Shares and the Notes. The remedies provided for
in this Section 9 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any Indemnified Party at law or in equity.
21
10. Termination.
The Placement Agent, in its absolute discretion, may terminate this
Agreement at any time on or prior to the Closing Date by notice to the Issuer
and the Investment Manager, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date, (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange or the Chicago
Board of Trade, (ii) a general moratorium on commercial banking activities in
New York shall have been declared by the relevant U.S. federal or New York state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in the judgment of the Placement Agent, is material and adverse, and (b) in the
case of any of the events specified in clauses (a)(i) through (iii), such event
singly or together with any other such event makes it, in the judgment of the
Placement Agent, impracticable to market any of the Preferred Shares or the
Notes on the terms and in the manner contemplated in this Agreement and the
Preferred Shares and Notes PPM.
If this Agreement shall be terminated by the Placement Agent because of
any failure or refusal on the part of the Issuer to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the Issuer
shall be unable to perform its obligations under this Agreement (other than as a
result of a default by the Placement Agent hereunder), the Issuer shall be
obligated to reimburse the Placement Agent as has so terminated this Agreement
with respect to itself for all out-of-pocket expenses (including the fees and
disbursements of its counsel) reasonably incurred by the Placement Agent in
connection with this Agreement or the offering contemplated hereunder.
11. Submission to Jurisdiction, Waiver of Immunity, Venue.
(a) Each of the Issuer, Investment Manager and Placement
Agent irrevocably submits, to the extent permitted by applicable
law, to the nonexclusive jurisdiction of any New York State or
United States Federal Court sitting in the City of New York in any
suit, action or proceeding arising out of or relating to this
Agreement. Each of the Issuer, Investment Manager and Placement
Agent irrevocably waives, to the fullest extent permitted by law,
any objection that it may have to the laying of the venue of any
such suit, action or proceeding brought in such a court and any
claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. Each of the
Issuer and Investment Manager
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hereby irrevocably appoints the Investment Manager (the "PROCESS
AGENT"), as its agent to receive, on behalf of it and its
property, service of any summons and complaint and any other
process that may be served in any such action or proceeding.
Such service may be made, to the extent permitted by applicable
law, by delivering by hand or certified or overnight mail a copy
of such process to the Issuer or Investment Manager, as the case
may be, in care of the Process Agent at such Process Agent's above
address or such other address as the Issuer or Investment Manager
shall notify the Placement Agent, in writing; provided, however,
that service shall also be mailed to the Issuer or Investment
Manager, as the case may be, and each of the Issuer and Investment
Manager hereby irrevocably authorizes and directs the Process
Agent to accept such service on its behalf, with delivery of a
copy thereof to the Issuer or the Investment Manager in the same
manner and to the same address as notices are required to be
delivered to the Issuer or Investment Manager under Section 14
hereof. Each of the Issuer and Investment Manager agrees that
such service shall be deemed in every respect effective service of
process upon it in any suit, action or proceeding and shall, to
the fullest extent permitted by law, be taken and held to be valid
personal service upon and personal delivery to it. Nothing in
this paragraph shall affect or limit any right to serve process in
any manner permitted by law, to bring proceedings in the courts of
any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction. To the
fullest extent permitted by applicable law, the Issuer and the
Investment Manager agree that a final judgment obtained in any
such court described above in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit
on such judgment or in any other manner provided by law.
(b) To the extent that any of the Issuer, the Investment
Manager or the Placement Agent has or hereafter may acquire any
immunity from jurisdiction of any such court referred to above, or
from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives, to the extent permitted by applicable
law, such immunity in respect of its obligations under this
Agreement.
(c) The Issuer, Investment Manager and the Placement Agent
hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum
non conveniens, that it may now or hereafter have to the bringing
of any such action or proceeding in such respective courts
referred above.
12. Status of the Placement Agent.
In soliciting offers to purchase the Preferred Shares and the Notes
from the Issuer pursuant to this Agreement and in assuming its other obligations
in connection therewith, the Placement Agent is acting solely as agent for the
Issuer, and not as principal, it is understood that the Placement Agent has and
will be acting as the Issuer's agent in the placing of the Preferred Shares and
the Notes and that the Placement Agent's responsibility with respect to the
Preferred Shares and the Notes is limited to a "reasonable efforts" basis in
placing such Preferred Shares and the Notes with no understanding, express or
implied, on the Placement Agent's part of a commitment to purchase or place such
Preferred Shares or Notes. The Placement Agent shall have the right, in its sole
discretion, to reject in whole or in part any offer to purchase Preferred Shares
and the Notes or to allot to any purchaser less than the amount of Preferred
Shares or Notes offered to be purchased by such purchaser, and the Placement
Agent's decision in respect thereof shall be binding on the Issuer. The Issuer
will sell the Preferred Shares and the Notes, as applicable, directly to each
purchaser through the Placement Agent as agent, and the Placement Agent will
have no ownership interest in or title to the Preferred Shares or the Notes
prior to their
23
purchase by purchasers; provided, however, that the Placement Agent shall have
the right to purchase Preferred Shares and the Notes as principal for its own
account.
The Placement Agent will make reasonable efforts to assist the Issuer
in obtaining performance by each purchaser whose offer to purchase Preferred
Shares and the Notes from the Issuer has been solicited by the Placement Agent
and accepted by the Issuer, but the Placement Agent shall have no liability to
the Issuer if any such purchase is not consummated for any reason. If the Issuer
shall fail to deliver Preferred Shares or Notes to a purchaser whose offer it
has accepted, the Issuer (i) shall hold the Placement Agent harmless against any
loss, claim, damage or liability arising from or as a result of such failure by
the Issuer or the Investment Manager and (ii) shall pay to the Placement Agent
any fee to which they would be entitled hereunder in connection with such sale
as if such sale had been consummated.
Nothing contained in this Agreement (i) shall prevent the Placement
Agent from entering into any agency agreements, underwriting agreements or other
similar agreements governing the offer and sale of securities with any issuer or
issuers of securities or (ii) shall be construed in any way as precluding or
restricting other rights of the Placement Agent to sell or offer for sale any
securities issued by any person, including securities similar to, or competing
with, any of the Preferred Shares or Notes.
13. Survival.
The respective agreements, representations, warranties, indemnities and
other statements made by or on behalf of the Issuer, the Investment Manager and
their officers, directors or other representatives and the Placement Agent,
respectively, pursuant to this Agreement, shall remain in full force and effect
(in the case of the Issuer, regardless of' any investigation or any statements
as to the results thereof made by or on behalf of the Placement Agent or any
officer, director, employee or controlling person of the Placement Agent) and
will survive delivery of and payment for the Preferred Shares and the Notes. The
provisions of Sections 7 and 9 shall survive the termination of this Agreement.
14. Notices.
All communications hereunder shall be in writing and, if sent to the
Placement Agent, shall be sufficient in all respects if delivered, sent by
registered mail, telecopied or telegraphed and confirmed to Xxxxxx Xxxxxxx & Co.
Incorporated at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: 000-000-0000),
attention: Managing Director, Fixed Income Structured Credit Transactions; or,
if sent to MSIL, shall be sufficient in all respects if delivered, sent by
registered mail, telecopied or telegraphed and confirmed to Xxxxxx Xxxxxxx & Co.
International Limited at 00 Xxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxx Xx0 0XX, Xxxxxx
Xxxxxxx (fax: 000-00-00-0000-0000), attention: Managing Director, Fixed Income
Structured Credit Transactions; or, if sent to the Issuer, shall be sufficient
in all respects if delivered, sent by registered mail, telecopied or telegraphed
and confirmed to York Enhanced Strategies Fund, LLC, 000 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxx; or, if sent to the
Investment Manager, shall be sufficient in all respects if delivered, sent by
registered mail, telecopied or telegraphed and confirmed to York Enhanced
Strategies Management, LLC, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxx X. Xxxxxx.
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15. Miscellaneous.
(a) If this Agreement is executed by or on behalf of any
party hereto by a person acting under a power of attorney given
him by such party, such person hereby states that at the time of
execution hereof he has no notice of revocation of the power of
attorney by which he has executed this Agreement as such attorney.
(b) This Agreement may be signed in two or more counterparts
with the same effect as if the signatures thereto and hereto were
upon the same instrument.
(c) This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their successors and, with
respect to Section 9 hereof, the officers, directors and
controlling persons thereof, and no other person will have any
right or obligation hereunder.
(d) The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed a part
hereof.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICT OF LAWS.
16. Limited Recourse.
The obligations of the Issuer under this Agreement are limited in
recourse to the assets of the Issuer. To the extent the assets of the Issuer are
not sufficient to meet the obligations of the Issuer, in full, the Issuer shall
have no further obligations hereunder and any outstanding obligations shall be
extinguished.
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Please confirm your agreement to the foregoing by signing in the space
provided below for that purpose and returning to us a copy hereof, whereupon
this Agreement shall constitute a binding agreement among the parties hereto.
Very truly yours,
YORK ENHANCED STRATEGIES FUND, LLC
By:
-----------------------------
Name:
Title:
YORK ENHANCED STRATEGIES
MANAGEMENT, LLC
By:
-----------------------------
Name:
Title:
Accepted at New York, New York,
as of the date first above written.
XXXXXX XXXXXXX & CO. INCORPORATED
By:
-------------------------
Name:
Title:
Accepted at London, United Kingdom,
as of the date first above written.
XXXXXX XXXXXXX & CO. INTERNATIONAL
LIMITED
By:
-------------------------
Name:
Title:
Accepted at London, United Kingdom,
as of the date first above written.
XXXXXX XXXXXXX & CO. INTERNATIONAL
LIMITED
By:
-------------------------
Name:
Title: