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TORTOISE CAPITAL RESOURCES CORPORATION
(a Maryland corporation)
185,006 Warrants
185,006 Common Shares
REGISTRATION RIGHTS AGREEMENT
Dated: May 4, 2007
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TORTOISE CAPITAL RESOURCES CORPORATION
(a Maryland corporation)
185,006 Warrants
185,006 Common Shares
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of May 4, 2007, by and among Tortoise Capital Resources Corporation, a
Maryland corporation (the "Company") and each of the undersigned purchasers
(individually, a "Purchaser" and collectively, the "Purchasers") pursuant to
certain Purchase Agreements, dated December 22, 2006 (the "Purchase
Agreements"), by and among the Company, the Purchasers and Tortoise Capital
Advisors, LLC ("Tortoise Capital Advisors").
In order to induce the investors who are purchasing the Preferred Shares
and Warrants (as defined herein) to purchase such Preferred Shares and Warrants,
the Company agreed to provide the registration rights set forth in this
Agreement. As used in this Agreement, the terms "herein," "hereof," "hereto,"
"hereinafter" and similar terms 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 Company agrees with the Purchasers (i) for their benefit as Purchasers
and (ii) for the benefit of the beneficial owners from time to time of the
Securities (as defined herein) and the Additional Securities (as defined
herein), as follows:
1. Definitions. Capitalized terms used herein without definition shall have
the respective meanings set forth in the Purchase Agreements. As used in this
Agreement, the following terms shall have the following meanings:
(a) "Additional Securities" means Common Shares or other securities
issued in respect of the Securities by reason of or in connection with any
stock dividend, stock distribution, stock split, purchase in any rights
offering or in connection with any exchange for or replacement of such
shares or any combination of shares, recapitalization, merger or
consolidation, or any other equity securities issued pursuant to any other
pro rata distribution with respect to the Preferred Shares or Warrants.
(b) "Affiliate" means, with respect to any specified person, an
"affiliate," as defined in Rule 144, of such person.
(c) "Agreement" has the meaning set forth in the preamble hereto.
(d) "Business Day" means with respect to any act to be performed
hereunder, each Monday, Tuesday, Wednesday, Thursday and Friday that is not
a day on which banking institutions in New York, New York or other
applicable place where such act is to occur are authorized or obligated by
applicable law, regulation or order to close.
(e) "Claim" has the meaning set forth in Section 10(n) hereof.
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(f) "Comfort Letter" has the meaning set forth in Section 4(t) hereof.
(g) "Common Shares" means the shares of common stock, $0.001 par value
per share, of the Company.
(h) "Company" has the meaning set forth in the preamble hereto.
(i) "End of Suspension Notice" has the meaning set forth in Section
5(b) hereof.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
(k) "Free Writing Prospectus" shall have the meaning set forth in Rule
405 of the Securities Act.
(l) "Holder" means each Purchaser and its direct or indirect
transferees, so long as such Purchaser or transferee owns any Registrable
Securities.
(m) "IPO" means the sale of Common Shares in an underwritten initial
public offering registered under the Securities Act.
(n) "Investment Advisory Agreement" means that certain Investment
Advisory Agreement, dated as of January 1, 2007, by and between the Company
and Tortoise Capital Advisors.
(o) "Investment Representation, Transfer and Market Stand-Off
Agreement" means the Investment Representation, Transfer and Market
Stand-Off Agreements required to be executed and delivered to the Company
by any transferee of the Securities.
(p) "NASD" means the National Association of Securities Dealers, Inc.
(q) "Opinion" has the meaning set forth in Section 4(t) hereof.
(r) "Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 415 under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments and any prospectus filed
with respect to any Registration Statement pursuant to Rule 424 under the
Securities Act, and all materials incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
(s) "Preferred Shares" means the shares of preferred stock, par value
$.001 per share, of the Company.
(t) "Registrable Securities" means the Warrants, all Common Shares
issuable upon exercise of the Warrants, and any Additional Securities, upon
original issuance
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thereof, and at all times subsequent thereto, including upon the transfer
thereof by the original holder or any subsequent holder, until, in the case
of any such Additional Securities, as applicable, the earliest to occur of:
(i) the second anniversary of the initial effective date of the
Shelf Registration Statement or, in the case of any Additional
Securities for which tacking under Rule 144 is not available and which
are not included in the Shelf Registration Statement, until the second
anniversary of the issuance of the Additional Securities;
(ii) the date on which all such shares have been sold pursuant to
a Registration Statement or distributed to the public pursuant to Rule
144;
(iii) the date on which, in the opinion of counsel to the
Company, all such shares not held by Affiliates of the Company are
eligible for sale without registration under the Securities Act
pursuant to subparagraph (k) of Rule 144 and any applicable legend
restricting further transfer of such shares has been removed; or
(iv) the date on which all such shares are sold to the Company or
any of its subsidiaries.
(u) "Registration Expenses" means all fees and expenses incurred in
connection with the performance by the Company of its obligations under
this Agreement whether or not any of the Registration Statements are filed
or declared effective under the Securities Act, including, without
limitation: (i) all registration and filing fees and expenses (including,
without limitation, fees and expenses (x) with respect to filings required
to be made with the NASD and (y) of compliance with federal securities laws
and state securities or "blue sky" laws (including, without limitation,
reasonable fees and disbursements of counsel in connection with "blue sky"
qualification of any of the Registrable Securities and the preparation of a
"blue sky" memorandum, if any)), (ii) all printing expenses (including,
without limitation, expenses of printing certificates for Registrable
Securities in a form eligible for deposit with The Depository Trust
Company, if any, and printing Prospectuses), (iii) all duplication and
mailing expenses relating to copies of any Registration Statement or
Prospectus delivered to any Holder hereunder, (iv) all fees and
disbursements of counsel for the Company and the fees and disbursements of
Selling Holders' Counsel, if any, in connection with the Registration
Statement, (v) all fees and disbursements of the registrar and transfer
agent for the Common Shares, (vi) Securities Act liability insurance
obtained by the Company in its sole discretion, (vii) the internal expenses
of the Company and its Affiliates (including, without limitation, all
salaries and expenses of officers and employees performing legal or
accounting duties), (viii) the expenses of any special audit, annual audit
or quarterly review and "cold comfort" letters required by or incident to
such performance, (ix) the fees and expenses incurred in connection with
the listing by the Company of the Registrable Securities on any securities
exchange or quotation system and (x) the fees and expenses of any person,
including, without limitation, special experts, retained by the Company.
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(v) "Registration Statement" means any Shelf Registration Statement,
Subsequent Shelf Registration Statement, Additional Shelf Registration
Statement, or other registration statement of the Company that covers the
resale of any Registrable Securities, including the Prospectus, amendments
and supplements to such registration statement or Prospectus, including
pre- and post-effective amendments, all exhibits thereto and all material
incorporated by reference or deemed to be incorporated by reference, if
any, in such registration statement.
(w) "Regulation D" means Regulation D (Rules 501-508) under the
Securities Act, as such Rules may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
(x) "Rule 144" means Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
(y) "Rule 144A" means Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
(z) "Rule 158" means Rule 158 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
(aa) "Rule 415" means Rule 415 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
(bb) "Rule 424" means Rule 424 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
(cc) "Rule 429" means Rule 429 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
(dd) "SEC" means the Securities and Exchange Commission.
(ee) "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
(ff) "Selling Holders' Counsel" means one counsel for the Holders that
is selected by the Holders holding a majority of the Registrable Securities
included in any Registration Statement, with such selection being effective
by written consent of a majority of the beneficial Holders of the
Registrable Securities; provided, that if no such counsel is selected prior
to the time any activity is required hereunder relating to such counsel,
upon appointment of any such counsel in the manner set forth herein, the
Company will at such point treat such counsel as the Selling Holders'
Counsel; provided
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further, that in the event Holders have not made any such selection, the
Company will use its good faith efforts to facilitate Holders making such a
selection and shall at such time fulfill any obligations as would have been
required in this Agreement with respect to such counsel.
(gg) "Securities" means shares of Preferred Shares and Warrants
initially sold by the Company in accordance with the Purchase Agreements
and Regulation D and pursuant to a Subscription Agreement and all Common
Shares issuable upon the exercise of the Warrants.
(hh) "Shelf Registration Statement" has the meaning set forth in
Section 2(a) hereof.
(ii) "Subscription Agreement" means the subscription agreements
entered into by each Purchaser.
(jj) "Subsequent Shelf Registration Statement" has the meaning set
forth in Section 2(c) hereof.
(kk) "Suspension Event" has the meaning set forth in Section 5(a)
hereof.
(ll) "Suspension Notice" has the meaning set forth in Section 5(a)
hereof.
(mm) "Tortoise Capital Advisors" has the meaning set forth in the
preamble hereto.
(nn) "Underwritten Offering" means a sale of securities of the Company
to an underwriter or underwriters for reoffering to the public.
(oo) "Warrants" means the warrants of the Company which entitle the
holder to purchase one common share of the Company upon exercise.
2. Registration Rights.
(a) Mandatory Shelf Registration. As set forth in Section 4 hereof,
the Company agrees to use its best efforts to file with the SEC promptly
following the earlier to occur of (i) June 8, 2007, or (ii) nine (9) months
after completion of the IPO, a Shelf Registration Statement on Form N-2 or
such other form under the Securities Act then available to the Company
providing for the resale, pursuant to Rule 415, from time to time by the
Holders of any and all Registrable Securities (including for the avoidance
of doubt any Additional Securities that are issued prior to the
effectiveness of such shelf Registration Statement) (such registration
statement, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto and all material incorporated by reference
or deemed to be incorporated by reference, if any, in such registration
statement, the "Shelf Registration Statement"). The Company shall use its
commercially reasonable efforts to cause such Shelf Registration Statement
to be declared effective by the SEC as promptly as practicable but in any
event on or prior to the 75th day following
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such filing. Any Shelf Registration Statement shall provide for the resale,
from time to time and pursuant to any method or combination of methods
legally available (including, without limitation, an Underwritten Offering,
a direct sale to purchasers, a sale through brokers or agents or a sale
over the internet) by the Holders, of any and all Registrable Securities.
(b) [Reserved]
(c) Subsequent Registration. If, following an IPO, the Company
proposes to file with the SEC at any time a registration statement on Form
N-2 or such other form under the Securities Act providing for a follow-on
public offering of Common Shares (any such registration statement,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement, a
"Subsequent Shelf Registration Statement") then the Company will notify
each Holder in writing of the filing (including notifying each Holder of
the identity of the managing underwriters of such subsequent public
offering), within five Business Days after the filing thereof, and afford
each Holder an opportunity within the 15-Business Day period designated in
such notice to include in such Subsequent Shelf Registration Statement all
or any part of the Registrable Securities then held by such Holder. Each
Holder desiring to include in any such Subsequent Shelf Registration
Statement all or part of the Registrable Securities held by such Holder
shall, within 15 Business Days after receipt of the above-described notice
by the Company, so notify the Company in writing, and in such notice shall
inform the Company of the number of Registrable Securities such Holder
wishes to include in such Subsequent Shelf Registration Statement. Any
election by any Holder to include any Registrable Securities in such
Subsequent Shelf Registration Statement will not affect the inclusion of
such Registrable Securities in the Shelf Registration Statement until such
Registrable Securities have been sold under the Subsequent Shelf
Registration Statement; provided, however, that at such time of sale, the
Company shall have the right to remove from the Shelf Registration
Statement the Registrable Securities sold pursuant to the Subsequent Shelf
Registration Statement. For the avoidance of doubt, if the Shelf
Registration Statement is declared effective by the SEC prior to the filing
of a Subsequent Shelf Registration Statement, Registrable Securities will
not be entitled to be included in the Subsequent Shelf Registration
Statement.
(d) Provisions Applicable to IPO Registration Statement or Subsequent
Shelf Registration Statement.
(i) Right to Terminate IPO Registration Statement or Subsequent
Shelf Registration Statement. At any time, the Company shall have the
right to terminate or withdraw any Subsequent Shelf Registration
Statement referred to in Section 2(c) whether or not any Holder has
elected to include Registrable Securities in such registration;
provided, however, that the Company must provide each Holder that
elected to include any Registrable Securities in such Subsequent Shelf
Registration Statement prompt notice of such termination. Furthermore,
in the event the Subsequent Shelf Registration Statement is not
declared effective by
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the SEC within 75 days following the initial filing of the Subsequent
Shelf Registration Statement, unless a road show for the Underwritten
Offering pursuant to the Subsequent Shelf Registration Statement is in
progress at such time, the Company shall promptly provide a new notice
in writing substantially the same as the original notice described
above to all Holders giving the Holders, as applicable, a further
opportunity to elect to include Registrable Securities in the pending
Subsequent Shelf Registration Statement. Each Holder desiring to
include in any such Subsequent Shelf Registration Statement all or
part of the Registrable Securities held by such Holder shall, within
15 Business Days after receipt of the above-described notice by the
Company, so notify the Company in writing, and in such notice shall
inform the Company of the number of Registrable Securities such Holder
wishes to include in such Subsequent Shelf Registration Statement.
(ii) Shelf Registration not Impacted by Subsequent Shelf
Registration Statement. The Company's obligation to file the Shelf
Registration Statement pursuant to Section 2(a) hereof and keep
effective such Shelf Registration Statement shall not be affected by
the filing or effectiveness of a Subsequent Shelf Registration
Statement, except to the extent Registrable Securities are sold
pursuant to a Subsequent Shelf Registration Statement, in which case,
the Company shall have the right to remove from such Shelf
Registration Statement the Registrable Securities sold pursuant to the
Subsequent Shelf Registration Statement.
(iii) Selection of Underwriter. The Company shall have the sole
right to select the managing or co-lead underwriter(s) for its IPO or
any follow-on public offering, regardless of whether any Registrable
Securities are included in a Subsequent Shelf Registration Statement
as provided above. The right of any such Holder's Registrable
Securities, as applicable, to be included in any Subsequent Shelf
Registration Statement pursuant to Section 2(c) shall be conditioned
upon such Holder's participation, as applicable, in such Underwritten
Offering and the inclusion of such Holder's Registrable Securities, as
applicable, in the Underwritten Offering to the extent provided
herein. All Holders proposing to distribute their Registrable
Securities through such Underwritten Offering shall enter into an
underwriting agreement in customary form with the managing
underwriters selected by the Company for such underwriting and
complete and execute any questionnaires, powers-of-attorney,
indemnities, securities escrow agreements and other documents
reasonably required under the terms of such underwriting, and furnish
to the Company such information in writing as the Company may
reasonably request for inclusion in any Subsequent Shelf Registration
Statement; provided, however, that no Holder who is not an affiliate
of the Company or Tortoise Capital Advisors shall be required to make
any representations or warranties to or agreements (including
indemnities) with the Company or the underwriters other than
representations, warranties or agreements (including indemnities) as
are customary and reasonably requested by the Company or the
underwriters with the understanding that the foregoing shall be
several, not joint and several, and no such agreement (including
indemnities) shall
8
require any Holder to be liable for an amount in excess of the gross
proceeds received by such Holder through such Underwritten Offering.
Notwithstanding any other provision of this Agreement, if the managing
underwriters determine in good faith that marketing factors require a
limitation on the number of shares to be included, then the managing
underwriters may exclude shares (including Registrable Securities)
from the Subsequent Shelf Registration Statement and any Common Shares
included in a Subsequent Shelf Registration Statement shall be
allocated, first, to the Company, second, to each of the holders
pursuant to registration rights agreements dated December 8, 2005 and
January 9, 2006 between the Company and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Stifel, Nicolaus &
Company, Incorporated (the "Existing Registration Rights Agreements")
requesting inclusion of their registrable securities under the
Existing Registration Rights Agreements in such Subsequent Shelf
Registration Statement, and third, to each of the Holders hereunder,
on a pro rata basis based on the total number of Registrable
Securities then held by each such Holder requesting inclusion.
If any Holder disapproves of the terms of any Underwritten
Offering that is undertaken by the Company in accordance with the
terms hereof, such Holder may elect to withdraw therefrom by written
notice to the Company and the managing underwriter(s), delivered at
least five (5) Business Days prior to the effective date of the
Subsequent Shelf Registration Statement; provided, however, that if,
in the opinion of counsel, such withdrawal would necessitate a
re-circulation of the Prospectus to investors, such Holder shall be
required to deliver such written notice at least 10 Business Days
prior to the effective date of such Subsequent Shelf Registration
Statement. Any Registrable Securities excluded or withdrawn from such
Underwritten Offering shall be excluded and withdrawn from such
Subsequent Shelf Registration Statement.
(iv) Hold-Back Agreement. By electing to include Registrable
Securities in a Subsequent Shelf Registration Statement, if any, each
Holder shall be deemed to have agreed not to effect any sale or
distribution of securities of the Company of the same or similar class
or classes of the securities included in such Subsequent Shelf
Registration Statement or any securities convertible into or
exchangeable or exercisable for such securities, including a sale
pursuant to Rule 144 or Rule 144A, during such periods as reasonably
requested by the managing underwriter(s) of the Underwritten Offering
pursuant to a Subsequent Shelf Registration Statement (but in no event
for a period longer than 180 days or 90 days following the effective
date of such Subsequent Shelf Registration Statement), provided that
each of Tortoise Capital Advisors and its Affiliates and each
executive officer, director, stockholder, member, partner or manager
of any of the foregoing that hold Common Shares or securities
convertible into or exchangeable or exercisable for Common Shares are
subject to the same restriction for the entire time period required of
the Holders hereunder.
(e) Registrable Securities not Included under Subsequent Shelf
Registration Statement. If Registrable Securities were otherwise not
included in a Subsequent Shelf
9
Registration Statement because (i) a Subsequent Shelf Registration
Statement is withdrawn prior to the distribution of all Registrable
Securities registered thereunder, (b) the underwriters exercise their right
to exclude any Registrable Securities from such Subsequent Shelf
Registration Statement, or (c) any Registrable Securities are otherwise not
offered an opportunity to be registered under and distributed pursuant to
such Subsequent Shelf Registration Statement, then the Company will be
obligated to file an additional shelf registration statement relating to
any Registrable Securities not included in and distributed pursuant to such
Subsequent Shelf Registration Statement (y) within thirty (30) days of the
withdrawal or abandonment of the offering pursuant to such Subsequent Shelf
Registration Statement or (z) within one hundred eighty (180) days of the
consummation of the offering pursuant to such Subsequent Shelf Registration
Statement, providing for the resale of the Registrable Securities pursuant
to Rule 415 from time to time by the Holders (such registration statement,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement, an
"Additional Shelf Registration Statement") in the same manner, and subject
to the same provisions in this Agreement as the Shelf Registration
Statement, provided that the provisions of Sections 2(a), 2(c) and 2(d)
shall not apply to any Additional Shelf Registration Statement.
(f) Expenses. The Company shall pay all Registration Expenses in
connection with the registration of the Registrable Securities pursuant to
this Agreement. Each Holder participating in a registration pursuant to
this Section 2 shall bear such Holder's proportionate share (based on the
total number of Registrable Securities sold in such registration) of all
discounts and commissions payable to underwriters or brokers and all
transfer taxes and transfer fees in connection with a registration of
Registrable Securities pursuant to this Agreement and any other expense of
the Holders, as applicable, not specifically allocated to the Company
pursuant to this Agreement relating to the sale or disposition of such
Holder's Registrable Securities pursuant to any Registration Statement.
3. Rules 144 and 144A Reporting.
With a view to making available the benefits of certain rules and regulations of
the SEC that may permit the sale of the Registrable Securities to the public
without registration, until such date as no Holder owns any Registrable
Securities, the Company agrees to:
(a) at all times after the effective date of the first registration
statement under the Securities Act filed by the Company for an offering of
its securities to the general public, use its commercially reasonable
efforts to make and keep public information available, as those terms are
understood and defined in Rule 144(c);
(b) use its commercially reasonable efforts to file with the SEC in a
timely manner all reports and other documents required to be filed by the
Company under the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements); and
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(c) if the Company is not required to file reports and other documents
under the Securities Act and the Exchange Act, make available other
information as required by, and so long as necessary to permit sales of
Registrable Securities pursuant to, Rule 144 and Rule 144A and in any event
shall provide to each Holder a copy of:
(i) the Company's annual consolidated financial statements
(including at least balance sheets, statements of profit and loss,
statements of stockholders' equity and statements of cash flows)
prepared in accordance with U.S. generally accepted accounting
principles, accompanied by an audit report of the Company's
independent accountants, no later than 90 days after the end of each
fiscal year of the Company, and
(ii) the Company's unaudited quarterly financial statements
(including at least balance sheets, statements of profit and loss,
statements of stockholders' equity and statements of cash flows)
prepared in a manner consistent with the preparation of the Company's
annual financial statements, no later than 45 days after the end of
each fiscal quarter of the Company.
(d) take such further actions consistent with this Section 3, as a
Holder may reasonably request in availing itself of any rule or regulation
of the SEC allowing a Holder to sell any such Registrable Securities
without registration.
4. Registration Procedures.
In connection with the obligations of the Company with respect to any
registration pursuant to this Agreement, the Company shall use its commercially
reasonable efforts to effect or cause to be effected the registration of the
Registrable Securities under the Securities Act to permit the public resale of
such Registrable Securities by the Holder or Holders in accordance with the
Holders' intended method or methods of resale and distribution (which methods
shall be commercially reasonable), and the Company shall:
(a) notify Selling Holders' Counsel, if any, in writing, at least 20
Business Days prior to filing a Registration Statement (other than a
Subsequent Shelf Registrant Statement notice which is set forth in Section
2), of its intention to file such Registration Statement with the SEC and,
at least 15 Business Days prior to filing, provide a copy of the
Registration Statement to Selling Holders' Counsel, if any, for review and
comment, which comments shall be provided within 10 Business Days of
delivering such Registration Statement; prepare and file with the SEC, as
specified in this Agreement, a Registration Statement, which Registration
Statement shall comply in all material respects as to form with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and use its best efforts to
reflect in such Registration Statement, when so filed with the SEC, such
comments as Selling Holders' Counsel, if any, may reasonably propose;
notify Selling Holders' Counsel, if any, in writing, at least two Business
Days prior to the filing of any amendment or supplement to a Registration
Statement, and within a reasonable time prior to filing, provide a copy of
such amendment or supplement to Selling Holders' Counsel, if any, for
review and comment and use its best efforts to reflect in such amendment or
supplement,
11
when so filed with the SEC, such comments as Selling Holders' Counsel, if
any, may reasonably propose; and use its commercially reasonable efforts to
cause such Registration Statement to become effective as promptly as
practicable following such filing (and in any event as provided in Section
2(a)) and to remain effective, subject to Section 5 hereof, until the
earlier of (i) such time as all Registrable Securities covered thereby have
been sold in accordance with the intended methods of distribution of such
Registrable Securities, and (ii) the date on which no Holder holds
Registrable Securities; provided, however, that the Company shall not be
required to cause any Subsequent Shelf Registration Statement to become
effective; provided, further, that if the Company has an effective Shelf
Registration Statement, Subsequent Shelf Registration Statement or
Additional Shelf Registration Statement on Form N-2 under the Securities
Act and becomes eligible to use a short-form Registration Statement under
the Securities Act, the Company may, upon 30 days' prior written notice to
all Holders of Registrable Securities, register any Registrable Securities
registered but not yet distributed under the effective Shelf Registration
Statement, Subsequent Shelf Registration Statement or Additional Shelf
Registration Statement on such short-form Shelf Registration Statement and,
once the short-form Shelf Registration Statement is declared effective,
de-register such shares under the previous Shelf Registration Statement,
any Subsequent Shelf Registration Statement or Additional Shelf
Registration Statement or transfer filing fees from the previous Shelf
Registration Statement, Subsequent Shelf Registration Statement or
Additional Shelf Registration Statement (such transfer pursuant to Rule
429, if applicable) unless the Holders holding at least a majority of the
shares registered by the Holders under the initial Shelf Registration
Statement, any Subsequent Shelf Registration Statement or Additional
Registration Statement notify the Company within 10 days of receipt of the
Company notice that such a registration under a new Registration Statement
and de-registration of the initial Shelf Registration Statement, any
Subsequent Shelf Registration Statement or Additional Shelf Registration
Statement would materially interfere with such Holders' distribution of
Registrable Securities already in progress, in which case the Company shall
delay the effectiveness of the short-form Shelf Registration Statement and
de-registration for a period of not less than 20 days from the date that
the Company receives the notice from such Holders requesting a delay;
(b) subject to Section 4(i) hereof, (i) prepare and file with the SEC
such amendments and post-effective amendments to each such Registration
Statement as may be necessary to keep such Registration Statement effective
for the period described in Section 4(a) hereof, (ii) cause each Prospectus
contained therein to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 and (iii) comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by each Registration Statement during the
applicable period in accordance with the method or methods of distribution
set forth in the "Plan of Distribution" section of the Prospectus;
(c) furnish to the Holders, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder may reasonably
request, in order to facilitate the public sale or other disposition of the
Registrable Securities; the Company consents, subject to Section 5, to the
lawful use of such Prospectus, including each preliminary
12
Prospectus, by the Holders, if any, in connection with the offering and
sale of the Registrable Securities covered by any such Prospectus;
(d) use its commercially reasonable efforts to register or qualify, or
obtain exemption from registration or qualification for, all Registrable
Securities by the time the applicable Registration Statement is declared
effective by the SEC under all applicable state securities or "blue sky"
laws of such United States jurisdictions as any Holder with Registrable
Securities covered by a Registration Statement shall reasonably request in
writing, keep each such registration or qualification or exemption
effective during the period such Registration Statement is required to be
kept effective pursuant to Section 4(a) and do any and all other acts and
things that may be reasonably necessary or advisable to enable such Holder
to consummate the disposition in each such jurisdiction of such Registrable
Securities covered by the Registration Statement; provided, however, that
the Company shall not be required to take any action to comply with this
Section 4(d) if it would require the Company or any of its subsidiaries to
(i) qualify generally to do business in any jurisdiction or to register as
a broker or dealer in such jurisdiction where it would not otherwise be
required to qualify but for this Section 4(d) and except as may be required
by the Securities Act, (ii) subject itself to taxation in any such
jurisdiction or (iii) submit to the general service of process in any such
jurisdiction;
(e) use its commercially reasonable efforts to cause all Registrable
Securities covered by such Registration Statement to be registered and
approved by such other governmental agencies or authorities in the United
States, if any, as may be necessary to enable the Holders thereof to
consummate the disposition of such Registrable Securities; provided,
however, that the Company shall not be required to take any action to
comply with this Section 4(e) if it would require the Company or any of its
subsidiaries to (i) qualify generally to do business in any jurisdiction or
to register as a broker or dealer in such jurisdiction where it would not
otherwise be required to qualify but for this Section 4(e) and except as
may be required by the Securities Act, (ii) subject itself to taxation in
any such jurisdiction or (iii) submit to the general service of process in
any such jurisdiction;
(f) notify Selling Holders' Counsel, if any, and each Holder with
Registrable Securities covered by a Registration Statement promptly and, if
requested by Selling Holders' Counsel, if any, or any such Holder, confirm
such advice in writing, (i) when such Registration Statement has become
effective and when any post-effective amendments thereto become effective
or upon the filing of a supplement to any Prospectus, (ii) of the issuance
by the SEC or any state securities authority of any stop order suspending
the effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose, (iii) of any request by the SEC or any other
federal or state governmental authority for amendments or supplements to
such Registration Statement or related Prospectus or for additional
information and (iv) of the happening of any event during the period such
Registration Statement is effective as a result of which such Registration
Statement or the related Prospectus or any document incorporated by
reference therein contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or, in the case of the
Prospectus, contains any untrue statement of a material
13
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (which information shall be
accompanied by an instruction to suspend the use of the Registration
Statement and the Prospectus (such instruction to be provided in the same
manner as a Suspension Notice) until the requisite changes have been made,
at which time notice of the end of suspension shall be delivered in the
same manner as an End of Suspension Notice);
(g) during the period of time referred to in Section 4(a) above, use
commercially reasonable efforts to avoid the issuance of, or if issued, to
obtain the withdrawal of, any order enjoining or suspending the use or
effectiveness of a Registration Statement or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities for
sale in any jurisdiction, as promptly as practicable;
(h) upon request, furnish to Selling Holders' Counsel, if any, and
each requesting Holder with Registrable Securities covered by a
Registration Statement, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment or supplement
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);
(i) except as provided in Section 5, upon the occurrence of any event
contemplated by Section 4(f)(iv) hereof, use its commercially reasonable
efforts to promptly prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that such Registration Statement or related Prospectus or document
incorporated therein by reference will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or, in
the case of the Prospectus, will not contain any 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, in the light of the
circumstances under which they were made, not misleading;
(j) if requested by the representative of the underwriters, if any, or
any Holder of Registrable Securities being sold in connection with an
Underwritten Offering, (i) as promptly as practicable incorporate in a
Prospectus supplement or post-effective amendment such material information
as the representative of the underwriters, if any, or such Holder indicates
in writing relates to them and (ii) use its commercially reasonable efforts
to make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has
received written notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(k) enter into customary agreements (including in the case of an
Underwritten Offering, an underwriting agreement in customary form and
reasonably satisfactory to the Company) and take all other reasonable
action in connection therewith in order to expedite or facilitate the
distribution of the Registrable Securities included in such
14
Registration Statement and, in the case of an Underwritten Offering, make
representations and warranties to the Holders of Registrable Securities
covered by such Registration Statement and to the underwriters in such form
and scope as are customarily made by issuers to selling stockholders and
underwriters in underwritten offerings, respectively, and confirm the same
to the extent customary if and when requested;
(l) use its commercially reasonable efforts to make available for
inspection by one representative selected by the Holders holding a majority
of the Registrable Securities included in any Registration Statement and,
with respect to an Underwritten Offering, the representative underwriters
participating in any disposition pursuant to a Registration Statement and
any one law firm retained by each of the Holders and the underwriters,
respectively, during normal business hours and upon reasonable notice, all
financial and other records, pertinent corporate documents and properties
of the Company and cause the respective officers, directors and employees
of the Company and/or Tortoise Capital Advisors to supply all information
reasonably requested by such parties in connection with a Registration
Statement and the due diligence review of the Registration Statement and
the information contained or incorporated therein; provided, however, that
such records, documents or information that the Company determines, in good
faith, to be confidential and notifies the foregoing parties of such
confidential nature shall not be disclosed by the foregoing parties unless
(i) the disclosure of such records, documents or information is necessary
to avoid or correct a material misstatement or omission in a Registration
Statement or Prospectus, (ii) the release of such records, documents or
information is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction, or (iii) such records, documents or information
have been generally made available to the public by the Company; provided,
further, that to the extent practicable, the foregoing inspection and
information gathering shall be coordinated on behalf of the Holders and the
other parties entitled thereto by one law firm designated by and on behalf
of the Holders and the other parties;
(m) use its commercially reasonable efforts (including, without
limitation, seeking to cure in the Company's listing or inclusion
application any deficiencies cited by the exchange or market) to list or
include all Registrable Securities on the New York Stock Exchange or the
Nasdaq Stock Market;
(n) use its commercially reasonable efforts to prepare and file in a
timely manner all documents and reports required by the Exchange Act and,
to the extent the Company's obligation to file such reports pursuant to
Section 15(d) of the Exchange Act expires prior to the expiration of the
effectiveness period of the Registration Statement as required by Section
4(a) hereof, the Company shall register the Registrable Securities under
the Exchange Act and shall maintain such registration through the
effectiveness period required by Section 4(a) hereof;
(o) provide a CUSIP number for all Registrable Securities, not later
than the effective date of the Registration Statement;
(p) (i) otherwise use its commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC, (ii) make generally
available to its
15
stockholders, as soon as reasonably practicable, earnings statements
covering at least 12 months that satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 (or any similar rule promulgated under the
Securities Act), no later than 90 days after the end of each fiscal year of
the Company and (iii) delay the effectiveness of any Registration Statement
or Prospectus or not file any amendment or supplement to such Registration
Statement or Prospectus to which Selling Holders' Counsel, if any, or any
Holder of Registrable Securities covered by such Registration Statement
shall have, based upon the written opinion of counsel, objected on the
grounds that such Registration Statement or Prospectus or amendment or
supplement does not comply in all material respects with the requirements
of the Securities Act, provided that the Company may file and request
effectiveness of such Registration Statement following such time as the
Company shall have used its commercially reasonable efforts to resolve any
such issue with Selling Holder's Counsel, if any, or such objecting Holder
and shall have advised Selling Holder's Counsel, if any, or such Holder in
writing of its reasonable belief that such filing complies with the
requirements of the Securities Act;
(q) provide and cause to be maintained a registrar and transfer agent
for all Registrable Securities covered by any Registration Statement from
and after a date not later than the effective date of such Registration
Statement;
(r) in connection with any sale or transfer of the Registrable
Securities (whether or not pursuant to a Registration Statement) that will
result in the securities being delivered no longer being Registrable
Securities, cooperate with the Holders and the managing underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities to be sold, which certificates
shall not bear any transfer restrictive legends (other than as required by
the Company's charter) and to enable such Registrable Securities to be in
such denominations and registered in such names as the managing
underwriter(s), if any, or the Holders may reasonably request at least
three Business Days prior to any sale of the Registrable Securities;
(s) upon effectiveness of the first Registration Statement filed by
the Company, take such actions and make such filings as are necessary to
effect the registration of the Common Shares under the Exchange Act
simultaneously with or as soon as practicable following the effectiveness
of the Registration Statement to the extent such registration has not
already taken place;
(t) in the case of an Underwritten Offering, use its best efforts to
furnish or cause to be furnished to the underwriters a signed counterpart,
addressed to the underwriters, of: (i) an opinion of counsel for the
Company, dated the date of each closing under the underwriting agreement,
in customary form and reasonably satisfactory to the underwriters (an
"Opinion"); and (ii) a "cold comfort" letter, dated the effective date of
the Registration Statement and the date of each closing under the
underwriting agreement, signed by the independent public accountants who
have certified the Company's financial statements included in such
Registration Statement (and the Prospectus included therein) and with
respect to events subsequent to the date of such financial statements, as
are customarily covered in accountants' letters delivered to underwriters
in underwritten public offerings of securities and such other financial
16
matters as the underwriters may reasonably request and are customarily
obtained by underwriters in underwritten public offerings (a "Comfort
Letter");
(u) at a reasonable time prior to the filing of any Prospectus, any
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus
after initial filing of a Registration Statement, provide copies of such
document to Selling Holders' Counsel, if any, and make representatives of
the Company as shall be reasonably requested by Selling Holders' Counsel,
if any, available for discussion of such document; and
(v) in connection with the initial filing of a Registration Statement
and each amendment thereto with the SEC, prepare and timely file with the
NASD all forms and information required or requested by the NASD.
The Company may require the Holders to furnish to the Company such information
regarding the proposed distribution by such Holder of such Registrable
Securities as the Company may from time to time reasonably request in writing or
as shall be required to effect the registration of the Registrable Securities
and no Holder shall be entitled to be named as a selling stockholder in any
Registration Statement and no Holder shall be entitled to use the Prospectus
forming a part thereof if such Holder does not provide such information to the
Company. Any Holder that sells Registrable Securities pursuant to a Registration
Statement shall be required to be named as a selling stockholder in the related
Prospectus and to deliver or cause to be delivered a Prospectus to purchasers.
Each Holder further agrees to furnish promptly to the Company in writing all
information required from time to time to make the information previously
furnished by such Holder not misleading.
Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(f)(ii), 4(f)(iii) or
4(f)(iv) hereof, such Holder will immediately discontinue disposition of
Registrable Securities pursuant to a Registration Statement until such Holder's
receipt of copies of the supplemented or amended Prospectus. If so directed by
the Company, such Holder will deliver to the Company (at the reasonable expense
of the Company) all copies in its possession, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice.
5. Black-Out Period.
(a) Subject to the provisions of this Section 5, the Company shall
have the right, but not the obligation, from time to time, to suspend the
use of a Registration Statement following the effectiveness of the
Registration Statement (and the filings with any international, federal or
state securities commissions), if a Suspension Event (as defined herein)
occurs. If the Company elects to suspend the effectiveness and/or use of a
Registration Statement following the occurrence of a Suspension Event, the
Company, by written notice to Selling Holders' Counsel, if any, and the
Holders (a "Suspension Notice"), shall notify such parties in writing that
the effectiveness of the Registration Statement has been suspended and
shall direct the Holders to suspend sales of the Registrable Securities
pursuant to the Registration Statement until the Suspension Event
17
has ended. A "Suspension Event" shall be deemed to have occurred if: (i)
the managing underwriter(s) of an Underwritten Offering has advised the
Company that the offer or sale of Registrable Securities pursuant to the
Registration Statement would have a material adverse effect on the
Company's Underwritten Offering; (ii) the Board of Directors of the Company
in good faith has determined that the offer or sale of any Registrable
Securities would materially impede, delay or interfere with any proposed
financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction involving the Company; or
(iii) the Board of Directors of the Company has determined in good faith,
that it is required by law, or that it is in the best interests of the
Company, to supplement the Registration Statement or file a post-effective
amendment to the Registration Statement in order to ensure that the
Prospectus included in the Registration Statement (1) contains the
information required under Section 10(a)(3) of the Securities Act; (2)
discloses any fundamental change in the information included in the
Prospectus; or (3) discloses any material information with respect to the
plan of distribution not disclosed in the Registration Statement or any
material change to such information. Upon the occurrence of any Suspension
Event, the Company shall use its best efforts to cause the Registration
Statement to become effective or to promptly amend or supplement the
Registration Statement or to take such action as is necessary to make
resumed use of the Registration Statement compatible with the Company's
best interests, as applicable, so as to permit the Holders to resume sales
of the Registrable Securities as soon as practicable. In no event shall the
Company be permitted to suspend the use of a Registration Statement in any
12-month period for more than 30 consecutive days or for more than an
aggregate of 60 days, except as a result of a refusal by the SEC to declare
any post-effective amendment to the Registration Statement effective after
the Company has used its best efforts to cause such post-effective
amendment to be declared effective, in which case the Company shall
terminate the suspension of the use of the Registration Statement
immediately following the effective date of the post-effective amendment.
(b) If the Company gives a Suspension Notice to Selling Holders'
Counsel, if any, and the Holders to suspend sales of the Registrable
Securities following a Suspension Event, the Holders shall not effect any
sales of the Registrable Securities pursuant to such Registration Statement
(or such filings) at any time after it has received a Suspension Notice
from the Company and prior to receipt of an End of Suspension Notice (as
defined herein). If so directed by the Company in writing, each Holder will
deliver to the Company (at the expense of the Company) all copies other
than permanent file copies then in such Holder's possession of the
Prospectus covering the Registrable Securities at the time of receipt of
the Suspension Notice. The Holders may recommence effecting sales of the
Registrable Securities pursuant to the Registration Statement (or such
filings) upon delivery by the Company of a notice in writing that the
Suspension Event or its potential effects are no longer continuing (an "End
of Suspension Notice"), which End of Suspension Notice shall be given by
the Company to Selling Holders' Counsel, if any, and the Holders in the
same manner as the Suspension Notice promptly following the conclusion of
any Suspension Event and its effect.
(c) Notwithstanding any provision herein to the contrary, if the
Company shall give a Suspension Notice with respect to any Registration
Statement pursuant to this
18
Section 5, the Company agrees that it shall extend the period of time
during which such Registration Statement shall be maintained effective
pursuant to this Agreement by one times the number of days during the
period from the date of receipt by the Holders of the Suspension Notice to
and including the date of receipt by the Holders of the End of Suspension
Notice and provide copies of the supplemented or amended Prospectus
necessary to resume sales, with respect to each Suspension Event; and, if
applicable, the period for which the shares of Common Shares covered by
such Registration Statement remain Registrable Securities shall be
commensurately extended.
6. Indemnification, Contribution.
(a) The Company agrees to indemnify and hold harmless each Holder,
each Person who participates as an underwriter (any such Person being an
"Underwriter") and each Person, if any, who controls any Holder or
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto)
pursuant to which Registrable Securities were registered under the
1933 Act, including all documents incorporated therein by reference,
or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or any Free
Writing Prospectus or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, or arising out of any material misstatement or omission in
the information conveyed to an investor at the time it made its
investment decision;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by any
indemnified party), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii) above;
19
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Holder or Underwriter expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) or
any Free Writing Prospectus.
(b) Each Holder severally, but not jointly, agrees to indemnify and
hold harmless the Company, each Underwriter and the other selling Holders,
and each of their respective directors and officers, and each Person, if
any, who controls the Company, any Underwriter or any other selling Holder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 6(a) hereof, as incurred,
but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in a Registration Statement (or any amendment
thereto) or any Prospectus included therein (or any amendment or supplement
thereto) or any Free Writing Prospectus in reliance upon and in conformity
with written information with respect to such Holder furnished to the
Company by such Holder expressly for use in such Registration Statement (or
any amendment thereto) or such Prospectus (or any amendment or supplement
thereto) or any Free Writing Prospectus; provided, however, that no such
Holder shall be liable for any claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Registrable
Securities pursuant to such Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder,
but failure so to notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account
of this indemnity agreement. An indemnifying party may participate at its
own expense in the defense of such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying party or parties be liable for the fees and expenses
of more than one counsel (in addition to any local counsel) separate from
their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party
from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
20
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) If the indemnification provided for in this Section 6 is for any
reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred
to therein, then each indemnifying party shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred
by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand
and the Holders on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative fault of the Company on the one hand and the Holders on the
other hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Holders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 6. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 6 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No Person: (i) guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation; or (ii) shall be
entitled to indemnification or contribution from the Company under this Section
6 for conduct of the type described in Section 17(i) of the Investment Company
Act of 1940.
For purposes of this Section 6, each Person, if any, who controls a Holder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as such Holder, and each director of
the Company, and each Person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company.
21
7. Market Stand-Off Agreement.
Notwithstanding anything to the contrary in the Subscription Agreements, each
Holder agrees that it shall not, to the extent requested by the Company or an
underwriter of the Company's Common Shares, without the prior written consent of
the Company and such underwriter(s), directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of,
or otherwise dispose of or transfer any shares of the Company's Common Shares or
any securities convertible into or exchangeable or exercisable for Common Shares
(including the Warrants), whether now owned or hereafter acquired by the
undersigned (excluding Common Shares acquired in the IPO or acquired in the open
market following the IPO) or with respect to which the undersigned has or
hereafter acquires the power of disposition, or file, or cause to be filed, any
registration statement under the Securities Act, with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of Common Shares, whether any such swap or transaction
is to be settled by delivery of Common Shares or other securities, in cash or
otherwise sell (other than in any such case to bona fide donees of the
purchaser, in each case, who agree to be similarly bound by completing and
executing a copy of the Investment Representation, Transfer and Market Stand-Off
Agreement and furnishing it to the Company) within the ninety (90) days
following the effective date of a Registration Statement for an Underwritten
Offering. The provisions of this Section 7 shall remain in full force and effect
for all Holders of the Common Shares until such time as a Holder no longer holds
any Registrable Securities.
8. Termination of the Company's Obligations.
The Company shall have no further obligations pursuant to this Agreement at such
time as no Registrable Securities are outstanding; provided, however, that the
Company's obligations under Sections 3, 6 and 10(a) through and including 10(n)
of this Agreement shall remain in full force and effect following such time.
9. Underwritten Offerings.
(a) If any of the Registrable Securities covered by the Shelf
Registration Statement or any Additional Shelf Registration Statement are
to be offered and sold in an Underwritten Offering, the investment bank or
investment banks and manager or managers that will administer the offering
shall be selected by the Holders of a majority of such Registrable
Securities to be included in such offering.
(b) No Holder may participate in any Underwritten Offering proposed
under the Shelf Registration Statement or any Additional Shelf Registration
Statement unless such Holder (i) agrees to sell such Holder's Registrable
Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires,
powers-of-attorney, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting
arrangements.
22
10. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under this Agreement may result
in material irreparable injury to the Holders for which there is no
adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, any
Holder may obtain such relief as may be required to specifically enforce
the Company's obligations under this Agreement. The Company further agrees
to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(b) No Conflicting Agreements. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement,
enter into, any agreement with respect to the Company's securities that
conflicts with the rights granted to the Holders in this Agreement. The
Company represents and warrants that the rights granted to the Holders
hereunder do not in any way conflict with the rights granted to the holders
of the Company's securities under any other agreements. The Company will
not take any action with respect to the Registrable Securities which would
adversely affect the ability of any of the Holders to include such
Registrable Securities in a registration undertaken pursuant to this
Agreement.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, without the written consent of the Company and
Holders of a majority of outstanding Registrable Securities; provided,
however, that, no consent is necessary from any of the Holders in the event
that this Agreement is amended, modified or supplemented for the purpose of
curing any ambiguity, defect or inconsistency that does not adversely
affect the rights of any Holders. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of a Holder of Registrable
Securities whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of
other Holders of Registrable Securities may be given by such Holder;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Each Holder of Registrable Securities
outstanding at the time of any such amendment, modification, supplement,
waiver or consent or thereafter shall be bound by any such amendment,
modification, supplement, waiver or consent effected pursuant to this
Section 10(c), whether or not any notice, writing or marking indicating
such amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by
telecopier, by courier guaranteeing overnight delivery or by first-class
mail, return receipt requested, and shall be deemed given (A) when made, if
made by hand delivery, (B) upon confirmation, if made by telecopier, (C)
one Business Day after being deposited with such courier, if
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made by overnight courier or (D) on the date indicated on the notice of
receipt, if made by first-class mail, to the parties as follows:
(i) if to a Holder, at the most current address given by the
registrar and transfer agent of the Securities to the Company;
(ii) if to the Company, to:
Tortoise Capital Resources Corporation
c/o Tortoise Capital Advisors, LLC
10801 Mastin Boulevard, Suite 222
Overland Park, Kansas 66210
Attention: Terry Matlack
Telecopy No: (913) 981-1021
with a copy to (for informational purposes only):
Blackwell Sanders Peper Martin, L.L.P.
4801 Main Street, Suite 1000
Kansas City, MO 64112
Attention: Steve Carman, Esq.
Telecopy No.: (816) 983-8080
or to such other address as such person may have furnished to the other persons
identified in this Section 10(d) in writing in accordance herewith.
(e) Stock Legend. In addition to any other legend that may appear on
the stock certificates evidencing the Registrable Securities, for so long
as any Securities or Additional Securities remain Registrable Securities
each stock certificate evidencing such Registrable Securities shall contain
a legend to the following effect: "THE SHARES EVIDENCED BY THIS CERTIFICATE
ARE SUBJECT TO AND ENTITLED TO THE OBLIGATIONS AND BENEFITS OF A CERTAIN
REGISTRATION RIGHTS AGREEMENT, DATED AS OF MAY __, 2007."
(f) Approval of Holders. Whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its Affiliates (other than
subsequent Holders of Registrable Securities, if such subsequent Holders
are deemed to be such Affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(g) Enforceability of Agreement by Holders. No Holder shall have the
right to enforce the Agreement unless and until such Holder fulfills all of
its obligations hereunder.
(h) Successors and Assigns. Any person who purchases any Securities or
Additional Securities from any Holder shall be deemed, for purposes of this
Agreement,
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to be an assignee of such Holder, as the case may be. This Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of each of the parties hereto and shall inure to the benefit of and
be binding upon each Holder of any Securities or Additional Securities.
(i) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be original and all of which
taken together shall constitute one and the same agreement.
(j) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(k) Governing Law. THIS AGREEMENT SHALL BE GOVERNED EXCLUSIVELY BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
(l) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction, it being intended that all of the
rights and privileges of the parties shall be enforceable to the fullest
extent permitted by law.
(m) Entire Agreement. This Agreement is intended by the parties hereto
as a final expression of their agreement and is intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable
Securities. Except as provided in the Purchase Agreements, there are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein, with respect to the registration rights
granted by the Company with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and undertakings among the
parties with respect to such registration rights. No party hereto shall
have any rights, duties or obligations other than those specifically set
forth in this Agreement.
(n) Submission to Jurisdiction. Except as set forth below, no claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or
in any way relating to this Agreement ("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
hereby consents to the jurisdiction of such courts and personal service
with respect thereto. THE COMPANY HEREBY WAIVES ALL RIGHTS TO TRIAL BY
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JURY IN ANY PROCEEDING (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) IN
ANY WAY ARISING OUT OF OR RELATING TO THIS AGREEMENT. The Company agrees
that a final judgment in any such Proceeding brought in any such court
shall be conclusive and binding upon the Company and may be enforced in any
other courts in the jurisdiction of which the Company is or may be subject,
by suit upon such judgment.
[The Remainder of This Page Intentionally Left Blank; Signature Pages Follow]
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