Document:

Exhibit 10.22

 

Execution
Version

 

January
7, 2021

 

LF
Capital Acquisition Corp.

600 Madison Avenue

Suite 1802

New York, NY 10022

 

Re:          Investor
Representation Letter

 

Ladies
and Gentlemen:

 

The
undersigned (the “Holder”) is a holder of shares of common stock of Landsea Homes Incorporated, a Delaware
corporation (the “Company”). LF Capital Acquisition Corp., a Delaware corporation (“Parent”),
is acquiring the Company (the “Acquisition”) pursuant to that certain Agreement and Plan of Merger, dated as
of August 31, 2020 (as it may be amended from time to time in accordance with its terms, the “Merger Agreement”),
by and among Parent, Merger Sub, the Company and the Seller. Capitalized terms used in this letter (this “Investor Representation
Letter”) and not otherwise defined herein shall have the same meanings ascribed to such terms in the Merger Agreement.

 

Upon
the closing of the Acquisition (the “Closing” and, the date of such Closing, the “Closing Date”),
each share of issued and outstanding Company Common Stock held by the Holder shall be cancelled and automatically converted into
the right to receive shares of Parent Class A Stock, subject to and in accordance with the terms of the Merger Agreement, in a
private placement effected in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended
(the “Securities Act”), provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated under
the Securities Act, and exemptions from the qualification requirements of applicable state law. The Holder hereby acknowledges
and agrees that Parent is relying on the truth and accuracy of the representations and warranties made by the Holder in this Investor
Representation Letter in order to rely on the exemptions described above. In addition, it is a condition to the Closing that the
undersigned enters into and delivers this Investor Representation Letter.

 

1.             Representations,
Warranties and Certain Agreements of the Holder. The Holder hereby makes the following representations, warranties and agreements
to Parent, each of which is true and correct as to the Holder as of the date hereof and will be true and correct on and as of
the Closing Date as if made on the Closing Date (or, if any such representations and warranties expressly relate to an earlier
date, then as of such earlier date).

 

1.1            Investment Representation Authorization Letter. This Investor Representation Letter constitutes the Holder’s valid
and legally binding obligation, enforceable against the Holder in accordance with its terms, except as may be limited by: (a)
applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement
of creditors’ rights generally; or (b) the effect of rules of law governing the availability of equitable remedies.

 

1.2            Acquisition for Own Account. The shares of Parent Class A Stock to be acquired by the Holder pursuant to the Merger Agreement
will be acquired for investment for the Holder’s own account, not as a nominee or agent, and not with a view to the public
resale or distribution thereof within the meaning of the Securities Act, or which would violate the securities laws of the United
States or any other jurisdiction in any manner whatsoever, and the Holder has no present intention of selling, granting any participation
in, or otherwise distributing the same.

     

     

    

1.3            No Solicitation. At no time was the Holder presented with or solicited by any publicly issued or circulated newspaper,
mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and purchase of
the Parent Class A Stock by Parent or its agents.

 

1.4            Accredited
Investor. The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.

 

1.5            Disclosure of Information. The Holder has received or has had full access to all the information the Holder considers necessary
or appropriate to make an informed investment decision with respect to the shares of Parent Class A Stock. The Holder further
has had an opportunity to ask questions and receive answers from Parent regarding the terms and conditions of the offering of
the shares of Parent Class A Stock and to obtain additional information necessary to verify any information furnished to the Holder
or to which the Holder had access.

 

1.6            Understanding of Risks . The Holder is fully aware of (a) the highly speculative nature of the shares of Parent Class A
Stock and (b) the financial risk involved.

 

1.7            The Holder’s Qualifications. The Holder has such knowledge and experience in financial and business matters that
the Holder is capable of evaluating the merits and risks of this prospective investment, has the capacity to protect the Holder’s
own interests in connection with this transaction and is financially capable of bearing a total loss of the shares of Parent Class
A Stock. The Holder has determined, based on its own independent review and such professional advice as it deems appropriate,
that its participation in this transaction is proper and suitable, notwithstanding the substantial risks inherent in investing
in or holding securities.

 

1.8            Compliance with Securities Laws. The Holder understands and acknowledges that, in reliance upon the representations and
warranties made by the Holder herein, the shares of Parent Class A Stock are not being registered with the U.S. Securities and
Exchange Commission (“SEC”) under the Securities Act or any state securities laws, but instead are being transferred
under an exemption or exemptions from the registration and qualification requirements of the Securities Act and applicable state
securities laws which impose certain restrictions on the Holder’s ability to transfer the shares of Parent Class A Stock.

 

1.9            Restricted Securities. The Holder agrees not to make any disposition of all or any portion of the shares of Parent Class
A Stock unless and until: (a) there is then in effect a registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with such registration statement; or (b) the Holder shall have furnished
Parent with an opinion of counsel, in a form reasonably satisfactory to Parent, that such disposition will not require registration
of the shares of Parent Class A Stock under the Securities Act and otherwise complies with applicable state securities laws; provided
that no such registration statement or opinion shall be required for dispositions effected under Rule 144 promulgated under
the Act.

 

1.10          Rule 144. The Holder acknowledges that, because the shares of Parent Class A Stock have not been registered under the Securities
Act, such shares must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from
such registration is available. The Holder is aware of the provisions of Rule 144 promulgated under the Securities Act.

 

1.11          Contractual Restrictions. The Holder acknowledges and agrees that he, she or it shall not Transfer any Parent Class A Stock
to be acquired by the Holder pursuant to the Merger Agreement until 180 days after the Closing Date. “Transfer”
shall mean the: (a) sale of, offer to sell, contract or

     

     

    

agreement
to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or
indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of
the SEC promulgated thereunder with respect to, any security; (b) entry into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled
by delivery of such securities, in cash or otherwise; or (c) public announcement of any intention to effect any transaction specified
in clause (a) or (b). Notwithstanding the foregoing, the Holder may Transfer any or all of such shares of Parent Class A Stock:
(i) by gift to a member of the individual’s immediate family, to a trust, the beneficiary of which is a member of the individual’s
immediate family or an affiliate of such person, or to a charitable organization; (ii) by virtue of laws of descent and distribution
upon death of the individual; (iii) in the event of Parent’s liquidation, merger, capital stock exchange, reorganization
or other similar transaction which results in all of Parent’s stockholders having the right to exchange their shares of
Parent Class A Stock for cash, securities or other property; (iv) if the Holder is an entity, by distribution to partners, members
or stockholders of the Holder, or to any corporation, partnership or other entity that controls, is controlled by or is under
common control with the Holder, (v) to any holder of phantom stock or equivalent security of the Holder that has vested, as determined
by the board of directors of the Holder, in satisfaction of such vested phantom stock or equivalent security of the Holder, or
(vi) a pledge or hypothecation of any Parent Class A Stock as collateral to a third party loan; provided, however,
with respect to each of clauses (i) - (iv) above, it shall be a condition to the Transfer that the transferee execute an agreement
stating that the transferee is receiving and holding the securities subject to the provisions of this Investor Representation
Letter.

 

1.12          Legends. The certificates or book-entry entitlements representing the shares of Parent Class A Stock shall bear the following
legend (as well as any other legends required by applicable state and federal securities laws) until such time as such legends
are no longer relevant or applicable:

 

THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER APPLICABLE
STATE SECURITIES LAWS AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION
OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES
LAWS.

 

THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS AS SET FORTH IN A LETTER TO THE COMPANY.

 

The
legend shall be removed by Parent from any certificate or book-entry entitlement evidencing the shares of Parent Class A Stock
upon delivery to Parent of an opinion of counsel, reasonably satisfactory in form and substance to Parent, that either: (a) a
registration statement under the Securities Act is at that time in effect with respect to the legended security; or (b) such security
can be freely transferred without requiring registration thereof under the Securities Act and such transfer otherwise complies
with the applicable state securities laws.

 

1.13          Stop-Transfer Instructions. The Holder agrees that, in order to ensure compliance with the restrictions imposed by this
Investor Representation Letter, Parent may issue appropriate “stop-transfer” instructions to its transfer agent. Parent
will not be required: (a) to transfer on its books any shares of Parent Class A Stock that have been sold or otherwise transferred
in violation of any of the provisions of this Investor Representation Letter; or (b) to treat as owner of such shares of Parent
Class A Stock, or to

     

     

    

accord
the right to vote or receive dividends, to any purchaser or other transferee to whom such shares of Parent Class A Stock have
been so transferred in violation of any of the provisions of this Investor Representation Letter.

 

1.14          Entire Agreement. This Investor Representation Letter and the Merger Agreement constitute the entire agreement and understanding
of the parties with respect to the subject matter of this Investor Representation Letter, and supersede all prior understandings
and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

     

     

    

IN
WITNESS WHEREOF, the Holder has entered into this Investor Representation Letter as of the date and year first entered.

 

	 	Very
    truly yours,
	 	 	 
	 	 	THE
    HOLDER:
	 	 	 
	 	 	LANDSEA
    HOLDINGS CORPORATION
	 	 	 
	 	 	By:	/s/
    John Ho
	 	 	Name:
    John Ho
	 	 	Title:
      CEO
	 	 	 
	 	 	Landsea
    Holdings Corporation
	 	 	660
    Newport Center Drive, Suite 300
	 	 	Newport
    Beach, CA 92660
	 	 	Attention:
    Joanna Zhou
	 	 	Email:
    zhouqin@landsea.cn
	 	 	 
	 	 	With
    copies of any notice to:
	 	 	 
	 	 	Squire
    Patton Boggs LLP
	 	 	555
    South Flower Street, 31st Floor
	 	 	Los
    Angeles, CA 90071
	 	 	Attention:
    James Hsu; Charlotte Westfall
	 	 	Email:
    james.hsu@squirepb.com;
	 	 	charlotte.westfall@squirepb.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature
Page to Investor Representation Letter]Document

Exhibit 4.3

DESCRIPTION OF SECURITIES 

The following is a brief description of the securities of Nuveen Churchill Direct Lending Corp. (the “Company,” “we,” “our” or “us”), registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “1934 Act”). As of December 31, 2020 and the date hereof, our common stock is the only class of our securities registered under Section 12 of the 1934 Act. This description of the terms of our common stock does not purport to be complete and is subject to and qualified in its entirety by reference to the applicable provisions of Maryland General Corporation Law (the “MGCL”), and the full text of our charter and bylaws. 

General

The authorized stock of the Company consists of 500,000,000 shares of stock, par value $0.01 per share (the “Shares”), all of which are initially designated as common stock. There are no outstanding options or warrants to purchase our stock. No stock has been authorized for issuance under any equity compensation plans. Under the MGCL, our shareholders generally are not personally liable for our debts or obligations.

Under our Articles of Amendment and Restatement (as amended or supplemented from time to time, the “Charter”), our board of directors (the “Board”) is authorized to classify and reclassify any unissued shares of stock into other classes or series of stock without obtaining shareholder approval. As permitted by the MGCL, our Charter provides that the Board, without any action by our shareholders, may amend the Charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue.

The following are our outstanding classes of securities as of March 12, 2021:

																					
	(1)
Title of Class		(2)
Amount Authorized		(3)
Amount Held by
Us or for
Our Account		(4)
Amount Outstanding
Exclusive of
Amounts Shown
Under(3)

	Common stock		500,000,000		—		9,201,271 	

Common Stock

All Shares have equal rights as to earnings, assets, voting, and dividends and, when they are issued, will be duly authorized, validly issued, fully paid and nonassessable. Distributions may be paid to our shareholders if, as and when authorized by our Board and declared by us out of assets legally available therefor. Our Shares have no preemptive, conversion or redemption rights and may not be transferred without the consent of Nuveen Churchill Advisors LLC, our investment adviser (the “Adviser”), and may not be transferred if restricted by federal and state securities laws or otherwise by contract. In the event of our liquidation, dissolution or winding up, each Share would be entitled to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time. Each Share is entitled to one vote on all matters submitted to a vote of shareholders, including the election of directors. Except as provided with respect to any other class or series of stock, the holders of our Shares will possess exclusive voting power.

Limitation on Liability of Directors and Officers; Indemnification and Advance of Expenses

Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its shareholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our Charter contains such a provision which eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law, subject to the requirements of the Investment Company Act of 1940, as amended (the “1940 Act”).

Our Charter authorizes us, to the maximum extent permitted by Maryland law and subject to the requirements of the 1940 Act, to indemnify any present or former director or officer or any individual who, while serving as our director or officer and at our request, serves or has served another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner, trustee, member or manager from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in any such capacity and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. Our Charter obligates us, to the maximum extent permitted by Maryland law and subject to the requirements of the 1940 Act, to indemnify any present or former director or officer or any individual who, while serving as our director or officer and at our request, serves or has served another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner, trustee, member or manager and who is made, or threatened to be made, a party to the proceeding by reason of his or her service in that capacity from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in any such capacity and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding. Our Charter also permits us to indemnify and advance expenses to any person who served a predecessor of us in any of the capacities described above and any of our employees or agents or any employees or agents of our predecessor. In accordance with the 1940 Act, we will not indemnify any person for any liability to which such person would be subject by reason of such person’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

Maryland law requires a corporation (unless its charter provides otherwise, which our Charter does not) to indemnify a director or officer who has been successful in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that capacity. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made, or threatened to be made, a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, under Maryland law, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received unless, in either case a court orders indemnification, and then only for expenses. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer in advance of final disposition of a proceeding upon the corporation’s receipt of (a) a written affirmation by the director or officer of his or her good-faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation and (b) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.

Certain Provisions of the Maryland General Corporation Law and Our Charter and Bylaws

The MGCL and our Charter and Bylaws contain provisions that could make it more difficult for a potential acquirer to acquire us by means of a tender offer, proxy contest or otherwise, the material ones of which are discussed below. These provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with our Board. We expect the benefits of these provisions to outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation of such proposals may improve their terms.

Classified Board of Directors

Our Board is divided into three classes of directors serving staggered terms currently expiring in 2021, 2022 and 2023. Upon expiration of their terms, directors of each class will be elected to serve for three-year terms and until their respective successors are duly elected and qualify, and each year one class of directors will be elected by the shareholders. A classified board may render a change in control of us or removal of our incumbent management more difficult. We believe, however, that the longer time required to elect a majority of a classified Board will help to ensure the continuity and stability of our management and policies.

Election of Directors

Our bylaws (as amended or supplemented from time to time, the “Bylaws”), as authorized by our Charter, provide that the affirmative vote of the holders of a plurality of all votes cast at a meeting of shareholders duly called, and at which a quorum is present, will be required to elect a director. Pursuant to our Charter, our Board may amend the bylaws to alter the vote required to elect directors.

Number of Directors; Vacancies; Removal

Our Charter provides that the number of directors will be set only by the Board in accordance with our Bylaws. Our Bylaws provide that a majority of our entire Board may at any time increase or decrease the number of directors. However, unless our Bylaws are amended, the number of directors may never be less than one nor more than nine. Our Charter provides that, at such time as we have at least three independent directors and our Shares are registered under the 1934 Act, as amended, we will elect to be subject to the provision of Subtitle 8 of Title 3 of the MGCL regarding the filling of vacancies on the Board. Accordingly, at such time, except as may be provided by the Board in setting the terms of any class or series of preferred stock, any and all vacancies on the Board may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is elected and qualifies, subject to any applicable requirements of the 1940 Act.

Our Charter provides that a director may be removed only for cause, as defined in the Charter, and then only by the affirmative vote of at least two-thirds of the votes entitled to be cast in the election of directors.

Action by Shareholders

Under the MGCL, shareholder action can be taken only at an annual or special meeting of shareholders or (unless the charter provides for shareholder action by less than unanimous written consent, which our Charter does not) by unanimous written consent in lieu of a meeting. These provisions, combined with the requirements of our Bylaws regarding the calling of a shareholder-requested special meeting of shareholders discussed below, may have the effect of delaying consideration of a shareholder proposal indefinitely.

Advance Notice Provisions for Shareholder Nominations and Shareholder Proposals

Our Bylaws provide that with respect to an annual meeting of shareholders, nominations of persons for election to the Board and the proposal of business to be considered by shareholders may be made only (1) pursuant to our notice of the meeting, (2) by or at the direction of the Board or (3) by a shareholder of the Company who is a shareholder of record both at the time of giving of notice provided for in our Bylaws and at the time of the annual meeting, who is entitled to vote at the meeting and who has complied with the advance notice provisions of the Bylaws. With respect to special meetings of shareholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of persons for election to the Board at a special meeting may be made only (1) by or at the direction of the Board or (2) provided that the Board has determined that directors will be elected at the meeting, by a shareholder of the Company who is a shareholder of record both at the time of giving of notice provided for in our Bylaws and at the time of the special meeting, who is entitled to vote at the meeting and who has complied with the advance notice provisions of the Bylaws.

The purpose of requiring shareholders to give us advance notice of nominations and other business is to afford our Board a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by our Board, to inform shareholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure for conducting meetings of shareholders. Although our bylaws do not give our Board any power to disapprove shareholder nominations for the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election of directors or the consideration of shareholder proposals if proper procedures are not followed and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our shareholders.

Calling of Special Meetings of Shareholders

Our Bylaws provide that special meetings of shareholders may be called by our Board and certain of our officers. Additionally, our Bylaws provide that, subject to the satisfaction of certain procedural and informational requirements by the shareholders requesting the meeting, a special meeting of shareholders will be called by the secretary of the Company upon the written request of shareholders entitled to cast not less than a majority of all the votes entitled to be cast at such meeting.

Approval of Extraordinary Corporate Action; Amendment of Charter and Bylaws

Under Maryland law, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business, unless approved by the affirmative vote of shareholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our Charter generally provides for approval of charter amendments and extraordinary transactions by the shareholders entitled to cast at least a majority of the votes entitled to be cast on the matter. Our Charter also provides that certain charter amendments, any proposal for our conversion, whether by charter amendment, merger or otherwise, from a closed-end company to an open-end company and any proposal for our liquidation or dissolution requires the approval of the shareholders entitled to cast at least 75% of the votes entitled to be cast on such matter (provided, however, that in connection with subscribing to purchase Shares prior to any listing of our Shares on a national securities exchange (an “Exchange Listing”), each shareholder will grant an irrevocable proxy to our Board to vote their Shares in favor of liquidating or dissolving the Company if the Company does not effectuate an Exchange Listing within 5 years of the initial closing of the Company’s private offering, subject to up to two 1-year extensions in the discretion of the Board). However, if such amendment or proposal is approved by a majority of our continuing directors (in addition to approval by our Board), such amendment or proposal may be approved by a majority of the votes entitled to be cast on such a matter. The “continuing directors” are defined in our charter as (1) our current directors, (2) those directors whose nomination for election by the shareholders or whose election by the directors to fill vacancies is approved by a majority of our current directors then on the Board or (3) any successor directors whose nomination for election by the shareholders or whose election by the directors to fill vacancies is approved by a majority of continuing directors or the successor continuing directors then in office.

Our Charter and Bylaws provide that the Board will have the exclusive power to make, alter, amend or repeal any provision of our Bylaws.

No Appraisal Rights

Except with respect to appraisal rights arising in connection with the Control Share Act (as defined and discussed below), as permitted by the MGCL, our Charter provides that shareholders will not be entitled to exercise appraisal rights unless a majority of the Board determines such rights apply.

Control Share Acquisitions

The MGCL provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter (the “Control Share Act”). Shares owned by the acquirer, by officers or by directors who are employees of the corporation are excluded from shares entitled to vote on the matter. Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power:

•one-tenth or more but less than one-third;
•one-third or more but less than a majority; or
•a majority or more of all voting power.

The requisite shareholder approval must be obtained each time an acquirer crosses one of the thresholds of voting power set forth above. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained shareholder approval. A control share acquisition means the acquisition of control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition may compel the Board of the corporation to call a special meeting of shareholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation may itself present the question at any shareholders meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the corporation to redeem control shares is subject to certain conditions and limitations, including, as provided in our bylaws compliance with the 1940 Act. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or of any meeting of shareholders at which the voting rights of the shares are considered and not approved. If voting rights for control shares are approved at a shareholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition.

The Control Share Act does not apply (a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (b) to acquisitions approved or exempted by the charter or bylaws of the corporation. Our Bylaws contain a provision exempting from the Control Share Act any and all acquisitions by any person of our shares of stock. There can be no assurance that such provision will not be amended or eliminated at any time in the future. However, we will amend our Bylaws to be subject to the Control Share Act only if the Board determines that it would be in our best interests to do so.

Business Combinations

Under Maryland law, “business combinations” between a Maryland corporation and an interested shareholder or an affiliate of an interested shareholder are prohibited for five years after the most recent date on which the interested shareholder becomes an interested shareholder (the “Business Combination Act”). These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested shareholder is defined as:

•any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding voting stock; or
•an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding voting stock of the corporation.

A person is not an interested shareholder under this statute if the Board approved in advance the transaction by which the shareholder otherwise would have become an interested shareholder. However, in approving a transaction, the Board may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the Board.

After the five-year prohibition, any business combination between the Maryland corporation and an interested shareholder generally must be recommended by the Board of the corporation and approved by the affirmative vote of at least:

•80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and
•two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested shareholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested shareholder.

These super-majority vote requirements do not apply if the corporation’s common shareholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested shareholder for its shares.

The statute permits various exemptions from its provisions, including business combinations that are exempted by the Board before the time that the interested shareholder becomes an interested shareholder. We expect our Board to adopt a resolution that any business combination between us and any other person is exempted from the provisions of the Business Combination Act, provided that the business combination is first approved by the Board, including a majority of the directors who are not “interested persons” as defined in the 1940 Act. This resolution may be altered or repealed in whole or in part at any time; however, our Board will adopt resolutions so as to make us subject to the provisions of the Business Combination Act only if the Board determines that it would be in our best interests and if the Securities and Exchange Commission staff does not object to our determination that our being subject to the Business Combination Act does not conflict with the 1940 Act. If this resolution is repealed, or the Board does not otherwise approve a business combination, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

Conflict with 1940 Act

Our Bylaws provide that, if and to the extent that any provision of the MGCL, including the Control Share Act (if we amend our Bylaws to be subject to such Act) and the Business Combination Act, or any provision of our Charter or Bylaws conflicts with any provision of the 1940 Act, the applicable provision of the 1940 Act will control.

Exclusive Forum

Our Charter and Bylaws provide that, to the fullest extent permitted by law, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s shareholders, (iii) any action asserting a claim arising pursuant to any provision of the MGCL, the Charter or Bylaws or the securities, antifraud, unfair trade practices or similar laws of any international, national, state, provincial, territorial, local or other governmental or regulatory authority, including, in each case, the applicable rules and regulations promulgated thereunder, or (iv) any action asserting a claim governed by the internal affairs doctrine will be a federal or state court located in the state of Maryland, provided that to the extent the appropriate court located in the state of Maryland determines that it does not have jurisdiction over such action, then the sole and exclusive forum will be any federal or state court located in the state of Maryland. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company will be deemed, to the fullest extent permitted by law, to have notice of and consented to these exclusive forum provisions and to have irrevocably submitted to, and waived any objection to, the exclusive jurisdiction of such courts in connection with any such action or proceeding and consented to process being served in any such action or proceeding, without limitation, by United States mail addressed to the shareholder at the shareholder’s address as it appears on the records of the Company, with postage thereon prepaid.

Transfer and Resale Restrictions

Shares of the Company may not be directly or indirectly sold, transferred, assigned, pledged, hypothecated or otherwise disposed of without the prior written consent of the Adviser, which consent may be given or withheld in the sole discretion of the Adviser. Any costs associated with a transfer by a shareholder may be borne by such shareholder.

Furthermore, following any Exchange Listing, our shareholders will be subject to lock-up restrictions pursuant to which they will be prohibited from selling Shares for a certain period after the date of the Exchange listing. The specific terms of this restriction and any other limitations on the sale of our Shares in connection with or following an Exchange Listing will be agreed in advance between our board of directors and our Adviser, acting on behalf of our investors, and the underwriters of the Exchange Listing or other similar institutions, acting on our behalf, in connection with a listing.

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