Document:

exh_101.htm

EXHIBIT 10.1

 

BARCLAYS

745 Seventh Avenue

New York, New York 10019

PERSONAL AND CONFIDENTIAL

July 15, 2014

Platform Specialty Products Corporation

Address: c/o MacDermid Holdings, LLC

245 Freight Street

Waterbury, Connecticut 06702

Attention: General Counsel

Amended and Restated Commitment Letter

 

Ladies and Gentlemen:

 

You have advised Barclays Bank PLC (“Barclays”) (the “Commitment Party,” “we” or “us”), that Platform Specialty Products Corporation (“PSP” or “you”) either directly or through its wholly-owned subsidiary MacDermid, Incorporated (the “Borrower”) or one of its other subsidiaries intends to acquire (the “Acquisition”) the “Chemtura AgroSolutions” business (including certain subsidiaries of Chemtura Corporation) (collectively, the “Acquired Business”) from Chemtura Corporation and certain of its subsidiaries (collectively, the “Seller”), pursuant to a stock and asset purchase agreement (the “Acquisition Agreement”) and to consummate certain transactions described therein (as described in Exhibit A and as otherwise contemplated by this Commitment Letter and the Fee Letter (each as defined below), the “Transactions”), in each case on the terms and subject to the conditions set forth in this Amended and Restated Commitment Letter and Exhibits A and B (collectively, the “Commitment Letter”).

You have also advised us that the total cost of the Acquisition (and related fees, commissions and expenses (collectively, “Transaction Costs”)) after consummation of the Acquisition will be financed from borrowings by the Borrower of $405 million of incremental first lien term loans (the “First Lien Facility”) incurred under and in accordance with Section 2.14 of the amended and restated credit agreement dated as of June 7, 2013 (as amended, restated and/or otherwise modified on October 31 2013 and from time to time, the “Existing Credit Agreement”) and as entered into among, inter alia, the Borrower, the lenders from time to time party thereto, Barclays Bank PLC, as administrative agent and collateral agent, sole lead arranger and sole bookrunner and Credit Suisse Securities (USA) LLC, as syndication agent, and having the terms set forth in Exhibit A.

	
1.  

	
Commitments and Agency Roles

You hereby appoint Barclays to act, and Barclays hereby agrees to act, as sole and exclusive administrative agent and collateral agent (collectively in such capacities, the “Administrative Agent”) for the First Lien Facility. You hereby appoint Barclays to act, and Barclays hereby agrees to act, as sole lead arranger and sole bookrunner (in such capacities, the “Arranger”) for the First Lien Facility. The Arranger and the Administrative Agent will have the rights and authority customarily given to financial institutions in such roles. In such capacities we may, in our discretion and as reasonably acceptable to you, appoint 

 

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additional agents and co-agents in connection with the First Lien Facility. Barclays is pleased to hereby provide to you its commitment (the “Commitment”) to provide 100% of the First Lien Facility upon the terms and subject to the conditions set forth in this Commitment Letter and the Fee Letter.

 

Our fees for services related to the First Lien Facility are set forth in a separate fee letter (the “Fee Letter”) between you and us entered into on the date hereof. As consideration for the execution and delivery of this Commitment Letter by us, you agree to pay the fees and expenses set forth in Exhibit A and in the Fee Letter as and when payable in accordance with the terms hereof and thereof. You agree that no other titles will be awarded and no compensation will be paid (other than as expressly contemplated by this Commitment Letter and the Fee Letter) in connection with the First Lien Facility unless you and we shall so agree; provided that on or before the close of business on June 15, 2014 you may appoint up to one additional arranger that is reasonably satisfactory to us and such additional arranger may be awarded the title of joint lead arranger and joint book runner, so long as (i) Barclays shall have “left” placement in any and all marketing materials or other documentation used in connection with the First Lien Facility and, with respect to the First Lien Facility, Barclays shall hold the leading role and responsibilities conventionally associated with such “left” placement, (ii) such additional arranger (or its lending affiliate) shall provide a commitment with respect to the First Lien Facility commensurate with its economics with respect thereto in a form reasonably satisfactory to Barclays and (iii) Barclays shall be entitled to a pro rata percentage of, but not less than 35% of the commitments and related economics in respect of the First Lien Facility.

 

	
2.  

	
Conditions Precedent

 

Our commitments hereunder and our agreements to perform the services described herein are subject to the following conditions: (i)  since December 31, 2012, there has not been a Business Material Adverse Effect (as defined below). “Business Material Adverse Effect” means any change or effect that, individually or in the aggregate, has had a material adverse effect on the assets, results of operations or financial condition of the Business, taken as a whole; provided that changes or effects, alone or in combination, that arise out of or result from the following, individually or in the aggregate, shall not be considered when determining whether a Business Material Adverse Effect has occurred: (a) changes in economic conditions, financial or securities markets in general, including any changes in interest or exchange rates, or the industries and markets (including with respect to commodity prices) in which the Business is operated or in which products of the Business are used or distributed, including increases in operating costs (except to the extent such change has a materially disproportionate adverse effect on the Business as compared to other companies which operate in the same industries as the Business), (b) any change in Laws, GAAP or any other generally accepted accounting principles applicable to the Business, or the enforcement or interpretation thereof, applicable to the Business (except to the extent such change has a materially disproportionate adverse effect on the Business  as compared to other companies which operate in the same industries as the Business), (c) any change resulting from the negotiation, execution, announcement or consummation of the transactions contemplated by, or the performance of obligations under, this Agreement, including any such change relating to the identity of, or facts and circumstances relating to, Purchaser or its Affiliates and including any actions by customers, suppliers or personnel, (d) acts of God (including any hurricane, flood, tornado, earthquake or other natural disaster or any other force majeure event), calamities, national or international political or social conditions, including acts of war, sabotage, the engagement by the United States in hostilities, whether commenced before or after the date hereof, or the occurrence of any military attack or terrorist act upon the United States or any escalation or worsening of any of the foregoing, (e) the failure, in and of itself, to achieve any projections, forecasts, estimates, performance metrics or operating statistics (whether or not shared with Purchaser) (it being understood that this clause (e) shall not exclude the facts or circumstances giving rise to such failure to the extent such facts or circumstances would otherwise constitute a Business Material Adverse Effect) or (f)  the taking of any action required by, or the failure to act to the extent such action is 

 

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specifically prohibited by, this Agreement or any Transaction Document. Capitalized terms used in this clause (i) but not defined herein are used with the meaning assigned to them in the Acquisition Agreement and (ii) the conditions precedent set forth in Exhibit B. The conditions to closing and initial funding of our commitments hereunder on the Closing Date are limited to only those conditions set forth or referred to in this paragraph.

 

	
3.  

	
Syndication

 

The Arranger shall commence syndication of the First Lien Facility to prospective Lenders (as such term is defined in Exhibit A) promptly upon the execution of this Commitment Letter and, in connection with its syndication of the First Lien Facility, the Arranger will select the Lenders after consultation with you provided that we agree not to syndicate the commitment under the First Lien Facility or any portion thereof to certain banks, financial institutions and other institutional, investors and funds that have been specified in writing to the Commitment Party by you at any time prior to the date of delivery hereof (or, if after such date but prior to the commencement of general syndication, that are reasonably acceptable to the Commitment Party). The Arranger will lead the syndication, including determining the timing of all offers to prospective Lenders, any title of agent or similar designations or roles awarded to any Lender and the acceptance of commitments, the amounts offered and the compensation provided to each Lender from the amounts to be paid to the Arranger pursuant to the terms of this Commitment Letter and the Fee Letter, and will in consultation with you determine the final commitment allocations and notify you of such determinations. You agree to use all commercially reasonable efforts to ensure that the Arranger’s syndication efforts benefit from the existing lending and investment banking relationships of you, the Borrower, the Acquired Business and your and their respective subsidiaries. To ensure an orderly and successful syndication of the First Lien Facility, you agree that, until the date (the “Syndication Termination Date”) which is the earliest of (a) the termination by the Arranger of syndication of the First Lien Facility, (b) 60 days following the Closing Date and (c) the “successful syndication” of the First Lien Facility (as defined in the Fee Letter), you will not, and agree to use commercially reasonable efforts to ensure that the Acquired Business will not, syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of, or engage in discussions concerning the syndication or issuance of, any debt facility or any debt security of you, the Acquired Business or the Borrower or any of your or their respective subsidiaries, including any renewal or refinancing of any existing debt facility or debt security (including the Existing Credit Agreement) in each case without the prior written consent of the Arranger (other than the First Lien Facility, indebtedness permitted pursuant to the Acquisition Agreement, and purchase money indebtedness and capitalized lease obligations incurred in the ordinary course of business).

 

You agree to, and agree to use commercially reasonable efforts to cause the Acquired Business to, cooperate with, and provide information reasonably required by, the Arranger in connection with all syndication efforts, including: (i) as soon as practicable after the date of this Commitment Letter, assist in the preparation of a customary information memorandum and other customary presentation materials (collectively, “First Lien Facility Marketing Materials”) reasonably acceptable in form and content to the Arranger for use in bank meetings and other communications with prospective Lenders in connection with the syndication of the First Lien Facility regarding the business, operations, financial projections and prospects of you, the Borrower and the Acquired Business and your and their respective subsidiaries, including without limitation the delivery of all information relating to the Transactions prepared by or on behalf of you, the Borrower or the Acquired Business that the Arranger deems reasonably necessary to complete the syndication of the First Lien Facility; (ii) using commercially reasonable efforts to obtain from Moody’s Investor Service, Inc. (“Moody’s”) and Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business (“S&P”), prior to the launch of the general syndication, a corporate family rating from Moody’s, a corporate credit rating from S&P and a credit rating for the First Lien Facility from each of Moody’s and S&P; (iii) arranging for direct communications at reasonable 

 

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times and places, using reasonable methods (including telecommunications), with prospective Lenders, excluding Disqualified Lenders, in connection with the syndication of the First Lien Facility (including without limitation direct contact between appropriate senior management, representatives and advisors of you and the Borrower (and using commercially reasonable efforts to cause direct contact with appropriate senior management, representatives and advisors of the Acquired Business) and participation of such persons in such meetings); and (iv) hosting (including any preparations with respect thereto) with the Arranger at places and times reasonably requested by the Arranger one or more conference calls with prospective Lenders and, in connection with such conference calls, consulting with the Arranger with respect to the presentations to be made and making available appropriate senior management, representatives and advisors of you and the Borrower to rehearse such presentations prior to such conference calls, as reasonably requested by the Arranger. You agree that the Arranger has the right to place advertisements in financial and other newspapers and journals at their own expense describing their services to you; provided that the Arranger will submit a copy of any such advertisement to you for your prior written approval, which approval will not be unreasonably withheld or delayed. You further agree that any references to the Arranger or any of its affiliates made by you or your affiliates in advertisements or other marketing materials used in connection with the Transactions are subject to the prior written approval of the Arranger, which approval shall not be unreasonably withheld or delayed.

 

You will be solely responsible for the contents of the First Lien Facility Marketing Materials and all other information, documentation or other materials delivered to us in connection therewith and you acknowledge that we will be using and relying upon such information without independent verification thereof. You and the Borrower agree that such information regarding the First Lien Facility and information provided by you and the Borrower or your or its representatives to the Arranger in connection with the First Lien Facility (including, without limitation, draft and execution versions of the Loan Documents, information packages, presentations and publicly filed financial statements) may be disseminated to prospective Lenders and other persons through one or more Intranet sites (including an IntraLinks or Syndtrak workspace) created for purposes of syndicating the First Lien Facility or otherwise in accordance with the Arranger’s standard syndication practices (including hard copy and via electronic transmissions) which shall contain standard confidentiality undertakings.

 

You understand that certain prospective Lenders (such Lenders, “Public Lenders”) may have personnel that do not wish to receive MNPI (as defined below). At the Arranger’s request, you agree to prepare an additional version of the First Lien Facility Marketing Materials that does not contain material non-public information concerning you, the Borrower, the Acquired Business or your or their respective subsidiaries or affiliates or your or their respective securities for purposes of foreign and United States federal and state securities laws (collectively, “MNPI”) which is suitable to make available to Public Lenders. You acknowledge and agree that the following documents may be distributed to Public Lenders: (a) drafts and final versions of the Loan Documents; (b) administrative materials prepared by the Arranger for prospective Lenders (including without limitation a lender meeting invitation, allocations and funding and closing memoranda); and (c) term sheets and notification of changes in the terms and conditions of the First Lien Facility. Before distribution of any Facility Marketing Materials in connection with the syndication of the First Lien Facility (i) to prospective Lenders that are not Public Lenders, you will provide us with a customary letter authorizing the dissemination of such materials and (ii) to prospective and existing Public Lenders, you will provide us with a customary letter authorizing the dissemination of information that does not contain MNPI (the “Public Information Materials”) to Public Lenders and confirming the absence of MNPI therein. In addition, at the Arranger’s request, you will identify Public Information Materials by marking the same as “PUBLIC” and you agree that unless specifically labeled “PRIVATE — CONTAINS NON-PUBLIC INFORMATION,” no information, documentation or other data disseminated to prospective Lenders in connection with the syndication of the First Lien Facility, whether through an Internet site (including without limitation an IntraLinks or SyndTrak workspace), electronically, in presentations, at meetings or otherwise will contain MNPI.

 

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4.  

	
Information

 

You represent and covenant that (i) all information (other than projections and other forward-looking information and information of a general economic or industry nature) that has been or will be provided to the Arranger, the Commitment Party, the prospective Lenders or any of our or their respective affiliates directly or indirectly by you or the Borrower or, to the best of your knowledge, on behalf of the Acquired Business, in connection with the Transactions is and will be, when furnished and taken as a whole, complete and correct in all material respects and does not and will not, when furnished and taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made and (ii) the projections and other forward-looking information that have been or will be made available directly or indirectly to the Arranger, the Commitment Party, the prospective Lenders or any of our or their respective affiliates by or on behalf of you or the Borrower and, to the best of your knowledge, the Acquired Business, have been and will be prepared in good faith based upon assumptions believed by management of the preparer thereof to be reasonable when made and when initially made available to the Arranger, the Commitment Party, the prospective Lenders and our or their respective affiliates and on the Closing Date, it being understood and agreed that financial projections are not a guarantee of financial performance and actual results may differ from financial projections and such differences may be material. You agree that if at any time prior to the Closing Date any of the representations in the preceding sentence would be incorrect in any material respect if the information and projections were being furnished, and such representations were being made, at such time, then you will promptly supplement, or cause to be supplemented, the information and projections so that such representations will be correct in all material respects in light of the circumstances in which statements are made. You understand that in providing our services pursuant to this Commitment Letter we may use, rely on and assume the accuracy and completeness of all of the financial, accounting, tax and other information and projections discussed with or reviewed by us for such purposes, without independent verification thereof, and we do not assume responsibility for the accuracy or completeness thereof.

 

	
5.  

	
Indemnification

 

To induce us to enter into this Commitment Letter and the Fee Letter and to provide the services described herein and proceed with the documentation of the First Lien Facility, you hereby agree to indemnify upon demand and hold harmless the Administrative Agent and the Arranger and each other agent or co-agent (if any) designated by the Arranger with respect to the First Lien Facility and Barclays in any other capacity to which it may be appointed by you in connection with the Transactions, the Commitment Party and our and their respective affiliates and each partner, trustee, shareholder, director, officer, employee, advisor, representative, agent, attorney and controlling person thereof (each of the above, an “Indemnified Person”) from and against any and all actions, suits, proceedings (including any investigations or inquiries), claims, losses, damages, liabilities or expenses (including all reasonable and documented fees and disbursements of any law firm or other external counsel, but limited to (i) one counsel to the Indemnified Persons taken as a whole, (ii) in the case of any actual or reasonably perceived conflict of interest, additional counsel to the affected Indemnified Persons or group of Indemnified Persons, limited to one such additional counsel for each affected Indemnified Persons or group of Indemnified Persons so long as representation of each such party by a single counsel is consistent with and permitted by professional responsibility rules, and (iii) if necessary, one local counsel in each relevant jurisdiction and special counsel for each relevant specialty) which may be incurred by or asserted against or involve any Indemnified Person (whether or not any Indemnified Person is a party to such action, suit, proceeding or claim) as a result of or arising out of or in any way related to or resulting from the Acquisition, this Commitment Letter, the Fee Letter, the First Lien Facility, the Transactions or any related transaction contemplated hereby or thereby or any use or intended use of the proceeds of the First Lien Facility, including any actual or prospective claim, litigation, investigation or proceeding relating to 

 

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any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding), whether direct, indirect, or consequential (whether or not we or any other Indemnified Person is a party to, or you or the Borrower or any affiliate thereof initiated or is a party to, any action, suit, proceeding or claim out of which any such expenses arise); provided that you will not have to indemnify any Indemnified Person against any claim, loss, damage, liability or expense to the extent the same resulted from the gross negligence, bad faith or willful misconduct of such Indemnified Person or the material breach by such Indemnified Person of its obligations under this Commitment Letter, the Fee Letter or the First Lien Facility (in each case, to the extent determined by a court of competent jurisdiction in a final and non-appealable judgment) or arises from any dispute between or among any Indemnified Parties (other than any dispute against an Agent or Arranger) and not involving any act or omission by the Borrower or any of its affiliates. Notwithstanding any other provision of this Commitment Letter, except to the extent any such damages result from the willful misconduct, bad faith or gross negligence of such Indemnified Person as determined by a court of competent jurisdiction in a final and non-appealable judgment, no Indemnified Person will be responsible or liable to you or any other person or entity for damages arising from the use by others of any information or other materials obtained through internet, electronic, telecommunications or other information transmission systems.

 

Your indemnity and reimbursement obligations under this Section 5 will be in addition to any liability which you may otherwise have and will be binding upon and inure to the benefit of the successors, assigns, heirs and personal representatives of you and the Indemnified Persons.

 

Neither you, we nor any other Indemnified Person will be responsible or liable to you, us or any other person or entity for any indirect, special, punitive or consequential damages which may be alleged as a result of the Acquisition, this Commitment Letter, the Fee Letter, the First Lien Facility, the Transactions or any related transaction contemplated hereby or thereby or any use or intended use of the proceeds of the First Lien Facility; provided that the foregoing shall not otherwise affect your indemnity obligations as set forth in this Section 5.

 

	
6.  

	
Assignments

 

This Commitment Letter may not be assigned by us or you without the prior written consent of the Commitment Party (and any purported assignment without such consent will be null and void), is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights or remedies in favor of, any person (including your equity holders, employees or creditors) other than the parties hereto (and any Indemnified Person); provided that Barclays may assign its commitments and agreements hereunder, in whole or in part, to (X) any of its affiliates, (Y) additional arrangers or (Z) any Lender (including without limitation as provided in Section 3 above) so long as such assignment in the case of clause (Z) does not relieve us of our obligation to provide 100% of the First Lien Facility on the Closing Date to the extent the conditions thereto have been satisfied. This Commitment Letter may not be amended or any term or provision hereof waived or modified except by an instrument in writing signed by each of the parties hereto.

 

	
7.  

	
USA PATRIOT Act Notification

 

Barclays hereby notifies you, the Borrower, the Acquired Business, the Guarantors and your and their respective affiliates that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (as amended, supplemented or modified from time to time, the “Patriot Act”) it and each Lender may be required to obtain, verify and record information that identifies you, the Borrower, the Acquired Business, the Guarantors and your and their respective affiliates, including the name and address of each such Person and other information that will allow 

 

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Barclays and each Lender to identify you, the Borrower, the Acquired Business, the Guarantors and your and their respective affiliates in accordance with the Patriot Act and other applicable “know your customer” and anti-money laundering rules and regulations. This notice is given in accordance with the requirements of the Patriot Act and is effective for Barclays and each prospective Lender.

 

	
8.  

	
Sharing Information; Affiliate Activities; Absence of Fiduciary Relationship

 

Please note that this Commitment Letter, the Fee Letter and any written or oral communications provided by the Commitment Party, the Arranger or any of their affiliates in connection with the Transactions are exclusively for the information of you, the Borrower and your and its subsidiaries as well as their other employees involved in the contemplated Transaction, and may not be disclosed to any other person or entity or circulated or referred to publicly without our prior written consent except, after providing written notice to the Commitment Party (or, if not practical to provide prior notice, providing notice to the Commitment Party as soon as practical) and with appropriate redactions as requested by the Commitment Party to the extent permitted under applicable law, pursuant to applicable law, regulation or rules of any applicable stock exchange or compulsory legal process, in the reasonable discretion of the you and the Borrower (upon the advice of counsel), including, without limitation, a subpoena or order issued by a court of competent jurisdiction or by a judicial, administrative or legislative body or committee; provided that we hereby consent to your disclosure of (i) this Commitment Letter and the Fee Letter and such communications to your and the Borrower’s officers, directors, agents and advisors who are directly involved in the consideration of the First Lien Facility to the extent you notify such persons of their obligation to keep this Commitment Letter, the Fee Letter and such communications confidential and such persons agree to hold the same in confidence, (ii) this Commitment Letter or the information contained herein (but not the Fee Letter or the information contained therein) to the Acquired Business (including its direct and indirect parent companies, as applicable) and its officers, directors, agents and advisors who are directly involved in the consideration of the First Lien Facility to the extent you notify such persons of their obligation to keep this Commitment Letter and the information contained herein confidential and such persons agree to hold the same in confidence; provided that, to the extent redacted in a manner reasonably acceptable to Barclays, the Fee Letter may be made available to the Acquired Business and its officers, directors, agents and advisors who are directly involved in the consideration of the First Lien Facility to the extent you notify such persons of their obligation to keep this Commitment Letter and the information contained herein confidential and such persons agree to hold the same in confidence, and (iii) this Commitment Letter or the information contained herein to rating agencies.

 

You acknowledge that Barclays and its affiliates are full service securities firms and as such may from time to time effect transactions, for their own account or the account of customers, and may hold positions (including long or short positions) in securities, loans or indebtedness, or options thereon, of you, the Borrower, the Acquired Business and other companies that may be the subject of the Transactions. Barclays and its affiliates may have economic interests that are different from or conflict with those of you or the Borrower regarding the transactions contemplated hereby, and you acknowledge and agree that Barclays will not have any obligation to disclose such interests and transactions to you or the Borrower by virtue of any fiduciary, advisory or agency relationship. You further acknowledge and agree that nothing in this Commitment Letter, the Fee Letter or the nature of our services or in any prior relationship will be deemed to create an advisory, fiduciary or agency relationship between us, on the one hand, and you, your equity holders or your affiliates, on the other hand, and you waive, to the fullest extent permitted by law, any claims you may have against Barclays for breach of fiduciary duty or alleged breach of fiduciary duty and agree that Barclays will not have any liability (whether direct or indirect) to you or the Borrower in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on your or its behalf, including your or its equity holders, employees or creditors. You acknowledge that the Transactions (including the exercise of rights and remedies hereunder and under the Fee Letter) are arms’ length commercial transactions and that we are acting as principal and in our own best interests. 

 

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You are relying on your own experts and advisors to determine whether the Transactions are in your best interests. You agree that we will act under this Commitment Letter as an independent contractor. In addition, you acknowledge that we may employ the services of our affiliates in providing certain services hereunder and may exchange with such affiliates information concerning you, the Borrower, the Acquired Business (provided that such persons agree to hold the same in confidence, to the extent Barclays is required to hold the same in confidence hereunder) and other companies that may be the subject of the Transactions and such affiliates will be entitled to the benefits afforded to us hereunder.

 

Consistent with our policies to hold in confidence the affairs of our customers, we will not use or disclose confidential information obtained from you by virtue of the Transactions in connection with our performance of services for any of our other customers (other than as permitted to be disclosed under this Section 8). Furthermore, you acknowledge that neither we nor any of our affiliates have an obligation to use in connection with the Transactions, or to furnish to you, confidential information obtained or that may be obtained by us from any other person.

 

In addition, please note that Barclays Capital Inc. has been retained by PSP as financial advisor (in such capacity, the “Financial Advisor”) to PSP in connection with the Acquisition. You agree to such retention, and further agree not to assert any claim you might allege based on any actual or potential conflicts of interest that might be asserted to arise or result from, on the one hand, the engagement of the Financial Advisor, and on the other hand, our and our affiliates’ relationships with you as described and referred to herein.

 

Please note that Barclays and its affiliates do not provide tax, accounting or legal advice.

 

	
9.  

	
Waiver of Jury Trial; Governing Law; Submission to Jurisdiction; Surviving Provisions

 

ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION, SUIT, PROCEEDING OR CLAIM ARISING IN CONNECTION WITH OR AS A RESULT OF ANY MATTER REFERRED TO IN THIS COMMITMENT LETTER OR THE FEE LETTER IS HEREBY WAIVED BY THE PARTIES HERETO. THIS COMMITMENT LETTER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK. Each of the parties hereto hereby irrevocably (i) submits, for itself and its property, to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, New York County, located in the Borough of Manhattan and (b) the United States District Court for the Southern District of New York, located in the Borough of Manhattan, and any appellate court from any such court, in any action, suit, proceeding or claim arising out of or relating to this Commitment Letter, the Fee Letter or the Transactions or the performance of services contemplated hereunder or under the Fee Letter, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action, suit, proceeding or claim may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court, (ii) waives, to the fullest extent that it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any action, suit, proceeding or claim arising out of or relating to this Commitment Letter, the Fee Letter, the Transactions or the performance of services contemplated hereunder or under the Fee Letter in any such New York State or Federal court and (iii) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any such action, suit, proceeding or claim in any such court. Each of the parties hereto agrees to commence any such action, suit, proceeding or claim either in the United States District Court for the Southern District of New York, located in the Borough of Manhattan,

 

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or in the Supreme Court of the State of New York, New York County located in the Borough of Manhattan.

 

This Commitment Letter is issued for your benefit only and no other person or entity (other than the Indemnified Persons) may rely hereon.

 

The provisions of Sections 3, 5 and 8 and this Section 9 of this Commitment Letter will survive any termination or completion of the arrangements contemplated by this Commitment Letter or the Fee Letter, including without limitation whether or not the Loan Documents are executed and delivered and whether or not the First Lien Facility is made available; provided Section 3 shall survive only until the Syndication Termination Date. Except as provided in the preceding sentence, none of the agreements hereunder will survive the termination of this Commitment Letter.

 

	
10.  

	
Termination; Acceptance

 

This Commitment Letter amends and restates in its entirety the Commitment Letter, dated as of April 16, 2014, by and among you and the Commitment Party.

 

Our commitments hereunder and our agreements to provide the services described herein will terminate upon the earlier to occur of (i) the consummation of the Acquisition, (ii) the Termination Date (under and as defined in the Acquisition Agreement), (iii) November 1, 2014, and (iv) written notice by you to terminate this Commitment Letter.

 

This Commitment Letter may be executed in any number of counterparts, each of which when executed will be an original and all of which, when taken together, will constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile or other electronic transmission will be as effective as delivery of a manually executed counterpart hereof. Those matters that are not covered or made clear in this Commitment Letter are subject to mutual agreement of the parties.  No person has been authorized by Barclays to make any oral or written statements that are inconsistent with this Commitment Letter.

 

Please confirm that the foregoing is in accordance with your understanding by signing and returning to Barclays the enclosed copy of this Commitment Letter, together, if not previously executed and delivered, with the Fee Letter on or before the close of business on July 15, 2014, whereupon this Commitment Letter and the Fee Letter will become binding agreements between us. If not signed and returned as described in the preceding sentence by such date, this offer will terminate on such date.

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We look forward to working with you on this assignment.

 

Very truly yours,

BARCLAYS BANK PLC

By:  /s/ Kevin Crealese 

Name:  Kevin Crealese

Title: Managing Director

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ACCEPTED AND AGREED TO AS OF THE DATE FIRST WRITTEN ABOVE:

PLATFORM SPECIALTY PRODUCTS CORPORATION

By:  /s/ Frank J. Monteiro                     

Name:  Frank J. Monteiro

Title: Chief Financial Officer

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Exhibit A

 

Summary of Terms and Conditions of the First Lien Facility

 

This Summary of Terms and Conditions outlines certain terms and conditions of the First Lien Facility.

 

	
Borrower:

	
MacDermid, Incorporated and each other Borrower (as defined in the Existing Credit Agreement) permitted to incur the First Lien Facility under the Existing Credit Agreement.

 

	
Guarantors:

	
Platform Specialty Products Corporation (“PSP”) and those subsidiaries of PSP acting as guarantors under the Existing Credit Agreement, including the Acquired Business to the extent required to be guarantors under the Existing Credit Agreement (the “Guarantors”), will jointly and severally guarantee the obligations of the Borrower under the First Lien Facility.

 

	
Collateral:

	
The same collateral securing the secured obligations under the in the Existing Credit Agreement, including with respect to the Acquired Business (it being understood and agreed that, with respect to the Acquired Business, to the extent any security interest in any collateral is or cannot be perfected on the Closing Date (other than (a) the pledge and perfection of the security interest in the certificated equity interests of each subsidiary of the Borrower and the Guarantors required to be pledged under the Existing Credit Agreement (it being understood and agreed that such pledges shall be limited to any pledges required to be delivered under the Existing Credit Agreement and related loan documents) and (b) other assets pursuant to which a lien may be perfected by filing of a financing statement under the Uniform Commercial Code) after use of commercially reasonable efforts to do so, then the perfection of a security interest in such collateral shall not constitute a condition precedent to the availability of the First Lien Facility on the Closing Date, but instead shall be required to be delivered after the Closing Date pursuant to arrangements and timing to be mutually agreed by the Administrative Agent and the Borrower (and in no event later than 90 days following the Closing Date or any earlier date required by the Existing Credit Agreement).

Sole Bookrunner and Sole

	
Lead Arranger: 

	
Barclays Bank PLC (“Barclays”) will act as sole bookrunner and sole lead arranger (in such capacities, the “Arranger”) for the First Lien Facility and will perform the duties customarily associated with such roles.

 

	
Administrative Agent: 

	
Barclays will act as sole and exclusive administrative agent and collateral agent (collectively in such capacities, the “Administrative Agent”) for the Lenders and will perform the duties customarily associated with such roles.

 

  

Commitment Letter Exhibit A-1

  

	
Lenders:

	
Banks, financial institutions and institutional lenders selected by the Arranger (each, a “Lender” and together the “Lenders”) (excluding Disqualified Lenders).

 

	
Facility: 

	
A first lien incremental term loan facility in an aggregate principal amount equal to $405 million (the “First Lien Facility”) incurred, at the option of the Arranger, either by way of an increase to the principal amount of the existing term loan facility under the Existing Credit Agreement or by the establishment of a new tranche of term loans, in each case, under and in accordance with Section 2.14 of the Existing Credit Agreement.

 

	
Purpose/Use of Proceeds: 

	
The proceeds of the First Lien Facility will be used by the Borrower to fund, in part, the Acquisition (including paying all Transaction Costs).

 

	
Closing Date: 

	
The date on which the borrowings under the First Lien Facility are made and the Acquisition is consummated in accordance with the Commitment Letter (the “Closing Date”).

 

	
Availability:

	
The First Lien Facility shall be made in a single drawing on the Closing Date. Repayments and prepayments of the First Lien Facility may not be reborrowed.

 

	
Maturity:

	
June 7, 2020 (the maturity date of the term loans currently outstanding under the Existing Credit Agreement).

 

	
Interest Rate: 

	
The interest rates under the First Lien Facility will be as follows:

 

At the option of the Borrower, Eurocurrency Rate plus 3.00% or Base Rate plus 2.00% with a step-down of 25 basis points on or after September 30, 2014 so long as the First Lien Net Leverage Ratio is less than 3.25 to 1.00 and the Total Net Leverage Ratio is less than 5.75 to 1.00, as more further detailed in the Existing Credit Agreement.

 

The Borrower may elect interest periods of one, two, three or six months (or nine or twelve months if available to all applicable Lenders) for Eurocurrency Rate borrowings.

 

Calculation of interest shall be on the basis of the actual number of days elapsed over a 360-day year (or 365- or 366-day year, as the case may be, in the case of Base Rate loans based on the Prime Rate) and interest shall be payable at the end of each interest period and, in any event, at least every three months.

 

Base Rate is the highest of (i) Barclays’ Prime Rate, (ii) the Federal Funds Effective Rate plus 1⁄2 of 1.0% and (iii) one-month Eurocurrency Rate plus 1.0%.

 

Eurocurrency Rate will at all times include statutory reserves and shall be deemed to be not less than 1.00 % per annum.

 

  

Commitment Letter Exhibit A-2

  

	
Issue Price

	
99.0% (or better if agreed by the Arranger)  payable to the applicable Lenders; provided that the discount to par reflected in the issuance price of First Lien Facility may, at the election of the Arranger, be taken in the form of an upfront fee paid on the Closing Date.

 

For the avoidance of doubt, calculations of fees, and interest with respect to the First Lien Facility, shall be calculated based on the full stated principal amount of the First Lien Facility.

 

	
Amortization:

	
Substantially as set forth in the Existing Credit Agreement with respect to the existing term loans thereunder.

 

	
Default Interest: 

	
Substantially as set forth in the Existing Credit Agreement.

 

	
Yield Protection and Taxes:

	
Substantially as set forth in the Existing Credit Agreement.

 

	
Voluntary Prepayments: 

	
Substantially as set forth in the Existing Credit Agreement and ratably with the existing term loans under the Existing Credit Agreement.

 

In the event that all or any portion of the First Lien Facility is voluntarily prepaid as part of a Repricing Transaction (as defined below) (including pursuant to the yank-a-bank provision of the Existing Credit Agreement) within 6 months of the Closing Date, such prepayments shall be made at 101% of the principal amount so prepaid. As used herein, “Repricing Transaction” means the prepayment or refinancing of all or a portion of the First Lien Facility with the incurrence by the Borrower or any Guarantor of any senior bank loan financing having an effective interest cost or weighted average yield (as determined by the Administrative Agent consistent with generally accepted financial practice and, in any event, excluding any arrangement or commitment fees in connection therewith not payable to Lenders generally) that is less than the interest rate for or weighted average yield (as determined by the Administrative Agent on the same basis) of such loans under the First Lien Facility, including, without limitation, as may be effected through any amendment to the Existing Credit Agreement relating to the interest rate for, or weighted average yield of, the First Lien Facility (including any mandatory assignment in connection therewith).

 

	
Mandatory Prepayments:

	
Substantially as set forth in the Existing Credit Agreement and ratably with the existing term loans under the Existing Credit Agreement.

 

Representations and

	
Warranties:

	
Substantially as set forth in the Existing Credit Agreement.

 

	
Covenants:

	
Substantially as set forth in the Existing Credit Agreement.

 

	
Financial Covenants: 

	
None.

 

	
Events of Default: 

	
Substantially as set forth in the Existing Credit Agreement.

 

  

Commitment Letter Exhibit A-3

  

Conditions Precedent to

	
Borrowing:

	
The several obligation of each Lender to make, or cause an affiliate to make the First Lien Facility will be subject only to the conditions set forth or referred to in Section 2 of the Commitment Letter and Exhibit B to the Commitment Letter.

 

Assignments and

	
Participations:

	
Substantially as set forth in the Existing Credit Agreement.

 

Amendments and

	
Required Lenders: 

	
Substantially as set forth in the Existing Credit Agreement.

	
Indemnity and Expenses: 

	
Substantially as set forth in the Existing Credit Agreement.

 

Governing Law and

	
Jurisdiction:

	
New York (as set forth in the Existing Credit Agreement).

 

Counsel to the Arranger

	
and the Administrative Agent:

	
Latham & Watkins LLP.

 

The foregoing is intended to summarize certain terms and conditions of the First Lien Facility. It is not intended to be a definitive list of all of the requirements of the Borrower and the Guarantors in connection with the First Lien Facility other than the conditions precedent to the funding of the First Lien Facility.

 

  

Commitment Letter Exhibit A-4

  

Exhibit B

 

Conditions Precedent to the First Lien Facility

 

The following shall have occurred prior to or concurrently with the initial extensions of credit under the  First Lien Facility .

 

	
1.  

	
Concurrent Transactions: The proceeds from the borrowings made pursuant to the First Lien Facility on the Closing Date will be sufficient together with other cash on hand of the Borrower to consummate the Acquisition, refinance all existing debt of the Acquired Business (other than existing debt permitted to survive pursuant to the terms of the Acquisition Agreement) and pay the Transaction Costs. The terms of the Acquisition Agreement (including all exhibits, schedules, annexes and other attachments thereto) and all related material documents (including transitional services agreements) shall be reasonably satisfactory to the Arranger; (it being understood that the bid draft of the Acquisition Agreement dated as of April 16, 2014 and received by counsel to the Lead Arranger at 5:01 p.m. Pacific Standard Time on April 16, 2014 is in form and substance satisfactory to the Lead Arranger). The Acquisition shall have been consummated or will be consummated concurrently with the initial funding under the First Lien Facility in accordance with the Acquisition Agreement; provided that no amendment, modification or waiver of any term thereof or any condition to your or the Borrower’s obligation to consummate the Acquisition thereunder (other than any such amendment, modification or waiver that is not materially adverse to any interest of the Lenders) shall be made or granted, as the case may be, without the prior written consent of the Arranger (it being understood that any change in the price (including any price decrease) of the Acquisition of 10% or greater will be deemed to be materially adverse to the interests of the Lenders and will require the prior written consent of the Arranger, and any such reduction of price shall be applied to the First Lien Facility on a pro rata basis).

 

	
2.  

	
Fee Letters. You, the Borrower and the Guarantors shall make the payments of any fees and expenses required to be made in the Fee Letter.

 

	
3.  

	
Representations. (a) With respect to representations relating to the Acquired Business, the representations made by or with respect to the Acquired Business in the Acquisition Agreement that are material to the interests of the Lenders and which the breach thereof will excuse PSP and Borrower (or any of their affiliates) from their obligations to consummate the Acquisition shall be true and correct as of the Closing Date (the “Acquired Business Representations”); and (b) with respect to representations relating to you, the Borrower and its and your subsidiaries, the Specified Representations (as defined below) shall be true and correct as of the Closing Date, it being understood and agreed that the only representations the accuracy of which will be a condition precedent to the availability of the First Lien Facility on the Closing Date will be the Acquired Business Representations and the Specified Representations. For purposes hereof, “Specified Representations” means the representations and warranties referred to or incorporated by reference in Exhibit A relating to corporate existence and good standing, requisite power and authority to enter into the Loan Documents, due authorization, execution, delivery and enforceability of the Loan Documents (including the Existing Credit Agreement and the Fee Letter); no conflicts of the Loan Documents with the organizational documents, any material debt agreement or material applicable law; environmental compliance; insurance; taxes; no litigation to enjoin the funding of the First Lien Facility; no default; accuracy and completeness of historical financial statements; Investment Company Act; FCPA; OFAC; margin stock; solvency of you and the Borrower and your respective subsidiaries on a consolidated and pro forma basis for the Acquisition and the financing thereof; senior indebtedness; and Patriot Act.

 

  

Commitment Letter Exhibit B-1

  

	
4.  

	
Definitive Documents; Customary Closing Conditions. (i) the definitive loan documents relating to the First Lien Facility, guarantees and any other related definitive documents (collectively, the “Loan Documents”) shall have been prepared by Barclays’ counsel based upon and substantially consistent with the terms set forth in this Commitment Letter and otherwise consistent with documentation for financings of this kind, with such changes thereto as may be mutually agreed, and shall have been executed and delivered by you, the Borrower and each of its and your subsidiaries party thereto and any Lender party thereto; (ii) the Arranger shall have received customary forms or legal opinions, evidence of authority, officer’s certificates, corporate organizational and governing documents, good standing certificates, a solvency certificate from the chief financial officer of you and the Borrower in form and substance reasonably satisfactory to the Administrative Agent, resolutions and other customary closing certificates as are customary for transactions of this type and reasonably satisfactory to the Arranger; and (iii) all documents and instruments required to create and perfect the Administrative Agent’s security interests in the Collateral (as defined in Exhibit A) shall have been executed and delivered and, if applicable, be in proper form for filing subject to the limitations described in Exhibit A hereto under the heading “Collateral”.

 

	
5.  

	
Patriot Act. Each Lender shall have received at least 5 business days prior to the Closing Date all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the Patriot Act, to the extent requested by such Lender at least 10 business days prior to the Closing Date.

 

	
6.  

	
Marketing Period. The Arranger shall have been afforded a period of at least 15 consecutive Business Days from the delivery to the Arranger of the First Lien Facility Marketing Materials to syndicate the First Lien Facility.

 

	
7.  

	
Financial Statements. The Arranger shall have received (a) audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Acquired Business for the 2011, 2012 and 2013 fiscal years (b) unaudited consolidated statements of income of the Acquired Business in a form substantially similar to the “Hyperion P&L” statements contained in the online data room (items 3.2.29.1 and 3.2.29.2) for each month subsequent to the most recent audit delivered pursuant to (a) above, and ended 45 days or more prior to the Closing Date and (c) a pro forma consolidated statement of income for the Borrower as of and for the twelve month period ending on the last day of the most recently completed fiscal period for which financial statements have been delivered pursuant to clause (a) or (b) above, so long as such recently complete fiscal period is a calendar quarter end, prepared in good faith after giving effect to the Transactions as if the Transactions had occurred at the beginning of such period, which shall be on a combined and/or consolidated basis consistent with the historic financial statements used in such pro forma financial statements.

 

	
8.  

	
Indebtedness. After giving effect to the Transactions, PSP and its subsidiaries (including the Acquired Business) shall have outstanding no indebtedness other than (a) the loans and other extensions of credit under the Existing Credit Agreement and the First Lien Facility and (b) any other indebtedness permitted pursuant to the Existing Credit Agreement, the Acquisition Agreement or the Loan Documents.

 

 

Commitment Letter Exhibit B-2exh_101.htm

EXHIBIT 10.1

 

 

STOCK PURCHASE AND TRANSACTION AGREEMENT

 

by and among

 

NGP CAPITAL RESOURCES COMPANY

 

OHA BDC INVESTOR, LLC,

 

and

 

OAK HILL ADVISORS, L.P.

 

dated as of

 

July 21, 2014

 

 

  

  

  

TABLE OF CONTENTS

 

PAGE

 

	
ARTICLE 1 DEFINITIONS

	
2

	
Section 1.01.

	
Certain Defined Terms

	
2

	
Section 1.02.

	
Index of Other Defined Terms

	
8

	
Section 1.03.

	
Other Definitional and Interpretative Provisions

	
9

	 	 
	
ARTICLE 2 AGREEMENT TO PURCHASE AND SELL STOCK AND TAKE OTHER ACTIONS

	
10

	
Section 2.01.

	
Agreement to Purchase and Sell

	
10

	
Section 2.02.

	
Other Actions

	
11

	
Section 2.03.

	
Balance Purchase

	
11

	 	 
	
ARTICLE 3 RESTRICTIONS ON TRANSFER

	
12

	
Section 3.01.

	
General Restrictions on Transfer

	
12

	
Section 3.02.

	
Permitted Transferees

	
12

	
Section 3.03.

	
Notice of Transfers

	
12

	 	 
	
ARTICLE 4 CLOSING; DELIVERY

	
12

	
Section 4.01.

	
The Closing

	
12

	
Section 4.02.

	
Delivery and Other Actions

	
12

	 	 
	
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

	
13

	
Section 5.01.

	
Corporate Existence and Power

	
13

	
Section 5.02.

	
Corporate Authorization

	
13

	
Section 5.03.

	
Governmental Authorization

	
14

	
Section 5.04.

	
Non-contravention

	
14

	
Section 5.05.

	
Capitalization

	
15

	
Section 5.06.

	
Subsidiaries

	
15

	
Section 5.07.

	
SEC Filings and the Sarbanes-Oxley Act

	
16

	
Section 5.08.

	
Financial Statements

	
17

	
Section 5.09.

	
Disclosure Documents

	
17

	
Section 5.10.

	
Absence of Certain Changes

	
18

	
Section 5.11.

	
No Undisclosed Material Liabilities

	
18

	
Section 5.12.

	
Compliance With Laws and Court Orders

	
18

	
Section 5.13.

	
Litigation

	
20

	
Section 5.14.

	
Material Contracts

	
20

	
Section 5.15.

	
Taxes

	
20

	
Section 5.16.

	
Related Party Transactions

	
22

	
Section 5.17.

	
Registered Investment Company Status

	
22

	
Section 5.18.

	
Anti-money Laundering

	
23

	
Section 5.19.

	
Finders’ Fees

	
23

	
Section 5.20.

	
Rights Agreement; Takeover Statutes

	
24

	
Section 5.21.

	
Insurance

	
24

	
Section 5.22.

	
Investment Securities

	
24

 

  

i

  

	
Section 5.23.

	
No Additional Representations

	
24

	 	 
	
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE OHA PARTIES

	
25

	
Section 6.01.

	
Corporate Existence; Power and Authority; Enforceability

	
25

	
Section 6.02.

	
Governmental Authorization

	
25

	
Section 6.03.

	
Non-contravention

	
25

	
Section 6.04.

	
Compliance with Laws and Court Orders

	
26

	
Section 6.05.

	
Litigation

	
26

	
Section 6.06.

	
Purchase for Own Account

	
26

	
Section 6.07.

	
Accredited Investor

	
27

	
Section 6.08.

	
Exempt from Registration; Restricted Securities

	
27

	
Section 6.09.

	
Restrictive Legends

	
27

	
Section 6.10.

	
Removal of Restrictive Legend

	
28

	
Section 6.11.

	
Money Laundering Laws

	
28

	
Section 6.12.

	
Disclosure Documents

	
28

	
Section 6.13.

	
Investment Advisor and Administrator

	
28

	
Section 6.14.

	
Finders’ Fees

	
29

	
Section 6.15.

	
Sufficient Funds

	
29

	
Section 6.16.

	
Independent Investigation

	
29

	
Section 6.17.

	
No Additional Representations

	
29

	 	 
	
ARTICLE 7 COVENANTS OF THE COMPANY

	
30

	
Section 7.01.

	
Conduct of the Company

	
30

	
Section 7.02.

	
Company Stockholder Meeting

	
32

	
Section 7.03.

	
No Solicitation; Other Offers

	
32

	 	 
	
ARTICLE 8 COVENANTS OF THE OHA PARTIES AND THE COMPANY

	
34

	
Section 8.01.

	
Reasonable Best Efforts

	
34

	
Section 8.02.

	
Proxy Statement

	
35

	
Section 8.03.

	
Public Announcements

	
36

	
Section 8.04.

	
Access to Information

	
36

	
Section 8.05.

	
Notices of Certain Events

	
36

	
Section 8.06.

	
Director and Officer Liability

	
37

	
Section 8.07.

	
Confidentiality

	
38

	
Section 8.08.

	
Takeover Statutes

	
38

	
Section 8.09.

	
Stock Purchase Plan

	
39

	
Section 8.10.

	
Change of Name and Ticker Symbol

	
39

	 	 
	
ARTICLE 9 CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

	
39

	
Section 9.01.

	
Conditions to the Obligations of Each Party

	
39

	
Section 9.02.

	
Conditions to the Obligations of the OHA Parties

	
40

	
Section 9.03.

	
Conditions to the Obligations of the Company

	
41

	
Section 9.04.

	
Conditions to the Balance Closing

	
41

	 	 
	
ARTICLE 10 TERMINATION

	
42

	
Section 10.01.

	
Termination

	
42

 

  

ii

  

	
Section 10.02.

	
Effect of Termination

	
44

	
Section 10.03.

	
Termination Fees and Expense Reimbursement

	
44

	 	 
	
ARTICLE 11 MISCELLANEOUS

	
45

	
Section 11.01.

	
Notices

	
45

	
Section 11.02.

	
Survival of Representations and Warranties

	
47

	
Section 11.03.

	
Amendments and Waivers

	
47

	
Section 11.04.

	
Expenses

	
47

	
Section 11.05.

	
Disclosure Schedule and SEC Document References

	
47

	
Section 11.06.

	
Binding Effect; Benefit; Assignment

	
48

	
Section 11.07.

	
Governing Law

	
48

	
Section 11.08.

	
Submission to Jurisdiction; Selection of Forum

	
49

	
Section 11.09.

	
Waiver of Jury Trial

	
49

	
Section 11.10.

	
Counterparts; Effectiveness

	
49

	
Section 11.11.

	
Entire Agreement

	
49

	
Section 11.12.

	
Severability

	
49

	
Section 11.13.

	
Specific Performance

	
50

 

 

EXHIBITS

 

	
Exhibit A

	
Termination and Mutual Release Agreement

	
Exhibit B

	
Replacement Advisory Agreement

	
Exhibit C

	
Replacement Administration Agreement

	
Exhibit D

	
Stock Purchase Plan

	
Exhibit E

	
Joinder Agreement

 

  

iii

  

STOCK PURCHASE AND TRANSACTION AGREEMENT

 

This Stock and Transaction Purchase Agreement (this “Agreement”) is entered into as of July 21, 2014 by and among NGP CAPITAL RESOURCES COMPANY, a Maryland corporation (the “Company”), OHA BDC Investor, LLC, a Delaware limited liability company (the “Investor”), and Oak Hill Advisors, L.P., a Delaware limited partnership (“OHA”).

 

WHEREAS, the Board of Directors of the Company (the “Board”) has approved this Agreement and the transactions (including the Investment) contemplated hereby, and recommended that the stockholders of the Company approve (i) the Replacement Advisory Agreement (as defined herein) in accordance with Section 15 of the Investment Company Act and (ii) the other transactions contemplated hereby;

 

WHEREAS, as a condition to the consummation of the Investment (as defined herein) and subject to the terms and conditions herein, (i) NGP Investment Advisor, LP, a Delaware limited partnership (the “Company Advisor”), desires to withdraw, effective as of the Closing (as defined herein), as the Company’s investment advisor, and (ii) NGP Administration, LLC, a Delaware limited liability company (the “Company Administrator”), desires to withdraw, effect as of Closing, as the Company’s administrator, in each case, pursuant to the Termination and Mutual Release Agreement in the form attached hereto as Exhibit A.

 

WHEREAS, the Company desires to retain OHA to be the Company’s new investment advisor (OHA acting in such capacity, the “OHA Advisor”) and to be the Company’s new administrator (OHA acting in such capacity, the “OHA Administrator”);

 

WHEREAS, the Board has approved the termination of the Company Management Agreements (as defined herein) and approved the investment advisory agreement between the Company and the OHA Advisor in the form attached hereto as Exhibit B (the “Replacement Advisory Agreement”) and the administration agreement between the Company and the OHA Administrator in the form attached hereto as Exhibit C (the “Replacement Administration Agreement” and, collectively with the Replacement Advisory Agreement, the “Replacement Management Agreements”) and the Board has recommended that the stockholders of the Company approve the Replacement Advisory Agreement; and

 

WHEREAS, the Company desires to issue and sell to the Investor, in a private transaction that is exempt from registration under Section 4(2) of the 1933 Act (as defined herein) and Regulation D, and the Investor desires to purchase from the Company, the Investment Shares (as defined herein), and the parties desire to make certain representations, warranties, covenants and agreements in connection with this Agreement and the transactions contemplated hereby, and to prescribe certain conditions with respect to the consummation of the Investment and the other transactions contemplated by this Agreement.

 

  

1

  

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants, conditions and agreements contained herein, the parties hereto agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.01. Certain Defined Terms.  As used in this Agreement, the following terms shall have the following respective meanings:

 

“Advisers Act” means the Investment Advisers Act of 1940.

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person.

 

“Applicable Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise.

 

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.

 

“Code” means the Internal Revenue Code of 1986.

 

“Common Stock” means the Company’s common stock, par value $0.001 per share.

 

“Company Administration Agreement” means that certain Administration Agreement, dated as of November 9, 2004, by and between the Company and the Company Administrator.

 

“Company Advisory Agreement” means that certain Investment Advisory Agreement, dated as of November 9, 2004, by and between the Company and the Company Advisor.

 

“Company Balance Sheet” means the consolidated balance sheet of the Company as of March 31, 2014 and the notes thereto set forth in the Company 10-Q.

 

“Company Balance Sheet Date” means March 31, 2014.

 

  

2

  

“Company Credit Documents” means the Third Amended and Restated Credit Agreement, dated as of May 23, 2013, between the Company, SunTrust Bank, Comerica Bank and the lenders from time to time party thereto and the Treasury Secured Revolving Credit Agreement, dated as of March 31, 2011, between the Company, SunTrust Bank and the lenders from time to time party thereto together with the following agreements and arrangements entered into in connection therewith: (i) Consent and First Amendment to Treasury Secured Revolving Credit Agreement, dated as of March 30, 2012, between the Company, SunTrust Bank and the lenders from time to time party thereto, (ii) Second Amendment to Treasury Secured Revolving Credit Agreement, dated as of September 25, 2012, between the Company, SunTrust Bank and the lenders from time to time party thereto, (iii) Third Amendment to Treasury Secured Revolving Credit Agreement, dated as of May 23, 2013, between the Company, SunTrust Bank and the lenders from time to time party thereto, and (iv) Fourth Amendment to Treasury Secured Revolving Credit Agreement, dated as of September 24, 2013, between the Company, SunTrust Bank and the lenders from time to time party thereto.

 

“Company Disclosure Schedule” means the disclosure schedule dated as of the date hereof regarding this Agreement that has been provided by the Company to the Investor and delivered contemporaneously herewith.

 

“Company Management Agreements” means the Investment Advisory Agreement dated as of November 9, 2004 between the Company Advisor and the Company and the Administration Agreement dated as of November 9, 2004 between the Company Administrator and the Company.

 

“Company SEC Documents” means all final reports, schedules, forms, statements, prospectuses, registration statements and other documents that the Company has filed with or furnished to the SEC, together with any exhibits and schedules thereto and other information incorporated therein.

 

“Company 10-K” means the Company’s annual report on Form 10-K filed with the SEC on March 10, 2014, as amended by Form 10-K/A filed with the SEC on April 29, 2014, for the fiscal year ended December 31, 2013.

 

“Company 10-Q” means the Company’s quarterly report on Form 10-Q filed with the SEC on May 9, 2014, for the fiscal quarter ended March 31, 2014.

 

“Confidentiality Agreement” means the confidentiality agreement dated October 1, 2013 between the Company and OHA.

 

“Contract” means all contracts, agreements, arrangements, understandings, guarantees, mortgages, indentures, leases or licenses.

 

“Control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

“D&O Indemnity Agreements” means those certain individual Indemnification Agreements entered into between the Company and each of the following directors and/or officers of the Company: Kenneth A. Hersh; William K. White; David R. Albin; Lon C. Kile; Edward W. Blessing; Stephen K. Gardner; and L. Scott Biar.

 

  

3

  

“GAAP” means generally accepted accounting principles in the United States.

 

“Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental, regulatory, self-regulatory (including stock exchanges), or administrative authority, department, court, commission, arbitral authority, agency, official, or any other governmental body, including any political subdivision thereof.

 

“Governmental Authorization” means any approval, consent, license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Applicable Law.

 

“Intellectual Property” means (i) trademarks, trade names, service marks, brand names, certification marks, trade dress, domain names and other indications of origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application, (ii) inventions and discoveries, whether patentable or not, in any jurisdiction, patents, applications for patents (including divisions, continuations, continuations in part and renewal applications), and any renewals, extensions or reissues thereof, in any jurisdiction, (iii) Trade Secrets, (iv) writings and other works, whether copyrightable or not, in any jurisdiction, and any and all copyright rights, whether registered or not, and registrations or applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof, (v) moral rights, database rights, design rights, industrial property rights, publicity rights and privacy rights, (vi) licenses and approvals, and (vii) any similar intellectual property or proprietary rights.

 

“Investment Company Act” means the Investment Company Act of 1940.

 

“IT Assets” means computers, computer software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines and all other information technology equipment, and all associated documentation owned by any Person or licensed or leased by any Person or its Subsidiaries pursuant to written agreement (excluding any public networks).

 

“Knowledge” as used with respect to (i) the Company or any of its Subsidiaries, means the actual knowledge of Steve Gardner or Scott Biar, in each case including the knowledge that would have been gained after reasonable inquiry, (ii) any OHA Party, means the actual knowledge of Glenn R. August and Steven Wayne, in each case including the knowledge that would have been gained after reasonable inquiry, (iii) any Person (other than the Company and any OHA Party) that is not an individual, means the actual knowledge of such Person’s officers, directors and managers, and the officers, directors and managers of such Person’s investment advisor, in each case including the knowledge that would have been gained after reasonable inquiry, and (iv) any Person that is an individual, means the actual knowledge of such Person, in each case including the knowledge that would have been gained after reasonable inquiry.

 

  

4

  

“Lender” means SunTrust Bank.

 

“Lender Consents” means any consent, waiver or approval pursuant to the Company Loan Documents required to consummate the transactions contemplated by this Agreement.

 

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance, option, right of first refusal, right of first offer, license or other adverse claim of any kind in respect of such property or asset.  For purposes of this Agreement, a Person shall be deemed to own subject to a Lien any property or asset that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset.

 

“Maryland Law” means the Maryland General Corporation Law.

 

“Material Adverse Effect” means with respect to any Person, a material adverse effect on the condition (financial or otherwise), business, assets, liabilities or results of operations of such Person and its Subsidiaries, taken as a whole, excluding any effect resulting from (i) changes in the financial or securities markets or general business, economic or political conditions in the United States not having a materially disproportionate effect on such Person and its Subsidiaries, taken as a whole, relative to other participants in the industry in which such Person and its Subsidiaries operate, (ii) changes or conditions generally affecting the industry in which such Person and its Subsidiaries operate and not having a materially disproportionate effect on such Person and its Subsidiaries, taken as a whole, (iii) changes in GAAP or Applicable law not having a materially disproportionate effect on such Person and its Subsidiaries, taken as a whole (iv) acts of war, sabotage or terrorism or natural disasters involving the United States of America not having a materially disproportionate effect on such Person and its Subsidiaries, taken as a whole, relative to other participants in the industry in which such Person and its Subsidiaries operate, (v) the announcement or consummation of the transactions contemplated by this Agreement or the taking of any actions required to be taken under this Agreement relating to the consummation thereof, or (vi) any failure by such Person and its Subsidiaries to meet any internal or published budgets, projections, forecasts or predictions of financial performance for any period (it being understood that this clause (vi) shall not prevent a party from asserting that any fact, change, event, occurrence or effect that may have contributed to such failure independently constitutes or contributes to a Material Adverse Effect).

 

“NASDAQ” means the NASDAQ Global Select Market.

 

  

5

  

“Net Asset Value” means the net asset value of the Company as calculated in a manner consistent with the calculation of the net asset value of the Company in the Company SEC Documents.

 

“OHA Parties” means the Investor, the OHA Advisor, and the OHA Administrator.

 

“Organizational Documents” means, with respect to a Person other than a natural person, (i) the charter, articles or certificate of incorporation and the bylaws of a corporation; (ii) the certificate of formation and operating agreement of a limited liability company, (iii) the partnership agreement and any statement of partnership of a general partnership; (iv) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (v) any charter or similar document adopted or filed in connection with the creation, formation, or organization of any other Person; and (vi) any amendment to any of the foregoing.

 

“Permitted Liens” means Liens (i) for Taxes or other governmental charges not yet due and payable; (ii) carriers, warehousemen, mechanics, laborers or other similar Liens created by statute and incurred in the ordinary course of business for sums not yet due; and (iii) Liens involving restrictions on transfer arising under federal or state securities laws.

 

“Permitted Transferee” means

 

(a)           any Affiliate; provided that a Transfer to, and the subsequent ownership of the Shares by, such Affiliate is in compliance with the requirements of the Investment Company Act;

 

(b)           in the case of any Permitted Transferee that is a natural person, (i) any other Permitted Transferee that is a natural person, (ii) a Person to whom Shares are Transferred from such Permitted Transferee (A) by will or the laws of descent and distribution or (B) by gift without consideration of any kind; provided that, in the case of clause (B), such transferee is the spouse or the lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of such Permitted Transferee, or (iii) a trust that is for the exclusive benefit of such Permitted Transferee or its Permitted Transferees under (ii) above; and

 

(c)           any other Person with respect to which the Board shall have adopted a resolution (which shall have been approved by a majority of the independent directors of the Board) stating that the Board has no objection if a Transfer of Shares is made to such Person.

 

“Person” means an individual, corporation, partnership, limited liability company, association, trust, sole proprietorship, unincorporated organization, other entity, organization, group (as defined in Section 13(d) of the 1934 Act), or any other business entity or any Governmental Authority, including a government or political subdivision or an agency or instrumentality thereof.

 

  

6

  

“Proceeding” means any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Authority or arbitrator.

 

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

 

“SEC” means the Securities and Exchange Commission.

 

“Shares” means, the Investment Shares, the Plan Shares, and the Balance Shares.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, joint venture or other entity in which such Person (a) owns, directly or indirectly, more than fifty percent (50%) of the outstanding voting power, equity securities, profits interest or capital interest, (b) is entitled to elect at least a majority of the board of directors, the board of trustees, the board of managers or other persons performing similar functions or (c) in the case of a limited partnership, limited liability company or joint venture, is a general partner, managing member or joint venturer, respectively.

 

“Superior Proposal ” means a bona fide, unsolicited written Transaction Proposal that the Board determines in its good faith judgment that (a) if consummated would result in a transaction that is more favorable to the Company and its stockholders than the transactions contemplated hereby and (b) is reasonably certain of being completed.

 

“Taxes” means any and all federal, state, provincial, local, foreign and other taxes, levies, fees, imposts, duties, and similar governmental charges (including any interest, fines, assessments, penalties or additions to tax imposed in connection therewith or with respect thereto) including (x) taxes imposed on, or measured by, income, franchise, profits or gross receipts, and (y) ad valorem, value added, capital gains, sales, goods and services, use, real or personal property, capital stock, license, branch, payroll, estimated withholding, employment, social security (or similar), unemployment, compensation, escheat, utility, severance, unclaimed property, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes, and customs duties.

 

“Tax Returns” means any and all reports, returns, declarations, claims for refund, elections, disclosures, estimates, information reports or returns or statements supplied or required to be supplied to a Governmental Authority in connection with Taxes, including any schedule or attachment thereto or amendment thereof.

 

“Third Party” means any Person, including as defined in Section 13(d) of the 1934 Act, other than the Investor, the Company or any of their respective Affiliates.

 

“Trade Secrets” means trade secrets and confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any Person.

 

  

7

  

“Transaction Proposal” means, other than the transactions contemplated by this Agreement, any Third Party offer, proposal or inquiry relating to, or any Third Party indication of interest in, (i) a transaction pursuant to which a Third Party would serve as the investment advisor to and/or administrator of the Company, (ii) any acquisition or purchase, direct or indirect, of 10% or more of the consolidated assets of the Company or 10% or more of any class of equity or voting securities of the Company, (iii) any tender offer or exchange offer that, if consummated, would result in such Third Party beneficially owning 10% or more of any class of equity or voting securities of the Company, (iv) a merger, consolidation, share exchange, business combination, sale of all or substantially all of the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the Company or (v) any other transaction (including a refinancing of the amounts outstanding under the Company Credit Documents) the consummation of which could reasonably be expected to impede, interfere with, prevent or materially delay the Investment or that could reasonably be expected to dilute materially the benefits to the Investor and the OHA Advisor of the transactions contemplated hereby.

 

“Transfer” means, with respect to any Shares, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer such Shares or any economic participation or interest therein, whether directly or indirectly, or agree or commit to do any of the foregoing and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation or other transfer of such Shares or any participation or interest therein or any agreement or commitment to do any of the foregoing.

 

“Treasury Regulations” means the U.S. Treasury regulations promulgated under the Code.

 

“1933 Act” means the Securities Act of 1933.

 

“1934 Act” means the Securities Exchange Act of 1934.

 

Section 1.02. Index of Other Defined Terms.  In addition to the terms defined above, the following terms shall have the respective meanings given thereto in the sections indicated below:

 

	
Term

	
Section

	
Adverse Recommendation Change

	
7.03(a)

	
Agreement

	
Recitals

	
ATP

	
7.01(c)(v)

	
Balance Closing

	
2.03(b)

	
Balance Purchase

	
2.03(a)

	
Balance Share Price

	
2.03(a)

	
Balance Shares

	
2.03(a)

	
BDC Election

	
5.17(b)

	
Board

	
Recitals

	
Change of Recommendation Notice

	
7.03(c)

 

  

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Chosen Courts

	
11.08

	
Closing

	
4.01

	
Company

	
Preamble

	
Company Administrator

	
Recitals

	
Company Advisor

	
Recitals

	
Company Board Recommendation

	
5.02(b)

	
Company Financial Advisor

	
5.19

	
Company Securities

	
5.05(b)

	
Company Stockholder Approval

	
7.02

	
Company Stockholder Meeting

	
7.02

	
Company Stockholder Proposal

	
7.02

	
Definitive Proxy Statement

	
8.02(a)

	
D&O Insurance

	
8.06(c)

	
End Date

	
10.01(b)(i)

	
Entity

	
6.06

	
Expense Reimbursement

	
10.03(a)

	
Indemnification Agreements

	
8.06(a)

	
Indemnified Person

	
8.06(a)

	
Investment

	
2.01

	
Investment Shares

	
2.01

	
Investor

	
Preamble

	
Money Laundering Laws

	
5.18

	
New Independent Directors

	
2.02

	
NASDAQ Rules

	
5.07(i)

	
OHA

	
Preamble

	
OHA Administrator

	
Recitals

	
OHA Advisor

	
Recitals

	
OHA Directors

	
2.02

	
Plan Shares

	
2.01

	
Preliminary Proxy Statement

	
8.02(a)

	
Proxy Statement

	
5.09

	
Replacement Administration Agreement

	
Recitals

	
Replacement Advisory Agreement

	
Recitals

	
Replacement Management Agreements

	
Recitals

	
Representatives

	
7.03(a)

	
SDAT

	
5.01

	
Stock Purchase Plan

	
2.01

	
Takeover Statute

	
5.20(a)

	
Tax Sharing Agreements

	
5.15(g)

	
Termination Fee

	
10.03(a)

	
Underlying Beneficial Owner

	
6.06

  

9

  

Section 1.03. Other Definitional and Interpretative Provisions.  The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified.  All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement.  Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.  The neuter pronoun, as used herein, includes the masculine, feminine and neuter gender.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import.  “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder.  References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract included in this Agreement or listed on any schedules hereto, all such amendments, modifications or supplements must also be included in this Agreement and listed in the appropriate schedule, respectively.  References to any Person include the successors and permitted assigns of that Person.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.  References to “law”, “laws” or to a particular statute or law shall be deemed also to include any Applicable Law.

 

ARTICLE 2

 

AGREEMENT TO PURCHASE AND SELL STOCK

AND TAKE OTHER ACTIONS

 

Section 2.01. Agreement to Purchase and Sell.  Subject to the terms and conditions hereof, at the Closing, the Company will sell and issue to the Investor, and the Investor shall purchase from the Company, a number of shares of Common Stock (the “Investment Shares”) equal to the quotient of (i) $1,000,000, divided by (ii) the Net Asset Value per share of the Common Stock as determined by the Board within forty-eight (48) hours of the Closing (the “Investment”).  The purchase price for the Investment Shares shall be $1,000,000 and shall be paid by the Investor by wire transfer of funds to a designated account of the Company, provided that wire transfer instructions are delivered to the Investor at least three (3) Business Days prior to the Closing.  At the Closing, the Investor shall execute a stock purchase plan (the “Stock Purchase Plan”), substantially in the form attached hereto as Exhibit D, pursuant to which the Investor shall commit to purchase in accordance with the terms thereof,  from time to time during the twelve (12) month period immediately following the Closing through open market purchases, additional shares of Common Stock (the “Plan Shares”) having an aggregate purchase price of $4,000,000 (including any commissions incurred in connection with the purchase of the Plan Shares); provided that the Investor’s obligation to purchase the Plan Shares shall terminate upon the termination of either the Replacement Advisory Agreement or the Replacement Administration Agreement.

 

  

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Section 2.02. Other Actions.  At the Closing, the (i) Company shall enter into the Replacement Management Agreements; (ii) the OHA Advisor shall enter into the Replacement Advisory Agreement and the OHA Administrator shall enter into the Replacement Administration Agreement, and (iii) effective as of and subject to the consummation of the Closing, Glenn R. August and Robert B. Okun, or such other individuals as designated by the Investor upon notice to the Company prior to the filing of the Definitive Proxy Statement (as defined herein) (the “OHA Directors”) and Stuart I. Oran, James A. Stern and Frank V. Tannura, or such other individuals as designated by the Investor upon notice to the Company prior to the filing of the Definitive Proxy Statement (the “New Independent Directors”) shall become the interested and disinterested directors, respectively, of the Board.

 

Section 2.03. Balance Purchase.

 

(a) If after twelve (12) months following the Closing, the Investor has not purchased all of the Plan Shares pursuant to the Stock Purchase Plan for an aggregate purchase price of $4,000,000 (including any commissions incurred in connection with the purchase of the Plan Shares), the Investor shall purchase (the “Balance Purchase”) from the Company, and the Company shall issue and sell to the investor, an aggregate number of additional shares of Common Stock (the “Balance Shares”) at a price per share equal to the Net Asset Value per share of the Common Stock as determined by the Board within forty-eight (48) hours of the closing of the Balance Purchase (the “Balance Share Price”) equal to (i) (x) $4,000,000 minus (y) the total amount paid for the Plan Shares purchased pursuant to the Stock Purchase Plan or otherwise in open market purchases during such twelve (12) month period (including any commissions incurred in connection with the purchase of the Plan Shares), divided by (ii) the Balance Share Price.

 

(b) Subject to the provisions of Section 9.04, the consummation of the Balance Purchase by the Investor of the Balance Shares, as contemplated herein (the “Balance Closing”), shall take place as soon as reasonably practicable at the expiration of the twelve (12) month period following the Closing.

 

(c) At the Balance Closing, the Company shall deliver to the Investor the Balance Shares to be purchased by the Investor hereunder, registered in book-entry form through The Depository Trust Company registration system, and the Investor shall pay the full purchase price therefor by wire transfer of funds to a designated account of the Company, provided that wire transfer instructions are delivered to the Investor at least three (3) Business Days prior to the Balance Closing.

 

  

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ARTICLE 3

 

RESTRICTIONS ON TRANSFER

 

Section 3.01. General Restrictions on Transfer.

 

(a) The Investor agrees that it shall not Transfer any Shares (or solicit any offers in respect of any Transfer of any Shares), except in compliance with the 1933 Act, any other applicable securities or “blue sky” laws, and the terms and conditions of this Agreement.

 

(b) Any attempt to Transfer any Shares not in compliance with this Agreement shall be null and void, and the Company shall not, and shall cause any transfer agent not to, give any effect in the Company’s stock records to such attempted Transfer.

 

Section 3.02. Permitted Transferees.  Notwithstanding anything in this Agreement to the contrary, the Investor may at any time Transfer any or all of its Shares to one or more of its Permitted Transferees without the consent of the Company so long as (a) such Permitted Transferee shall have agreed in writing to be bound by the terms of this Agreement by executing a Joinder Agreement substantially in the form of Exhibit E attached hereto, and (b) the Transfer to such Permitted Transferee is in compliance with the 1933 Act and any other applicable securities or “blue sky” laws.

 

Section 3.03. Notice of Transfers.  So long as the OHA Advisor is the Company’s investment advisor, the Investor shall give the Company prompt written notice of any transactions relating to the Shares in reliance on Section 3.02.

 

ARTICLE 4

 

CLOSING; DELIVERY

 

Section 4.01. The Closing.  Subject to the provisions of ARTICLE 9, the consummation of the purchase by the Investor of the Investment Shares, as contemplated herein and the other actions contemplated by ARTICLE 2 (the “Closing”) shall take place in New York City at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York 10019-6064 as soon as reasonably practicable, but in any event no later than three (3) Business Days after the date the conditions set forth in ARTICLE 9 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permissible, waiver of those conditions at Closing) have been satisfied or, to the extent permissible, waived by the party or parties entitled to the benefit of such conditions, or at such other place, at such other time or on such other date as the Investor and the Company may mutually agree in writing.

 

Section 4.02. Delivery and Other Actions.  At the Closing, the Company shall deliver to the Investor the Investment Shares, registered in book-entry form through The Depository Trust Company registration system, to be purchased by the Investor hereunder and the Investor shall pay the full purchase price therefor by wire transfer and the parties shall cause the other actions contemplated by ARTICLE 2 to occur.

 

  

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ARTICLE 5

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Subject to Section 11.05, except as disclosed in any Company SEC Document filed after January 1, 2014 and before the date of this Agreement or as set forth in the Company Disclosure Schedule, the Company represents and warrants to the Investor as of the date hereof and as of the Closing (other than with respect to representations and warranties that by their terms address matters only as of another specified time, which shall be made only as of such time) as follows:

 

Section 5.01. Corporate Existence and Power.  The Company is a corporation duly incorporated and validly existing under the laws of the State of Maryland and is in good standing with the Maryland State Department of Assessments and Taxation (the “SDAT”).  The Company has the requisite corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.  The Company has heretofore made available to the Investor true, complete and correct copies of the charter and bylaws of the Company as currently in effect.

 

Section 5.02. Corporate Authorization.

 

(a) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby are within the Company’s corporate powers and have been duly authorized by all necessary corporate action on the part of the Company and, in each case, except for the Company Stockholder Approval, no other corporate proceedings on the part of the Company are necessary.  The Company Stockholder Approval (none of which require the affirmative vote of shares of Common Stock representing more than a majority of the issued and outstanding Common Stock) are the only votes or consents of the holders of any class or series of the Company’s stock necessary to approve the Investment and to consummate the other transactions contemplated hereby.  This Agreement constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).  The Investment Shares and the Balance Shares, if any, when issued in compliance with the provisions of this Agreement, will be validly issued and will be fully paid and nonassessable, free of any Liens, and will not be subject to any preemptive rights, whether arising under Maryland Law or the charter or bylaws of the Company, as amended or restated, or any Contract, to which or by which the Company or any of its Subsidiaries is a party or otherwise subject or bound or to which or by which any property, business, operation or right of the Company or any of its Subsidiaries is subject or bound.

 

  

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(b) At a meeting duly called and held in person, the Board has (i) determined that this Agreement, the Investment, the Replacement Management Agreements and the other transactions contemplated hereby are in the best interests of the Company, (ii)  approved this Agreement, the Investment, the Replacement Management Agreements and the other transactions contemplated hereby and (iii) subject to Section 7.03, recommended approval of the Company Stockholder Proposal (such recommendation, the “Company Board Recommendation”) and has adopted a resolution to the foregoing effect.

 

(c) Subject to Section 7.03, the Company Board Recommendation has not been rescinded or modified in any respect.

 

Section 5.03. Governmental Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority other than (i) the filing with the SEC of a proxy statement relating to the meeting of the Company’s stockholders to be held in connection with the Replacement Advisory Agreement and certain other transactions contemplated by this Agreement, (ii) compliance with any applicable requirements of the 1933 Act, the 1934 Act, the Investment Company Act and any other applicable state or federal securities laws and (iii) any actions or filings the absence of which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.

 

Section 5.04. Non-contravention.  The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) contravene, conflict with, or result in any violation or breach of any provision of the charter or bylaws of the Company, as amended or restated, (ii) assuming compliance with the matters referred to in Section 5.03 and receipt of the Company Stockholder Approval, contravene, conflict with or result in a violation or breach of any provision of any Applicable Law, (iii) other than any consents required under the Company Credit Documents, require any consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Company is entitled under any provision of any Contract or other instrument binding upon the Company or any license, franchise, permit, certificate, approval or other similar authorization affecting, or relating in any way to, the assets or business of the Company or (iv) result in the creation or imposition of any Lien, other than a Permitted Lien, on any asset of the Company, with only such exceptions, in the case of each of clauses (ii), (iii) and (iv), as would not have and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.

 

  

14

  

Section 5.05. Capitalization.

 

(a) The authorized stock of the Company consists of 250,000,000 shares of Common Stock.  As of June 30, 2014, there were 20,499,188 shares of Common Stock outstanding.  All outstanding shares of stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable and are free of preemptive rights, whether arising under Maryland Law or the charter or bylaws of the Company, as amended or restated, or any Contract to which or by which the Company or any of its Subsidiaries is a party or otherwise subject or bound or to which or by which any property, business, operation or right of the Company or any of its Subsidiaries is subject or bound.

 

(b) (i) Except under the Company Credit Documents, there are no outstanding bonds, debentures, notes or other indebtedness for borrowed money of the Company and (ii) there are no issued, reserved for issuance or outstanding (A) shares of stock or other voting securities of or ownership interests in the Company other than the Common Stock, (B) securities of the Company convertible into or exchangeable for shares of stock or other voting securities of or ownership interests in the Company, (C) warrants, calls, options or other rights to acquire from the Company, or other obligation of the Company to issue, any stock, voting securities or securities convertible into or exchangeable for stock or voting securities of the Company or (D) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any stock of or voting securities of the Company (the items in the foregoing clauses (i) and (ii), together with the Common Stock, being referred to collectively as the “Company Securities”).  There are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any of the Company Securities.  The Company is not a party to any voting agreement with respect to the voting of any Company Securities.

 

Section 5.06. Subsidiaries.  Each Subsidiary of the Company is duly formed and validly existing and in good standing under the laws of its jurisdiction of organization has the requisite corporate or entity power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.

 

  

15

  

Section 5.07. SEC Filings and the Sarbanes-Oxley Act.

 

(a) The Company SEC Documents constitute all reports, schedules, forms, statements and other documents required to be filed with or furnished to the SEC by the Company since January 1, 2011.

 

(b) As of its filing date (and as of the date of any amendment), each Company SEC Document complied as to form in all material respects with the applicable requirements of the 1933 Act, the 1934 Act and the Investment Company Act, as the case may be.

 

(c) As of its filing date (or, if amended or superseded by a filing prior to the date hereof, on the date of such filing), each Company SEC Document filed pursuant to the 1934 Act did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

 

(d) Each Company SEC Document that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the 1933 Act, as of the date such registration statement or amendment became effective, did not, and each Company SEC Document that is a registration statement filed subsequent to the date hereof 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.

 

(e) The Company has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the 1934 Act).  Such disclosure controls and procedures are designed to ensure that material information relating to the Company is made known to the Company’s principal executive officer and its principal financial officer by others within the Company, particularly during the periods in which the periodic reports required under the 1934 Act are being prepared.  Such disclosure controls and procedures are effective in all material respects in timely alerting the Company’s principal executive officer and principal financial officer to material information required to be included in the Company’s periodic and current reports required under the 1934 Act.  For purposes of this Agreement, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.

 

(f) The Company has established and maintains a system of internal control over financial reporting (as defined in Rule 13a-15 under the 1934 Act) sufficient to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of the Company financial statements for external purposes in accordance with GAAP applied on a consistent basis.  The Company has disclosed, based on its most recent evaluation of internal control over financial reporting prior to the date hereof, to the Company’s auditors and audit committee (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to have a material adverse effect on the Company’s ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in internal control over financial reporting.

 

  

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(g) There are no outstanding loans or other extensions of credit made by the Company or any of its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the 1934 Act) or director of the Company.  The Company has not, since the enactment of the Sarbanes-Oxley Act, taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.

 

(h) No attorney representing the Company, whether or not employed by the Company, has reported to the Company’s chief legal counsel or chief executive officer evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents pursuant to Section 307 of the Sarbanes-Oxley Act.

 

(i) Except as set forth on Section 5.07(i) of the Company Disclosure Schedule, since January 1, 2011, the Company has complied in all material respects with the applicable listing and corporate governance rules and regulations of NASDAQ (the “NASDAQ Rules”).

 

(j) Each of the principal executive officer and principal financial officer of the Company (or each former principal executive officer and principal financial officer of the Company, as applicable) has made all certifications required by Rule 13a-14 under the 1934 Act and Sections 302 and 906 of the Sarbanes-Oxley Act and any related rules and regulations promulgated by the SEC and NASDAQ, and the statements contained in any such certifications are complete and correct in all material respects as of the date of this Agreement as though made as of the date of this Agreement.

 

Section 5.08. Financial Statements.  The audited consolidated financial statements and unaudited consolidated interim financial statements of the Company included or incorporated by reference in the Company SEC Documents (including the related notes, where applicable) have been prepared from, and are in accordance with, the books and records of Company, fairly present in all material respects, in conformity with GAAP applied on a consistent basis (except as may be indicated in the notes thereto), the consolidated financial position of the Company as of the dates thereof and the consolidated results of operations and cash flows for the periods then ended (subject to, in the case of any unaudited interim financial statements, year-end audit adjustments that are normal in nature and amount).

 

Section 5.09. Disclosure Documents. The information supplied by the Company or its Affiliates or Representatives for inclusion in the proxy statement, or any amendment or supplement thereto, to be sent to the Company stockholders in connection with the Replacement Advisory Agreement and the other transactions contemplated by this Agreement (the “Proxy Statement”), excluding any information provided by the OHA Parties or their Affiliates for use in the Proxy Statement, shall not, on the date the Proxy Statement, and any amendment thereto, is first mailed to the stockholders of the Company or at the time of the Company Stockholder Approval, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

  

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Section 5.10. Absence of Certain Changes.  Since the Company Balance Sheet Date:

 

(a) the business of the Company has been conducted in the ordinary course of business in a manner that is consistent with past practice;

 

(b) there has not been any event, occurrence, development or state of circumstances or facts that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company; and

 

(c) there has not been any action taken by the Company that, if taken during the period from the date of this Agreement through the Closing without the Investor’s consent, would constitute a breach of Section 7.01(b).

 

Section 5.11. No Undisclosed Material Liabilities.  Except as set forth on Section 5.11 of the Company Disclosure Schedule, there are no material liabilities or obligations of the Company of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, that would be required by GAAP to be disclosed in a balance sheet prepared as of the date hereof, other than: (i) liabilities or obligations disclosed and provided for in the Company Balance Sheet or in the notes thereto; or (ii) liabilities or obligations incurred in the ordinary course of business in a manner that is consistent with past practice since the Company Balance Sheet Date.

 

Section 5.12. Compliance With Laws and Court Orders.

 

(a) Since June 1, 2011, the Company has been and the Company is in compliance with, and to the Knowledge of the Company is not under investigation with respect to and has not been threatened to be charged with or given notice of any violation of, any Applicable Law, except for failures to comply or violations that have not resulted in, and would not reasonably be expected to result in, a material liability of the Company or materially impede the business of the Company.  There is no judgment, decree, injunction, rule or order of any arbitrator or Governmental Authority outstanding against the Company that has resulted in, or would reasonably be expected to result in, a material liability of the Company or that would materially impede the business of the Company or that in any manner seeks to prevent, enjoin, alter or materially delay the Investment or any of the other transactions contemplated hereby.  Neither the Company nor any Subsidiary has any Knowledge as of the date hereof of any investigations, charges or proceedings that has resulted in, or would reasonably be expected to result in, a material liability of the Company or that would materially impede the business of the Company or that in any manner seeks to prevent, enjoin, alter or materially delay the Investment or any of the other transactions contemplated hereby.

 

  

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(b) Each material Governmental Authorization used or held for use in connection with the business by the Company or any Subsidiary is validly held by the Company or such Subsidiary and is in full force and effect, except where the failure to be so validly held and/or in full force and effect would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.  None of the Company or any Subsidiary is in default or violation (and no event has occurred which, with notice or the lapse of time or both, would constitute a material default or violation) of any provision of any such Governmental Authorization to which it is a party, except for any defaults or violations that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.  The Company or its relevant Subsidiary is, and since June 1, 2011 has been in compliance with the terms and requirements of each such Governmental Authorization, except where the failure to be so in compliance would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.  No event has occurred or circumstance exists that would (with or without notice or lapse of time) (A) constitute or result in a violation of or a failure to comply with any term or requirement of any Governmental Authorization, or (B) result in the revocation, withdrawal, suspension, cancellation, or termination of, or any modification to, any Governmental Authorization, except, in each case, where the occurrence of such event or the existence of such circumstance would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.  To the Knowledge of the Company, neither the Company nor any Subsidiary has received, at any time since June 1, 2011, any notice or other communication (whether oral or written) from any Governmental Authority or any other Person regarding (A) any actual, alleged, possible, or potential violation of or failure to comply with any term or requirement of any such Governmental Authorization, or (B) any actual, proposed, possible, or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to any such Governmental Authorization, except for notices or other communications that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.  All applications required to have been filed for the renewal of the Governmental Authorizations have been duly filed on a timely basis with the appropriate governmental bodies, and all other filings required to have been made with respect to such Governmental Authorizations have been duly made on a timely basis with the appropriate Governmental Authorities, except where the failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company.

 

The Governmental Authorizations used or held for use in connection with the business by the Company or any Subsidiary collectively constitute all of the Governmental Authorizations necessary to permit the Company and its Subsidiaries to lawfully conduct and operate their businesses in the manner they currently conduct and operate such businesses and to permit the Company and its Subsidiaries to own and use their assets in the manner in which they currently own and use such assets, except for such Governmental Authorizations that the failure use or hold for use in connection with the business of the Company would not be and would not reasonably be expected to be, individually or in the aggregate, material to the Company.

 

  

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Section 5.13. Litigation.  Except as set forth on Section 5.13 of the Company Disclosure Schedule, there is no action, suit, investigation or proceeding pending against, or, to the Knowledge of the Company, threatened against, the Company, any present or former officer, director or employee of the Company or any of their respective properties before (or, in the case of threatened actions, suits, investigations or proceedings, would be before) or by any Governmental Authority or arbitrator, that, if determined or resolved adversely in accordance with the plaintiff’s demands, would reasonably be expected to result in, individually or in the aggregate, a material liability of the Company.  To the Company’s Knowledge as of the date hereof, there is no basis for any action, suit, investigation or proceeding that is reasonably likely to result in a material liability of the Company.

 

Section 5.14. Material Contracts.

 

(a) Since June 1, 2011, all Contracts, including amendments thereto, required to be filed as an exhibit to any report of the Company filed pursuant to the 1934 Act have been filed, and no such Contract has been amended or modified, except as set forth in Section 5.14(a) of the Company Disclosure Schedule, as of the date hereof.

 

(b) Each such Contract referenced in Section 5.14(a) is a valid and binding agreement of the Company and, to the Knowledge of the Company, all other parties thereto, and is in full force and effect, and neither the Company nor, to the Knowledge of the Company, any other party thereto is in default or breach in any respect under the terms of any such Contract except for such default or breach as would not, individually or in the aggregate, reasonably be expected to result in a material liability of the Company.

 

Section 5.15. Taxes.  Except as set forth in Section 5.15 of the Company Disclosure Schedule as of the date hereof:

 

(a) Section 5.15 of the Company Disclosure Schedule lists the name and U.S. federal income tax classification of each Subsidiary of the Company.

 

(b) All material Tax Returns required to be filed by or with respect to the Company or any of its Subsidiaries have been properly prepared and timely filed, and all such Tax Returns (including information provided therewith or with respect thereto) are true, correct and complete in all material respects.

 

(c) The Company and its Subsidiaries have fully and timely paid all material Taxes owed by them (whether or not shown on any Tax Return), and the most recent financial statements contained in the Company SEC Documents reflect an adequate reserve (excluding any reserve for deferred Taxes) for all material Taxes payable by the Company and its Subsidiaries for all taxable periods and portions thereof accrued through the date of such financial statements and since the date of such financial statements, neither the Company nor any of its Subsidiaries has incurred any Tax liabilities other than Taxes relating to ordinary course operations conducted by the Company and its Subsidiaries.

 

  

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(d) There are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection or assessment or reassessment of, material Taxes due from the Company or any of its Subsidiaries for any taxable period and no request for any such waiver or extension is currently pending.

 

(e) No audit or other proceeding by any Governmental Authority is pending or threatened in writing with respect to any material Taxes due from or with respect to the Company or any of its Subsidiaries, no Governmental Authority has given written notice of any intention to assert any deficiency or claim for additional material Taxes against the Company or any of its Subsidiaries, no material claim in writing has been made by any Governmental Authority in a jurisdiction where the Company and its Subsidiaries does not file Tax Returns that it is or may be subject to taxation by that jurisdiction, and all deficiencies for Taxes asserted or assessed in writing against the Company or any of its Subsidiaries have been fully and timely paid, settled or properly reflected in the most recent financial statements contained in the Company SEC Documents.

 

(f) There are no Liens for Taxes upon the assets or properties of the Company or any of its Subsidiaries, except for statutory Liens for current Taxes not yet due.

 

(g) Neither the Company nor any of its Subsidiaries has participated in any listed transaction within the meaning of Treasury Regulations Section 1.6011-4(b)(2) (or any similar provision of state, local or foreign Tax law).

 

(h) Except as set forth on Section 5.15(h) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to or otherwise bound by any Contract relating to the sharing, allocation or indemnification of Taxes (collectively, “Tax Sharing Agreements”), or has any liability for Taxes of any Person (other than the Company or any of its Subsidiaries) under Treasury Regulations Sections 1.1502-6 or 1.1502-78 or similar provision of state, local or foreign Tax law, as a transferee or successor or by contract.

 

(i) The Company and its Subsidiaries have each withheld (or will withhold) from their respective employees, independent contractors, creditors, stockholders and third parties and timely paid to the appropriate Governmental Authority proper and accurate amounts in all material respects for all periods ending on or before the Closing Date in compliance in all material respects with all Tax withholding and remitting provisions of applicable laws.

 

  

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(j) Neither the Company nor any of its Subsidiaries has constituted a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of shares qualifying for tax-free treatment under Section 355 of the Code (i) in the two (2) years prior to the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with this acquisition.

 

(k) The Company made a valid election under Subchapter M of Chapter 1 of the Code to be treated as a regulated investment company.  The Company has qualified as, and been eligible to be treated as, a “regulated investment company” under Subchapter M of the Code for each taxable year beginning on or after January 1, 2005, and expects to qualify as, and to be eligible to be treated as, such for its current taxable year.  The Company has satisfied the distribution requirements imposed on a regulated investment company under Section 852 of the Code for its 2005 through 2013 taxable years.  The Company does not have any liability for excise taxes under Section 4982 for any taxable year.

 

Section 5.16. Related Party Transactions.  Except as set forth in the Company SEC Documents or on Section 5.16 of the Company Disclosure Schedule, there are no material transactions, agreements, arrangements or understandings between the Company, on the one hand, and any Affiliate (including any director or officer) thereof, on the other hand, that would be required to be disclosed pursuant to Item 404 of Regulation S-K of the SEC in the Company’s Form 10-K or proxy statement pertaining to an annual meeting of stockholders.  No transaction that would violate Section 57 of the Investment Company Act or the rules and regulations promulgated thereunder has occurred between the Company and the Persons described in such section.

 

Section 5.17. Registered Investment Company Status.  Except as set forth in Section 5.17 of the Company Disclosure Schedule:

 

(a) Pursuant to Section 6(f) of the Investment Company Act, the Company is not, and at no time since its inception has been required to register with the SEC as a closed-end management investment company under the Investment Company Act.

 

(b) The Company has elected to be regulated as a business development company under the Investment Company Act and has filed with the SEC, pursuant to Section 54(a) of the Investment Company Act, a duly completed and executed Form N-54A (the “BDC Election”); the Company has not filed with the SEC any notice of withdrawal of the BDC Election pursuant to Section 54(c) of the Investment Company Act; the Company’s BDC Election remains in full force and effect, and no order of suspension or revocation of such election under the Investment Company Act has been issued or, to the Company’s Knowledge, proceedings therefore initiated or threatened by the SEC.  The operations of the Company are in compliance in all material respects with the provisions of the Investment Company Act, in each case, and the rules and regulations of the SEC thereunder, including the provisions applicable to business development companies.

 

  

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(c) The Board has been established and operated and is currently operating in conformity with the requirements and restrictions of Sections 10 and 16 of the Investment Company Act, to the extent applicable to business development companies and Section 56 of the Investment Company Act and satisfies the fund-governance standards as defined in Rule 0-1(a)(7) (except for clauses (i) and (iv) thereof) under the Investment Company Act.

 

(d) The Company (i) has duly adopted written policies and procedures required by Rule 38a-1 under the Investment Company Act, (ii) designated and approved an appropriate chief compliance officer in accordance with such Rule and (iii) has duly adopted a written code of ethics as required by Rule 17j-1 under the Investment Company Act.  All such policies and procedures (including the code of ethics) comply in all material respects with Applicable Law and there have been no material violations or allegations of material violations of such policies and procedures.

 

(e) Since October 29, 2004, the Company has complied in all material respects with the capital structure requirements as set forth in Section 61 of the Investment Company Act.

 

(f) All exemptive, no action or similar relief received by the Company from any Governmental Authority is in full force and effect, and is being fully complied with in all material respects by the Company.  No requests for exemptive, no action or similar relief are currently pending.

 

Section 5.18. Anti-money Laundering.  The operations of the Company are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all applicable jurisdictions, the applicable rules and regulations thereunder and any applicable related similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending, or to the Knowledge of the Company, threatened.

 

Section 5.19. Finders’ Fees.  Except for Keefe, Bruyette & Woods, Inc. (the “Company Financial Advisor”), there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of the Company or any of its Subsidiaries who might be entitled to any fee or commission from the Company or any of its Subsidiaries in connection with the transactions contemplated by this Agreement.

 

  

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Section 5.20. Rights Agreement; Takeover Statutes.

 

(a) The Company does not have in effect any plan, scheme, device or arrangement, commonly or colloquially known as a “rights plan,” “rights agreement” or “poison pill.”  The Board has taken all necessary action, if any, so that the restrictions contained in Title 3, Subtitles 6 or 7 of Maryland Law applicable to a “business combination” with “interested stockholders” or any acquisition of “control shares”, or any other similar Maryland Law or other Applicable Law (each a “Takeover Statute”), will not apply to Investor in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement.

 

(b) No anti-takeover provision contained in the Company’s charter or bylaws, as amended or restated, would prohibit the transactions contemplated by this Agreement and no anti-takeover provision, whether in an Applicable Law, agreement or otherwise, would prohibit the execution and delivery of this Agreement or the consummation of the transactions contemplated by this Agreement.

 

Section 5.21. Insurance.  All material insurance policies of the Company are in full force and effect and will not be materially affected by, or terminate or lapse by reason of, the execution (but not the performance) of this Agreement.

 

Section 5.22. Investment Securities.  Each of the Company and its Subsidiaries has good title to all securities (including any evidence of indebtedness) owned by it, free and clear of any Liens, except (a) for Permitted Liens, (b) restrictions arising under the Organizational Documents of the issuers of such securities, or (c) for Liens or restrictions which would not, individually or in the aggregate, be material with respect to the value, ownership or transferability of such securities.  Such securities are valued on the books of the Company in accordance with GAAP and the Investment Company Act in all material respects.

 

Section 5.23. No Additional Representations.  Except for the representations and warranties made by the Company in this ARTICLE 5 or in any certificate delivered pursuant to this Agreement, neither the Company nor any other Person makes any express or implied representation or warranty with respect to the Company or its business, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and the Company hereby disclaims any such other representations or warranties.  In particular, without limiting the foregoing disclaimer, neither the Company nor any other Person makes or has made any representation or warranty to the Investor or any of their respective Affiliates or Representatives with respect to (i) any financial projection, forecast, estimate or budget relating to the Company or its business or (ii) except for the representations and warranties made by the Company in this ARTICLE 5 or in any certificate delivered pursuant to this Agreement, any oral or written information presented to the Investor or any of their respective Affiliates or Representatives in the course of their due diligence investigation of the Company, the negotiation of this Agreement or in the course of the transactions contemplated hereby.

 

  

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ARTICLE 6

 

REPRESENTATIONS AND WARRANTIES OF THE OHA PARTIES

 

The OHA Parties, jointly and severally, represent and warrant to the Company as of the date hereof and as of the Closing (other than with respect to representations and warranties that by their terms address matters only as of another specified time, which shall be made only as of such time) as follows:

 

Section 6.01. Corporate Existence; Power and Authority; Enforceability.  Each OHA Party is duly formed, validly existing and in good standing under the laws of its jurisdiction of organization and has all corporate or entity powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its respective business as now conducted.  The execution, delivery and performance by the Investor of this Agreement and the consummation by the OHA Parties of the transactions contemplated hereby are within the corporate or entity powers of the OHA Parties and have been duly authorized by all necessary corporate or entity action.  This Agreement constitutes a valid and binding agreement of the Investor, enforceable against the Investor in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).

 

Section 6.02. Governmental Authorization.  The execution, delivery and performance by the Investor of this Agreement and the consummation by the OHA Parties of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority, other than (i) required filings with the SEC in connection with the Investment and other transactions contemplated by this Agreement, (ii) compliance with any applicable requirements of the 1933 Act, the 1934 Act, the Investment Company Act, the Advisers Act and any other state or federal securities laws, and (iii) other filings with state regulatory agencies that are necessary or convenient and do not require approval of the agency in connection therewith.

 

Section 6.03. Non-contravention.  The execution, delivery and performance by the Investor of this Agreement and the consummation by the OHA Parties of the transactions contemplated hereby do not and will not (i) contravene, conflict with, or result in any violation or breach of any provision of the Organizational Documents of the OHA Parties, (ii) assuming compliance with the matters referred to in Section 6.02, contravene, conflict with or result in a material violation or material breach of any provision of any Applicable Law. (iii) require any consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Investor or any of its Subsidiaries is entitled under any provision of any Contract, agreement or other instrument binding upon the Investor or any of its Subsidiaries or any license, franchise, permit, certificate, approval or other similar authorization affecting, or relating in any way to, the respective assets or business of the OHA Parties and their respective Subsidiaries or (iv) result in the creation or imposition of any Lien on any asset of any OHA Party or any of their respective Subsidiaries, with only such exceptions, in the case of each of clauses (iii) and (iv), as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of any OHA Party to consummate the transactions contemplated by this Agreement and to fulfill its obligations hereunder and the other agreements to be executed in connection with the transactions contemplated by this Agreement.

 

  

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Section 6.04. Compliance with Laws and Court Orders.  Each OHA Party is in compliance with, and to its Knowledge is not under investigation with respect to and has not been threatened to be charged with or given notice of any violation of, any Applicable Law, except for violations that would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of any OHA Party to consummate the transactions contemplated by this Agreement and to fulfill its obligations hereunder and the other agreements to be executed in connection with the transactions contemplated by this Agreement.  There is no judgment, decree, injunction, rule or order of any arbitrator or Governmental Authority outstanding against any OHA Party that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of any OHA Party to consummate the transactions contemplated by this Agreement and to fulfill its obligations hereunder and the other agreements to be executed in connection with the transactions contemplated by this Agreement or that in any manner seeks to prevent, enjoin, alter or materially delay the Investment or any of the other transactions contemplated hereby.  No OHA Party has any Knowledge as of the date hereof of any investigations or charges that have had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of any OHA Party to consummate the transactions contemplated by this Agreement and to fulfill its obligations hereunder and the other agreements to be executed in connection with the transactions contemplated by this Agreement or that in any manner seeks to prevent, enjoin, alter or materially delay the Investment or any of the other transactions contemplated hereby.

 

Section 6.05. Litigation.  As of the date hereof, there is no action, suit, investigation or proceeding pending against, or, to its Knowledge, threatened against or affecting, any OHA Party, any officer, director or employee of any OHA Party or any of their respective properties before (or, in the case of threatened actions, suits, investigations or proceedings, would be before) or by any Governmental Authority or arbitrator that, if determined or resolved adversely in accordance with the plaintiff’s demands, would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of any OHA Party to consummate the transactions contemplated by this Agreement and to fulfill its obligations hereunder and the other agreements to be executed in connection with the transactions contemplated by this Agreement.

 

Section 6.06. Purchase for Own Account.  The Shares will be acquired by the Investor for its own account, not as a nominee or agent, and not with a view to or in connection with the public sale or public distribution of any part thereof, without prejudice, however, to the Investor’s right at all times to sell or otherwise dispose of all or any part of the Shares pursuant to an effective registration statement under the 1933 Act and applicable state securities laws, or under an exemption from such registration available under the 1933 Act and other applicable state securities laws.  The Investor is not acting as an agent, representative, intermediary, nominee, derivative counterparty or in a similar capacity for any other Person, nominee account or beneficial owner, whether a natural person or Entity (each such natural person or Entity, an “Underlying Beneficial Owner”), and no Underlying Beneficial Owner will have a beneficial or economic interest in the Shares being purchased by the Investor (whether directly or indirectly, including through any option, swap, forward or any other hedging or derivative transaction).  For purposes of this Agreement, “Entity” means any entity, including a fund-of-funds, trust, pension plan or other entity that is not a natural person.

 

  

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Section 6.07. Accredited Investor.  The Investor is an “Accredited Investor” as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act.

 

Section 6.08. Exempt from Registration; Restricted Securities.  The Investor understands that the Investment Shares and the Balance Shares, if any, being purchased hereunder are restricted securities within the meaning of Rule 144 under the 1933 Act; and that neither the Investment Shares nor the Balance Shares, if any, are registered and all such Shares must be held indefinitely unless they are subsequently registered or an exemption from such registration is available.

 

Section 6.09. Restrictive Legends.  The Investor understands that each certificate representing the Investment Shares and the Balance Shares, if any, shall be stamped or otherwise imprinted with a legend substantially in the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATES.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO AN EFFECTIVE REGISTRATION OR AN EXEMPTION FROM REGISTRATION WHICH, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, IS AVAILABLE.

 

INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK PURCHASE AGREEMENT DATED AS OF JULY 21, 2014, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM NGP CAPITAL RESOURCES COMPANY OR ANY SUCCESSOR THERETO.

 

  

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Section 6.10. Removal of Restrictive Legend.  The legend set forth above shall be removed by the Company from any certificate evidencing Investment Shares or the Balance Shares, if any, upon delivery to the Company of an opinion of counsel, reasonably satisfactory to the Company, that a registration statement under the 1933 Act is at that time in effect with respect to the legend security or that such security can be freely transferred in a public sale without such a registration statement being in effect and that such transfer will not jeopardize the exemption or exemptions from registration pursuant to which the Company issued the Investment Shares and the Balance Shares, if any.

 

Section 6.11. Money Laundering Laws.  The operations of each OHA Party are and have been conducted at all times in compliance with applicable Money Laundering Laws and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving any OHA Party or any of their respective Affiliates with respect to the Money Laundering Laws is pending or, to the Knowledge of the OHA Parties, threatened.

 

Section 6.12. Disclosure Documents.  The information supplied by the OHA Parties or any of their respective Affiliates or Representatives for inclusion in the Proxy Statement (or any amendment or supplement thereto) shall not, on the date the Proxy Statement, and any amendments thereto, is first mailed to the stockholders of the Company or at the time of the Company Stockholder Approval, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

Section 6.13. Investment Advisor and Administrator.

 

(a) Each of OHA Advisor and the OHA Administrator, as applicable, has the corporate or entity power and authority to execute, deliver and perform the Replacement Management Agreement to which it will be a party.

 

(b) There is no pending nor, to the Knowledge of the OHA Parties, threatened action, suit, proceeding, or investigation before or by any court, arbiter, governmental, regulatory, self-regulatory or exchange body or agency to which the OHA Advisor, the OHA Administrator, or their respective principals is a party which would reasonably be expected to result in any material adverse change in the ability of the OHA Advisor, the OHA Administrator, or their respective principals to perform their obligations under the applicable Replacement Management Agreements.

 

(c) Except as disclosed on Form ADV filed by OHA on March 31, 2014, neither the OHA Advisor nor any of its employees or Affiliates has engaged in any of the activities specified in the Sections 203(e)(1) through 203(e)(9) of the Advisers Act, and no condition described in any such Section is applicable to the OHA Advisor or any such employee or Affiliate.

 

  

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(d) Except disclosed on Form ADV filed by OHA on March 31, 2014, neither the OHA Advisor nor any respective “affiliated person” (as defined under the Investment Company Act) thereof is subject to disqualification as an investment advisor or subject to disqualification to serve in any other capacity contemplated by the Investment Company Act for any investment company under Sections 9(a) and 9(b) of the Investment Company Act.  There is no proceeding or investigation pending or, to the Knowledge of the OHA Advisor, threatened that would reasonably be expected to become the basis for any such disqualification.

 

(e) The OHA Advisor is an investment advisor that has been registered with the SEC pursuant to Section 203 of the Advisers Act.  The OHA Advisor has delivered to the Company all information required by Form ADV Part 1A and Form ADV Part 2 with respect to the OHA Advisor as an investment advisor in connection with its registration pursuant to Section 203 of the Advisers Act, and the information contained therein does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

 

Section 6.14. Finders’ Fees.  There is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of the Investor who is entitled to any fee or commission from the Company or any of its Affiliates upon consummation of the Investment or the other transactions contemplated by this Agreement.

 

Section 6.15. Sufficient Funds.  The Investor (a) has and will have at the Closing sufficient cash or other immediately available funds to enable it to make its payment of the purchase price of the Investment Shares and any other amounts expressly required to be paid by the Investor at the Closing hereunder; (b) has or will have on the date of each additional purchase of Plan Shares sufficient cash or other immediately available funds to enable it to make its payment(s) of the purchase price(s) of the Plan Shares; and (c) has access to and, if applicable, will have at the Balance Closing sufficient cash or other immediately available funds to enable it to make its payment of the Balance Purchase Price.

 

Section 6.16. Independent Investigation.  Without limiting the representations and warranties of the Company set forth in this Agreement, the OHA Parties acknowledge and agree that they have conducted their own independent review and analysis of and, based thereon, have formed an independent judgment concerning, the business, assets, condition, operations and prospects of the Company. In entering into this Agreement and in their decision to consummate the Investment and the other transactions contemplated hereby, the OHA Parties have relied upon their own investigation and analysis and the representations and warranties of the Company expressly set forth in this Agreement.

 

Section 6.17. No Additional Representations.  Except for the representations and warranties made by the Investor in this ARTICLE 6 or in any certificate delivered pursuant to this Agreement, none of the Investor nor any other Person makes any express or implied representation or warranty with respect to the Investor or its business, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and the Investor hereby disclaims any such other representations or warranties.

 

  

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ARTICLE 7

 

COVENANTS OF THE COMPANY

 

Section 7.01. Conduct of the Company.

 

(a) From the date hereof until the Closing, the Company shall conduct its business in the ordinary course in a manner that is consistent with past practice and use its commercially reasonable efforts to (i) preserve intact its present business organization, (ii) maintain in effect all of its foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (iii) keep available the services of its directors and officers and (iv) maintain satisfactory relationships with its Lender and others having material business relationships with it.

 

(b) Without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or with the prior written consent of the Investor, which consent shall not be unreasonably withheld, conditioned or delayed, the Company shall not:

 

(i) amend its charter or bylaws (whether by merger, consolidation or otherwise);

 

(ii) split, combine or reclassify any shares of its stock; or

 

(iii) agree, resolve or commit to do any of the foregoing.

 

(c) Without limiting the generality of the foregoing, unless the Company first provides notice to and consults with the Investor, the Company shall not:

 

(i) (x) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its stock, except as necessary to maintain the Company’s qualification for treatment as a regulated investment company under Subchapter M of the Code and/or to avoid corporate-level Tax or otherwise in the ordinary course of business in a manner consistent with past practice, or (y) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Company Securities;

 

(ii) (x) issue, deliver or sell, or authorize the issuance, delivery or sale of, any Company Securities or (y) amend any term of any Company Security (in each case, whether by merger, consolidation or otherwise);

 

  

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(iii) incur any material capital expenditures or any obligations or liabilities in respect thereof;

 

(iv) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than in the ordinary course of business of the Company in a manner that is consistent with past practice;

 

(v) sell, lease, license or otherwise transfer, or create or incur any material Lien on, any of the Company’s material assets, securities, properties, interests or businesses (including any assets, securities, properties or interests of ATP Oil & Gas Corporation (“ATP”) held by the Company), other than sales in the ordinary course of business of the Company in a manner that is consistent with past practice;

 

(vi) other than in connection with actions permitted by Section 7.01(c)(iv), make any material loans, advances or capital contributions to, or investments in, any other Person, other than in the ordinary course of business of the Company in a manner that is consistent with past practice;

 

(vii) create, incur, assume, suffer to exist or otherwise be liable with respect to any material indebtedness for borrowed money or guarantees thereof, other than under the Company Credit Documents and other than in the ordinary course of business of the Company in a manner that is consistent with past practice;

 

(viii) enter into, modify, amend or terminate any material Contract or waive, release or assign any rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would be reasonably likely to (x) impair the ability of the Company to perform its obligations under this Agreement in any material respect or (y) prevent or materially delay the consummation of the transactions contemplated hereby; or take any other action intended to or that would reasonably be expected to, individually or in the aggregate, impede, interfere with, prevent, or materially delay the consummation of the transactions contemplated by this Agreement;

 

(ix) adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, or recapitalization of the shares of the Company;

 

(x) change the Company’s methods of accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the 1934 Act, as agreed to by its independent public accountants;

 

(xi) settle, or offer or propose to settle, (x) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company (including with respect to ATP), (y) any material stockholder litigation or dispute against the Company or any of its officers or directors or (z) any litigation, arbitration, proceeding or dispute that primarily relates to the transactions contemplated hereby;

 

  

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(xii) take any action that would make any representation or warranty of the Company hereunder, or omit to take any action necessary to prevent any representation or warranty of the Company hereunder from being, inaccurate in any material respect at, or as of any time before, the Closing; or

 

(xiii) agree, resolve or commit to do any of the foregoing.

 

Section 7.02. Company Stockholder Meeting.  The Company shall cause an annual meeting of its stockholders (the “Company Stockholder Meeting”) to be duly called and held as soon as reasonably practicable for the purposes of (i) considering and voting on proposals to approve the Replacement Advisory Agreement in accordance with Section 15 of the Investment Company Act (the “Company Stockholder Proposal”, and the approval thereof by the Company’s stockholders, collectively referred to as the “Company Stockholder Approval”), (ii) electing a Class I director to the Board, and (iii) ratifying the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2014.  The Company shall engage a proxy soliciting firm reasonably acceptable to OHA to assist in the solicitation of proxies with respect to the Company Stockholder Proposal at the Company Stockholder Meeting.

 

Section 7.03. No Solicitation; Other Offers.

 

(a) General Prohibitions.  Subject to Section 7.03(b), the Company shall not, and shall not authorize or permit any of its officers, directors, employees, controlled Affiliates, investment bankers, attorneys, accountants, consultants or other agents or advisors (“Representatives”) to, directly or indirectly, (i) solicit, initiate or take any action to facilitate or encourage the submission of any Transaction Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish any information relating to the Company or any of its Subsidiaries or afford access to the business, properties, assets, books or records of the Company to, otherwise cooperate in any way with, or knowingly assist, participate in, facilitate or encourage any effort by any Third Party that is seeking to make, or has made, a Transaction Proposal, (iii) withdraw, fail to make, or modify in a manner adverse to the Investor the Company Board Recommendation (or recommend a Transaction Proposal or take any action or make any statement inconsistent with the Company Board Recommendation) (any of the foregoing in this clause (iii), an “Adverse Recommendation Change”), (iv) grant any waiver or release under, or fail to enforce the terms of, any confidentiality, standstill or similar agreements or arrangements with respect to any class of equity securities or assets of the Company (unless such action is advisable in order to comply with its duties under Applicable Law, in which case, such waiver or release shall also apply to the Confidentiality Agreement, to the extent applicable), or (v) enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement, option agreement or other similar instrument relating to a Transaction Proposal.

 

(b) Exceptions.  Notwithstanding Section 7.03(a), but subject at all times to satisfaction of the conditions in Section 7.03(c), at any time prior to receipt of the Company Stockholder Approval:

 

  

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(i) the Company, directly or indirectly through advisors, agents or other intermediaries, may (A) engage in negotiations or discussions with any Third Party and its Representatives or financing sources that has made after the date of this Agreement a bona fide, written Transaction Proposal that the Board reasonably believes could lead to a Superior Proposal and (B) furnish to such Third Party or its Representatives or financing sources non-public information relating to the Company pursuant to a confidentiality agreement with such Third Party with terms no less favorable to the Company than those contained in the Confidentiality Agreement; provided that all such information (to the extent that such information has not been previously provided or made available to the Investor and the OHA Advisor) is provided or made available to the Investor, as the case may be, prior to or substantially concurrently with the time it is provided or made available to such Third Party) and (C) take any nonappealable, final action that any court of competent jurisdiction orders the Company to take; and

 

(ii) the Board may make an Adverse Recommendation Change;

 

in each case referred to in the foregoing clauses (i) and (ii) if (x) such Transaction Proposal was not solicited in violation of Section 7.03(a), and (y) the Board determines in good faith, after consultation with outside legal counsel, that the failure to take such action would be inconsistent with the duties of the Board under Maryland Law.

 

In addition, nothing contained herein shall prevent the Board from taking and disclosing to the stockholders of the Company a position contemplated by Rule 14e-2(a) or Rule 14d-9 promulgated under the 1934 Act, or other Applicable Law, in each case, if the Board determines in good faith that the failure to so disclose such position would be inconsistent with its duties under Applicable Law; provided that any such disclosure shall be deemed to be an Adverse Recommendation Change unless the Board reaffirms the Company Board Recommendation within five (5) Business Days of such disclosure.  Furthermore, it is understood and agreed that, for purposes of this Agreement, a factually accurate public statement by the Company concerning financial results, operations or business conditions or developments, or that describes the Company’s receipt of a Transaction Proposal, and the operation of this Agreement with respect thereto, shall not be deemed an Adverse Recommendation Change; provided that the Company has determined in good faith that such statement is required by Applicable Law and the Board reaffirms the Company Board Recommendation within five (5) Business Days of disclosing the receipt of a Transaction Proposal.

 

(c) Required Notices.  The Company shall not take any of the actions referred to in Section 7.03(b)(i) unless the Company shall have delivered to the Investor and the OHA Advisor a prior written notice advising the Investor and the OHA Advisor that it intends to take such action and the Company shall notify the Investor and the OHA Advisor promptly (but in no event later than two (2) Business Days) after receipt by the Company (or any of its Representatives) of any Transaction Proposal.  The Company shall not take any action referred to in Section 7.03(b)(ii) unless and until (i) the Transaction Proposal was made in accordance with Section 7.03(b) and the Investor has received from the Company a notice (a “Change of Recommendation Notice”) at least two (2) Business Days prior to such proposed Adverse Recommendation Change, which notice shall (x) expressly state that the Company has received a Transaction Proposal which the Board has determined is a Superior Proposal and that the Company intends to effect an Adverse Recommendation Change and the manner in which it intends to do so, and (y) includes a copy and summary of the material terms of such Transaction Proposal, provided that any material amendment to the terms of such Transaction Proposal shall require a Change of Recommendation Notice at least two (2) Business Days prior to such proposed Adverse Recommendation Change, and (ii) within such notice period, the Company and its Representatives shall have negotiated in good faith with the Investor to make adjustments to the terms and conditions of this Agreement such that the Transaction Proposal in question would no longer constitute a Superior Proposal and the Board shall have determined in good faith that such Transaction Proposal would remain a Superior Proposal despite such adjustments to this Agreement; provided that any material amendment to the terms of such Transaction Proposal shall require a new Adverse Recommendation Change.

 

  

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(d) Obligation to Terminate Existing Discussions.  The Company shall, and shall cause its Representatives to, cease immediately and cause to be terminated any and all existing discussions or negotiations with any Third Party and its Representatives and its financing sources conducted prior to the date hereof with respect to any Transaction Proposal and shall take all actions to the extent commercially reasonable and necessary to enforce the terms of any existing confidentiality, standstill or similar arrangement with any Third Party.

 

ARTICLE 8

 

COVENANTS OF THE OHA PARTIES AND THE COMPANY

 

The parties hereto agree that:

 

Section 8.01. Reasonable Best Efforts.

 

(a) Subject to the terms and conditions of this Agreement, the Company and the OHA Parties, as applicable, shall use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable hereunder and under Applicable Law to consummate the transactions contemplated by this Agreement, including (i) preparing and filing as promptly as practicable with any Governmental Authority or other third party all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents and (ii) obtaining and maintaining all approvals, consents, registrations, permits, authorizations and other confirmations required to be obtained from any Governmental Authority or other third party that are necessary, proper or advisable to consummate the transactions contemplated by this Agreement; provided that the parties hereto understand and agree that the reasonable best efforts of any party hereto shall not be deemed to include entering into any settlement, undertaking, consent decree, stipulation or agreement with any Governmental Authority in connection with the transactions contemplated hereby.

 

  

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(b) The Company shall use its (and the Company shall cause its Subsidiaries to use their) reasonable best efforts, and the OHA Parties, as applicable, shall cooperate with the Company and its Subsidiaries, to obtain at the earliest practicable date the Lender Consents; provided, that the Company shall be responsible for the out-of-pocket costs and expenses in connection with seeking the Lender Consents.

 

Section 8.02. Proxy Statement.

 

(a) As promptly as reasonably practicable and in no event later than five (5) Business Days after the date hereof, the Company shall file a preliminary proxy statement on Schedule 14A with the SEC (the “Preliminary Proxy Statement”) and, subsequent to receiving clearance from the SEC, a definitive proxy statement on Schedule 14A (the “Definitive Proxy Statement”).  Subject to Section 7.03, the Proxy Statement shall include the Company Board Recommendation in favor of each of the Company Stockholder Proposal.  The Company shall use its reasonable best efforts to cause the Definitive Proxy Statement to be mailed to its stockholders as promptly as reasonably practicable after the SEC clears any and all outstanding comments to the Proxy Statement, and in no event later than five (5) Business Days thereafter.  The Company shall promptly provide copies, consult with the Investor and the OHA Advisor and prepare written responses with respect to any written comments received from the SEC with respect to the Proxy Statement and shall notify the Investor of any oral comments received from the SEC.  The Company shall use its reasonable best efforts to ensure that the Proxy Statement complies in all material respects with the rules and regulations promulgated by the SEC under the 1934 Act (including Section 14 thereof) and the Proxy Statement will be complete in all material respects and will not contain (at the time such materials or information are distributed, filed or provided, as the case may be and at the time of the applicable shareholder vote or action, including any supplement thereto) any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading or necessary to correct any statement or any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading.

 

(b) The OHA Advisor shall use its reasonable best efforts to ensure that the information it supplies to the Company for inclusion in the Proxy Statement will be complete in all material respects and will not contain (at the time such materials or information are distributed, filed or provided, as the case may be and at the time of the applicable stockholder vote or action, including any supplement thereto) any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading or necessary to correct any statement or any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading.

 

  

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(c) The Company shall advise the OHA Advisor promptly after it receives notice thereof of the time when the Proxy Statement has been cleared by the SEC or any request by the SEC for amendment of the Proxy Statement or comments thereon and responses thereto or requests by the SEC for additional information.  Subject to Section 7.03, no amendment to the Proxy Statement shall be filed without the approval of the OHA Advisor, which approval shall not be unreasonably withheld or delayed.  If, at any time prior to the Closing, any information relating to the Company, or any of its respective Affiliates, officers or directors is discovered by the Company or the OHA Advisor that should be set forth in an amendment to the Proxy Statement so that such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party hereto that discovers such information shall promptly notify the other parties hereto and an appropriate amendment describing such information shall be promptly filed with the SEC and, to the extent required by law, disseminated to the stockholders of the Company.

 

Section 8.03. Public Announcements.  The OHA Advisor and the Company shall consult with each other before issuing any press release, having any communication with the press (whether or not for attribution), making any other public statement or scheduling any press conference or conference call with investors or analysts with respect to this Agreement or the transactions contemplated hereby and, except in respect of any public statement or press release as may be required by Applicable Law or any listing agreement with or rule of any national securities exchange or association, and shall not issue any such press release or make any such other public statement or schedule any such press conference or conference call without the consent of the other party.

 

Section 8.04. Access to Information.  From the date hereof until the Closing and subject to Applicable Law and the Confidentiality Agreement, the Company and the OHA Parties shall (i) give to the other party, its counsel, financial advisors, auditors and other authorized representatives reasonable access to the offices, properties, books and records of such party upon reasonable advance notice and during reasonable business hours, (ii) furnish to the other party, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information as such Persons may reasonably request and (iii) instruct its employees, counsel, financial advisors, auditors and other authorized representatives to cooperate with the other party in its investigation.  Any investigation pursuant to this Section 8.04 shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of the other party.  No information or knowledge obtained in any investigation pursuant to this Section 8.04 shall be deemed to modify any representation or warranty made by any party hereunder.

 

Section 8.05. Notices of Certain Events.  Each of the Company, the Investor and the OHA Advisor shall promptly notify the other of:

 

  

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(a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

 

(b) any discussions/negotiations with, or communications received from or provided to, the Lender;

 

(c) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement;

 

(d) any actions, suits, claims, investigations or proceedings commenced or, to its Knowledge, threatened against, relating to or involving or otherwise affecting the Company or any of its Subsidiaries or any OHA Party, as the case may be, that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to any Section of this Agreement or that relate to the consummation of the transactions contemplated by this Agreement;

 

(e) any inaccuracy of any representation or warranty contained in this Agreement at any time during the term hereof that would reasonably be expected to cause the conditions set forth in ARTICLE 9 not to be satisfied; and

 

(f) any failure of that party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder;

 

provided that the delivery of any notice pursuant to this Section 8.05 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice.

 

Section 8.06. Director and Officer Liability.

 

(a) For six (6) years after the Closing, the Company shall indemnify and hold harmless, and no OHA Party shall take any action, including any action with respect to the voting of its shares, that will prevent or otherwise impair the Company’s ability to do so, (i) the present and former officers and directors of the Company, (ii) the present and former members of the Company’s investment committee or disclosure committee, and (iii) the Company Advisor and the Company Administrator, and each of their respective Affiliates and Representatives (each, an “Indemnified Person”) in respect of acts or omissions occurring at or prior to the Closing to the fullest extent permitted by Maryland Law or any other Applicable Law or provided under the Company’s charter, bylaws or any other Contract in effect on the date hereof, including the Company Advisory Agreement, the Company Administration Agreement, and the D&O Indemnity Agreements (collectively, the “Indemnification Agreements”); provided that such indemnification shall be subject to any mandatory limitation imposed from time to time under Applicable Law.

 

(b) For six (6) years after the Closing, no OHA Party shall take any action, including any action with respect to the voting of its shares, that would prevent the Company from maintaining in effect, or would otherwise terminate, materially modify, change or alter, the provisions in the Indemnification Agreements (or in such documents of any successor to the business of the Company) regarding indemnification and/or elimination of liability of the Indemnified Persons, or advancement of expenses that are no less advantageous to the Indemnified Persons than the corresponding provisions in existence on the date of this Agreement.

 

  

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(c) Prior to the Closing, the Company shall obtain a “tail” insurance policy from a reputable insurance carrier with respect to directors’ and officers’ liability insurance (the “D&O Insurance”) covering acts or omissions occurring prior to the Closing with respect to the Indemnified Persons with a claims period of at least six (6) years from and after the Closing, the terms of which, including coverage and amount, shall be no less favorable to the Indemnified Persons than the current directors’ and officers’ liability insurance under which such Indemnified Persons are covered as of the date hereof.  The OHA Parties and the Company shall cooperate with each other to ensure that the D&O Insurance is effectively implemented; provided that the Company shall be responsible for all fees, costs, expenses or payments incurred in obtaining the D&O Insurance.

 

(d) These rights shall survive consummation of the Investment and the other transactions contemplated hereby and are intended to benefit, and shall be enforceable by, each Indemnified Person.

 

Section 8.07. Confidentiality.

 

(a) Prior to the Closing and after any termination of this Agreement, the Investor, each OHA Party and OHA shall comply or continue to comply with the terms and conditions of the Confidentiality Agreement; provided that the obligations of the OHA Parties and OHA pursuant to Section 8, Section 9 and Section 10 of the Confidentiality Agreement shall terminate as of the Closing.

 

(b) The provisions of the Confidentiality Agreement are hereby incorporated by reference upon, and shall apply mutatis mutandis to the Company (other than Section 4 (Securities Law Restrictions), Section 8 (Restrictive Covenants; No Solicitation of Employees), Section 9 (Standstill), Section 10 (No Joint Bidding) and Section 16 (Miscellaneous), but including Section 16(b) (No License)); provided that for the avoidance of doubt and for purposes of this Section 8.07(b), references to “Oak Hill” shall be construed as references to the Company and references to the “Company” shall be construed as references to the OHA and the OHA Parties.

 

Section 8.08. Takeover Statutes.  If any Takeover Statute shall become applicable to the Investment or the other transactions contemplated hereby, each of the Company and the OHA Parties and the respective members of their boards of directors or other governing bodies shall, to the extent permitted by Applicable Law, use reasonable efforts to grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated herein and otherwise act to eliminate or minimize the effects of such Takeover Statute on the transactions contemplated hereby.

 

  

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Section 8.09. Stock Purchase Plan.  During the twelve (12) month period immediately following the Closing, neither the Company nor any OHA Party shall terminate the Stock Purchase Plan; provided that the OHA Parties may (i) subject to and in accordance with Applicable Law, amend the Stock Purchase Plan during such time and (ii) terminate the Stock Purchase Plan upon the termination of either the Replacement Advisory Agreement or the Replacement Administration Agreement.

 

Section 8.10. Change of Name and Ticker Symbol.  As soon as reasonably practicable following the Closing, the Company shall (i) change its name such that it no longer includes reference to “NGP” to a name selected and approved by the OHA Advisor, and (ii) subject to obtaining the requisite approval, change its stock or ticker symbol for its Common Stock from NGPC to a different stock or ticker symbol as selected and approved by the OHA Advisor.

 

ARTICLE 9

 

CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

 

Section 9.01. Conditions to the Obligations of Each Party.  The obligations of the Company and the Investor to consummate the Investment and the other transactions contemplated hereby are subject to the satisfaction of the following conditions:

 

(a) the Company Stockholder Approval shall have been obtained in accordance with the Investment Advisers Act, the Investment Company Act, the NASDAQ Rules, and, if required, Maryland Law;

 

(b) no Applicable Law shall prohibit the consummation of the Investment and the other transactions contemplated hereby;

 

(c) (i) there shall not have been instituted and pending any action or proceeding by any Governmental Authority challenging or seeking to make illegal, to delay materially or otherwise directly or indirectly to restrain or prohibit the consummation of the Investment or the other transactions contemplated by this Agreement, seeking to obtain material damages or otherwise directly or indirectly relating to the transactions in connection with the Investment or the other transactions contemplated by this Agreement, and (ii) there shall not have been any action taken, or any Applicable Law enacted, enforced, promulgated, issued or deemed applicable to the Investment or the other transactions contemplated by this Agreement, by any Governmental Authority, that, in the reasonable judgment of the Investor and the Company, is likely, directly or indirectly, to result in any of the consequences referred to in clause (i) above;

 

(d) the Company shall have obtained the Lender Consents, in form and substance reasonably satisfactory to the Investor; and

 

  

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(e) all actions by or in respect of, or filings with, any Governmental Authority, required to permit the consummation of the Investment and the other transactions contemplated hereby, shall have been taken, made or obtained.

 

Section 9.02. Conditions to the Obligations of the OHA Parties.  The obligations of each of the Investor, the OHA Administrator and the OHA Advisor to consummate the Investment and the other transactions contemplated hereby are subject to the satisfaction of the following further conditions:

 

(a) (i) the Company shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Closing, (ii) (A) the representations and warranties contained in Section 5.01, Section 5.02 and Section 5.15(k) shall be true in all respects as of the date hereof and as of the Closing as if made at and as of such time; and (B) the other representations and warranties of the Company contained in this Agreement shall be true as of the date hereof and at and as of the Closing as if made at and as of such time (other than representations and warranties that by their terms address matters only as of another specified time, which shall be true only as of such time), except for, in the cause of this clause (B) only, such failures to be true (disregarding all materiality and Material Adverse Effect qualifications contained therein) as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company, and (iii) the Investor shall have received a certificate signed by an executive officer of the Company to the foregoing effect;

 

(b) all of the members of the Board immediately prior to the Closing shall have resigned and named the OHA Directors and New Independent Directors as the sole successor members of the Board, in each case, effective and subject to the consummation of the Closing;

 

(c) the Company shall have entered into the Replacement Management Agreements, effective as of the date of the Closing;

 

(d) the Company shall have approved and prepared an amendment to its charter changing its name to a name that no longer includes “NGP”;

 

(e) the Company’s BDC Election shall be in full force in effect, the Company shall not have filed with the SEC any notice of withdrawal of the BDC Election, and no order of suspension or revocation of such election shall have been issued or, to the Company’s Knowledge, proceedings therefor been initiated or threatened by the SEC; and

 

(f) concurrently with the Closing, the Company Administrator and the Company Advisor shall have transferred the Transferred Assets, as defined in that certain Bill of Sale and Assignment Agreement, dated as of the date hereof, by and among the Company Administrator, the Company Advisor and OHA, to OHA, in accordance with the terms thereof.

 

  

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Section 9.03. Conditions to the Obligations of the Company.  The obligations of the Company to consummate the Investment and the other transactions contemplated hereby are subject to the satisfaction of the following further condition:

 

(a) (i) The OHA Parties, as applicable, shall have performed in all material respects all of their obligations hereunder required to be performed by them at or prior to the Closing, (ii) (A) the representations and warranties of the OHA Parties contained in Section 6.01, Section 6.06 and Section 6.07  shall be true in all respects as of the date hereof and as of the Closing as if made at and as of such time; and (B) the other representations and warranties of the OHA Parties contained in this Agreement shall be true as of the date hereof and at and as of the Closing as if made at and as of such time (other than representations and warranties that by their terms address matters only as of another specified time, which shall be true only as of such time), except for, in the case of this clause (B) only, such failures to be true (disregarding all materiality and Material Adverse Effect qualifications contained therein) as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to such OHA Party, and (iii) the Company shall have received a certificate signed by an executive officer of each OHA Party to the foregoing effect;

 

(b) The OHA Advisor shall be in compliance in all material respects with its obligations under the Advisers Act as of the date of the Closing;

 

(c) The Investor shall have entered into the Stock Purchase Plan, effective as of the date of the Closing;

 

(d) The OHA Advisor shall have entered into the Replacement Advisory Agreement, effective as of the date of the Closing; and

 

(e) The OHA Administrator shall have entered into the Replacement Administration Agreement, effective as of the date of the Closing.

 

Section 9.04. Conditions to the Balance Closing.  The obligations of the Company and the Investor to consummate the Balance Purchase are subject to the satisfaction of the following conditions:

 

(a) no Applicable Law shall prohibit the consummation of the Balance Purchase;

 

(b) (i) there shall not have been instituted any pending action or proceeding by any Governmental Authority challenging or seeking to make illegal, to delay materially or otherwise directly or indirectly to restrain or prohibit the consummation of the Balance Purchase or otherwise with respect to the relationship between OHA, the OHA Advisor and the OHA Administrator, on the one hand, and the Company, on the other hand, seeking to obtain material damages or otherwise directly or indirectly relating to the transactions in connection with the Balance Purchase, and (ii) there shall not have been any action taken, or any Applicable Law enacted, by any Governmental Authority, that, in the reasonable judgment of the Investor and the Company, is likely, directly or indirectly, to result in any of the consequences referred to in clause (i) above;

 

  

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(c) the Company shall not be in material breach of the Replacement Management Agreements;

 

(d) all actions by or in respect of, or filings with, any Governmental Authority, required to permit the consummation of the Balance Purchase, shall have been taken, made or obtained; and

 

(e) the Replacement Management Agreements shall be in full force and effect.

 

ARTICLE 10

 

TERMINATION

 

Section 10.01. Termination.  This Agreement may be terminated and the Investment and the other transactions contemplated by this Agreement may be abandoned at any time prior to the Closing (notwithstanding any approval of the Investment and the other transactions contemplated hereby by the stockholders of the Company):

 

(a) by mutual written agreement of the Company and the Investor;

 

(b) by either the Company or the Investor, if:

 

(i) the Closing has not been consummated on or before November 30, 2014 (the “End Date”); provided that the right to terminate this Agreement pursuant to this Section 10.01(b)(i) shall not be available to any party whose breach of any provision of this Agreement results in the failure of the Closing to be consummated by such time; provided, further, that in the event the Company desires to terminate this Agreement pursuant to this Section 10.01(b)(i) and the Investor desires to terminate this Agreement pursuant to Section 10.01(c)(iv), then the termination right of the Investor under Section 10.01(c)(iv) shall prevail; or

 

(ii) there shall be any Applicable Law that (1) makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or (2) enjoins the Company or any OHA Party from consummating the transactions contemplated by this Agreement and such injunction shall have become final and nonappealable; or

 

(iii) at the Company Stockholder Meeting (including any adjournment or postponement thereof), the Company Stockholder Approval shall not have been obtained; provided that the Company shall not have the right to terminate this Agreement pursuant to this Section 10.01(b)(iii) if (1) an Adverse Recommendation Change shall have occurred, or (2) at any time after receipt or public announcement of a Transaction Proposal, the Board shall have failed to reaffirm the Company Board Recommendation within five (5) Business Days (but in any event prior to the date of the Company Stockholder Meeting) after receipt of any written request to do so from the Investor; or

 

  

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(c) by the Investor, if:

 

(i) an Adverse Recommendation Change shall have occurred, or at any time after receipt or public announcement of a Transaction Proposal, the Board shall have failed to reaffirm the Company Board Recommendation as promptly as practicable (but in any event within five (5) Business Days, provided that, in any event, such reaffirmation must be made prior to the date of the Company Stockholder Meeting) after receipt of any written request to do so from the Investor; or

 

(ii) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company, set forth in this Agreement shall have occurred that would cause the condition set forth in Section 9.02(a) not to be satisfied, and such condition is incapable of being satisfied by the End Date; or

 

(iii) there shall have been a material breach by the Company or its Representatives of Section 7.02 or Section 7.03; or

 

(iv) the Company Stockholder Meeting (including any adjournment or postponement thereof) has not been held prior to the End Date; provided, however, that the Investor must not be in material breach of this Agreement on the date of such termination; or

 

(v) (A) all of the conditions set forth in Section 9.01 and Section 9.03 have been satisfied (other than those conditions that, by their nature, can only be satisfied or waived at the Closing, but which would be capable of being satisfied if the Closing date were the date of such termination), (B) the OHA Parties confirm in writing that they stand ready, willing and able to consummate the Closing, and (C) the Company fails to consummate the Closing by the date the Closing should have occurred pursuant to Section 2.01; or

 

(d) by the Company, if:

 

(i) prior to the Company Stockholder Meeting, the Board shall have made an Adverse Recommendation Change in compliance with the terms of this Agreement; provided, however, that such termination will not take effect until the Company has paid OHA the full amount of the Termination Fee as set forth in Section 10.03(a); or

 

(ii) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Investor set forth in this Agreement shall have occurred that would cause the condition set forth in Section 9.03(a) not to be satisfied, and such condition is incapable of being satisfied by the End Date.

 

  

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The party desiring to terminate this Agreement pursuant to this Section 10.01 (other than pursuant to Section 10.01(a)) shall give notice of such termination to the other party.

 

Section 10.02. Effect of Termination.  If this Agreement is terminated pursuant to Section 10.01, except as otherwise specifically provided elsewhere in this Agreement (including Section 10.03), this Agreement shall become void and of no effect without liability of any party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to the other party hereto.  The provisions of Section 8.07, this Section 10.02, Section 10.03, and ARTICLE 11 shall survive any termination hereof pursuant to Section 10.01.

 

Section 10.03. Termination Fees and Expense Reimbursement.

 

(a) In the event that this Agreement is terminated pursuant to Section 10.01(c)(i), Section 10.01(c)(iii), Section 10.01(c)(v), or Section 10.01(d)(i), the Company shall (i) pay, or cause to be paid, to OHA or its designee an amount in immediately available funds equal to $1,500,000 (the “Termination Fee”) as liquidated damages and (ii) reimburse OHA in an amount up to $250,000 for OHA’s reasonable and documented out-of-pocket third-party expenses incurred in connection with the negotiation, documentation and implementation of the transactions contemplated by this Agreement (the “Expense Reimbursement”).

 

(b) In the event that (i) (x) this Agreement is terminated pursuant to Section 10.01(b)(iii), (y) the Board has not made an Adverse Recommendation Change, and (z) at any time after receipt or public announcement of a Transaction Proposal, the Board shall not have failed to reaffirm the Company Board Recommendation within five (5) Business Days after receipt of any written request to do so from the Investor, or (ii) this Agreement is terminated pursuant to Section 10.01(c)(ii), the Expense Reimbursement shall be payable by the Company to OHA.

 

(c) Payments of any amount under the foregoing provisions of this Section 10.03 shall be due and payable by wire transfer of immediately available funds no later than two (2) Business Days after the date of such termination.

 

(d) The parties acknowledge that the agreements contained in Section 10.03 are an integral part of the transaction contemplated by this Agreement, and that, without these agreements, the parties would not enter into this Agreement.  Accordingly, if the Company fails to promptly pay the Termination Fee and/or the Expense Reimbursement pursuant to the provisions of Section 10.03(a) or Section 10.03(b), as applicable, and, in order to obtain such payment, such party commences a suit that results in a final non-appealable adjudication on the merits against the Company, such party shall be indemnified for the reasonable and documented attorneys’ fees of enforcing this Agreement.

 

  

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(e) Notwithstanding anything to the contrary in this Agreement, the Investor's right to receive payment of the Termination Fee and/or the Expense Reimbursement, if any, pursuant to the provisions of Section 10.03(a) or Section 10.03(b), as applicable, and any additional expense reimbursement pursuant to Section 10.03(d), shall be the sole and exclusive remedy of the OHA Parties and each of their respective Affiliates against the Company, the Company Advisor, the Company Administrator and each of their respective Affiliates, stockholders, partners, members, and Representatives for any and all losses that may be suffered based upon, resulting from or arising out of the circumstances giving rise to such termination, and upon payment of the Termination Fee and/or the Expense Reimbursement, if any, pursuant to the provisions of Section 10.03(a) or Section 10.03(b), as applicable, and any additional expense reimbursement pursuant to Section 10.03(d), none of the Company, the Company Advisor, the Company Administrator or any of their respective Affiliates, stockholders, partners, members, or Representatives shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated by this Agreement.

 

ARTICLE 11

 

MISCELLANEOUS

 

Section 11.01. Notices.  All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“e-mail”) transmission) and shall be given,

 

if to the Investor, to:

 

OHA BDC Investor, LLC

c/o Oak Hill Advisors, L.P.

1114 Avenue of the Americas, 27th Floor

New York, NY 10036

Attention: Glenn R. August

Facsimile No. (212) 838-8411

E-mail: gaugust@oakhilladvisors.com

 

with copies to:

 

Oak Hill Advisors, L.P.

1114 Avenue of the Americas, 27th Floor

New York, NY 10036

Attention: Gregory S. Rubin

Facsimile No. (212) 735-5287

E-mail: grubin@ohpny.com

 

and

 

  

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Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Attention: Kenneth M. Schneider

Facsimile No. (212) 492-0303

E-mail: kschneider@paulweiss.com

 

if to OHA, to:

 

Oak Hill Advisors, L.P.

1114 Avenue of the Americas, 27th Floor

New York, NY 10036

Attention: Glenn R. August

Facsimile No. (212) 838-8411

E-mail: gaugust@oakhilladvisors.com

 

with copies to:

 

Oak Hill Advisors, L.P.

1114 Avenue of the Americas, 27th Floor

New York, NY 10036

Attention: Gregory S. Rubin

Facsimile No. (212) 735-5287

E-mail: grubin@ohpny.com

 

and

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Attention: Kenneth M. Schneider

Facsimile No. (212) 492-0303

E-mail: kschneider@paulweiss.com

 

if to the Company, to:

 

NGP Capital Resources Company

909 Fannin, Suite 3800

Houston, TX 77010

Attention: Stephen K. Gardner

Facsimile No. (713) 752-0063

Email: sgardner@ngpcrc.com

 

  

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with a copy to:

 

Thompson & Knight LLP

One Arts Plaza

1722 Routh Street, Suite 1500

Dallas, TX 75201

Attention: Wesley P. Williams

Facsimile No. (214) 999-1567

E-mail: wesley.williams@tklaw.com

 

or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto.  All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt.  Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.

 

Section 11.02. Survival of Representations and Warranties.  Except as set forth in the following sentence, the representations, warranties, covenants and agreements contained herein and in any certificate or other writing delivered pursuant hereto shall not survive the Closing.  Notwithstanding the foregoing, the agreements set forth in Section 8.06 shall survive for the time period(s) set forth therein.

 

Section 11.03. Amendments and Waivers.

 

(a) Any provision of this Agreement may be amended or waived prior to the Closing if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by the Company and the Investor or, in the case of a waiver, by each party against whom the waiver is to be effective; provided that after the Company Stockholder Approval have been obtained there shall be no amendment or waiver that would require the further approval of the stockholders of the Company under Maryland Law or the Investment Company Act without such approval having first been obtained.

 

(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.

 

Section 11.04. Expenses.  Except as otherwise provided herein (including in Section 10.03), all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.

 

Section 11.05. Disclosure Schedule and SEC Document References.

 

  

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(a) The parties hereto agree that any reference in a particular Section of the Company Disclosure Schedule shall only be deemed to be an exception to (or, as applicable, a disclosure for purposes of) (i) the representations and warranties (or covenants, as applicable) of the Company that are contained in the corresponding Section of this Agreement and (ii) any other representations and warranties of the Company that are contained in this Agreement, but only if the relevance of that reference as an exception to (or a disclosure for purposes of) such representations and warranties would be readily apparent to a reasonable person who has read that reference and such representations and warranties, without any independent Knowledge on the part of the reader regarding the matter(s) so disclosed.

 

(b) The parties hereto agree that any information contained in any part of any Company SEC Document filed after January 1, 2014 but prior to the date hereof shall only be deemed to be an exception to (or a disclosure for purposes of) the Company’s representations and warranties if the relevance of that information as an exception to (or a disclosure for purposes of) such representations and warranties would be reasonably apparent to a person who has read that information concurrently with such representations and warranties, without any independent Knowledge on the part of the reader regarding the matter(s) so disclosed; provided that in no event shall any information contained in any part of any Company SEC Document entitled “Risk Factors” or containing a description or explanation of “Forward-Looking Statements” be deemed to be an exception to (or a disclosure for purposes of) any representations and warranties of the Company contained in this Agreement.

 

Section 11.06. Binding Effect; Benefit; Assignment.

 

(a) The provisions of this Agreement shall be binding upon and, except as provided in Section 8.06, shall inure to the benefit of the parties hereto and their respective successors and assigns.  Except as provided in Section 8.06, no provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.

 

(b) No party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto, except that Investor may transfer or assign its rights and obligations under this Agreement, in whole or from time to time in part, to (i) one or more of its Affiliates at any time and (ii) after the Closing, to any Person; provided that such transfer or assignment shall not relieve Investor of its obligations hereunder or enlarge, alter or change any obligation of any other party hereto or due to Investor.

 

Section 11.07. Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law rules of such state that would result in the application of the laws of another jurisdiction.  Notwithstanding the foregoing, to the extent activities contemplated by Section 7.03 of this Agreement are based on the application of the laws of the State of Maryland, such laws shall govern.

 

  

48

  

Section 11.08. Submission to Jurisdiction; Selection of Forum.  Each party hereto agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement or the Investment exclusively in the United States District Court for the Southern District of New York or, if such court does not have jurisdiction, the Commercial Division of the New York Supreme Court, New York County (the “Chosen Courts”), and solely in connection with claims arising under this Agreement or the Investment that are the subject of this Agreement (a) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (b) waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (c) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party hereto and (d) agrees that service of process upon such party in any such action or proceeding shall be effective if notice is given in accordance with Section 11.01 of this Agreement.

 

Section 11.09. Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 11.10. Counterparts; Effectiveness.  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto.  Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

 

Section 11.11. Entire Agreement.  This Agreement, the Confidentiality Agreement and the Replacement Management Agreements, and those documents expressly referred to herein or therein constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

 

Section 11.12. Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, or if any term, provision, covenant or restriction of this Agreement is otherwise challenged as to its enforceability or validity, and the parties hereto are unable to convince the applicable court or other Governmental Authority otherwise after using their commercially reasonable efforts to do so (such efforts to be at OHA’s sole cost and expense to the extent relating to Section 10.03), then such term or provision shall be null and void, but the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.

 

  

49

  

Section 11.13. Specific Performance.  The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any Chosen Court, in addition to any other remedy to which they are entitled at law or in equity.

 

[Signature pages follow.]

 

  

50

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year herein above first written.

 

NGP CAPITAL RESOURCES COMPANY

 

	
  

	
By:

	
/s/ Stephen K. Gardner           

Name: Stephen K. Gardner

Title: President and CEO

	 

 

OHA BDC INVESTOR, LLC

 

	
  

	
By:

	
/s/ Glenn R. August               

Name: Glenn R. August

Title: President

	 

 

OAK HILL ADVISORS, L.P.

 

By: Oak Hill Advisors GenPar, L.P.,

its general partner

By: Oak Hill Advisors MGP, Inc.,

its managing general partner

 

	
  

	
By:

	
/s/ Glenn R. August              

Name: Glenn R. August

Title: President

	 

 

 

 

 

[Signature Page to Stock Purchase and Transaction Agreement]

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