Document:

ex10-1.htm

 

September 8th 2009

 

Mr. Aaron Whiteman, President and CEO

GENova Biotherapeutics, Inc.

29 Harley Street

London W1G 9QR

United Kingdom

Dear Aaron,

In accordance with our most recent discussions regarding your company’s desire to secure additional capital (the “Funds”), this letter agreement (the “Agreement”) shall serve as our full and complete understanding relative to your engagement of our firm, PacificWave Partners Limited (“PacificWave”),
as financial advisors to GENova Biotherapeutics, Inc. (the “Company”).  The Company acknowledges that the Funds may be provided through single or multiple tranche investments consisting of, without limitation, one or more of the following:  conventional debt, convertible debt, secured debt, participating debt, warrants, equity, preferred equity, equity draw-down facilities, lines of credit, letters of credit and/or any other forms of financing (each, an “Investment”).

In consideration of the mutual representations, warranties and covenants contained herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, PacificWave and the Company hereby agree to the following terms and conditions:

Role of PacificWave Partners Limited and Independent Contractor Status

1. The Company hereby engages PacificWave as its exclusive financial advisors to facilitate introductions to one or more persons, partnerships, corporations or other entities or groups, satisfactory to the Company, who would be interested
in entering into a Transaction with the Company, as well as such other consultants and/or professionals as may be necessary or appropriate in effecting a Transaction.  A “Transaction” shall mean the payment of Funds to the Company by way of any Investment or Investments.  The Company shall have the absolute right to refuse to consummate a Transaction for any reason or no reason.  The Company acknowledges and agrees that PacificWave and its officers, directors, employees,
agents and representatives are not acting as an agent or broker of the Company or otherwise acting in a fiduciary capacity on behalf of the Company and are acting solely as an independent contractor.  PacificWave and its officers, directors, employees, agents, and representatives shall not be empowered to act for or bind the Company to any contractual arrangement with any third parties.  The Company acknowledges and agrees that PacificWave will introduce potential investors to the Company,
but will not solicit any Transaction, participate in the negotiation or execution of any Transaction or advise on the merits of any Transaction.

Term of Engagement

2. The term of this Agreement shall be for a period of sixty (60) days (the “Term”) commencing from the date that PacificWave receives a copy of this Agreement executed by the Company.  PacificWave shall be the exclusive
financial advisors to the Company during the Term.  Thereafter, this Agreement shall renew automatically for successive terms of sixty (60) days (each, a “Renewal Term”) unless either party shall give twenty (20) days’ written notice of termination to the other party before the commencement of any Renewal Term.  Any termination of this Agreement pursuant to this paragraph 2 shall be without liability of any character (including, but not limited to, loss of anticipated profits
or consequential damages) on the part of any party thereto, except that the Company shall remain obligated to pay all fees and expenses provided to be paid by it specified in paragraphs 3, 4, 5 and 6 of this Agreement.

 

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Introductions

3. Prior to the introduction of the Company to any particular investor or investors, PacificWave will provide the investor’s name or investors’ names (each, a “Named Investor”) to the Company for approval by the
Company.  The Company agrees to accept every potential Named Investor except where the Company has already been introduced to a Named Investor or where the Company in good faith believes that the Company’s reputation may be harmed by entering into a Transaction with the Named Investor.  If the Company does not provide its approval or rejection of a Named Investor within 24 hours of the disclosure of the identity of that Named Investor, then such inaction shall be deemed an approval of
that Named Investor by the Company.

PacificWave Compensation

	
4.  
	
(a)As partial consideration for the services to be provided by PacificWave under this Agreement, the Company shall pay, upon receipt of Funds by the Company from a Transaction, whether such Transaction was closed during the Term, a Renewal Term or within one (1) year from the termination of this Agreement,
with any Named Investor introduced to or caused to be introduced to the Company by PacificWave, a cash fee of ten percent (10%) (the “Cash Fee”) of the gross value of such Transaction.  The Company agrees to wire to PacificWave the Cash Fee within forty-eight (48) hours of receipt of such Funds by the Company.  

	
  
	
(b)In the event that all or a portion of the consideration paid in a Transaction is other than cash, then the value of such non-cash consideration shall be deemed to be the fair market value of such non-cash consideration on the date such Transaction is consummated.  In the event the Company refers an investor or investors to PacificWave during the Term or a Renewal Term and such investor or investors subsequently
participate in a Transaction, PacificWave shall be paid fifty percent (50%) of the Cash Fee calculated in accordance with paragraph 4 of this Agreement.

	
  
	
(c)The Company agrees to maintain the confidentiality of each Named Investor, except as required by applicable law.  For a period of one (1) year from the termination of this Agreement, the Company will not solicit or enter into any Transaction with any Named Investor without the written consent of PacificWave and payment to PacificWave of compensation of no less than the compensation that PacificWave would
have received pursuant to the terms of this Agreement.

 

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5. In consideration of PacificWave agreeing to enter into this Agreement, the Company further agrees to pay PacificWave a non-refundable cash engagement fee of $10,000 (the “Engagement Fee”) to be paid at the time of execution
of this Agreement by the Company.  The Engagement Fee shall be credited against the Cash Fee.  The Company agrees to wire to PacificWave the Engagement Fee within twenty-four (24) hours of the execution by the Company of this Agreement.

Additional or Future Transaction(s) by Investor(s)

6. In the event any Named Investor successfully completes a Transaction subject to the terms of this Agreement, and the same Named Investor completes another Transaction or is a participant in another Transaction with the Company within
one (1) year from the termination of this Agreement, the Company shall pay PacificWave a ten percent (10%) cash fee on any and all Funds received by the Company or on the portion of Funds contributed by such Named Investor if part of a group or syndicate of investors. 

Company Representations and Warranties

7. In order to induce PacificWave to enter into this Agreement, the Company hereby represents and warrants to and agrees with PacificWave as follows:

	
  
	
(a)All information provided by the Company to PacificWave or to any Named Investor regarding the Company is true and does not omit any material fact necessary to make such information, in light of the circumstances under which it was delivered, not misleading.  If during the Term, any event occurs, or any event known to the Company relating to or affecting the Company shall occur, as a result of which the
information provided to PacificWave or to any Named Investor becomes incorrect or misleading, the Company shall inform PacificWave and any Named Investor of such occurrence within a reasonable period of time.  PacificWave and its officers, directors, employees, agents and representatives shall have no responsibility for any information supplied by or on behalf of the Company to any Named Investor, and the Company shall not represent to any person or entity that PacificWave and/or its officers, directors,
employees, agents and representatives have assumed such responsibility.

	
  
	
(b)The execution and delivery of this Agreement, and the consummation of the transactions herein contemplated, and compliance with the terms of this Agreement will not conflict with or result in a material breach of any of the terms, conditions or provisions of, or constitute a default under, the Articles of Incorporation or By-Laws of the Company (in any respect that is material to the Company), any material note,
indenture, mortgage, deed of trust, or other agreement or instrument to which the Company is a party or by which the Company or any property of the Company is bound, or to the best of the Company's knowledge, any existing law, order, rule, regulation, writ, injunction or decree of any government, governmental instrumentality, agency or body, arbitration tribunal or court, domestic or foreign, having jurisdiction over the Company or any property of the Company, which breach would have a material adverse effect
on the business or financial condition of the Company.

	
  
	
(c)The Company is duly formed, validly existing and in good standing as a corporation under the laws of its jurisdiction of incorporation.  The execution and delivery by the Company of this Agreement have been duly authorized by all necessary action, and this Agreement is the valid, binding and legally enforceable obligation of the Company, except as enforcement may be limited by general principles of equity
and by bankruptcy and other laws affecting creditors' rights generally

	
  
	
(d)All offerings of securities by the Company shall be conducted in compliance with all applicable laws, including but not limited to federal, state and other applicable securities laws. 

 

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Mutual Indemnification

8. The Company agrees to indemnify and hold harmless PacificWave and each of its officers, directors, employees, agents and representatives against any losses, claims, damages or liabilities, joint or several, for which PacificWave or
its officers, directors, employees, agents and representatives may directly or indirectly become liable in connection with or arising out of the advisory services that are governed by this Agreement or the offering or sale of securities of the Company.  Furthermore, the Company shall reimburse any legal or other expenses reasonably incurred by PacificWave and its officers, directors, employees, agents and representatives in connection with investigating or defending against any loss, claim, damage or
liability or any action in respect thereof.  Notwithstanding anything to the contrary contained herein, the Company shall not be liable hereunder for any loss, claim, damage or liability resulting from intentional wrongdoing, recklessness, bad faith or gross negligence of PacificWave and its officers, directors, employees, agents and representatives.  The indemnity agreement in this paragraph 8 shall, upon same terms and conditions, extend to and inure to the benefit of each person, if any,
who may be deemed to control PacificWave and to its officers, directors, employees, agents and representatives and shall survive the termination of this Agreement.

9. PacificWave agrees to indemnify and hold harmless the Company and its officers, directors, employees, agents and representatives against any losses, claims, damages or liabilities, joint or several, for which the Company or its officers,
directors, employees, agents and representatives may directly or indirectly become liable in connection with or arising out of the advisory services that are governed by this Agreement.  Furthermore, PacificWave shall reimburse any legal or other expenses reasonably incurred by the Company and its officers, directors, employees, agents and representatives in connection with investigating or defending against any loss, claim, damage or liability or any action in respect thereof.  Notwithstanding
anything to the contrary contained herein, PacificWave shall not be liable hereunder for any loss, claim, damage or liability resulting from intentional wrongdoing, recklessness, bad faith or gross negligence of the Company and its officers, directors, employees, agents and representatives.  The indemnity agreement in this paragraph 9 shall, upon same terms and conditions, extend to and inure to the benefit of each person, if any, who may be deemed to control the Company and to its officers, directors,
employees, agents and representatives and shall survive the termination of this Agreement.

Covenants and Obligations of Company

10. The Company shall make available to PacificWave all information concerning the business, assets, operations and financial condition of the Company which PacificWave reasonably requests in connection with the performance of its services
under this Agreement.  PacificWave may rely upon the accuracy and completeness of such information without independent verification.

 

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11. In connection with the services to be provided by PacificWave under this Agreement, PacificWave may receive from the Company information relating to the Company which is of a confidential and proprietary nature (the "Proprietary
Information"), which may include (without limitation) trade secrets, know-how, designs, formulas, processes, data and information regarding the Company's personnel, plans, operations, customers, prices, costs or financial condition.  Except for appropriate actions related to its activities under this Agreement by PacificWave and its employees, PacificWave shall not permit any other person to use the Proprietary Information or disclose to any other person any of the Proprietary Information, except
with the prior written consent of the Company.  PacificWave shall ensure that the confidentiality of the Proprietary Information is maintained by its employees, contractors, affiliates and agents.  Upon termination of this Agreement, any Proprietary Information possessed by PacificWave, including duplicates, shall be destroyed or delivered to the Company and shall not be retained, furnished or communicated to any third party in any form.  The foregoing obligations shall not apply
to disclosures of Proprietary Information required by court order or applicable laws or to information which, through no wrongful act or inaction or any breach on the part of PacificWave, has become generally known or available to the public, has been furnished to PacificWave by a third party as a matter of right and without restriction on such disclosure, or has been developed independently by PacificWave.

Arbitration

12. The Company and PacificWave agree that any dispute arising out of or in connection with this Agreement shall be resolved solely by confidential binding arbitration in San Francisco, California according to the then current commercial
arbitration rules of JAMS.  Each party shall bear its own attorneys’ fees, expert witness fees, and costs in connection with such arbitration.  This Agreement has been negotiated and drafted by each party, with counsel from each party reviewing the document.  The language in this Agreement shall be construed as to its fair meaning and not strictly for or against any party.  This Agreement, and any dispute arising hereunder, shall be governed by California law, without giving effect to
any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than California. 

Governing Law

13. This Agreement shall be governed by the laws of the State of California; without regard to its conflicts of law provisions.

 

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Attorney’s Fees

14. If any party to this Agreement brings an action directly or indirectly based on this Agreement, the prevailing party shall be entitled to reasonable expenses therefor, including but not limited to, attorney’s fees and court costs.

Assignment

15. This Agreement and the rights and obligations of the parties hereto shall bind and inure to the benefit of any successor or successors of the Company by reorganization, merger, consolidation or otherwise and any assignee of all or
substantially all of its business and properties.  Subject to the Company’s prior approval in writing, PacificWave shall have the right to assign its rights under this Agreement to any person or entity as specified in writing with notice of assignment sent to the Company by mail and/or facsimile.

Notices

16. Any notice required or permitted to be given to any of the parties to this Agreement will be in writing and may be given by prepaid registered post, electronic facsimile transmission or other means of electronic communication capable
of producing a printed copy to the address of such party first above stated or such other address as any party may specify by notice in writing to the other parties and any such notice will be deemed to have been given and received by the party to whom it was addressed if mailed, on the third day following the mailing thereof, if by facsimile or other electronic communication, on successful transmission, or, if delivered, on delivery; but if at the time of mailing or between the time of mailing and the third
business day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered.

Authorization

17. Each of the undersigned parties, respectively, hereby represents and warrants that he/she is duly authorized to execute this Agreement and that this Agreement, when executed, shall become a valid, binding and legally enforceable obligation,
enforceable in accordance with the terms and conditions set forth herein, except as may be limited by general principles of equity and by bankruptcy and other laws affecting creditors’ rights generally.

Entire Agreement, Modifications and Waivers

18. This Agreement sets forth the complete terms and conditions between the parties with respect to the subject matter hereof, and may not be amended except in another written document executed by all of the parties.  All prior
and contemporaneous conversations, negotiations, possible and alleged agreements, representations, warranties and covenants concerning the subject matter hereof are merged herein.  Waiver of or failure to exercise any rights provided by this Agreement in any respect shall not be deemed a waiver of any further or future rights.  

 

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Execution

19. This Agreement may be executed in any number of counterparts each of which shall be enforceable against the parties executing such counterparts, and all of which together shall constitute a single document.  Except as otherwise
stated herein, in lieu of the original documents, a facsimile transmission or copy of the original documents shall be as effective and enforceable as the original.

Construction

20. This Agreement shall be fairly interpreted in accordance with its terms and without any strict construction in favor of or against either party.  Any ambiguity shall not be interpreted against the drafting party.

Further Assurances

21. The parties will execute and deliver all such further documents, do or cause to be done all such further acts and things, and give all such further assurances as may be necessary to give full effect to the provisions and intent of
this Agreement.

Currency

22. Unless otherwise provided, all dollar amounts referred to in this Agreement are in lawful money of the United States of America.

Number and Gender

23. All references to any party, whether a party to this Agreement or not, will be read with such changes in number and gender as the context or reference requires.  When the context hereof makes it possible, the word “person”
appearing in this Agreement includes in its meaning any firm and any body corporate or politic.

 

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Set-Off

24. The obligation of the Company to make all payments hereunder will be absolute and unconditional and will not be affected by any circumstance, including, without limitation, any set-off, compensation, counterclaim, recoupment, defence,
or other right which the Company may have against PacificWave, or anyone else for any reason whatsoever.

Please confirm that the foregoing is in accordance with your understanding by initialing each page in the lower right hand corner, and signing and dating this letter in the spaces provided below, and faxing a copy to our Los Angeles telefax no. (240) 220.6348.

Sincerely, 

 

PACIFICWAVE PARTNERS LIMITED 

 

	 	 	 	 
	
/s/ Henrik Rouf
	 	 	 
	
Henrik Rouf
	 	 	 
	
Managing Director
	 	 	 

 

The foregoing has been read, understood and approved:

 

GENOVA BIOTHERAPEUTICS, INC.

 

	 	 	 	 	 	 	 
	By:	
/s/ Aaron Whitman
	  Dated: 	September  8, 2009	 	 	 
	 	
Aaron Whiteman
	 	 	 	 	 
	 	
President and CEO
	 	 	 	 	 

  

8exh10_1.htm

 

 

 

 

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made as of this 15th day of September, 2009 by and between Tortoise Capital Resources Corporation, a Maryland corporation having its principal place of business in Leawood, Kansas (the “Company”), and Tortoise Capital Advisors, L.L.C., a Delaware
limited liability company having its principal place of business in Leawood, Kansas (the “Advisor”).

 

WHEREAS, the Company is a newly organized, non-diversified management investment company that is not at this time registered under the Investment Company Act of 1940, as amended (the “1940 Act”);

 

WHEREAS, the Advisor is registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), as an investment advisor and engages in the business of acting as an investment advisor;

 

WHEREAS, the Company and the Advisor desire to enter into an agreement to provide for investment advisory services to the Company upon the terms and conditions hereinafter set forth; and

 

NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

 

1.   Appointment of Advisor.

 

The Company appoints the Advisor to act as manager and investment advisor to the Company for the period and on the terms herein set forth. The Advisor accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.

 

2.   Duties of the Advisor.

 

Subject to the overall supervision and review of the Board of Directors of the Company (“Board”), the Advisor will regularly provide the Company with investment research, advice and supervision and will furnish continuously an investment program for the Company, consistent with the investment objective and policies of the Company.   The
Advisor will provide, on behalf of the Company, any managerial assistance requested by the portfolio companies of the Company.  The Advisor will determine from time to time what securities shall be purchased for the Company, what securities shall be held or sold by the Company and what portion of the Company’s assets shall be held uninvested as cash or in other liquid assets, subject always to the provisions of the Company’s Articles of Incorporation, Bylaws, Confidential Offering Memorandum
for the initial private offering of its common shares (the “Memorandum”), and any subsequent registration statement of the Company under the 1940 Act and under the Securities Act of 1933 (the “1933 Act”) covering the Company’s shares, as filed with the Securities and Exchange Commission (the “Commission”), as any of the same may be amended from time to time, and to the investment objectives of the Company, as each of the same shall be from time to time in effect, and
subject, further, to such policies and instructions as the Board may from time to time establish.  To carry out such determinations, the Advisor will exercise full discretion and act for the Company in the same manner and with the same force and effect as the Company itself might or could do with respect to purchases, sales or other transactions, as well as with respect to all other things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions.  Without
limiting the generality of the foregoing, the Advisor shall, during the term and subject to the provisions of this Agreement, (i) determine the composition of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identify, evaluate and negotiate the structure of the investments made by the Company; (iii) perform due diligence on prospective portfolio companies; (iv) close and monitor the Company’s investments; (v) provide the Company
with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds.

 

3.   Administrative Duties of the Advisor.

 

The Advisor agrees to furnish office facilities and clerical and administrative services necessary to the operation of the Company (other than services provided by the Company’s custodian, accounting agent, administrator, dividend and interest paying agent and other service providers).  The Advisor is authorized to conduct
relations with custodians, depositaries, underwriters, brokers, dealers, placement agents, banks, insurers, accountants, attorneys, pricing agents, and other persons as may be deemed necessary or desirable.  To the extent requested by the Company, the Advisor shall (i) oversee the performance of, and payment of the fees to, the Company’s service providers, and make such reports and recommendations to the Company’s Board of Directors (the “Board”) concerning such matters as the
parties deem desirable; (ii) respond to inquiries and otherwise assist such service providers in the preparation and filing of regulatory reports, proxy statements, shareholder communications and the preparation of Board materials and reports; (iii) establish and oversee the implementation of borrowing facilities or other forms of leverage authorized by the Board; and (iv) supervise any other aspect of the Company’s administration as may be agreed upon by the Company and the Advisor. The Company shall reimburse
the Advisor or its affiliate for all out-of-pocket expenses incurred in providing the services set forth in this Section 3.

 

4.   Delegation of Responsibilities.

 

The Advisor is authorized to delegate any or all of its rights, duties and obligations under this Agreement to one or more sub-advisors, and may enter into agreements with sub-advisors, and may replace any such sub-advisors from time to time in its discretion, in accordance with the 1940 Act, the Advisers Act, and rules and regulations
thereunder, as such statutes, rules and regulations are amended from time to time or are interpreted from time to time by the staff of the Commission, and if applicable, exemptive orders or similar relief granted by the Commission, and upon receipt of approval of such sub-advisors by the Board and by shareholders (unless any such approval is not required by such statutes, rules, regulations, interpretations, orders or similar relief).  The Company hereby acknowledges that the Advisor has retained Kenmont
Investments Management, L.P. (“Kenmont”) to provide certain services for the benefit of the Company.  The Advisor shall compensate Kenmont for the services so provided.  The Advisor hereby indemnifies and agrees to hold harmless the Company from any obligation to pay Kenmont or any other sub-advisor or reimburse Kenmont or any other sub-advisor for any fees or expenses incurred by such party in providing services to or for the benefit of the Company.  The Company hereby
agrees to indemnify and hold harmless Kenmont or any other sub-advisor for any claim against any such person based on information provided in the Offering Memorandum of the Company dated September 13, 2005, the Supplement to such Offering Memorandum dated November 21, 2005, or the Closing Supplement to such Offering Memorandum dated December 1, 2005 (collectively, the “Disclosure”) other than any claim resulting from information provided by such indemnified party for inclusion in the Disclosure.

 

5.   Independent Contractors.

 

The Advisor and any sub-advisors shall for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Company in any way or otherwise be deemed to be an agent of the Company.

 

6.   Compliance with Applicable Requirements.

 

In carrying out its obligations under this Agreement, the Advisor shall at all times conform to:

 

	
a.  
	
all applicable provisions of the 1940 Act and the Advisers Act and any applicable rules and regulations adopted thereunder;

 

	
b.  
	
the provisions of the Memorandum or any subsequent registration statement of the Company, as the same may be amended from time to time under the 1933 Act, including without limitation, the investment objectives set forth therein;

 

	
c.  
	
the provisions of the Company’s Articles of Incorporation, as the same may be amended from time to time;

 

	
d.  
	
the provisions of the Bylaws of the Company, as the same may be amended from time to time

 

	
e.  
	
all policies, procedures and directives adopted by the Board; and

 

	
f.  
	
any other applicable provisions of state, federal or foreign law.

 

7.   Policies and Procedures.

 

The Advisor has adopted and implemented written policies and procedures reasonably designed to prevent violation of the Federal Securities laws by the Advisor.  The Advisor shall provide the Company, at such times as the Company shall  reasonably request, with a copy of such policies and procedures and a report of such
policies and procedures; such report shall be of sufficient scope and in sufficient detail as may reasonably be required to comply with Rule 38a-1 under the 1940 Act and to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the reports shall so state.

 

8.   Brokerage.

 

The Advisor is responsible for decisions to buy and sell securities for the Company, broker-dealer selection, and negotiation of brokerage commission rates.  The Advisor’s primary consideration in effecting a security transaction will be to obtain the best execution.  In selecting a broker-dealer to execute a
particular transaction, the Advisor will take the following into consideration: the best net price available; the reliability, integrity and financial condition of the broker-dealer; the size of and the difficulty in executing the order; and the value of the expected contribution of the broker-dealer to the investment performance of the Company on a continuing basis.  Accordingly, the price to the Company in any transaction may be less favorable than that available from another broker-dealer if the
difference is reasonably justified by other aspects of the execution services offered.

 

Subject to such policies as the Board may from time to time determine, the Advisor shall not be deemed to have acted unlawfully, or to have breached any duty created by this Agreement or otherwise, solely by reason of its having caused the Company to pay a broker or dealer that provides brokerage and research services to the Advisor an
amount of commission for effecting a Company investment transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction, if the Advisor determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Advisor’s overall responsibilities with respect to the Company and to other clients
of the Advisor as to which the Advisor exercises investment discretion.  The Advisor is further authorized to allocate the orders placed by it on behalf of the Company to such brokers and dealers who also provide research or statistical material or other services to the Company, the Advisor or to any sub-advisor.  Such allocation shall be in such amounts and proportions as the Advisor shall determine and the Advisor will report on said allocations regularly to the Board indicating the brokers
to whom such allocations have been made and the basis therefore.

 

9.   Books and Records.

 

The Advisor will maintain complete and accurate records in respect of all transactions relating to the Company’s portfolio.  The Advisor will keep or will cause to be kept records in respect of all such portfolio transactions executed on behalf of the Company.  To the extent permitted by applicable law, the Advisor
shall provide access to its books and records relating to the Company as the Company may reasonably request.  The Advisor shall have access at all reasonable times to books and records maintained for the Company to the extent necessary for the Advisor to comply with all applicable securities or other laws to which it is subject, and further provided that the Company shall produce copies of such records and books whenever reasonably required to do so by the Advisor for the purpose of legal proceedings
or dealings with any governmental or regulatory authorities or for its internal compliance procedures.

 

10.   Compensation.

 

For the services, payments and facilities to be furnished hereunder by the Advisor, the Advisor shall receive from the Company the following compensation:

 

	
a.  
	
Base Management Fee.  The Advisor shall receive quarterly a base management fee (the “Base Management Fee”) equal to .375% (1.50% annualized) of the Company’s average monthly Managed Assets for such quarter.  “Managed Assets” means the total
assets of the Company (including any assets purchased with or attributable to any borrowed funds) minus accrued liabilities other than (1) deferred taxes and (2) debt entered into for the purpose of leverage.  Accrued liabilities are expenses incurred in the normal course of the Company’s operations.  The Base Management Fee shall be calculated quarterly and paid quarterly in arrears within thirty (30) days of the end of each fiscal quarter.  The Company’s Managed Assets
shall be computed in accordance with any applicable policies and determinations of the Board of Directors.  In case of the initiation or termination of the Agreement during any fiscal quarter, the Base Management Fee for that quarter shall be reduced proportionately on the basis of the number of calendar days during which the Agreement is in effect, and the fee shall be computed upon the basis of the average Managed Assets for the business days the Agreement is in effect for that fiscal quarter.

 

	
b.  
	
Incentive Fee.  The Advisor shall receive an incentive fee (the “Incentive Fee”).  The Incentive Fee shall consist of two parts, as follows:

 

(i) Investment Income Fee.  The Advisor shall receive an investment income fee (the “Investment Income Fee”) equal to 15% of the excess, if any, of the Company’s Net Investment Income for
the fiscal quarter over a quarterly hurdle rate equal to 2% (8% annualized), multiplied, in either case, by the Company’s average monthly Net Assets for the quarter.  “Net Assets” means the Managed Assets less deferred taxes, debt entered into for the purposes of leverage and the aggregate liquidation preference of outstanding preferred shares.  “Net Investment Income” means interest income (including accrued interest that we have not yet received in cash), dividend
and distribution income from equity investments (but excluding that portion of cash distributions that are treated as a return of capital), and any other income (including any fees such as commitment, origination, syndication, structuring, diligence, monitoring, and consulting fees or other fees that the Company is entitled to receive from portfolio companies) accrued during the fiscal quarter, minus the Company’s operating expenses for such quarter (including the Base Management Fee, expenses payable pursuant
to Section 11 below, any interest expense, any accrued income taxes related to net investment income, and dividends paid on issued and outstanding preferred stock, if any, but excluding the Incentive Fee payable hereunder).  Net Investment Income also includes, in the case of investments with a deferred interest or income feature (such as original issue discount, debt or equity instruments with a payment-in-kind feature, and zero coupon securities), accrued income that the Company has not yet received
in cash.  Net Investment Income does not include any realized capital gains, realized capital losses, or unrealized capital appreciation or depreciation.  The Investment Income Fee shall be calculated and payable quarterly in arrears within thirty (30) days of the end of each fiscal quarter, with the fee first accruing from the first anniversary of the day the Company receives the proceeds from its initial offering of common shares (the “Commencement of Operations”).  The
Investment Income Fee calculation shall be adjusted appropriately on the basis of the number of calendar days in the first fiscal quarter the fee accrues or the fiscal quarter during which the Agreement is in effect in the event of termination of the Agreement during any fiscal quarter.

 

(ii) Capital Gains Fee.  The Advisor shall receive a capital gains fee (the “Capital Gains Fee”) equal to:  (A) 15% of
(i) the Company’s net realized capital gains (realized capital gains less realized capital losses) on a cumulative basis from the Commencement of Operations to the end of each fiscal year, less (ii) any unrealized capital depreciation at the end of such fiscal year, less (B) the aggregate amount of all Capital Gains Fees paid to the Advisor in prior fiscal years.  The calculation of the Capital Gains Fee will not include any capital gains that result from that portion of any scheduled periodic
distributions made possible by the normally recurring cash flow from the operations of portfolio companies (“Expected Distributions”) that are characterized by the Company as return of capital for U.S. generally accepted accounting principles purposes.  In that regard, any such return of capital will not be treated as a decrease in our cost basis of an investment for purposes of calculating the Capital Gains Fee.  This does not apply to any portion of any distribution from a portfolio
company that is not an Expected Distribution.  Except as set forth in the last sentence of this paragraph, the Capital Gains Fee shall be calculated and payable annually within thirty (30) days of the end of each fiscal year.  For the purposes of this paragraph, realized capital gains on a security will be calculated as the excess of the net amount realized from the sale or other disposition of such security over the adjusted cost basis for the security.  Realized capital losses
on a security will be calculated as the amount by which the net amount realized from the sale or other disposition of such security is less than the adjusted cost basis of such security.  Unrealized capital depreciation on a security will be calculated as the amount by which the Company’s adjusted cost basis of such security exceeds the fair value of such security at the end of a fiscal year.  All fiscal year-end valuations will be determined by the Company in accordance with generally
accepted accounting principles, the 1940 Act (even if such valuation is made prior to the date on which the Company has elected to be regulated as a business development company), and the policies and procedures of the Company to the extent consistent therewith.  If the Company’s shares of common stock become listed on any national securities exchange or automated dealer quotation system, then the Advisor shall use at least 25% of any Capital Gains Fee received on or prior to the second anniversary
of the Commencement of Operations to purchase the Company’s common stock in the open market.  In the event this Agreement is terminated, the Capital Gains Fee calculation shall be undertaken as of, and any resulting Capital Gains Fee shall be paid within thirty (30) days of, the date of termination.

 

The Advisor may, from time to time, waive or defer all or any part of the compensation described in this Section 10.  The parties do hereby expressly authorize and instruct the Company’s administrator, or its successors, to calculate the fee payable hereunder and to remit all payments specified herein to the Advisor.

 

11.   Expenses of the Advisor.

 

The compensation and allocable routine overhead expenses of all investment professionals of the Advisor and its staff, when and to the extent engaged in providing investment advisory services required to be provided by the Advisor under Section 2 hereof, will be provided and paid for by the Advisor and not by the Company.   It
is understood that the Company will pay all expenses other than those expressly stated to be payable by the Advisor hereunder, which expenses payable by the Company shall include, without limitation the following:

 

(i) other than as set forth in the first sentence of this Section 10 above, expenses of maintaining the Company and continuing its existence and related overhead, including, to the extent such services are provided
by personnel of the Advisor or its affiliates, office space and facilities and personnel compensation, training and benefits,

 

(ii) commissions, spreads, fees and other expenses connected with the acquisition, holding and disposition of securities and other investments including placement and similar fees in connection with direct placements
entered into on behalf of the Company,

 

(iii) auditing, accounting and legal expenses,

 

(iv) taxes and interest,

 

(v) governmental fees,

 

(vi) expenses of listing shares of the Company with a stock exchange, and expenses of issue, sale, repurchase and redemption (if any) of interests in the Company, including expenses of conducting tender offers for the
purpose of repurchasing Company securities,

 

(vii) expenses of registering and qualifying the Company and its securities under federal and state securities laws and of preparing and filing registration statements and amendments for such purposes,

 

(viii) expenses of communicating with shareholders, including website expenses and the expenses of preparing, printing, and mailing press releases, reports and other notices to shareholders and of meetings of shareholders
and proxy solicitations therefor,

 

(ix) expenses of reports to governmental officers and commissions,

 

(x) insurance expenses,

 

(xi) association membership dues,

 

(xii) fees, expenses and disbursements of custodians and subcustodians for all services to the Company (including without limitation safekeeping of funds, securities and other investments, keeping of books, accounts
and records, and determination of net asset values),

 

(xiii) fees, expenses and disbursements of transfer agents, dividend and interest paying agents, shareholder servicing agents and registrars for all services to the Company,

 

(xiv) compensation and expenses of directors of the Company who are not members of the Advisor’s organization,

 

(xv) pricing, valuation, and other consulting or analytical services employed in considering and valuing the actual or prospective investments of the Company,

 

(xvi) all expenses incurred in leveraging of the Company’s assets through a line of credit or other indebtedness or issuing and maintaining preferred shares,

 

(xvii) all expenses incurred in connection with the organization of the Company and any offering of common shares, and

 

(xviii) such non-recurring items as may arise, including expenses incurred in litigation, proceedings and claims and the obligation of the Company to indemnify its directors, officers and shareholders with respect thereto.

 

12.   Covenants of the Advisor.

 

The Advisor covenants that it is registered as an investment adviser under the Investment Advisers Act of 1940.  The Advisor agrees that its activities will at all times be in compliance in all material respects with all applicable federal and state laws governing its operations and investments.

 

13.   Non-Exclusivity.

 

The Company understands that the persons employed by the Advisor to assist in the performance of the Advisor’s duties under this Agreement may not devote their full time to such service and nothing contained in this Agreement shall be deemed to limit or restrict the right of the Advisor or any affiliate of the Advisor to engage in
and devote time and attention to other businesses or to render services of whatever kind or nature, so long as the Advisor’s services to the Company are not impaired by the provision of such services to others.  The Company further understands and agrees that managers of the Advisor may serve as officers or directors of the Company, and that officers or directors of the Company may serve as managers of the Advisor to the extent permitted by law; and that the managers of the Advisor are not prohibited
from engaging in any other business activity or from rendering services to any other person, or from serving as partners, officers or directors of any other firm or company, including other investment advisory companies.

 

14.   Consent to the Use of Name.

 

The Advisor hereby consents to the royalty free use by the Company of the name “Tortoise” as part of the Company’s name and consents to the royalty free use of the related “Tortoise” logo; provided, however, that such consents shall be conditioned upon the employment of the Advisor or one of its approved affiliates
as the investment advisor of the Company.  The name “Tortoise” and the related “Tortoise” logo or any variation thereof may be used from time to time in other connections and for other purposes by the advisor and its affiliates and other investment companies that have obtained consent to the use of the name “Tortoise”.  The Advisor shall have the right to require the Company to cease using the name “Tortoise” as part of the Company’s name
and the related “Tortoise” logo if the Company ceases, for any reason, to employ the Advisor or one of its approved affiliates as the Company’s investment advisor.  Future names adopted by the Company for itself, insofar as such names include identifying words requiring the consent of the Advisor, shall be the property of the Advisor and shall be subject to the same terms and conditions.

 

15.   Effective Date, Term and Approval.

 

This Agreement shall become effective with respect to the Company, if approved by the shareholders of the Company, as of the date of execution above.  This Agreement shall continue in force and effect through December 31, 2010, and may be continued from year to year thereafter, provided that the continuation of the Agreement
is specifically approved at least annually:

	
a.  
	
(i) by the Board or (ii) by the vote of “a majority of the outstanding voting securities” of the Company (as defined in Section 2(a)(42) of the 1940 Act); and

 

	
b.  
	
by the affirmative vote of a majority of the directors who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of a party to this Agreement (other than as directors of the Company), by votes cast in person at a meeting specifically called for such purpose.

 

16.   Termination.

 

This Agreement may be terminated by the Company at any time, without the payment of any penalty by the Company, by vote of the Board or by vote of a majority of the outstanding voting securities of the Company, on no more than sixty (60) days’ written notice to the Advisor.  This Agreement may be terminated by the Advisor
at any time, without the payment of any penalty by the Advisor, on no less than sixty (60) days’ written notice to the Company.  The notice provided for herein may be waived by the party entitled to receipt thereof.  This Agreement shall automatically terminate in the event of its assignment, the term “assignment” for purposes of this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.  Upon termination pursuant to this Section 14, the Advisor,
at the Company’s request, must deliver all copies of books and records maintained in accordance with this Agreement and applicable law.

 

17.   Amendment.

 

No amendment of this Agreement shall be effective unless it is in writing and signed by the party against which enforcement of the amendment is sought.  No amendment to Section 10 or Section 11 of this Agreement shall be effective unless it is approved by the vote of a majority of the outstanding voting securities of the
Company.

 

18.   Liability of Advisor.

 

The Advisor will not be liable in any way for any default, failure or defect in any of the securities comprising the Company’s portfolio if it has satisfied the duties and the standard of care, diligence and skill set forth in this Agreement.  However, the Advisor shall be liable to the Company for any loss, damage, claim,
cost, charge, expense or liability resulting from the Advisor’s willful misconduct, bad faith or gross negligence or disregard by the Advisor of the Advisor’s duties or standard of care, diligence and skill set forth in this Agreement or a material breach or default of the Advisor's obligations under this Agreement.

 

19.   Third Party Beneficiaries

 

The Company acknowledges and agrees that Kenmont is a permitted third party beneficiary of Sections 4 and 10 hereof for the limited purposes of:  (i) enforcing the indemnification offered to Kenmont by the Company in Section 4 and (ii) enforcing, on behalf of the Advisor, the payment obligations owed to the
Advisor pursuant to Section 10.

 

20.   Notices.

 

Any notices under this Agreement shall be in writing, addressed and delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice.  Until further notice to the other party, it is agreed that the address of the Company and
that of the Advisor shall be 11550 Ash Street, Suite 300, Leawood, Kansas 66211.

 

 

 

 

21.   Questions of Interpretation.

 

Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United States courts
or in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to said Acts.  In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of the Agreement is revised by rule, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order.  Subject to the foregoing, this Agreement shall be governed by and construed
in accordance with the laws (without reference to conflicts of law provisions) of the State of Delaware.

 

[Signature page to follow.]

 

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective duly authorized officers on the day and year first written above.

 

TORTOISE CAPITAL RESOURCES CORPORATION

By:    /s/ Terry Matlack                                                                                 

Name:  Terry Matlack

Title:    Chief Financial Officer

TORTOISE CAPITAL ADVISORS, L.L.C.

By:    /s/ H. Kevin Birzer 

Name:  H. Kevin Birzer

Title:    Senior Managing Director

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