EX-99.H
Published on February 8, 2011
Exhibit (h)
EXECUTION COPY
TRIANGLE CAPITAL CORPORATION
3,000,000 Shares of Common Stock
UNDERWRITING AGREEMENT
February 8, 2011
Morgan Keegan & Company, Inc.
Robert W. Baird & Co. Incorporated
BB&T Capital Markets
A Division of Scott & Stringfellow, LLC
Janney Montgomery Scott LLC
JMP Securities LLC
c/o Morgan Keegan & Company, Inc.
50 N. Front Street, 12th Floor
Memphis, TN 38103
Robert W. Baird & Co. Incorporated
BB&T Capital Markets
A Division of Scott & Stringfellow, LLC
Janney Montgomery Scott LLC
JMP Securities LLC
c/o Morgan Keegan & Company, Inc.
50 N. Front Street, 12th Floor
Memphis, TN 38103
Ladies and Gentlemen:
Triangle Capital Corporation, a corporation established under the laws of Maryland (the
Company) confirms its agreement with Morgan Keegan & Company, Inc. (Morgan Keegan), Robert W.
Baird & Co. Incorporated (Baird), BB&T Capital Markets, a division of Scott & Stringfellow, LLC
(BB&T), Janney Montgomery Scott LLC (Janney Montgomery), JMP Securities LLC (JMP Securities)
and any other Underwriters named in Schedule A hereto (collectively, the Underwriters, which term
shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), with
respect to the issue and sale by the Company of a total of 3,000,000 shares of common stock, par
value $0.001 per share (the Initial Securities), and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of Initial Securities set forth in said
Schedule A hereto, and with respect to the grant by the Company to the Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 450,000 additional shares to cover over-allotments, if any (the Over-Allotment
Securities). The Initial Securities and Over-Allotment Securities are hereinafter called,
collectively, the Securities. Certain terms used in this Agreement are defined in Section 17
hereof.
The Company understands that the Underwriters propose to make a public offering of the
Securities as soon as the Underwriters deem advisable after this Agreement has been executed and
delivered.
The Company owns (i) 99.9% of the limited partnership interests in Triangle Mezzanine Fund
LLLP, a limited liability limited partnership established under the laws of North Carolina (Fund
I), (ii) 99.9% of the limited partnership interests in Triangle Mezzanine Fund II LP, a Delaware
limited partnership (Fund II, and together with Fund I, the Funds), (iii) 100% of the equity
interests of New Triangle GP, LLC, a North Carolina limited liability company and
the general partner of Fund I (GP I), and (iv) 100% of the equity interests of New Triangle
GP, LLC, a Delaware limited liability company and the general partner of Fund II (GP II, and
together with GP I, the General Partners). The Company, the Funds and the General Partners are
hereinafter referred to collectively as the Triangle Entities.
The Company has prepared and filed, pursuant to the 1933 Act, with the Commission a
registration statement on Form N-2 (File number 333-151930), which registers the offer and sale of
common stock, par value $0.001 per share, of the Company to be issued from time to time by the
Company, including the Securities. The Company filed a Form N-54A Notification of Election to be
Subject to Sections 55 through 65 of the 1940 Act Filed Pursuant to Section 54(a) of the 1940 Act
(File number 814-00733) with the Commission on November 3, 2006, under the 1940 Act.
The registration statement, as amended by the post-effective amendment thereto filed with the
Commission on June 9, 2010, including the exhibits and schedules thereto, at the time it became
effective on August 12, 2010, and as thereafter amended by any subsequent post-effective amendment,
and including any information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 497 under the 1933 Act with respect to the offer, issuance and/or sale of the
Securities and deemed to be a part of the registration statement at the time of effectiveness
pursuant to Rule 430C under the 1933 Act, and also including any Rule 462(b) Registration Statement
filed pursuant to Rule 462(b) under the 1933 Act, is hereinafter referred to as the Registration
Statement. The prospectus, dated as of August 12, 2010 included in the Registration Statement at
the time it became effective on August 12, 2010 is hereinafter referred to as the Base
Prospectus. The Base Prospectus, together with the preliminary prospectus supplement, dated
February 7, 2011, filed with the Commission pursuant to Rule 497 under the 1933 Act, is hereinafter
referred to as the Preliminary Prospectus. The Base Prospectus, together with the prospectus
supplement to be filed with the Commission pursuant to Rule 497 and used to confirm sales of the
Securities, is hereinafter referred to as the Prospectus.
The Preliminary Prospectus, together with the information set forth on Schedule B
hereto (which information the Underwriters have informed the Company is being conveyed orally by
the Underwriters to prospective purchasers at or prior to the Underwriters confirmation of sales
of the Securities in the public offering) is hereinafter referred to as the Disclosure Package.
Section 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents and warrants
to each Underwriter as of the date hereof, as of the Applicable Time, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Option Closing Time (if any) referred to in
Section 2(b) hereof, and agrees with each Underwriter, as follows:
(1) Compliance with Registration Requirements. (i) The Securities have been duly
registered under the 1933 Act pursuant to the Registration Statement. The Company meets the
requirements for use of Form N-2 under the 1933 Act. The Registration Statement has become
effective under the 1933 Act, and no stop order suspending the effectiveness of the Registration
Statement or the use of the Preliminary Prospectus or the Prospectus has been issued, and no
proceedings for any such purpose, have been instituted or are pending or, to a Triangle Entitys
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knowledge, are contemplated by the Commission, and any request on the part of the Commission
for additional information with respect thereto has been complied with.
(ii) At the respective times the Registration Statement, and any subsequent post-effective
amendment thereto, became effective, at the Closing Time and as of each Option Closing Time (if
any), the Registration Statement, and all amendments and supplements thereto, complied and will
comply in all material respects with the requirements of the 1933 Act and the 1940 Act, and did not
and 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. Neither
the Prospectus nor any amendment or supplement thereto, as of its date, at the time the Prospectus
or any such amendment or supplement was issued, at the Closing Time and as of each Option Closing
Time (if any), included or will include any untrue statement of a material fact or omitted or will
omit to state any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The representations and warranties in
this subsection shall not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information furnished to the Company by or
on behalf of any Underwriter for use in the Registration Statement or Prospectus, it being
understood and agreed that the only such information furnished to the Company in writing by the
Underwriters consists of the information described in Section 6(c) hereof.
(iii) The Disclosure Package as of the Applicable Time does not include any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from the Disclosure Package based
upon and in conformity with information relating to any Underwriter furnished to the Company in
writing by any Underwriter or its representative expressly for use therein, it being understood and
agreed that the only such information furnished by the Underwriters to the Company consists of the
information described in Section 6(c) hereof.
(iv) The Preliminary Prospectus when first filed under Rule 497 and as of its date complied in
all material respects with the 1933 Act, and when filed by electronic transmission pursuant to
EDGAR (except as may be permitted by Regulation S-T under the 1933 Act), was substantially
identical to the copy thereof delivered to the Underwriters for use in connection with this
offering. The Prospectus when first filed under Rule 497 and as of its date will comply in all
material respects with the 1933 Act, and when filed by electronic transmission pursuant to EDGAR
(except as may be permitted by Regulation S-T under the 1933 Act), will be substantially identical
to the copy thereof delivered to the Underwriters for use in connection with this offering.
(v) The Companys registration statement on Form 8-A under the 1934 Act is effective.
(2) Independent Registered Public Accounting Firm. Ernst & Young LLP, who audited the
financial statements and supporting schedules, if any, included in the Registration Statement, the
Preliminary Prospectus and the Prospectus is an independent registered public
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accounting firm as required by all applicable provisions of the 1933 Act and the 1934 Act and
the rules and regulations of the Public Company Accounting Oversight Board.
(3) Financial Statements. The consolidated financial statements of the Company
included in the Registration Statement, the Preliminary Prospectus and the Prospectus, together
with the related schedules (if any) and notes thereto, present fairly the consolidated financial
position of the Company at the dates indicated and the consolidated results of operations and
consolidated cash flows of the Company for the periods specified; and all such financial statements
have been prepared in conformity with GAAP applied on a consistent basis throughout the periods
involved and comply with all applicable accounting requirements under the 1933 Act and the 1940
Act, except as may be expressly stated in the related notes thereto. No other financial statements
or supporting schedules are required to be included in the Registration Statement, the Preliminary
Prospectus or the Prospectus. The other financial and statistical information and data included in
the Registration Statement, the Preliminary Prospectus and the Prospectus are accurately derived
from such consolidated financial statements and the books and records of the Company and have been
compiled on a basis consistent with the consolidated financial statements included in the
Registration Statement, the Preliminary Prospectus and the Prospectus.
(4) Expense Summary. The information set forth in the Registration Statement, the
Preliminary Prospectus and the Prospectus in the Fee and Expenses Table has been prepared in
accordance with the requirements of Form N-2 and to the extent estimated or projected, such
estimates or projections are reasonably believed to be attainable and reasonably based.
(5) No Material Adverse Change. Since the respective dates as of which information is
given in the Disclosure Package and the Prospectus, except as otherwise stated or contemplated
therein, there has not been (A) any Material Adverse Effect or any development that could
reasonably be expected to result in a Material Adverse Effect, (B) any transaction entered into by
either Triangle Entity that is material with respect to such Triangle Entity other than in the
ordinary course of its business as described in the Preliminary Prospectus and the Prospectus, (C)
any liability or obligation, direct, indirect or contingent (including any off-balance sheet
obligations), incurred by a Triangle Entity, that is material to such Triangle Entity and (D) any
dividend or distribution of any kind declared, paid or made by a Triangle Entity on any class of
its capital shares.
(6) Good Standing. (i) The Company has been duly incorporated, is validly existing as
a corporation under the laws of Maryland and is in good standing under the laws of Maryland, with
full power and authority to own, lease and operate its properties and to conduct its business as
described in the Preliminary Prospectus and the Prospectus, and to enter into and perform its
obligations under this Agreement and the Material Agreements (as hereinafter defined); and the
Company is duly qualified to transact business and is in good standing under the laws of each
jurisdiction which requires such qualification, except for such jurisdictions where failure to so
qualify or to be in good standing would not, individually or in the aggregate, result in a Material
Adverse Effect. The Articles of Incorporation of the Company, as amended to date, are in full force
and effect.
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(ii) Each of Fund I and Fund II has been duly organized, is validly existing as a limited
liability limited partnership and limited partnership, respectively, under the laws of North
Carolina and Delaware, respectively, and is in good standing under the laws of North Carolina and
Delaware, respectively, each as amended, and the provisions of the North Carolina Revised Uniform
Limited Partnership Act and the Delaware Revised Uniform Limited Partnership Act, respectively,
each as amended, with full power and authority to own, lease and operate its properties and to
conduct its business as described in the Preliminary Prospectus and the Prospectus, and to enter
into and perform its obligations under the Material Agreements to which it is a party; and the each
of the Funds is duly qualified to transact business and is in good standing under the laws of each
jurisdiction which requires such qualification, except for such jurisdictions where failure to so
qualify or to be in good standing would not, individually or in the aggregate, result in a Material
Adverse Effect. The Limited Partnership Agreement of each Fund, as amended to date, is in full
force and effect.
(iii) Each of GP I and GP II has been duly organized, is validly existing as a limited
liability company and is in good standing under the laws of North Carolina and Delaware,
respectively, with full power and authority to own, lease and operate its properties and to conduct
its business as described in the Preliminary Prospectus and the Prospectus; and each General
Partner is duly qualified to transact business and is in good standing under the laws of each
jurisdiction which requires such qualification, except for such jurisdictions where the failure to
qualify or to be in good standing would not, individually or in the aggregate, result in a Material
Adverse Effect.
(7) Subsidiaries; Portfolio Companies. The Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities of any corporation
or other entity other than (i) 99.9% of the equity interests of each of the Funds and 100% of the
equity interests of each of the General Partners, (ii) those corporations and other entities
described in the Preliminary Prospectus and the Prospectus under the caption Portfolio Companies
(each, a Portfolio Company) or (iii) as disclosed under Item 28 of the Registration Statement.
The Company or the Fund has duly authorized and executed enforceable agreements with respect to the
investments described in the Preliminary Prospectus and the Prospectus under the caption Portfolio
Companies.
(8) Business Development Company Status. Each of the Company and Fund I has duly
elected to be regulated as a business development company (BDC) under the 1940 Act and has filed
with the Commission, pursuant to Section 54(a) of the 1940 Act, a duly completed and executed Form
N-54A (the BDC Election). At the time each such BDC Election was filed with the Commission, it
(i) contained all statements required to be stated therein in accordance with, and complied in all
material respects with the requirements of, the 1940 Act, and (ii) did not include any untrue
statement of material fact or omit to state a material fact necessary to make the statements
therein not misleading. Neither the Company nor Fund I has filed with the Commission any notice of
withdrawal of such BDC Election pursuant to Section 54(c) of the 1940 Act. Each BDC Election
remains in full force and effect and, to the Companys knowledge, no order of suspension or
revocation of such election under the 1940 Act has been issued or proceedings therefore initiated
or threatened by the Commission. Fund II is not required to register as an investment company under
the 1940 Act.
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(9) Officers and Directors. Except as disclosed in the Preliminary Prospectus and the
Prospectus, no person is serving or acting as an officer, director or investment advisor of any
Triangle Entity except in accordance with the applicable provisions of the 1940 Act. Except as
disclosed in the Registration Statement, the Preliminary Prospectus and the Prospectus, no director
of a Triangle Entity is (i) an interested person (as defined in the 1940 Act) of such Triangle
Entity or (ii) an affiliated person (as defined in the 1940 Act) of any Underwriter. The Company
has a majority of independent directors as required by the 1934 Act and the rules and regulations
of the New York Stock Exchange. For purposes of this Section 1(a)(9), the Company shall be entitled
to reasonably rely on representations from such officers and directors.
(10) Capitalization. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Preliminary Prospectus and in the Prospectus. All issued and
outstanding shares of common stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable (except as described in the Registration Statement, the
Preliminary Prospectus and the Prospectus) and have been offered and sold or exchanged in
compliance with all applicable laws (including, without limitation, federal and state securities
laws); none of the outstanding shares of common stock of the Company were issued in violation of
the preemptive or other similar rights of any securityholder of the Company. All issued and
outstanding interests of the Fund are owned directly or through a wholly owned subsidiary by the
Company, free and clear of all liens, security interests, encumbrances, equities or claims. No
shares of preferred stock of the Company have been designated, offered, sold or issued, and no
shares of preferred stock are currently outstanding. The description of the Companys equity
incentive plans or arrangements, if any, and the awards or other rights granted thereunder, set
forth in the Preliminary Prospectus and the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements, awards and rights.
(11) Authorization and Description of Securities. The Securities to be sold pursuant
to this Agreement have been duly authorized by the Board of Directors of the Company and such
Securities, when issued and delivered by the Company pursuant to this Agreement against payment of
the consideration set forth herein, will be validly issued and fully paid and non-assessable. The
Securities conform in all material respects to all statements relating thereto contained in the
Registration Statement, the Preliminary Prospectus and the Prospectus and such descriptions conform
to the rights set forth in the instruments defining the same, to the extent such rights are set
forth; and the issuance of the Securities is not subject to the preemptive or other similar rights
of any securityholder of the Company.
(12) Material Agreements. Each agreement required to be described in the Preliminary
Prospectus and the Prospectus has been filed with the Commission (each such agreement, a Material
Agreement and collectively, the Material Agreements) and attached or incorporated by reference
as an exhibit to the Registration Statement and has been accurately and fully described in all
material respects; provided, however, that the Company will file this Agreement in a post-effective
amendment to the Registration Statement pursuant to Rule 462(d). No Triangle Entity has sent or
received notice of, or otherwise communicated or received communication with respect to,
termination of any Material Agreement, nor has any such termination been threatened by any person.
No Triangle Entity is a party to any employment agreements.
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(13) Power and Authority. The Company has full power and authority to execute, deliver
and perform this Agreement.
(14) Authorization of Agreements. This Agreement and the Material Agreements have each
been duly authorized by all requisite action on the part of any Triangle Entity that is a party
thereto, executed and delivered by such Triangle Entity, as of the dates noted therein, and
complies in all material respects with all applicable provisions of the 1940 Act. Assuming due
authorization, execution and delivery by the other parties thereto, each such agreement constitutes
a valid and binding agreement of such Triangle Entity, enforceable in accordance with its terms,
except as rights to indemnity and contribution hereunder and thereunder may be limited by federal
or state securities laws or principles of public policy and subject to the qualification that the
enforceability of such Triangle Entitys obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws relating
to or affecting creditors rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
(15) Absence of Defaults and Conflicts. No Triangle Entity is (i) in violation of its
Organizational Documents, each as amended from time to time, (ii) in breach or default in the
performance or observance of any obligation or the terms of any indenture, contract, lease,
mortgage, note agreement, loan or credit agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or by which it may be bound or to which its property
or assets is subject (collectively, Agreements and Instruments) or (iii) in violation of any law,
ordinance, administrative or governmental rule or regulation applicable to such Triangle Entity or
of any decree of the Commission, any state securities commission, any foreign securities
commission, any national securities exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official having jurisdiction over such
Triangle Entity, except, with respect to clauses (ii) or (iii), to the extent that such breaches,
defaults or violations would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect.
(16) Non-Contravention. The execution, delivery and performance of this Agreement, the
consummation of the transactions contemplated herein and in the Registration Statement, the
Preliminary Prospectus and the Prospectus (including the issuance and sale of the Securities and
the use of the proceeds from the sale of the Securities as described in the Preliminary Prospectus
and the Prospectus under the caption Use of Proceeds), and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time or both, (i) conflict
with or constitute a breach of, or default or Repayment Event (as defined herein) under, the
Agreements and Instruments or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of a Triangle Entity pursuant to the terms of the
Agreements and Instruments (except to the extent that such breaches, defaults or creations or
impositions would not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect), (ii) result in any violation of the provisions of the Organizational Documents of
any Triangle Entity, in each case as amended from time to time, or (iii) result in any violation of
any statute, law, rule, regulation, filing, judgment, order, injunction, writ or decree applicable
to any Triangle Entity or any of its assets, properties or operations (except to the extent that
such
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violations would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect). As used herein, a Repayment Event means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on
such holders behalf) the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by a Triangle Entity, as applicable.
(17) Absence of Proceedings. There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental, regulatory or self-regulatory agency
or body, domestic or foreign, now pending, or, to the Companys knowledge, threatened, against or
affecting any Triangle Entity that is required to be disclosed in the Registration Statement,
Preliminary Prospectus or the Prospectus (other than as disclosed therein), or that could
reasonably be expected to result in a Material Adverse Effect, or that could reasonably be expected
to materially and adversely affect the consummation of the transactions contemplated in this
Agreement or the performance by the Company or any other Triangle Entity of its obligations under
this Agreement or the Material Agreements, as applicable. The aggregate of all pending legal or
governmental proceedings to which any of the Triangle Entities is a party or of which any of their
respective property or assets is the subject that are not described in the Registration Statement,
Preliminary Prospectus or the Prospectus, including ordinary routine litigation incidental to the
business of the Triangle Entities, could not reasonably be expected to result in a Material Adverse
Effect.
(18) Accuracy of Descriptions and Exhibits. The statements set forth under the
headings Capitalization, Risk Factors, Business Development Company and Regulated Investment
Company Elections, Description of Capital Stock, Regulation and Material U.S. Federal Income
Tax Considerations in the Preliminary Prospectus and the Prospectus, and in Item 30 of the
Registration Statement, insofar as such statements purport to summarize certain provisions of the
1940 Act, Maryland law, the SBA Regulations (as defined herein), the shares of common stock, the
Companys Organizational Documents, United States federal income tax law and regulations or legal
conclusions with respect thereto, fairly and accurately summarize such provisions in all material
respects; all descriptions in the Registration Statement, the Preliminary Prospectus and the
Prospectus of any Triangle Entity documents are accurate in all material respects.
(19) Absence of Further Requirements. No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign is necessary or required for the performance by the
Company of its obligations under this Agreement in connection with the offering, issuance, sale or
delivery of the Securities hereunder, or the consummation of the transactions contemplated by this
Agreement, except such as have been already obtained under the 1933 Act, the 1940 Act and the 1934
Act, or as may be required under the rules and regulations of the Financial Industry Regulatory
Authority, Inc. (FINRA), the New York Stock Exchange or state securities laws.
(20) Possession of Licenses and Permits. Each Triangle Entity has such valid and
current licenses, permits, approvals, consents and authorizations of governmental or regulatory
authorities (permits) as are necessary to own its property and to conduct its business in the
manner described in the Preliminary Prospectus and the Prospectus, and no Triangle Entity has
received any notice of proceedings relating to the revocation or modification of, or non-
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compliance with, any permits, and no event has occurred which allows or, after notice or lapse
of time, would allow, revocation, modification or termination thereof or result in any other
material impairment of the rights of the Triangle Entities under any such permit, subject in each
case to such qualification as may be set forth in the Preliminary Prospectus and the Prospectus.
(21) Small Business Investment Company Status. Each of the Funds is licensed to
operate as a Small Business Investment Company (SBIC) by the U.S. Small Business Administration
(SBA). Each of the Funds respective SBIC license is in good standing with the SBA and no adverse
regulatory findings contained in any Examinations Reports prepared by the SBA regarding either of
the Funds are outstanding or unresolved.
(22) SBA Debentures. Each of the Funds is eligible to sell securities guaranteed by
the SBA in the amounts and on the terms described in the Preliminary Prospectus and the Prospectus.
Neither Fund is in default under the terms of any debenture which it has issued to the SBA for
guaranty by the SBA or any other material monetary obligation.
(23) Possession of Intellectual Property. The Triangle Entities own or possess, or can
acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, Intellectual Property) necessary to carry on their business
as described in the Preliminary Prospectus and the Prospectus. The expected expiration of any of
rights to such Intellectual Property would not result in a Material Adverse Effect. The Triangle
Entities have not received any notice or are not otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate to protect the
interest of the Triangle Entities therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect. None of the Intellectual Property employed by
the Triangle Entities has been obtained or is being used by the Triangle Entities in violation of
any contractual obligation binding on either of the Triangle Entities or any of its officers,
directors or employees or otherwise in violation of the rights of any person.
(24) Distribution of Written Offering Material. The Company has not distributed and
will not distribute any written offering material in connection with the offering and sale of the
Securities other than the Preliminary Prospectus and the Prospectus, and such materials as may be
approved by the Underwriters and comply with the requirements of Rule 482 under the 1933 Act.
(25) Absence of Registration Rights. Except as disclosed in the Preliminary Prospectus
and the Prospectus, there are no persons with registration rights or other similar rights to have
any securities (debt, equity or otherwise) (A) registered pursuant to the Registration Statement or
included in the offering contemplated by this Agreement or (B) otherwise registered by the Triangle
Entities under the 1933 Act or the 1940 Act. There are no persons with tag-along rights or other
similar rights to have any securities (debt or equity) included in the offering contemplated by
this Agreement or sold in connection with the sale of Securities by the Company pursuant to this
Agreement.
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(26) New York Stock Exchange. The common stock of the Company is registered pursuant
to Section 12(b) of the 1934 Act and is listed on the New York Stock Exchange. The Company has
taken no action designed to, or likely to have the effect of, terminating the registration of the
common stock of the Company under the 1934 Act or delisting the common stock of the Company from
the New York Stock Exchange, nor has the Company received any notification that the Commission or
the New York Stock Exchange is contemplating terminating such registration or listing. The Company
has continued to satisfy, in all material respects, all New York Stock Exchange listing
requirements.
(27) FINRA Matters. All of the information provided to the Underwriters or to counsel
for the Underwriters by the Company and its officers and directors in connection with letters,
filings or other supplemental information provided to FINRA pursuant to FINRAs conduct rules is
true, complete and correct.
(28) Tax Returns. Each of the Triangle Entities has filed all tax returns that are
required to be filed and have paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the foregoing is due and payable,
except for any such tax, assessment, fine or penalty that is currently being contested in good
faith by appropriate actions and except for such taxes, assessments, fines or penalties the
nonpayment of which would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect. The Company has made adequate charges, accruals and reserves in the
applicable financial statements referred to in the Preliminary Prospectus and the Prospectus in
respect of all federal, state and foreign income and franchise taxes for all periods as to which
the tax liability of any of the Triangle Entities has not been finally determined. The Company is
not aware of any tax deficiency that has been or might be asserted or threatened against any
Triangle Entities that could result in a Material Adverse Effect.
(29) Partnership Tax. At all times from the date of its formation until February 21,
2007, Fund I was treated as a partnership for federal income tax purposes, and not as an
association or publicly traded partnership taxable as a corporation. As of and at all times from
February 22, 2007, Fund I has been a disregarded entity for federal income tax purposes. As of and
at all times from December 15, 2009, Fund II has been a disregarded entity for federal income tax
purposes.
(30) Subchapter M. The Company qualified to be treated as a regulated investment
company (RIC) under Subchapter M of the Code for its taxable year ended December 31, 2009, and
the Company is in compliance with the requirements of the Code necessary to continue to qualify as
a RIC under the Code. The Company intends to direct the investment of the net proceeds of the
offering of the Securities and continue to conduct its activities in such a manner as to comply
with the requirements of Subchapter M of the Code.
(31) Insurance. Each of the Company and Fund I maintain a joint directors and
officers/errors and omissions insurance policy and fidelity bond that complies with the
requirements of Rule 17g-1 under the 1940 Act. Each Triangle Entity and its subsidiaries are
insured for reasonable amounts by such insurance companies and in such amounts as are prudent and
customary in the businesses in which they are engaged.
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(32) Accounting Controls and Disclosure Controls. (i) Each of the Company (together
with its subsidiaries) and Fund I maintains a system of internal control over financial reporting
(as such term is defined in the rules and regulations promulgated under the 1934 Act) sufficient to
provide reasonable assurances that (A) transactions are executed in accordance with managements
general or specific authorizations and with the investment objectives, policies and restrictions of
the Company and Fund I, as applicable, and the applicable requirements of the 1940 Act and the
Code; (B) transactions are recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability and to maintain compliance with the
applicable books and records requirements under the 1940 Act; (C) access to assets is permitted
only in accordance with managements general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. The Companys auditors and the Audit Committee of
the Board of Directors have been advised of (1) any known significant deficiencies in the design or
operation of internal controls that could adversely affect the ability to record, process,
summarize, and report financial data and (2) any known fraud, whether or not material, that
involves management or other employees who have a role in the Companys and the Funds respective
internal control over financial reporting; and such deficiencies or fraud will not result in a
Material Adverse Effect.
(ii) Each of the Company and Fund Is internal control over financial reporting is effective
and neither the Company nor Fund I is aware of any material weakness in their internal control over
financial reporting.
(iii) The Company has established and maintains disclosure controls and procedures (as such
term is defined in the rules and regulations promulgated under the 1934 Act), which are designed to
ensure that material information relating to the Company, including its consolidated subsidiaries,
is made known to the Companys principal executive officer and its principal financial officer by
others within those entities, particularly during the periods in which the periodic reports
required under the 1934 Act are being prepared, and such disclosure controls and procedures are
effective to perform the functions for which they were established.
(33) Compliance with the Sarbanes-Oxley Act. Each of the Company and Fund I is in
compliance with the applicable provisions of the Sarbanes-Oxley Act and the rules and regulations
promulgated in connection therewith, including Sections 302 and 906 related to certifications and
Section 404.
(34) Compliance with Laws. Each of the Company and Fund I (i) has adopted and
implemented written policies and procedures reasonably designed to prevent violation of the Federal
Securities Laws (as that term is defined in Rule 38a-1 under the 1940 Act) by the Company or Fund
I, as applicable, (ii) is conducting its business in compliance with all laws, rules, regulations,
decisions, directives and orders except for such failure to comply which would not reasonably be
expected to result in a Material Adverse Effect and (iii) is conducting its business in compliance
in all material respects with the requirements of the SBA and the 1940 Act.
(35) Investment Adviser Status. No Triangle Entity is currently subject to
registration as an investment adviser under the Investment Advisers Act of 1940, as amended.
11
(36) Absence of Stabilization. No Triangle Entity has taken nor after the date hereof
will take, directly or indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in the stabilization or manipulation of the price of any
security to facilitate the sale or resale of the Securities, and no Triangle Entity is aware of any
such action taken or to be taken by any affiliates of such Triangle Entity.
(37) Statistical, Demographic or Market-Related Data. Any statistical, demographic or
market-related data included in the Registration Statement, the Preliminary Prospectus or the
Prospectus is based on or derived from sources that the Company believes to be reliable and
accurate and all such data included in the Registration Statement, the Preliminary Prospectus or
the Prospectus accurately reflects the materials upon which it is based or from which it was
derived.
(38) Advertisements. All advertising, sales literature or other promotional material
(including prospectus wrappers, broker kits, road show slides and road show scripts),
whether in printed or electronic form, authorized in writing by or prepared by or at the direction
of the Company for use in connection with the offering and sale of the Securities (collectively,
sales material) complied and comply in all material respects with the applicable requirements of
the 1933 Act, the 1940 Act and the rules and interpretations of FINRA. No sales material contained
or contains an untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(39) Absence of Undisclosed Payments. To the Companys knowledge, no Triangle Entity
nor any employee or agent of any Triangle Entity has made any payment of funds of any Triangle
Entity or received or retained any funds, which payment, receipt or retention of funds is of a
character required to be disclosed in the Preliminary Prospectus or the Prospectus.
(40) Investments. Except for those limitations of general application provided in the
1940 Act, the SBA Regulations and the Code, there are no material restrictions, limitations or
regulations with respect to the ability of the Company or the Funds to invest their assets as
described in the Preliminary Prospectus or the Prospectus.
(41) No Material Relationships with the Underwriters. Except as disclosed in the
Preliminary Prospectus or the Prospectus, none of the Triangle Entities has any material lending or
other relationship with a bank or lending institution affiliated with any of the Underwriters.
(42) Lock-Up Agreements. The Company has obtained for the benefit of the Underwriters
the agreement (a Lock-Up Agreement), in the form set forth as Schedule C hereto, from all
directors and executive officers of each of the Triangle Entities.
(43) Payment of Dividends. None of the Triangle Entities or their respective
subsidiaries is currently prohibited, directly or indirectly, from paying any dividends, from
making any other distribution on its capital stock or securities, from repaying any loans or
advances or from transferring any of its property or assets, except as described in Preliminary
Prospectus and the Prospectus and as may be limited by the 1940 Act or SBA Regulations of general
applicability.
12
(44) Environmental. Each of the Triangle Entities (i) is in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or
contaminants with respect to any property owned, leased, managed or operated by any Triangle Entity
(Environmental Laws), (ii) has received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) has not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with Environmental Laws, failure to
receive required permits, licenses or other approvals, or liability would not, individually or in
the aggregate, result in a Material Adverse Effect.
(45) ERISA. Each of the Triangle Entities and its subsidiaries are in compliance in
all material respects with all currently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published interpretations
thereunder (herein called ERISA). No reportable event (as defined in ERISA) has occurred with
respect to any pension plan (as defined in Section 3(2) ERISA) for which such Triangle Entity or
any subsidiary would have any liability. Such Triangle Entity and its subsidiaries have not
incurred and do not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any pension plan or (ii) Sections 412 or 4971 of the Code.
Each pension plan for which any Triangle Entity or any subsidiary would have any liability that
is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or by failure to act, that would reasonably be expected to cause the
loss of such qualification.
(46) Anti-Money Laundering, Foreign Corrupt Practices Act Compliance. The operations
of the Triangle Entities are and have been conducted at all times in compliance in all material
respects with applicable financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, also known as the Bank Secrecy Act, the USA
Patriot Act, the money laundering statues of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental entity having jurisdiction over the Triangle Entities
(collectively, the Money Laundering Laws) and no proceeding by or before any court or
governmental or regulatory agency, authority or body or any arbitrator involving any Triangle
Entity with respect to the Money Laundering Laws is pending or, to the knowledge of the Company,
threatened. No Triangle Entity, or, to the knowledge of the Company, any director, officer,
partner, manager, agent, employee or affiliate of any Triangle Entity has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee; (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; (iv) made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment; or (v) made any payment of funds to any Triangle Entity or received or
retained funds in violation of any such law, rule or regulation.
(47) No Brokers or Finders. There is no broker, finder or other party that is entitled
to receive from the Company or the Funds any brokerage or finders fee or other fee or commission
13
as a result of any transactions contemplated by this Agreement, other than as contemplated
herein.
(48) FINRA Affiliations. To the knowledge of the Company, there are no affiliations or
associations (as such terms are defined by FINRAs rules and regulations) between any member of
FINRA and any of the Companys directors and officers, except for Sherwood Smith, as previously
disclosed to the Underwriters. For purposes of this Section 1(a)(48), the Company shall be entitled
to reasonably rely on representations from such officers and directors.
(49) OFAC. None of the Triangle Entities or any of their subsidiaries or, to the
knowledge of the Company, any director, officer, agent, employee of either of the Triangle Entities
(in their capacities as such) or affiliate of any Triangle Entity or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Department of the Treasury (OFAC); and the Company will not directly or indirectly use the
proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person or entity, for the
purpose of financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(b) Officers Certificates. Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be deemed a representation
and warranty by the Company to each Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company agrees to sell to
each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly,
agrees to purchase from the Company, at a purchase price of $18.3356 per share (representing a public
offering price of $19.2500 per share, less an underwriting discount of $0.9144 per share)( the
Purchase Price), the amount of Initial Securities set forth in Schedule A opposite such
Underwriters name, plus any additional number of Initial Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Over-Allotment Securities. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company hereby grants an option to
the several Underwriters to purchase, severally and not jointly, up to 450,000 Over-Allotment
Securities at the Purchase Price (less the per share amount or value, as applicable, of any
dividend or other distribution declared by the Company, the record date of which occurs during the
period from the Closing Time through the Option Closing Time (as defined below) with respect
thereto). Said option may be exercised only to cover over-allotments in the sale of the Initial
Securities by the Underwriters. Said option may be exercised in whole or in part at any time and
from time to time on or before the 30th day after the date of the Prospectus upon notice by the
Underwriters to the Company setting forth the number of shares of the Over-Allotment Securities as
to which the several Underwriters are exercising the option and the settlement time and date. The
number of Over-Allotment Securities to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Over-Allotment Securities to be
14
purchased by the several Underwriters as such Underwriter is purchasing of the Initial
Securities, plus any additional number of Over-Allotment Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof, subject to such
adjustments as you in your absolute discretion shall make to eliminate any fractional shares. Any
such time and date of delivery (an Option Closing Time) shall be determined by you, but shall not
be later than seven full business days after the exercise of said option, nor in any event prior to
the Closing Time.
(c) Payment. Payment of the Purchase Price for, and delivery of certificates, if any,
for the Initial Securities shall be made at the offices of Sutherland Asbill & Brennan LLP, 1275
Pennsylvania Avenue, NW, Washington, DC 20004, or at such other place as shall be agreed upon by
the Underwriters and the Company, at 10:00 a.m. (Eastern time) on February 11, 2011 (unless
postponed in accordance with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Underwriters and the Company (such
time and date of payment and delivery being herein called Closing Time).
In addition, in the event that any or all of the Over-Allotment Securities are purchased by
the Underwriters, payment of the Purchase Price for, and delivery of certificates, if any, for,
such Over-Allotment Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Underwriters and the Company, on each Option Closing Time as
specified in the notice from the Underwriters to the Company.
Delivery of the Securities shall be made to the Underwriters for the respective accounts of
the several Underwriters against payment by the several Underwriters of the Purchase Price thereof
to or upon the order of the Company by wire transfer payable in same-day funds to an account
designated by the Company. Delivery of the Initial Securities and the Over-Allotment Securities
shall be made through the facilities of The Depository Trust Company, unless the Underwriters shall
otherwise instruct. Morgan Keegan, Baird, BB&T, Janney Montgomery and JMP Securities, each
individually and not as a representative of the Underwriters, may (but shall not be obligated to)
make payment of the Purchase Price for the Initial Securities or the Over-Allotment Securities, if
any, to be purchased by any Underwriter whose funds have not been received by the Closing Time or
the relevant Option Closing Time, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities and the
Over-Allotment Securities, if any, shall be in such denominations and registered in such names as
the Underwriters may request in writing at least one full business day before the Closing Time or
the relevant Option Closing Time, as the case may be. The certificates, if any, for the Initial
Securities and the Over-Allotment Securities, if any, will be made available for examination and
packaging by the Underwriters in Memphis, Tennessee not later than noon (Eastern time) on the
business day prior to the Closing Time or the relevant Option Closing Time, as the case may be.
Section 3. Covenants of the Company. The Company covenants with each Underwriter as
follows:
(a) Compliance with Securities Regulations and Commission Requests. The Company,
subject to Section 3(a)(ii), will comply with the requirements of the 1933 Act, including
15
Rule 430C thereunder, and will notify the Underwriters immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statement shall become
effective, the Prospectus or any amendment or supplement thereto shall have been filed, or any
amendment or supplement to the Preliminary Prospectus shall have been filed, (ii) of the receipt of
any comments from the Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Preliminary Prospectus or the
Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order preventing or suspending
the use of the Preliminary Prospectus or the Prospectus, or of the suspension of the qualification
of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes, and (v) if the Company becomes the subject of a
proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities. The
Company will promptly effect the filings required by Rule 497 and will take such steps as they deem
necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule
497 was received for filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will make every reasonable effort to prevent the issuance of any
stop order, or order of suspension or revocation of registration, and, if any such stop order or
order of suspension or revocation of registration is issued, to obtain the lifting or withdrawal
thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriters notice of its
intention to file or prepare any amendment to the Registration Statement (including any Rule 462(b)
Registration Statement) or any amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to the Preliminary Prospectus or
the Prospectus or will furnish the Underwriters with copies of any such documents within a
reasonable amount of time prior to such proposed filing or use, as the case may be, and will not
file or use any such document to which the Underwriters or counsel for the Underwriters shall
reasonably object.
(c) Delivery of Registration Statements. At the request of the Underwriters, the
Company will furnish or deliver to the Underwriters and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein) and signed copies
of all consents and certificates of experts, and will also deliver to the Underwriters, without
charge, a conformed copy of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters, during the time period when the
Underwriters are required to deliver the Prospectus. The copies of the Registration Statement and
each amendment thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each Underwriter, without
charge, as many copies of the Preliminary Prospectus as such Underwriter reasonably requested, and
the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of copies of any
amendments or supplements to the Preliminary Prospectus prepared on or after the date of
16
this Agreement and the Prospectus (and any amendments or supplements thereto) as such
Underwriter may reasonably request. The Preliminary Prospectus and the Prospectus and any
amendments or supplements thereto furnished to the Underwriters is or will be, as the case may be,
identical to the electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply, and will cause
Fund I to comply, with the 1933 Act and the 1940 Act (including the requirements for qualification
as a BDC) so as to permit the completion of the distribution of the Securities as contemplated in
this Agreement and in the Preliminary Prospectus and the Prospectus. If at any time when the
Prospectus is required by the 1933 Act to be delivered in connection with sales of the Securities
(including, without limitation, pursuant to Rule 172), any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for
the Company, to amend the Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in
the opinion of such counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1940 Act,
the Company will promptly prepare and file with the Commission, subject to Section 3(b) hereof,
such amendment or supplement as may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such requirements, and the Company will
furnish to the Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) Amendments or Supplements to the Disclosure Package. If there occurs an event or
development as a result of which the Disclosure Package would include an untrue statement of a
material fact or would omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances then prevailing, not misleading, the Company will promptly
notify the Underwriters so that any use of the Disclosure Package may cease until it is amended or
supplemented (at the sole cost and expense of the Company).
(g) Blue Sky Qualifications. The Company will use its best efforts, in cooperation
with the Underwriters, to qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or foreign) as the Underwriters
may designate and to maintain such qualifications in effect so long as required for the
distribution of the Securities; provided, however, that the foregoing shall not
apply to the extent that the securities are covered securities that are exempt from state
regulation pursuant to Section 18 of the 1933 Act. Notwithstanding the foregoing, the Company shall
not be obligated to file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.
(h) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as
are necessary in order to make generally available to their securityholders as soon as practicable
an earnings statement for the purposes of, and to provide to the Underwriters the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
17
(i) Use of Proceeds. The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Preliminary Prospectus and the Prospectus
under Use of Proceeds. The proceeds will not be used by either Triangle Entity to purchase, hold
or carry margin securities as defined in, or in violation of, Board of Governors of the Federal
Reserve System Regulations T, U or X.
(j) Listing. The Company will use its reasonable best efforts to cause the Securities
to be duly authorized for listing by the New York Stock Exchange prior to the date the Securities
are issued.
(k) Restriction on Sale of Securities. During the period beginning from the date
hereof and continuing to and including the date 45 days from the date of the Prospectus (the
Lock-Up Period), the Company will not, and will cause each of the other Triangle Entities to not,
without the prior written consent of Morgan Keegan, (A) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option, rights or warrant to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose
of common stock of the Company or any securities convertible into or exercisable or exchangeable
for common stock of the Company or file any registration statement under the 1933 Act with respect
to any of the foregoing or (B) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of
the common stock of the Company, whether any such swap or transaction described in clause (A) or
(B) above is to be settled by delivery of common stock of the Company or such other securities, in
cash or otherwise. Notwithstanding the foregoing, if (1) during the last 17 days of the Lock-Up
Period, the Company issues an earnings release or material news or a material event relating to the
Triangle Entities occurs, or (2) prior to the expiration of the Lock-Up Period, the Company
announces that it will release earnings results or become aware that material news or a material
event will occur during the 16-day period beginning on the last day of the Lock-Up Period, then the
Lock-Up Period shall automatically be extended and the restrictions imposed by this Section 3(k)
shall continue to apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event, as applicable, unless
Morgan Keegan waives, in writing, such extension. The restrictions in this Section shall not apply
to (i) the Securities to be sold hereunder or (ii) common stock issued or, for avoidance of doubt,
purchased in the open market pursuant to the Companys dividend reinvestment plan or in connection
with grants awarded under the Company Amended and Restated 2007 Equity Incentive Plan, in each
case in the ordinary course consistent with past practice.
(l) Reporting Requirements. The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file, and will cause Fund I to
file, all documents required to be filed with the Commission pursuant to the 1933 Act, the 1940 Act
or the 1934 Act within the time periods required by the 1933 Act, the 1940 Act, the 1934 Act and
the rules and regulations of the Commission thereunder.
(m) Entity Taxation. The Company will use its best efforts to comply with the
requirements of Subchapter M of the Code to continue to qualify as a regulated investment company
under the Code.
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(n) Absence of Stabilization. The Company will not take, and will cause each of the
other Triangle Entities to not take, directly or indirectly, any action designed to cause or result
in, or that would constitute or may reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of the
Securities.
(o) Continued Compliance with SBA Requirements. The Company will use its best efforts
to cause each of the Funds to continue to comply with the requirements for qualification as an
SBIC, which is eligible to borrow from the SBA as described in the Prospectus.
Section 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing (or reproduction) and
filing with the Commission of the Registration Statement (including financial statements and
exhibits), each Preliminary Prospectus and the Prospectus, and each amendment or supplement (as
applicable) to any of them, (ii) the printing (or reproduction) and delivery to the Underwriters
(including postage, air freight charges and charges for counting and packaging) of such copies of
the Registration Statement (including financial statements and exhibits), each Preliminary
Prospectus and the Prospectus, and each amendment or supplement (as applicable) to any of them, as
may be reasonably requested for use in connection with the offering, purchase, sale, issuance or
delivery of the Securities, and such other documents as may be required in connection therewith,
(iii) the preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other duties payable
upon the sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of Companys Counsel (as hereinafter defined), the independent registered public
accounting firm and any other advisors to the Company, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof, including filing
fees and fees in connection with the preparation of any Blue Sky Survey and any supplements
thereto, (vi) the preparation, printing and delivery to the Underwriters of copies of any Blue Sky
Survey and any supplements thereto, (vii) the fees and expenses of the transfer agent and registrar
for the Securities, (viii) the filing fees of the Commission and any state agency with respect to
the Securities, (ix) the fees and expenses incurred in connection with the listing of the
Securities on the New York Stock Exchange, (x) the filing fees incident to any required review by
FINRA, and (xiii) all other Company costs and expenses incident to the performance by the Company
of its obligations hereunder.
(b) Termination of Agreement. If this Agreement is terminated by the Underwriters in
accordance with the provisions of Section 5 or Section 9(a) hereof, the Company agrees that it
shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
Section 5. Conditions of Underwriters Obligations. The obligations of the several
Underwriters hereunder shall be subject to the accuracy of the representations and warranties of
the Company contained in Section 1 hereof as of the Applicable Time, the Closing Time and any
Option Closing Time pursuant to Section 4 hereof, to the accuracy of the statements of the Company
made in any certificates delivered pursuant to the provisions hereof, to the
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performance by the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement, including any
Rule 462(b) Registration Statement, shall be effective and at the Closing Time (or the applicable
Option Closing Time, as the case may be) no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act, no notice or order objecting to
its use shall have been issued, no proceedings with respect to either shall have been initiated or,
to the knowledge of counsel to the Underwriters and Companys Counsel, threatened by the
Commission, and any request on the part of the Commission for additional information shall have
been complied or waived with to the reasonable satisfaction of counsel to the Underwriters. The
Prospectus containing the Rule 430C Information shall have been filed with the Commission in
accordance with Rule 497.
(b) Opinions of Triangle Entities Counsel. At the Closing Time, the Underwriters
shall have received the favorable opinions, dated as of the Closing Time, of Bass, Berry & Sims
PLC, Venable LLP, special Maryland counsel, and Pepper Hamilton LLP, special counsel with regard to
SBA-related matters (collectively, Companys Counsel), in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such letters for each of
the other Underwriters, to such further effect as counsel to the Underwriters may reasonably
request.
(c) Opinion of Counsel for the Underwriters. At the Closing Time, the Underwriters
shall have received the favorable opinion, dated as of the Closing Time, of Sutherland Asbill &
Brennan LLP, counsel for the Underwriters.
(d) Closing Certificates. At the Closing Time, there shall not have been, since the
date hereof or since the respective dates as of which information is given in the Preliminary
Prospectus or the Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), any event that would have a Material Adverse Effect, and, at the Closing
Time, the Underwriters shall have received certificates of the Chief Financial Officer or Chief
Accounting Officer of the Company, dated as of the Closing Time, to the effect that (i) there has
been no such Material Adverse Effect, (ii) the representations and warranties of the Company in
this Agreement are true and correct with the same force and effect as though expressly made at and
as of the Closing Time, (iii) the Company has complied with all agreements and satisfied all
conditions on their part to be performed or satisfied pursuant to this Agreement at or prior to the
Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement, or
order of suspension or revocation of registration, has been issued and no proceedings for any such
purpose have been instituted or are pending or, to the Companys knowledge, threatened by the
Commission.
(e) Independent Registered Public Accounting Firms Comfort Letter. At the time of the
execution of this Agreement, the Underwriters shall have received from Ernst & Young LLP a letter
dated such date, in form and substance satisfactory to the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, containing statements and
information of the type ordinarily included in accountants comfort letters to
20
underwriters with respect to the financial statements and certain financial information
contained in the Registration Statement, the Preliminary Prospectus and the Prospectus.
(f) Bring-down Comfort Letter. At the Closing Time, the Underwriters shall have
received from Ernst & Young LLP a letter dated as of the Closing Time, in form and substance
satisfactory to the Underwriters, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to the Closing Time.
(g) Approval of Listing. At the Closing Time, the Securities shall have been approved
for listing on the New York Stock Exchange, subject only to official notice of issuance.
(h) No Objection. FINRA shall have confirmed in writing that it has raised no
objection with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(i) Lock-Up Agreements. At the time of the execution of this Agreement, the Company
shall have procured for the benefit of the Underwriters lock-up agreements, in the form of
Schedule C attached hereto, from all directors and executive officers of each of the
Triangle Entities.
(j) Conditions to Purchase of Over-Allotment Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion
of the Over-Allotment Securities, the obligations of the several Underwriters to purchase the
applicable Over-Allotment Securities shall be subject to the conditions specified in the
introductory paragraph of this Section 5 and to the further condition that, at the applicable
Option Closing Time, the Underwriters shall have received:
(1) Closing Certificates. Certificates, dated such Option Closing Time, to the effect
set forth in Section 5(d) hereof, and signed by the Chief Financial Officer or Chief Accounting
Officer of the Company, except that the references in such certificate to the Closing Time shall be
changed to refer to such Option Closing Time.
(2) Opinions of Triangle Entities Counsel. The favorable opinions of Companys
Counsel, in form and substance satisfactory to counsel for the Underwriters, dated such Option
Closing Time, relating to the Over-Allotment Securities to be purchased on such Option Closing Time
and otherwise to the same effect as the opinion required by Section 5(b) hereof.
(3) Opinion of Counsel for the Underwriters. The favorable opinion of Sutherland
Asbill & Brennan LLP, counsel for the Underwriters, dated such Option Closing Time, relating to the
Over-Allotment Securities to be purchased on such Option Closing Time and otherwise to the same
effect as the opinion required by Section 5(c) hereof.
(4) Bring-down Comfort Letter. A letter from Ernst & Young LLP, in form and substance
satisfactory to the Underwriters and dated such Option Closing Time, substantially in the same form
and substance as the letter furnished to the Underwriters pursuant to Section 5(f) hereof, except
that the specified date in the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Option Closing Time.
21
(k) Additional Documents. At the Closing Time and at each Option Closing Time, counsel
for the Underwriters shall have been furnished with such documents and opinions as they may require
for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, contained in this Agreement; and all proceedings taken by
the Company in connection with the issuance and sale of the Securities as herein contemplated, and
in connection with the other transactions contemplated by this Agreement, shall be satisfactory in
form and substance to the Underwriters and counsel for the Underwriters.
(l) Delivery of Documents. The documents required to be delivered by this Section 5
shall be delivered at the office of Sutherland Asbill & Brennan LLP, 1275 Pennsylvania Avenue, NW,
Washington, DC 20004, on the Closing Time and at each Option Closing Time.
(m) Termination of Agreement. If any condition specified in this Section 5 shall not
have been fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any
condition to the purchase of Over-Allotment Securities, on an Option Closing Time which is after
the Closing Time, the obligations of the several Underwriters to purchase the relevant
Over-Allotment Securities, may be terminated by the Underwriters by notice to the Company at any
time at or prior to the Closing Time or such Option Closing Time, as the case may be, and such
termination shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7, 8 and 12 shall survive any such termination and remain
in full force and effect.
Section 6. Indemnification.
(a) Indemnification by the Company. The Company shall indemnify and hold harmless each
Underwriter, its partners, directors, officers and employees, and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and
the successors and assigns of all of the foregoing persons, as follows:
(1) against any and all loss, liability, claim, damage and expense whatsoever, as incurred,
arising out of any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule 430C Information, or the
omission or alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact included in the Preliminary Prospectus, any sales
material, the Disclosure Package or the Prospectus (or, in each case, any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading;
(2) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to
the extent of the aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental, regulatory or self-regulatory agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; and
22
(3) against any and all expense whatsoever, as incurred (including the fees and charges of
counsel chosen by the Underwriters), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental agency or body, or
regulatory or self-regulatory authority, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above; provided, however
, that this indemnity agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with written information furnished to the
Company by any Underwriter expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430C Information, or in the Preliminary Prospectus, any sales
material, the Disclosure Package or the Prospectus (or any amendment or supplement thereto), it
being understood and agreed that the only such information furnished to the Company in writing by
the Underwriters consists of the information described in Section 6(c) hereof.
(b) Indemnification for Marketing Materials. In addition to the foregoing
indemnification, the Company also shall indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 6(a), as limited by the proviso set forth therein,
with respect to any sales material, if any are employed.
(c) Indemnification by the Underwriters. Each Underwriter severally agrees to
indemnify and hold harmless the Company, its directors, members and shareholders, each of the
Companys officers who signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
and all loss, liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section 6, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430C Information, or any Preliminary Prospectus, any sales
material, the Disclosure Package or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the Company by such
Underwriter expressly for use in the Registration Statement (or any amendment thereto), including
the Rule 430C Information, or such Preliminary Prospectus, sales material, Disclosure Package or
Prospectus (or any amendment or supplement thereto). The Company acknowledges that the statements
set forth in the Preliminary Prospectus and the Prospectus in (i) the last paragraph of the cover
page regarding delivery of the Securities and (ii) under the heading Underwriting, (A) the list
of Underwriters and their respective participation in the sale of the Securities, (B) the sentences
related to concessions and reallowances and (C) the paragraph related to stabilization, syndicate
covering transactions and penalty bids constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in the Disclosure Package or the Prospectus.
(d) Actions against Parties; Notification. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the
23
extent it is not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this indemnity agreement. In
the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties
shall be selected by the Underwriters, and, in the case of parties indemnified pursuant to Section
6(c) above, counsel to the indemnified parties shall be selected by the Triangle Entities. An
indemnifying party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying party be liable for the fees and expenses of more than one counsel (in addition to
any local counsel) separate from its own counsel for all indemnified parties in connection with any
one action or separate but similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry of any judgment
with respect to any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(e) Settlement Without Consent. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or consent to the entry
of any judgment with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
Section 7. Contribution. (a) If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses (or actions in respect thereof) incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or expenses (or actions in
respect thereof), as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand in connection with
the offering of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Securities pursuant to
24
this Agreement (before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as set forth on the cover of
the Prospectus, bear to the aggregate initial public offering price of the Securities as set forth
on such cover.
(b) The relative fault of the Company on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
(c) The Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses (or actions in respect
thereof) incurred by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
(d) Notwithstanding the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
(e) No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. No person shall be entitled to indemnification hereunder in
contravention of Section 17(i) of the 1940 Act.
(f) For purposes of this Section 7, each person, if any, who controls an Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each trustee, director,
officer, employee and agent of an Underwriter shall have the same rights to contributions as such
Underwriter, and each person who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act, each officer of the Company and each director of the Company
shall have the same rights to contribution as the Company. The Underwriters respective
obligations to contribute pursuant to this Section 7 are several in proportion to the number of
Initial Securities set forth opposite their respective names in Schedule A hereto and not
joint.
Section 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and covenants contained in this Agreement or in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and in full force and
25
effect, regardless of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the Securities to the
Underwriters.
Section 9. Termination of Agreement. (a) The Underwriters may terminate this
Agreement, by notice to the Company, at any time on or prior to the Closing Time (and, if any
Over-Allotment Securities are to be purchased on an Option Closing Time which occurs after the
Closing Time, the Underwriters may terminate their obligations to purchase such Over-Allotment
Securities, by notice to the Company, at any time on or prior to such Option Closing Time) (i) if
there has been, since the respective dates as of which information is given in the Preliminary
Prospectus or the Prospectus, any Material Adverse Effect, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof, any calamity or crisis, any
acts of terrorism, or any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the effect of which is so
material and adverse as to make it, in the judgment of the Underwriters, impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the American Stock Exchange,
the New York Stock Exchange or in the Nasdaq Global Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices
have been required, by any of said exchanges or by such system or by order of the Commission, FINRA
or any other governmental authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (iv) if a banking moratorium
has been declared by either Federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except as provided in Section 4 hereof, and
provided further that Sections 1, 4, 6, 7, 8, and 12 hereof shall survive such termination and
remain in full force and effect.
Section 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at the Closing Time or an Option Closing Time to purchase the Securities
which it or they are obligated to purchase under this Agreement (the Defaulted Securities), the
remaining Underwriters shall have the right, within 24 hours thereafter, to make arrangements for
one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if,
however, the Underwriters shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number of Defaulted Securities does not exceed 10% of the number of Securities to
be purchased on such date, each of the non-defaulting Underwriters shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting
Underwriters; or
26
(b) if the number of Defaulted Securities exceeds 10% of the number of Securities to be
purchased on such date, this Agreement or, with respect to any Option Closing Time which occurs
after the Closing Time, the obligation of the Underwriters to purchase and of the Company to sell
the Over-Allotment Securities to be purchased and sold on such Option Closing Time, shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting Underwriter from
liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement or,
in the case of an Option Closing Time which is after the Closing Time, which does not result in a
termination of the obligation of the Underwriters to purchase and the Company to sell the relevant
Over-Allotment Securities, as the case may be, the Underwriters shall have the right to postpone
the Closing Time or the relevant Option Closing Time, as the case may be, for a period not
exceeding seven days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term Underwriter
includes any person substituted for an Underwriter under this Section 10.
Section 11. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to Morgan Keegan & Company,
Inc., 50 N. Front Street, 12th Floor, Memphis, TN 38103, Attention: Larry Herman, Senior Vice
President, with a copy to Sutherland Asbill & Brennan LLP, 1275 Pennsylvania Avenue, NW,
Washington, DC 20004, Attention: Steven B. Boehm, Esq.; notices to the Company shall be directed to
them at 3700 Glenwood Avenue Suite 530, Raleigh, NC 27612, Attention: Steven C. Lilly, with a copy
to Bass, Berry & Sims PLC, 100 Peabody Place, Suite 900, Memphis, TN 38103, Attention: John A.
Good, Esq.
Section 12. Parties. This Agreement shall inure to the benefit of and be binding upon
the Underwriters, the Company and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and their respective successors and the controlling persons and
directors, officers, members, shareholders and trustees referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained, whether as third-party beneficiaries or
otherwise. This Agreement and all conditions and provisions hereof are intended to be for the sole
and exclusive benefit of the Underwriters, the Company and their respective successors, and, solely
for purposes of Sections 6 and 7, their respective controlling persons and officers, directors,
shareholders and trustees, and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed
to be a successor by reason merely of such purchase.
Section 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS FORMED AND TO BE
PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
OR RULES THEREOF, TO THE EXTENT SUCH PRINCIPLES WOULD
27
REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
Section 14. Submission to Jurisdiction. Each of the parties hereto irrevocably agrees
that any suit, action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby may be instituted in any United States federal and New York State
courts located in the City of New York, irrevocably waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the laying of venue of any
such proceeding; and irrevocably submits to the non-exclusive jurisdiction of such courts in any
such suit, action or proceeding brought in such a court and waives any other requirements of or
objections to personal jurisdiction with respect thereto.
Section 15. Waiver of Jury Trial. The Company and the Underwriters hereby irrevocably
waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
Section 16. Effect of Headings. The Section and Schedule headings herein are for
convenience only and shall not affect the construction hereof.
Section 17. Definitions. As used in this Agreement, the following terms have the
respective meanings set forth below:
1933 Act means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
1934 Act means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
1940 Act means the Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder.
Applicable Time means 9:00 a.m. (New York City time) on February 8, 2011 or such other time
as agreed by the Company and the Underwriters; provided that if, subsequent to the date of this
Agreement, the Company and the Underwriters have determined that the Disclosure Package included an
untrue statement of material fact or omitted a statement of material fact necessary to make the
information therein not misleading, and have agreed, in connection with the public offering of the
Securities, to provide an opportunity to purchasers to terminate their old contracts and enter into
new contracts, then Applicable Time will refer to the information available to purchasers at the
time of entry into the first such new contract.
Articles of Incorporation means the Articles of Incorporation of Triangle Capital
Corporation dated as of October 10, 2006, as amended on November 29, 2006.
Code means the Internal Revenue Code of 1986, as amended.
Commission means the Securities and Exchange Commission.
28
EDGAR means the Commissions Electronic Data Gathering, Analysis and Retrieval System or
Interactive Data Electronic Applications system, as the case may be.
GAAP means United States generally accepted accounting principles.
Material Adverse Effect means a material adverse change in the condition, financial or
otherwise, or in the earnings, net asset value, business affairs or business prospects of the
Triangle Entities, considered as a whole, whether or not arising in the ordinary course of
business.
New York Stock Exchange means the New York Stock Exchange, Inc.
Organizational Documents means (a) in the case of a corporation, its charter and bylaws; (b)
in the case of a limited or general partnership, its partnership certificate, certificate of
formation or similar organizational document and its partnership agreement; (c) in the case of a
limited liability company, its articles of organization, certificate of formation or similar
organizational documents and its operating agreement, corporation agreement, membership agreement
or other similar agreement; (d) in the case of a trust, its certificate of trust, certificate of
formation or similar organizational document and its trust agreement or other similar agreement;
and (e) in the case of any other entity, the organizational and governing documents of such entity.
Rule 172, Rule 497, Rule 430C, Rule 462(b), and Rule 462(d) refer to such rules
under the 1933 Act.
Rule 430C Information means the information included in the Preliminary Prospectus and the
Prospectus that was omitted from the Registration Statement at the time it became effective but
that is deemed to be a part of and included in the Registration Statement pursuant to Rule 430C.
Rule 462(b) Registration Statement means a registration statement filed by the Company
pursuant to Rule 462(b) for the purpose of registering any of the Securities under the 1933 Act,
including the Rule 430C Information.
Sarbanes-Oxley Act means the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated thereunder or implementing the provisions thereof.
SBA means the U.S. Small Business Administration.
SBA Regulations means the Small Business Investment Act of 1958 and the regulations
promulgated thereunder.
All references in this Agreement to the Registration Statement, any Rule 462(b) Registration
Statement, the Preliminary Prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant to EDGAR.
29
Whenever the words include, includes or including are used in this Agreement, they are
deemed to be followed by the words without limitation.
Section 18. Absence of Fiduciary Relationship. The Company acknowledges and agrees
that:
(a) each of the Underwriters is acting solely as an underwriter in connection with the public
offering of the Securities and no Underwriter has assumed or will assume a fiduciary, advisory or
agency relationship in favor of the Company, no fiduciary, advisory or agency relationship has been
or will be created between the Underwriters and the Company in respect of the offering and any of
the transactions contemplated by this Agreement (irrespective of whether or not any of the
Underwriters has advised or is currently advising the Company on other matters) and none of the
Underwriters has any obligation to the Company with respect to the offering and the transactions
contemplated by this Agreement except the obligations expressly set forth in this Agreement;
(b) the purchase and sale of the Securities pursuant to this Agreement, including the
determination of the public offering price of the Securities and any related discounts and
commissions, and the price to be paid by the Underwriters for the Securities, is an arms-length
commercial transaction between the Company, on the one hand, and the several Underwriters, on the
other hand;
(c) it is capable of evaluating and understanding, and understands and accepts, the terms,
risks and conditions of the transactions contemplated by this Agreement;
(d) in connection with the offering and each transaction contemplated by this Agreement and
the process leading to such transactions, each Underwriter is and has been acting solely as
principal and not as fiduciary, advisor or agent of the Company or any of their respective
affiliates, stockholders, creditors, employees or any other party;
(e) none of the Underwriters has provided any legal, accounting, regulatory or tax advice with
respect to the offering and the transactions contemplated by this Agreement and the Company have
consulted their own legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate;
(f) the Underwriters and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company, and that none of the
Underwriters has any obligation to disclose such interests and transactions to the Company by
virtue of any fiduciary, advisory or agency relationship; and
(g) it waives, to the fullest extent permitted by law, any claims it may have against any of
the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that
none of the Underwriters shall have any liability (whether direct or indirect, in contract, tort or
otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on its behalf.
30
Section 19. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be deemed an original, and when taken together shall constitute one and the
same instrument.
Section 20. Complete Agreement. This Agreement (including the Schedules hereto and the
Lock-Up Agreements) represents the complete understanding and agreement of the parties and
supersedes all prior agreements and understandings (whether written or oral) between the Company
and the Underwriters with respect to the subject matter hereof.
[Remainder of Page Intentionally Left Blank]
31
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us a counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Underwriters and the Company in accordance with its terms.
Very truly yours, | ||||
TRIANGLE CAPITAL CORPORATION | ||||
By: | /s/ Garland S. Tucker, III | |||
Name: Garland S. Tucker III Title: President, Chief Executive Officer and Chairman of the Board of Directors |
32
CONFIRMED AND ACCEPTED, as of the date first above written: |
||||
MORGAN KEEGAN & COMPANY, INC. | ||||
By: | /s/ Larry M. Herman | |||
Name: Larry M. Herman Title: Managing Director |
||||
ROBERT W. BAIRD & CO. INCORPORATED | ||||
By: | /s/ Mark C. Micklem | |||
Name:Mark C. Micklem Title: Managing Director |
||||
BB&T CAPITAL MARKETS, A DIVISION OF SCOTT & STRINGFELLOW, LLC |
||||
/s/ G. Jacob Savage | ||||
Name: | G. Jacob Savage | |||
Title: | Senior Managing Director | |||
JANNEY MONTGOMERY SCOTT LLC | ||||
/s/ William J. Corkhill, Jr. | ||||
Name: William J. Corkhill, Jr. Title: Managing Director |
||||
JMP SECURITIES LLC | ||||
/s/ Steve Ortiz | ||||
Name: Steve Ortiz Title: Director, Equity Capital Markets |
33
SCHEDULE A
Name of Underwriter | No. of Initial Securities | |||
Morgan Keegan & Company, Inc. |
1,275,000 | |||
Robert W. Baird & Co. Incorporated |
675,000 | |||
BB&T Capital Markets, a division of Scott & Stringfellow, LLC |
675,000 | |||
Janney Montgomery Scott LLC |
300,000 | |||
JMP Securities LLC |
75,000 | |||
Total |
3,000,000 | |||
SCHEDULE B
PRICE-RELATED INFORMATION
TRIANGLE CAPITAL CORPORATION
Public
offering price: $19.2500 per share
Underwriting discounts and commissions: $0.9144 per share
Proceeds (before expenses) to the Company: $18.3356 per share
Shares offered: 3,000,000
Over-allotment option: 450,000
Underwriting discounts and commissions: $0.9144 per share
Proceeds (before expenses) to the Company: $18.3356 per share
Shares offered: 3,000,000
Over-allotment option: 450,000
SCHEDULE C
FORM OF LOCK-UP AGREEMENT
TRIANGLE CAPITAL CORPORATION
[] , 2011
Morgan Keegan & Company, Inc.
Robert W. Baird & Co. Incorporated
BB&T Capital Markets
A Division of Scott & Stringfellow, LLC
Janney Montgomery Scott LLC
JMP Securities LLC
c/o Morgan Keegan & Company, Inc.
50 N. Front Street, 12th Floor
Memphis, TN 38103
Robert W. Baird & Co. Incorporated
BB&T Capital Markets
A Division of Scott & Stringfellow, LLC
Janney Montgomery Scott LLC
JMP Securities LLC
c/o Morgan Keegan & Company, Inc.
50 N. Front Street, 12th Floor
Memphis, TN 38103
Re: Lock-Up Agreement for shares of Triangle Capital Corporation
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of common stock
(Common Stock) of Triangle Capital Corporation, a Maryland corporation (the Company) or
securities convertible into or exchangeable or exercisable for shares of Common Stock
(collectively, the Securities). The Company proposes to carry out a public offering of Common
Stock (the Offering) for which you will act as the representative to the several underwriters
(the Underwriters). The undersigned recognizes that the Offering will be of benefit to the
undersigned and will benefit the Company by, among other things, raising additional capital for its
operations. The undersigned acknowledges that you are relying on the representations and agreements
of the undersigned contained in this letter agreement (this Agreement) in carrying out the
Offering and in entering into an Underwriting Agreement (the Underwriting Agreement) with the
Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not
(and will cause any spouse or immediate family member of the spouse or the undersigned living in
the undersigneds household and any trustee of any trust that holds Securities for the benefit of
the undersigned or such spouse or family member not to), without the prior written consent of
Morgan Keegan & Company, Inc. on behalf of the Underwriters (which consent may be withheld in its
sole discretion), directly or indirectly, (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of (or enter into any transaction or device
that is designed to, or could be expected to, result in the disposition by any person at any time
in the future of) any Securities (including, without limitation, shares of Common Stock that may be
deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of
the Securities and Exchange Commission), (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any economic benefits
or risks of ownership of shares of the Securities, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of the Common Stock or such other Securities, in cash
or otherwise, or (3) publicly announce an intention to do any of the foregoing, for a period
commencing on the date hereof and continuing through the close of trading on the date 45 days after
the public offering date set forth on the final prospectus used to sell the Securities in the
Offering (the Lock-up Period) pursuant to the Underwriting Agreement.
The foregoing restrictions have been expressly agreed to by the undersigned so as to preclude
the undersigned (or such spouse, family member or trustee) from engaging in any hedging or other
transaction that is designed to or reasonably expected to lead to or result in a disposition of
Securities during the Lock-up Period, even if such Securities would be disposed of by someone other
than such holder. Such prohibited hedging or other transactions would include, without limitation,
any short sale (whether or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any significant part of
its value from the Securities. In addition, the undersigned agrees that, without the prior written
consent of Morgan Keegan & Company, Inc. on behalf of the Underwriters, it will not, during the
Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any
Securities or any security convertible into or exercisable or exchangeable for the Securities.
The foregoing shall not apply to the following: (1) the registration of or sale to the
Underwriters of Securities pursuant to the Offering and the Underwriting Agreement, (2) the
issuance of shares of Common Stock issuable under the Companys dividend reinvestment plan, (3)
Securities withheld by, or transferred to the Company under any Restricted Stock Award Agreement
for purposes of covering any tax withholding obligations on behalf of the undersigned, as permitted
under the Companys Amended and Restated 2007 Equity Incentive Plan, (4) bona fide gifts,
succession and inheritance by will or intestacy, (5) transfers to trusts for the benefit of the
undersigned, any spouse, immediate family member or a charitable, educational or religious
institution by the undersigned, or (6) transfers made with the prior written consent of Morgan
Keegan & Company, Inc. on behalf of the Underwriters; provided, however, that in
the case of a transfer under clause (4) or (5), the transferee(s)/donee(s) shall agree in writing
prior to such disposition to be bound by the restrictions set forth herein and to the extent any
interest in the Securities is retained by the undersigned (or such spouse or family member), the
Securities shall remain subject to the restrictions contained in this Agreement.
Notwithstanding the foregoing, if (1) during the last 17 days of the Lock-up Period, the
Company issues an earnings release or material news or a material event relating to the Company
occurs, or (2) prior to the expiration of the Lock-up Period, the Company announces that it will
release earnings results or become aware that material news or a material event will occur during
the 16-day period beginning on the last day of the Lock-up Period, then the Lock-up Period shall
automatically be extended and the restrictions imposed by this Agreement shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event, as applicable, unless Morgan Keegan & Company,
Inc., on behalf of the Underwriters, waives, in writing, such extension.
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The undersigned also agrees and consents (1) with respect to Securities held of record by the
undersigned, to the entry of stop transfer instructions with the Companys transfer agent and
registrar against the transfer of such Securities as described herein except in compliance with
this Agreement, and (2) with respect to Securities beneficially owned, but not held of record by,
the undersigned, to cause the record holder of such Securities to agree and consent to the entry of
stop transfer instructions with the Companys transfer agent and registrar against the transfer of
such Securities as described herein except in compliance with this Agreement.
It is understood that, if (1) the Company notifies the undersigned that it does not intend to
proceed with the Offering, (2) the registration statement filed with the Securities and Exchange
Commission with respect to the Offering is withdrawn, or (3) for any reason the Underwriting
Agreement shall terminate or be terminated prior to payment for and delivery of the Securities to
be sold thereunder, the undersigned will be released from its obligations under this Agreement.
This Agreement shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts formed and to be performed entirely within the State of New York,
without regard to conflicts of law principles or rules thereof, to the extent such principles would
require or permit the application of the laws of another jurisdiction.
This Agreement is irrevocable and will be binding on the undersigned and the respective
successors, heirs, personal representatives and assigns of the undersigned.
[Remainder of Page Intentionally Left Blank]
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* * *
Very truly yours, | ||
Name: Title: |
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