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Exhibit h.1
5,000,000 Shares
Sirrom Capital Corporation
Shares of Common Stock, No Par Value Per Share
UNDERWRITING AGREEMENT
February __, 1998
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February __, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
The Xxxxxxxx-Xxxxxxxx Company LLC
X.X. Xxxxxxxx & Co.
SunTrust Equitable Securities Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
The Xxxxxxxx-Xxxxxxxx Company LLC
X.X. Xxxxxxxx & Co.
SunTrust Equitable Securities Corporation
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
Sirrom Capital Corporation, a Tennessee corporation (the
"Company"), proposes to issue and sell to the several Underwriters (as defined
below) named in Schedules II and III hereto, an aggregate of 5,000,000 shares of
the Common Stock, no par value per share, of the Company (the "Firm Shares").
It is understood that, subject to the conditions hereinafter
stated, 4,000,000 Firm Shares (the "U.S. Firm Shares") will be sold to the
several U.S. Underwriters named in Schedule II hereto (the "U.S. Underwriters")
in connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and 1,000,000 Firm Shares (the "International Shares") will be
sold to the several International Underwriters named in Schedule III hereto (the
"International Underwriters") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated, The
Xxxxxxxx-Xxxxxxxx Company LLC, X.X. Xxxxxxxx & Co. and SunTrust
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Equitable Securities Corporation shall act as representatives (the "U.S.
Representatives") of the several U.S. Underwriters, and Xxxxxx Xxxxxxx & Co.
International Limited, The Xxxxxxxx-Xxxxxxxx Company, LLC, X.X. Xxxxxxxx & Co.
and SunTrust Equitable Securities Corporation shall act as representatives (the
"International Representatives") of the several International Underwriters. The
U.S. Underwriters and the International Underwriters are hereinafter
collectively referred to as the "Underwriters."
Certain shareholders of the Company (the "Selling
Shareholders") named in Schedule I hereto [severally] propose to sell to the
several U.S. Underwriters not more than an additional 750,000 shares of the
Common Stock, no par value per share, of the Company (the "Additional Shares")
if and to the extent that the U.S. Representatives shall have determined to
exercise, on behalf of the U.S. Underwriters, the right to purchase such shares
of common stock granted to the U.S. Underwriters in Section 3 hereof. The Firm
Shares and the Additional Shares are hereinafter collectively referred to as the
"Shares." The shares of Common Stock, no par value per share, of the Company to
be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the "Common Stock." The Company and the Selling
Shareholders are hereinafter sometimes collectively referred to as the
"Sellers."
The Company has filed with the Securities and Exchange
Commission (the "Commission"), pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), the Investment Company Act of 1940 (the
"Investment Company Act"), and the published rules and regulations adopted by
the Commission under the Securities Act (the "Securities Act Rules") and the
Investment Company Act (the "Investment Company Act Rules") a registration
Statement on Form N2 (File No. 333_____) relating to the Shares. The
registration statement contains the U.S. prospectus which is to be used in
connection with the offering and sale of Shares in the United States and Canada
to United States and Canadian Persons. The international prospectus, to be used
in connection with the offering and sale of Shares outside the United States and
Canada is identical to the U.S. prospectus except for the outside front cover
page. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act (and any information incorporated by reference therein) is
hereinafter referred to as the "Registration Statement"; the U.S. prospectus and
the international prospectus (as described in Rule 434(a)(1) under the
Securities Act) in the respective forms first used to confirm sales of Shares
are hereinafter collectively referred to as the "Distributed Prospectus"; the
U.S. prospectus included in the Registration Statement at the time of its
effectiveness (including the information, if any, deemed to be a part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act) is hereinafter referred to as the "Filed Prospectus"; and
the Distributed Prospectus and the Filed Prospectus are hereinafter referred to
collectively as the "Prospectus."
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1. REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) On (A) the effective date of the Registration Statement
(the "Effective Date"), and the date on which the Prospectus is first filed
with the Commission pursuant to Rule 497 of the Securities Act Rules, (B) the
date on which any posteffective amendment to the Registration Statement (except
any posteffective amendment required by Rule 8b16 of the Investment Company Act
Rules or which is filed with the Commission after the later of (x) one year
from the date of this Agreement or (y) the date on which the distribution of
the Shares is completed) became or becomes effective or any amendment or
supplement to the Prospectus was or is filed with the Commission and (C) at the
Closing Date (as defined below), the Registration Statement, the Prospectus and
any such amendment or supplement thereto and the Notification of Registration
of the Company filed with the Commission on Form N8A (the "Notification ")
pursuant to Section 8 of the Investment Company Act complied or will comply in
all material respects with the applicable requirements of the Securities Act,
the Investment Company Act, the Securities Act Rules and the Investment Company
Act Rules, as the case may be. On the Effective Date and on the date that any
posteffective amendment to the Registration Statement (except any posteffective
amendment required by Rule 8b16 of the Investment Company Act Rules or which is
filed with the Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which the distribution of the Shares
is completed) became or becomes effective, neither the Registration Statement
nor any such amendment did or will contain any untrue statement of a material
fact or omit to state a material fact required to be stated in it or necessary
to make the statements in it not misleading. At the Effective Date, if
applicable, the date the Prospectus or any amendment or supplement to the
Prospectus was or is filed with the Commission and at the Closing Date (as
defined below), the Prospectus did not or will not, as the case may be, contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements in it, in light of the circumstances under
which they were made, not misleading. The foregoing representations in this
paragraph 1(b) do not apply to statements or omissions made in reliance on and
in conformity with information relating to any Underwriter furnished in writing
to the Company by such Underwriter through you expressly for use in the
Registration Statement, the Prospectus, or any amendments or supplements
thereto.
(c) The Company has been duly incorporated, is validly
existing as
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a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing
of property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; all of the issued
shares of capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and nonassessable and are owned
directly by the Company, free and clear of all liens, encumbrances, equities or
claims, except with respect to all of the shares of Sirrom Investments, Inc., a
wholly-owned subsidiary of the Company ("SII"), which have been pledged by the
Company to First Union National Bank as agent for a syndicate of banks ("First
Union") as collateral to secure the revolving credit facility as described in
the Final Prospectus.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding prior to the issuance of the
Shares to be sold by the Company have been duly authorized and are validly
issued, fully paid and non-assessable.
(h) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will not
contravene any provision of applicable law or the certificate of incorporation
or by-laws of the Company or any agreement or other instrument binding upon the
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Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement other than
those which have been obtained as of the date hereof.
(j) To the best of the Company's knowledge, the Company's and
its subsidiaries' operations are in compliance with the Investment Company Act
and the Investment Company Act Rules.
(k) The Company and its subsidiaries are not currently in
breach of, or in default under, any material written agreement or instrument to
which they are a party or by which their property is bound or affected.
(l) The Company is duly registered with the Commission under
the Investment Company Act as a nondiversified closedend management investment
company, and all required action has or will have been taken by the Company
under the Securities Act, the Investment Company Act, the Securities Act Rules
and the Investment Company Act Rules, as the case my be, to make the public
offering and consummate the sale of the Shares as provided in this Agreement.
(m) The Company owns or possesses or has obtained all
governmental licenses, permits, consents, orders, approvals and other
authorizations, whether international or domestic, necessary to carry on its
business as contemplated.
(n) There are no material restrictions, limitations or
regulations with respect to the ability of the Company or its subsidiaries to
invest its assets as described in the Prospectus, other than as described
therein.
(o) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(p) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or
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to be filed as exhibits to the Registration Statement that are not described or
filed as required.
(q) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 497 under the Securities Act, complied when so filed
in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(r) The Company and its subsidiaries (i) are 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 ("Environmental Laws"), (ii) have received all permits, licenses
or other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) are in compliance with all terms
and conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(s) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with respect
to any securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration Statement.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING
SHAREHOLDERS. Each of the Selling Shareholders represents and warrants to and
agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) Such Selling Shareholder has, and on the Option Closing
Date (as defined below) will have, full legal right, power and authority to
enter into this Agreement and the Custody Agreement and Power of Attorney (the
"Custody Agreement and Power of Attorney") signed by such Selling Shareholder
and the Company, as Custodian, relating to the deposit of the Shares to be sold
by such Selling Shareholder and to appointing certain individuals as such
Selling Shareholder's attorneys-in-fact to the extent set forth therein,
relating to the transactions contemplated hereby and by the Registration
Statement. This Agreement has been duly executed and delivered by such Selling
Shareholder. In addition, the Custody Agreement and Power of Attorney has been
duly executed and delivered by such Selling Shareholder and constitutes the
valid
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and binding agreement of such Selling Shareholder in accordance with its terms
(except as (A) such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditor's rights and the
application of equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law) relating to the availability
of remedies, and (B) to the extent that rights to indemnity or contribution may
be limited by United States federal or state securities law and the public
policy underlying such laws).
(c) The execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations under, this
Agreement and the Custody Agreement and Power of Attorney will not contravene
any provision of applicable law, or the certificate of incorporation or by-laws
of such Selling Shareholder (if such Selling Shareholder is a corporation), or
any agreement or other instrument binding upon such Selling Shareholder or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by such Selling Shareholder of its
obligations under this Agreement or the Custody Agreement and Power of Attorney
of such Selling Shareholder.
(d) Such Selling Shareholder owns, and on the Option Closing
Date will own, the shares to be sold by such Selling Shareholder free of all
liens, claims and encumbrances and has, and the Option Closing Date will have,
the legal right and power to sell, transfer and deliver the Shares to be sold by
such Selling Shareholder.
(e) Upon the making by the Depository Trust Company of the
appropriate entries transferring the shares to be sold by such Selling
Shareholder on its books and records to the account of Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx & Co. Incorporated will acquire such shares free of
all liens, claims and encumbrances.
(f) On the Effective Date and on the date that any
post-effective amendment to the Registration Statement (except any post-
effective amendment required by Rule 8b16 of the Investment Company Act Rules
or which is filed with the Commission after the later of (x) one year from the
date of this Underwriting Agreement or (y) the date on which the distribution
of the Shares is completed) became or becomes effective, neither the
Registration Statement nor any such amendment did or will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in it or necessary to make the statements in it not misleading, with
reference to information furnished in writing by or on behalf of a Selling
Shareholder to the Company expressly for use in the Registration Statement, or
any amendments thereto. At the Effective Date, if applicable, the date the
Prospectus or any amendment or supplement to
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the Prospectus was or is filed with the Commission and at the Closing Date and
the Option Closing Date, the Prospectus did not or will not, as the case may
be, contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements in it, in light of the circumstances
under which they were made, not misleading, with reference to information
furnished in writing by or on behalf of a Selling Shareholder to the Company
expressly for use in the Prospectus, or any amendments or supplements thereto.
(g) Such Selling Shareholder has not taken, and on the Option
Closing Date will not have taken, directly or indirectly, any action designed to
stabilize or manipulate the price of any security of the Company, or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company, to
facilitate the sale or resale of the Shares or otherwise.
(h) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of 1986, such
Selling Shareholder shall deliver to you on or prior to the Closing Date a
properly completed and executed United States Treasury Department Form W8 or W9
(or other applicable form or statement specified by Treasury Department
Regulations in lieu thereof).
3. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees
to sell to the several Underwriters, and each Underwriter, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company at $____ a share (the "Purchase Price") the number of Firm
Shares (subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the number of Firm Shares to be
sold by such Seller as the number of Firm Shares such Underwriter bears to the
total number of Firm Shares.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, if the option is
exercised as to all or any portion of the Additional Shares, each of the
Selling Shareholders agrees to sell to the U.S. Underwriters up to the amount
of the Additional Shares set forth opposite the name of such Selling
Shareholder on Schedule I, and the U.S. Underwriters shall have a one-time
right to purchase severally and not jointly, up to [750,000] Additional Shares
at the Purchase Price. If the U.S. Representatives, on behalf of the U.S.
Underwriters, elect to exercise such option, the U.S. Representatives shall so
notify the Selling Shareholders in writing not later than 30 days after the
date of this Agreement, which notice shall specify the number of Additional
Shares to be purchased by the U.S. Underwriters and the date on which such
shares are to be purchased. Such date may be the same as the Closing Date (as
defined below) but not earlier than the Closing Date nor later than ten
business days after the date of such
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notice. Additional Shares may be purchased as provided in Section 4 hereof
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. If any Additional Shares are to be purchased, each
U.S. Underwriter agrees, severally and not jointly, to purchase from each
Selling Shareholder at the Purchase price (i) the number of Additional Shares
that bears the same proportion to the total number of Additional Shares to be
purchased as the number of U.S. Firm Shares such U.S. Underwriter bears to the
total number of U.S. Firm Shares and (ii) any additional number of Additional
Shares which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 11 hereof, subject in each case to such adjustments to
eliminate fractional shares as the U.S. Representatives may determine.
The Company and each Selling Shareholder hereby agrees that,
without the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf
of the Underwriters, it will not, during the period ending 90 days after the
date of the Prospectus, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Shares to be sold hereunder, (B)
the issuance by the Company of shares of Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date hereof
of which the Underwriters have been advised in writing or (C) transactions by
any person other than the Company relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
offering of the Shares. In addition, each Selling Shareholder, agrees that,
without the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on
behalf of the Underwriters, it will not, during the period ending 90 days after
the date of the Prospectus, make any demand for, or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
4. TERMS OF PUBLIC OFFERING. The Sellers are advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. Sellers are
further advised by you that the Shares are to be offered to the public initially
at U.S.$__ a share (the "Public Offering Price") and to certain dealers selected
by you at a price that represents a concession not in excess of U.S.$____ a
share under the Public Offering Price.
5. PAYMENT AND DELIVERY. Payment for the Firm Shares to be
sold by the Company shall be made to the Company in Federal or other funds
immediately available in New York City against delivery of such Firm Shares for
the respective accounts of the several Underwriters at 10:00 A.M., New York City
time, on _________ __, 1998, or at such other time on the same or such other
date, not later than _________ __, 1998, as shall be designated in writing by
you. The time and date of such payment are hereinafter referred to as the
"Closing Date."
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Payment for any Additional Shares shall be made to each of the
Selling Shareholders in Federal or other funds immediately available against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 A.M., New York City time, on the date specified in the
notice described in Section 3 or at such other time on the same or on such other
date, in any event not later than _________ __, 1998, as shall be designated in
writing by the U.S. Representatives. The time and date of such payment are
hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Sellers to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares on
the Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than 2:00 p.m. (New York City time) on
the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and that makes it, in
your judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) (i) The Underwriters shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in clause (a)(i) above and to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied hereunder on or before the Closing Date. The
officer
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signing and delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened;
(ii) The Underwriters shall have received on the Closing
Date a certificate, dated the Closing Date and signed by each Selling
Shareholder or their attorneyinfact, to the effect that the representations and
warranties of such Selling Shareholder contained in this Agreement are true and
correct as of the Closing Date and that such Selling Shareholder has complied
with all of the agreements and satisfied all of the conditions on its part to
be performed or satisfied hereunder on or before the Closing Date.
(c) The Underwriters shall have received on the Closing Date
an opinion of Bass, Berry, & Xxxx PLC, outside counsel for the Company, dated
the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole;
(ii) each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
(iii) the authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the Prospectus;
(iv) the shares of Common Stock (including the Shares to
be sold by the Selling Shareholders) outstanding prior to the issuance of the
Shares to be sold by the Company have been duly authorized and are validly
issued, fully paid and non-assessable;
(v) all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and nonassessable and are owned directly by the Company, free
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and clear of all liens, encumbrances, equities or claims, except with respect
to all of the shares of SII which have been pledged to First Union as
collateral to secure the revolving credit facility as described in the Final
Prospectus;
(vi) the shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company. In addition, the Custody Agreement and Power of
Attorney has been duly authorized, executed and delivered by the Company and
constitutes the valid and binding agreement of such Company in accordance with
its respective terms (except as (A) such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting the enforcement of creditor's
rights and the application of equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) relating to
the availability of remedies, and (B) to the extent that rights to indemnity or
contribution may be limited by United States federal or state securities law
and the public policy underlying such laws);
(viii) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this Agreement and the
Custody Agreement and Power of Attorney will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of the Company
or, to the best of such counsel's knowledge, any agreement or other instrument
binding upon the Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as may be required by the
National Association of Securities Dealers, Inc., the securities or Blue Sky
laws of the various states in connection with the offer and sale of the Shares
by the U.S. Underwriters and the laws of any foreign jurisdiction in connection
with the offer and sale by the International Underwriters;
(ix) the statements (A) in the Prospectus under the
captions "Description of Capital Stock" and "Underwriters" and (B) in the
Registration Statement in Item 29, in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the matters referred to
therein;
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(x) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not so described or of
any statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required;
(xi) such counsel (A) is of the opinion that the
Registration Statement and Prospectus (except for financial statements and
schedules and other financial and statistical data included therein as to which
such counsel need not express any opinion) comply as to form in all material
respects with the Securities Act, the Investment Company Act of 1940 and the
applicable rules and regulations of the Commission thereunder, (B) has no
reason to believe that (except for financial statements and schedules and other
financial and statistical data as to which such counsel need not express any
belief) the Registration Statement and the prospectus included therein at the
time the Registration Statement became effective contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (C) has no
reason to believe that (except for financial statements and schedules and other
financial and statistical data as to which such counsel need not express any
belief) the Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading and (D) is of the opinion that the Distributed Prospectus is not
materially different from the Filed Prospectus.
(xii) the Company is duly registered with the Commission
under the Investment Act as a closedend nondiversified management investment
company, and all action under the Securities Act and the Investment Company Act
necessary to make the public offering and consummate the sale of the Shares as
provided in this Agreement has been taken by the Company.
(d) The Underwriters shall have received on the Closing Date
an opinion of Bass, Xxxxx & Xxxx PLC, counsel for the Selling Shareholders,
dated the Closing Date, to the effect that:
(i) This Agreement has been duly authorized, executed
and delivered by or on behalf of each of the Selling Shareholders. The Custody
Agreement and Power of Attorney has been duly authorized, executed and
delivered by or on behalf of each of the Selling Shareholders and constitutes
the valid and binding agreement of such Selling Shareholder in accordance with
its terms (except as (A) such enforceability may be limited by applicable
bankruptcy,
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Page 15
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditor's rights and the
application of equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law) relating to the availability
of remedies, and (B) to the extent that rights to indemnity or contribution may
be limited by United States federal or state securities law and the public
policy underlying such laws);
(ii) Such Selling Shareholder has full legal right, power
and authority to enter into this Agreement and the Custody Agreement and Power
of Attorney signed by such Selling Shareholder and the Company, as Custodian,
relating to the deposit of the Shares to be sold by such Selling Shareholder
and appointing certain individuals as such Selling Shareholder's
attorneys-in-fact to the extent set forth therein, relating to the transactions
contemplated hereby and by the Registration Statement.
(iii) The execution and delivery by such Selling
Shareholder of, and the performance by such Selling Shareholder of its
obligations under, this Agreement, and the Custody Agreement and Power of
Attorney will not contravene any provision of applicable law, or the
certificate of incorporation or by-laws of such Selling Shareholder (if such
Selling Shareholder is a corporation), or, to such counsel's knowledge, any
agreement or other instrument binding upon such Selling Shareholder or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and, to such counsel's knowledge,
no consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by such Selling
Shareholder of its obligations under this Agreement or the Custody Agreement
and Power of Attorney of such Selling Shareholder.
(iv) Upon transfer of the shares to Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxx Xxxxxxx & Co. Incorporated, on behalf of itself and as
designee of the other Underwriters, will acquire such shares free of any
adverse claims (within the meaning of Section 8302 of the Uniform Commercial
Code as in effect in the State of New York (the "New York UCC")). "Transfer" of
the shares to Xxxxxx Xxxxxxx & Co. Incorporated will occur upon the making by
The Depository Trust Company of appropriate entries transferring the shares on
its books and records to the account of Xxxxxx Xxxxxxx & Co. Incorporated at
The Depository Trust Company. The opinion set forth in this paragraph (iv) is
subject to the following qualifications:
(A) we have assumed that each of the Underwriters
acquired its interest in the shares in good faith and without notice of any
adverse claims;
(B) we have assumed that appropriate entries
transferring the shares on the books and records of The Depository Trust
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Page 16
Company to the account of the Underwriter have been made and that such entries
are complete and accurate in all respects and that the shares will be
identified on the records of The Depository Trust Company for the sole and
exclusive account of Xxxxxx Xxxxxxx & Co. Incorporated;
(C) we have assumed that the shares have been
deposited by First Union National Bank, as transfer agent in the "underwriting
account" at The Depository Trust Company, to be held in that account for the
benefit of the Selling Shareholders, and will be transferred from that account
to the account of Xxxxxx Xxxxxxx & Co. Incorporated at The Depository Trust
Company upon payment therefor pursuant to the terms of the Underwriting
Agreement;
(D) we have assumed that (i) the shares are
maintained in the custody of The Depository Trust Company or a custodian bank
or a nominee of either subject to The Depository Trust Company's exclusive
control, (ii) the shares are in registered form either (x) registered in the
name of The Depository Trust Company or its nominee subject to The Depository
Trust Company's exclusive control, (y) indorsed to The Depository Trust
Company, or its nominee subject to The Depository Trust Company's exclusive
control or (z) indorsed in blank and (iii) will contain only signatures thereon
which are genuine;
(E) we have assumed that The Depository Trust
Company is a "clearing corporation" within the meaning of Section 8-102 of the
New York UCC; and
(F) we express no opinion with respect to the
priority of the lien of The Depository Trust Company.
(e) The Underwriters shall have received, on each of the
date hereof and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Xxxxxx Xxxxxxxx LLP, independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus; provided that the letter delivered on the Closing
Date shall use a "cutoff date" not earlier than the date hereof.
(f) The Underwriters shall have received on the Closing
Date an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Underwriters, dated the Closing Date, covering the matters referred to in
subparagraphs (vi), (vii) (but only as to the first sentence), (ix) (but only
as to the statements in the Prospectus under "Description of Capital Stock" and
"Underwriters") and (xi) of paragraph (c) above.
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With respect to subparagraph (xi) of paragraph (c) above,
Bass, Xxxxx & Xxxx PLC and Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP may state
that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto and review and discussion of the contents thereof, but are
without independent check or verification, except as specified.
The opinion of Bass, Xxxxx & Xxxx PLC described in paragraphs
(c) and (d) above (and any opinions of counsel for any Selling Shareholder
referred to in the immediately preceding paragraph) shall be rendered to the
Underwriters at the request of the Company or one or more of the Selling
Shareholders, as the case may be, and shall so state therein.
(g) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and the Company and all of its executive
officers and directors relating to sales and certain other dispositions of
shares of Common Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on the Closing Date.
(h) The several obligations of the U.S. Underwriters to
purchase Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company, the due
authorization and issuance of the Additional Shares and other matters related to
the issuance of the Additional Shares.
7. COVENANTS OF THE COMPANY. In further consideration of
the agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, nine signed copies of
the Registration Statement (including exhibits thereto and documents
incorporated by reference) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto but, including documents
incorporated by reference) and during the period mentioned in paragraph (c)
below, as many copies of the Distributed Prospectus and any supplements and
amendments thereto or to the Registration Statement as you may reasonably
request, prior to 1:00 P.M. New York City time on the business day next
succeeding the date of this Agreement.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the Commission
within the applicable period specified in Rule 497 under the Securities Act any
prospectus required to be filed pursuant to such Rule.
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Page 18
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, or if, in the opinion of counsel
for the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose
names and addresses you will furnish to the Company) to which Shares may have
been sold by you on behalf of the Underwriters and to any other dealers upon
request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will comply
with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering the
twelve-month period ending March 31, 1998 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
8. EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Sellers
agree to pay or cause to be paid all expenses incident to the performance of
their obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company's counsel, the Company's accountants and counsel
for the Selling Shareholders in connection with the registration and delivery
of the Shares under the Securities Act and the Investment Company Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies thereof to
the Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, if
applicable, (iii) all expenses in connection with the qualification of the
Shares for offer and sale under state securities laws as provided in Section
7(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification, (iv) all
filing fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Shares by
the National Association
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of Securities Dealers, Inc., (v) the cost of printing certificates representing
the Shares, (vi) the costs and charges of any transfer agent, registrar or
depositary, (vii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the offering of the Shares, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, and (viii) all
other costs and expenses incident to the performance of the obligations of the
Sellers hereunder for which provision is not otherwise made in this Section. It
is understood, however, that except as provided in this Section, Section 9
entitled "Indemnity and Contribution", and the last paragraph of Section 11
below, the Underwriters will pay all of their costs and expenses, including
fees and disbursements of their counsel, stock transfer taxes payable on resale
of any of the Shares by them and any advertising expenses connected with any
offers they may make.
The provisions of this Section shall not supersede or
otherwise affect any agreement that the Sellers may otherwise have for the
allocation of such expenses among themselves.
9. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(b) Each Selling Shareholder agrees, severally and not
jointly, to indemnify and hold harmless the Company and the Underwriters, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other
20
Page 20
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Selling Shareholder furnished in writing by or on behalf of such Selling
Shareholder expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Shareholders, the directors
of the Company, the officers of the Company who sign the Registration Statement
and each person, if any, who controls the Company or any Selling Shareholder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraph (a), (b) or (c) of this Section
9, such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation
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of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (i) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Underwriters and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section and (iii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Selling Shareholders and all
persons, if any, who control any Selling Shareholder within the meaning of
either such Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Underwriters
and such control persons of any Underwriters, such firm shall be designated in
writing by Xxxxxx Xxxxxxx & Co. Incorporated. In the case of any such separate
firm for the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. In the case of
any such separate firm for the Selling Shareholders and such control persons of
any Selling Shareholders, such firm shall be designated in writing by the
persons named as attorneys-in-fact for the Selling Shareholders under the Powers
of Attorney. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(e) To the extent the indemnification provided for in
paragraph (a), (b) or (c) of this Section 9 is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party or parties on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above
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 indemnifying party or parties on the one hand and of
the indemnified party or parties on the other hand in
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Page 22
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers on the one hand
and the Underwriters on the other hand in connection with the offering of the
Shares shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Shares (before deducting expenses) received
by each Seller and the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the Shares. The
relative fault of the Sellers on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Sellers or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 9 are several in proportion to the respective number of Shares
they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 9 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 that does not take account of
the equitable considerations referred to in paragraph (e) of this Section 9. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in
this Section 9 and the representations, warranties and other statements of the
Company and the Selling Shareholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, any Selling Shareholder or any person
controlling any Selling Shareholder, or the Company, its officers or directors
or any person controlling the Company and (iii) acceptance of and payment for
any of the Shares.
10. TERMINATION. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of
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Page 23
this Agreement and prior to the Closing Date (i) trading generally shall
have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have
been declared by either Federal or New York State authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change
in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event, singly or together with any other
such event, makes it, in your judgment, impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus.
11. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement
shall become effective upon the execution and delivery hereof by the
parties hereto.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse
to purchase Shares that it has or they have agreed to purchase hereunder on
such date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate number of the Shares to be purchased
on such date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their
respective names in Schedule II or Schedule III bears to the aggregate
number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date;
provided that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to
this Section 9 by an amount in excess of one-ninth of such number of Shares
without the written consent of such Underwriter. If, on the Closing Date,
any Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased, and arrangements satisfactory to you, the Company
and the Selling Shareholders for the purchase of such Firm Shares are not
made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Shareholders. In any such case either you or the
relevant Sellers shall have the right to postpone the Closing Date, but in
no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, on the Option
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Page 24
Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Additional Shares to be purchased, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation
hereunder to purchase Additional Shares or (ii) purchase not less than the
number of Additional Shares that such nondefaulting Underwriters would have
been obligated to purchase in the absence of such default. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this
Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of any
Seller to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason any Seller shall be unable to perform its
obligations under this Agreement, the Sellers will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including
the fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
12. COUNTERPARTS. This Agreement may be signed in two or
more counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
13. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New
York.
14. HEADINGS. The headings of the sections of this
Agreement have been inserted for convenience of reference only and
shall not be deemed a part of this Agreement.
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Very truly yours,
SIRROM CAPITAL CORPORATION
By:
---------------------------------
Name: Xxxxxx X. Xxxxxx III
Title: President and Chief
Executive Officer
The Selling Shareholders
named in Schedule I hereto,
acting severally
By:
---------------------------------
Attorney-in-Fact
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
THE XXXXXXXX-XXXXXXXX COMPANY LLC
X.X. XXXXXXXX & CO.
SUNTRUST EQUITABLE SECURITIES CORPORATION
Acting severally on behalf of themselves
and the several U.S. Underwriters named
in Schedule II hereto.
By Xxxxxx Xxxxxxx & Co. Incorporated
By:
---------------------------
Name: Xxxxxxx X. Xxxxxx XX
Title: Principal
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
THE XXXXXXXX-XXXXXXXX COMPANY LLC
X.X. XXXXXXXX & CO.
SUNTRUST EQUITABLE SECURITIES CORPORATION
Acting severally on behalf of themselves
and the several International Underwriters
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named in Schedule III hereto.
By Xxxxxx Xxxxxxx & Co. International Limited
By:
---------------------------
Name: Xxxxxxx X. Xxxxxx XX
Title: Principal
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Schedule I
Number of
Firm Shares
Selling Shareholders To Be Purchased
-------------------- ---------------
Total 750,000
=======
28
28
Schedule II
U.S. Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated
The Xxxxxxxx-Xxxxxxxx Company LLC
X.X. Xxxxxxxx & Co.
SunTrust Equitable Securities Corporation
Total U.S. Firm Shares ............. 4,000,000
=========
29
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Schedule III
International Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co.
International Limited
The Xxxxxxxx-Xxxxxxxx Company LLC
X.X. Xxxxxxxx & Co.
SunTrust Equitable Securities Corporation
Total International Firm Shares ...... 1,000,000
=========
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Exhibit A
[FORM OF LOCKUP LETTER]
February __, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
The Xxxxxxxx-Xxxxxxxx Company LLC
X.X. Xxxxxxxx & Co.
SunTrust Equitable Securities Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. International Limited
The Xxxxxxxx-Xxxxxxxx Company LLC
X.X. Xxxxxxxx & Co.
SunTrust Equitable Securities Corporation
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co.
Incorporated ("Xxxxxx Xxxxxxx") and Xxxxxx Xxxxxxx & Co. International Limited
("MSIL") propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with Sirrom Capital Corporation, a Tennessee corporation (the
"Company") providing for the public offering (the "Public Offering") by the
several Underwriters, including Xxxxxx Xxxxxxx and MSIL (the "Underwriters") of
5,000,000 shares (the "Shares") of the Common Stock, no par value per share, of
the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "Prospectus"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to
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sell, grant any option, right or warrant to purchase, lend or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
(whether such shares or securities now owned by the undersigned or acquired
after the date of the Prospectus), or (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (1) the sale of any Shares to the Underwriters pursuant to
the Underwriting Agreement or (2) the issuance by the Company of shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of which the Underwriters have been
advised in writing.
Whether or not the Public Offering actually occurs depends on
a number of factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company, the Selling Shareholders and Underwriters and
the Underwriters.
Very truly yours,
-------------------------
(Name)
-------------------------
(Address)
