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EXHIBIT h.1
2,900,000 Shares
Sirrom Capital Corporation
Shares of Common Stock, No Par Value Per Share
UNDERWRITING AGREEMENT
January __, 1997
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January __, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc.
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
Equitable Securities Corporation
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
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, and certain shareholders of the
Company (the "Selling Shareholders") named in Schedule I hereto severally
propose to sell to the several Underwriters, an aggregate of 2,900,000 shares
of the Common Stock, no par value per share, of the Company (the "Firm
Shares"), of which 2,680,513 shares are to be issued and sold by the Company
and 219,487 shares are to be sold by the Selling Shareholders, each Selling
Shareholder selling the amount set forth opposite such Selling Shareholder's
name in Schedule I hereto.
It is understood that, subject to the conditions hereinafter
stated, 2,320,000 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
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Underwriters of even date herewith), and 580,000 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. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& Co. Incorporated, The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc., ▇.▇. ▇▇▇▇▇▇▇▇ & Co. and
Equitable Securities Corporation shall act as representatives (the "U.S.
Representatives") of the several U.S. Underwriters, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
International Limited shall act as representative (the "International
Representative") of the several International Underwriters. The U.S.
Underwriters and the International Underwriters are hereinafter collectively
referred to as the "Underwriters."
The Company also proposes to issue and sell to the several
U.S. Underwriters not more than an additional 435,000 shares of its Common
Stock, no par value per share, (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 2 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 N-2 (File No. 333-19493) 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
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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."
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 post-effective amendment to the Registration Statement
(except any post-effective amendment required by Rule 8b-16 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
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of Registration of the Company filed with the Commission on Form N-8A (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 post-effective amendment to the Registration Statement
(except any post-effective amendment required by Rule 8b-16 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 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.
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(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 non-assessable and are owned directly
by the Company, free and clear of all liens, encumbrances, equities or claims.
(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.(1)
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations
----------------------------------
(1) If the Closing occurs prior to February 1, 1997, this section would
be modified to provide for the registration rights (which rights
expire on February 1, 1997) of each shareholder who received
common stock in the conversion.
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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 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.
(j) 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 non-diversified closed-end 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
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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 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 costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required
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for clean-up, closure of properties or compliance with Environmental Laws or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(t) 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)
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 full legal right, power and
authority to enter into this Agreement, the Custody Agreement signed by such
Selling Shareholder and the Company, as Custodian, relating to the deposit of
the Shares to be sold by such Selling Shareholder (the "Custody Agreement") and
the Power of Attorney 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 (the
"Power of Attorney"). This Agreement, the Power of Attorney and the Custody
Agreement have been duly executed and delivered by such Selling Shareholder,
and (assuming this Agreement is a binding agreement of yours) constitute the
valid and binding agreements of such Selling Shareholder in accordance with
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(2) If the Closing occurs prior to February 1, 1997, this section would be
modified to provide for the registration rights (which rights expire
on February 1, 1997) of each shareholder who received common
stock in the conversion.
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their 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).
(c) The execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations under, this
Agreement, the Custody Agreement and the 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, the Custody Agreement or the Power of
Attorney of such Selling Shareholder.
(d) Such Selling Shareholder has, and on the Closing Date (as
defined below) will have, valid title to the Shares to be sold by such Selling
Shareholder and the legal right and power, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement and the
Power of Attorney and to sell, transfer and deliver the Shares to be sold by
such Selling Shareholder.
(e) Physical delivery in the State of New York of the Shares
to be sold by such Selling Shareholder pursuant to this Agreement will pass
title to such Shares free and clear of any security interests, claims, liens,
equities and other 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
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Rule 8b-16 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
the Prospectus was or is filed with the Commission and at the 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, 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
W-8 or W-9 (or other applicable form or statement specified by Treasury
Department Regulations in lieu thereof).
3. AGREEMENTS TO SELL AND PURCHASE. Each Seller, severally and
not jointly, 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
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stated, agrees, severally and not jointly, to purchase from such Seller 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, the Company agrees
to sell to the U.S. Underwriters the Additional Shares, and the U.S.
Underwriters shall have a one-time right to purchase, severally and not
jointly, up to 435,000 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 Company 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 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 the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as the U.S.
Representatives may determine) 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.
The Company hereby agrees that, without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & 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 or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities
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convertible into or exercisable or exchangeable for Common Stock (whether such
shares or any such securities are now owned by such stockholder or acquired
after the date of the Prospectus) 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 or (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.
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.$[____] a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in
excess of U.S.$[____] a share, to any Underwriter or to certain other dealers.
5. PAYMENT AND DELIVERY. Payment for the Firm Shares to be
sold by each Seller shall be made to such Seller 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 [_________], 1997, or at such other time on the same or such
other date, not later than [_________], 1997, as shall be designated in writing
by you. The time and date of such payment are hereinafter referred to as the
"Closing Date."
Payment for any Additional Shares shall be made to the Company
in Federal or other funds immediately available in New York City 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
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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 [________], 1997,
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 [_______] (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:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the direction of
the possible change, in the rating accorded any of the Company's securities by
any "nationally recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in
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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 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, 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, & ▇▇▇▇ 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
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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 non-assessable and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(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;(3)
----------------------------------
(3) If the Closing occurs prior to February 1, 1997, this section would
be modified to provide for the registration rights (which rights
expire on February 1, 1997) of each shareholder who received
common stock in the conversion.
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(vii) this Agreement and the Custody Agreement
have been duly authorized, executed and delivered by the Company and
(assuming this Agreement is a binding agreement of yours) constitute
the valid and binding agreements of such Company in accordance with
their 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 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 securities or Blue Sky
laws of the various states in connection with the offer and sale of the Shares
by the U.S. 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) the Company and its subsidiaries (A) are in
compliance with any and all applicable Environmental Laws, (B) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (C) 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; and
(xii) 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 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
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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.
(xiii) the Company is duly registered with the
Commission under the Investment Act as a closed-end non-diversified 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, ▇▇▇▇▇ & ▇▇▇▇ PLC, counsel for the Selling Shareholders,
dated the Closing Date, to the effect that:
(i) This Agreement, the Custody Agreement and the
Power of Attorney has been duly authorized, executed and delivered by or on
behalf of each of the Selling Shareholders and (assuming this Agreement is a
binding agreement of yours) constitute the valid and binding agreements of such
Selling Shareholder in accordance with their 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);
(ii) Such Selling Shareholder has full legal right,
power and authority to enter into this Agreement, the Custody Agreement signed
by such Selling Shareholder and the Company, as Custodian, relating to the
deposit of the Shares to be sold by such Selling Shareholder (the "Custody
Agreement") and the Power of Attorney appointing certain individuals as such
Selling Shareholder's attorneys-in-fact to the extent set forth
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therein, relating to the transactions contemplated hereby and by the
Registration Statement (the "Power of Attorney").
(iii) The execution and delivery by such Selling
Shareholder of, and the performance by such Selling Shareholder of its
obligations under, this Agreement, the Custody Agreement and the 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, the Custody Agreement or the Power of Attorney of such Selling
Shareholder.
(iv) Each of the Selling Shareholders has valid title
to the Shares to be sold by such Selling Shareholder and the legal right and
power, and all authorization and approval required by law, to enter into this
Agreement, the Custody Agreement and Power of Attorney of such Selling
Shareholder and to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder;
(v) Physical delivery in the State of New York of the
Shares to be sold by each Selling Shareholder pursuant to this Agreement will
pass title to such Shares free and clear of any security interests, claims,
liens, equities and other encumbrances; and
(vi) Such counsel (A) 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 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, the Pro-
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spectus, or any amendments or supplements thereto and (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
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, 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.
(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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 "cut-off date" not earlier than the date hereof.
(f) The Underwriters shall have received on the Closing Date
an opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Underwriters, dated the Closing Date, covering the matters referred to in
subparagraphs (vi), (vii), (ix) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters") and (xii)
of paragraph (c) above.
With respect to subparagraph (xii) of paragraph (c) above,
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, and with respect to subparagraph (vi)
of paragraph (d) above, Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC, 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. With respect to paragraph (d)
above, [_______] may rely upon an opinion or opinions of counsel for any
Selling Shareholders and, with respect to factual matters and to the
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22
extent such counsel deems appropriate, upon the representations of each Selling
Shareholder contained herein and in the Custody Agreement and Power of Attorney
of such Selling Shareholder and in other documents and instruments; provided
that (A) each such counsel for the Selling Shareholders is satisfactory to your
counsel, (B) a copy of each opinion so relied upon is delivered to you and is
in form and substance satisfactory to your counsel, (C) copies of such Custody
Agreements and Powers of Attorney and of any such other documents and
instruments shall be delivered to you and shall be in form and substance
satisfactory to your counsel and (D) [________] shall state in their opinion
that they are justified in relying on each such other opinion.
The opinion of Bass, ▇▇▇▇▇ & ▇▇▇▇ 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 all of the Company's 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:
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(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.
(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.
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(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](4) 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, 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 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
----------------------------------
(4) Insert date one year after the end of the Company's fiscal quarter in
which the closing will occur.
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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
Seller 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 infor-
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26
mation 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 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
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27
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 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
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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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & 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
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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
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
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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 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
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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 Agree-
30
32
ment 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 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
non-defaulting 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.
31
33
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.
Very truly yours,
SIRROM CAPITAL MANAGEMENT
By
---------------------------------
Name:
Title:
The Selling Shareholders
named in Schedule I hereto,
acting severally
By
---------------------------------
Attorney-in-Fact
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY, INC.
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
EQUITABLE SECURITIES CORPORATION
Acting severally on behalf of themselves
and the several U.S. Underwriters named
in Schedule II hereto.
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By
---------------------------
Name:
Title:
32
34
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED
Acting severally on behalf of itself
and the several International Underwriters
named in Schedule III hereto.
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
By
----------------------------
Name:
Title:
33
35
Schedule I
Number of
Firm Shares
Selling Shareholders To Be Purchased
-------------------- ---------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 5,788
Bank of Scotland London Nominees Limited 1,528
O. ▇▇▇▇ ▇▇▇▇▇▇▇ 4,008
Hare & Co. 25,454
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 2,500
▇▇▇▇ ▇. ▇▇▇▇▇▇ 2,500
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee for
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,500
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee for
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,500
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 536
▇▇▇▇▇▇▇ ▇▇▇▇ 8,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 4,008
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 68,800
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 24,244
▇▇▇▇▇ ▇. ▇▇▇▇▇ 50,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ 12,121
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 5,000
-------
Total
Total 219,487
=======
36
Schedule II
U.S. Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 1,044,000
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc. 487,200
▇.▇. ▇▇▇▇▇▇▇▇ & Co. 394,400
Equitable Securities Corporation 394,400
---------
Total U.S. Firm Shares ............. 2,320,000
=========
37
Schedule III
International Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
International Limited 261,000
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc. 121,800
▇.▇. ▇▇▇▇▇▇▇▇ & Co. 98,600
Equitable Securities Corporation 98,600
-------
Total International Firm Shares ...... 580,000
=======
38
Exhibit A
[FORM OF LOCK-UP LETTER]
January __, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc.
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
Equitable Securities Corporation
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL (the "Underwriters") of
2,900,000 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 ▇▇▇▇▇▇
▇▇▇▇▇▇▇ 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 con-
39
tract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, 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)