Exhibit (h)(2)
Main Street Capital Corporation
(a Maryland Corporation)
2,500,000 Shares of Common Stock
Par Value $0.01 per Share
Underwriting Agreement
January 13, 2010
Morgan Keegan & Company, Inc.
As representative of the several Underwriters
named in Schedule A
c/o Morgan Keegan & Company, Inc.
50 North Front Street
Memphis, Tennessee 38103
Ladies and Gentlemen:
Main Street Capital Corporation, a Maryland corporation (the Company), confirms its
agreement with the underwriters listed on Schedule A, for whom Morgan Keegan & Company,
Inc. (Morgan Keegan) is acting as representative (collectively, the Underwriters), with respect
to the issue and sale by the Company and the purchase by the Underwriters, acting severally and not
jointly (the Offering), of the respective number of shares of the Companys common stock, par
value $0.01 per share (the Common Shares), set forth in Schedule A hereof, and with
respect to the grant by the Company to the Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 375,000 additional
Common Shares to cover over-allotments, if any. The aforesaid 2,500,000 Common Shares (the Firm
Shares) to be purchased by the Underwriters and all or any part of the 375,000 Common Shares
subject to the option described in Section 2(b) hereof (the Option Shares) are
collectively referred to as the Shares. The Company understands that the Underwriters propose to
make a public offering of the Shares as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
The Company owns (i) 100% of the limited partnership interests in Main Street Mezzanine Fund,
LP (SBIC Fund I), (ii) 88% of the limited partnership interests in Main Street Capital II, LP
(SBIC Fund II and together with SBIC Fund I, the Funds), (iii) 100% of the equity interests of
Main Street Mezzanine Management, LLC, the general partner of SBIC Fund I (MSGPI), (iv) 100% of
the equity interests of Main Street Capital II GP, LLC, the general partner of SBIC Fund II
(MSGPII and together with MSGPI, the General Partners), and (v) 100% of the equity interests of
Main Street Capital Partners, LLC, the Funds manager and investment advisor (the Investment
Advisor). The Company, the Funds, the General Partners and the Investment Advisor are collectively
referred to as the Main Street Entities.
Pursuant to the Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder (collectively, the 1940 Act), the Company has filed with
the United States Securities and Exchange Commission (the Commission) a Notification of Election
to be Subject to Sections 55 through 65 of the 1940 Act filed on Form N-54A (File No. 814-00751)
(the BDC Election), pursuant to which the Company elected to be treated as a business development
company (BDC) under the 1940 Act. The Company has elected to be treated for federal income tax
purposes as a regulated investment company (RIC) under Subchapter M of the Internal Revenue Code
of 1986, as amended (the Code).
Pursuant to the Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the 1933 Act), the Company has prepared and filed with the Commission a
registration statement on Form N-2 (File No. 333-155806), which registers the offer and sale of the
Common Shares to be issued from time to time by the Company, including the Shares. The
registration statement as amended, including the exhibits and schedules thereto, at the time it
became effective, or hereafter becomes effective, including any information contained in a
prospectus subsequently filed with the Commission pursuant to Rule 497 under the 1933 Act and
deemed to be a part of the registration statement at the time of effectiveness pursuant to Rule
430C under the 1933 Act, any registration statement filed pursuant to Rule 462(b) under the 1933
Act, and any post-effective amendment thereto, is hereinafter referred to as the Registration
Statement.
The base prospectus in the form in which it has most recently been filed with the Commission
and declared effective on or prior to the date of this Agreement, is hereinafter referred to as the
Base Prospectus. The Base Prospectus and the preliminary prospectus supplement, dated January
12, 2010, that was used prior to the execution and delivery of this Agreement and filed pursuant to
Rule 497 under the 1933 Act relating to the Shares, is herein called the Preliminary Prospectus.
The Company will file with the Commission in accordance with Rule 497, a final prospectus
supplement (the Prospectus Supplement) supplementing the Base Prospectus in connection with the
offer and sale of the Shares. The Base Prospectus and Prospectus Supplement are hereinafter
referred to collectively as the Prospectus.
The Preliminary Prospectus, together with the information set forth on Schedule B
hereto (which information the Underwriters have informed the Company is being conveyed orally by
the Underwriters to prospective purchasers at or prior to the Underwriters confirmation of sales
of the Shares in the public offering) is hereinafter referred to as the Disclosure Package.
All references in this Agreement to the Registration Statement, the Preliminary Prospectus,
the Prospectus Supplement or any amendments or supplements to any of the foregoing, shall include
any copy thereof filed with the Commission pursuant to the Electronic Data Gathering Analysis and
Retrieval System, or any successor system (EDGAR).
Section 1. Representations and Warranties of the Company.
The Company represents and warrants to and agrees with each of the Underwriters, as of the
date hereof, the Applicable Time (defined below), the Closing Time referred to in Section
2(c) hereof and as of each Date of Delivery (if any) referred to in Section 2(b)
hereof, as follows:
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(a) Compliance with Registration Requirements.
(i) The Company meets the requirements for use of Form N-2 under the 1933 Act. The
Registration Statement has become effective under the 1933 Act, and no stop order
suspending the effectiveness of the Registration Statement or suspending the use of
the Preliminary Prospectus or the Prospectus has been issued, and no proceedings for
any such purpose, have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of the
Commission for additional information with respect thereto has been complied with.
(ii) At the respective times the Registration Statement, and any post-effective
amendment thereto, became effective and at the Closing Time, as hereinafter defined
(and, if any Option Shares are purchased, at the Date of Delivery), the Registration
Statement, and all amendments and supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act and did not and will not
contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading. Neither the Prospectus nor any amendment or supplement thereto, at the
time the Prospectus or any such amendment or supplement thereto was issued and at
the Closing Time (and, if any Option Shares are purchased, at the Date of Delivery),
included or will include any untrue statement of a material fact or omitted or will
omit to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The
representations and warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement or the Prospectus (including any
amendments or supplements to the Registration Statement or the Prospectus) made in
reliance upon and in conformity with information furnished to the Company in writing
by or on behalf of any Underwriter for use in the Registration Statement or the
Prospectus (or any amendments or supplements to the Registration Statement or the
Prospectus), it being understood and agreed that the only such information furnished
to the Company in writing by the Underwriters consists of the information described
in Section 6(f) below.
(iii) The Disclosure Package as of the Applicable Time does not include any untrue
statement of a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under which they
were made, not misleading. As used in this subsection and elsewhere in this
Agreement, Applicable Time means 9:00 a.m. (Eastern Standard Time) on January 13,
2010; provided that, if, subsequent to the date of this Agreement, the Company and
the Underwriters have determined that the Disclosure Package included an untrue
statement of material fact or omitted a statement of material fact necessary to make
the information therein not misleading, and have agreed, in connection with the
public offering of the Shares, to provide an opportunity to
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purchasers to terminate their old contracts and enter into new contracts, then
Applicable Time will refer to the information available to purchasers at the time
of entry into the first such new contract. The representations and warranties in
this subsection shall not apply to statements in or omissions from the Disclosure
Package based upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by any Underwriter or its representative
expressly for use therein, it being understood and agreed that the only such
information furnished by the Underwriters to the Company consists of the information
described in Section 6(f) hereof.
(iv) The Preliminary Prospectus when first filed under Rule 497 and as of its date
complied in all material respects with the 1933 Act, and if filed by electronic
transmission pursuant to EDGAR (except as may be permitted by Regulation S-T under
the 1933 Act), was substantially identical to the copy thereof delivered to the
Underwriters for use in connection with this Offering. The Prospectus Supplement
when first filed under Rule 497 and as of its date will comply in all material
respects with the 1933 Act, and if filed by electronic transmission pursuant to
EDGAR (except as may be permitted by Regulation S-T under the 1933 Act), will be
substantially identical to the copy thereof delivered to the Underwriters for use in
connection with this Offering.
(b) Independent Accountant. Grant Thornton LLP, who has expressed its opinion with
respect to certain of the financial statements (which term as used in this Agreement includes the
related notes thereto) and supporting schedules filed with the Commission as a part of the
Registration Statement and included in the Prospectus and the Disclosure Package, is an independent
registered public accounting firm as required by the 1933 Act and the 1934 Act and the rules and
regulations of the Public Company Accounting Oversight Board.
(c) Expense Summary. The information set forth in the Prospectus and the Disclosure
Package under the caption Fees and Expenses has been prepared in accordance with the requirements
of Form N-2 and to the extent estimated or projected, such estimates or projections are believed to
be reasonably based.
(d) Preparation of the Financial Statements. The consolidated financial statements,
together with the related schedules and notes thereto, filed with the Commission as a part of the
Registration Statement and included in the Prospectus and the Disclosure Package present fairly the
consolidated financial position of the Company and its consolidated subsidiaries as of and at the
dates indicated and the results of their operations and cash flows for the periods specified. Such
financial statements have been prepared in conformity with accounting principles generally accepted
in the United States (GAAP) applied on a consistent basis throughout the periods involved, except
as may be expressly stated in the related notes thereto. The pro forma financial statements and the
related notes thereto included in the Registration Statement, the Disclosure Package and the
Prospectus present fairly, in all material respects, the information shown therein, have been
prepared in accordance with the Commissions rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments used
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therein are appropriate to give effect to the transactions and circumstances referred to
therein. Other than the financial statements included in the Registration Statement, no other
financial statements or supporting schedules are required to be included therein. The financial
data and financial information included in the Prospectus and the Disclosure Package under the
captions Selected Financial Data and Unaudited Selected Pro Forma Combined Financial Data
present fairly in all material respects the information shown therein and have been compiled on a
basis consistent with the financial statements included in the Registration Statement. All
disclosures contained in the Registration Statement, the Disclosure Package or the Prospectus
regarding non-GAAP financial measures (as such term is defined by the rules and regulations of
the Commission) comply with Regulation G under the 1934 Act and Item 10 of Regulation S-K of the
1933 Act, to the extent applicable.
(e) Internal Control Over Financial Reporting. The Company maintains a system of
internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f)
under the 1934 Act). The Companys auditors and the Audit Committee of the Board of Directors have
been advised of (1) any known significant deficiencies in the design or operation of internal
control over financial reporting that could adversely affect the ability to record, process,
summarize, and report financial data and (2) any known fraud, whether or not material, that
involves management or other employees who have a role in the Companys internal control over
financial reporting; and such deficiencies or fraud will not result in a Material Adverse Effect
(as defined below). The Companys internal control over financial reporting is effective and the
Company is not aware of any material weakness in its internal control over financial reporting.
(f) Disclosure Controls. The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15 and 15d-15 under the 1934 Act) that (i) are
designed to ensure that material information relating to the Company, including its consolidated
subsidiaries, is made known to the Companys principal executive officer and its principal
financial officer by others within those entities, particularly during the periods in which the
periodic reports required under the 1934 Act are being prepared, (ii) will be evaluated for
effectiveness as of the end of each fiscal quarter and fiscal year of the Company, and (iii) are
effective to perform the functions for which they were established.
(g) No Material Adverse Change. Except as otherwise disclosed in the Disclosure
Package and the Prospectus, subsequent to the respective dates as of which information is given in
the Disclosure Package and the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, net asset value, prospects, business or
operations, whether or not arising from transactions in the ordinary course of business, of the
Company, the Funds, the General Partners and the Investment Advisor, considered as one entity (any
such change or effect, where the context so requires is called a Material Adverse Change or a
Material Adverse Effect); (ii) the Company, the Funds, the General Partners and the Investment
Advisor, considered as one entity, have not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of business or entered into any material
transaction or agreement not in the ordinary course of business; and (iii) except for regular
distributions paid or declared by the Company to its stockholders consistent with past
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practice or any other distributions described in the Disclosure Package and the Prospectus,
there has been no dividend or distribution of any kind declared, paid or made by the Company, the
Funds, the General Partners or the Investment Advisor.
(h) Good Standing of the Company, the Funds, the General Partners and the Investment
Advisor. The Company is duly incorporated and validly existing as a corporation in good
standing under the laws of the state of Maryland and has the corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the Prospectus and the
Disclosure Package and to enter into and perform its obligations under this Agreement. The Company
is duly qualified as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate, have a Material
Adverse Effect.
Each of SBIC Fund I and SBIC Fund II is a limited partnership duly organized and validly
existing as a limited partnership under the laws of the state of Delaware and is duly qualified as
a foreign limited partnership to transact business, and is in good standing in each jurisdiction in
which such qualification is required whether by reason of ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so qualify or be in good
standing would not, individually or in the aggregate, have a Material Adverse Effect.
Each of the General Partners and the Investment Advisor is a limited liability company that is
duly formed and validly existing as a limited liability company under the laws of the State of
Delaware and is duly qualified as a foreign limited liability company to transact business, and is
in good standing in each jurisdiction in which such qualification is required whether by reason of
ownership or leasing of property or the conduct of business, except for such jurisdictions where
the failure to so qualify or be in good standing would not, individually or in the aggregate, have
a Material Adverse Effect.
All of the issued and outstanding limited liability company interests and partnership
interests of the General Partners, the Investment Advisor and the Funds, respectively, have been
duly authorized and validly issued, are fully paid and non-assessable and, except for SBIC Fund II,
owned 100% by the Company, directly or indirectly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim.
(i) Subsidiaries of the Company. The Company does not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities of any corporation or other entity
other than (i) its interests in the Funds, the General Partners, the Investment Advisor, MSCII
Equity Interests, LLC, Main Street Equity Interests, Inc., and CPEC Holdings, Inc. and (ii) those
corporations or other entities accounted for as portfolio investments in accordance with the
Commissions rules and regulations (each a Portfolio Company and collectively, the Portfolio
Companies).
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(j) Portfolio Companies. The Company or the Funds have duly authorized, executed and
delivered agreements (each a Portfolio Company Agreement) required to make the investments in the
Portfolio Companies. Except as otherwise disclosed in the Disclosure Package and the Prospectus,
none of the Portfolio Companies is currently on non-accrual status.
(k) Officers and Directors. Except as disclosed in the Prospectus and the Disclosure
Package, no person is serving or acting as an officer or director of the Company except in
accordance with the applicable provisions of the 1940 Act. Except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, no director of the Company is (i) an
interested person (as defined in the 1940 Act) of the Company or (ii) an affiliated person (as
defined in the 1940 Act) of any Underwriter. For purposes of this Section 1(k), the
Company shall be entitled to reasonably rely on representations from such officers and directors.
(l) Business Development Company Election. The Company has filed the BDC Election and,
accordingly, has duly elected to be subject to the provisions of Sections 55 through 65 of the 1940
Act. At the time the BDC Election was filed with the Commission, it (i) contained all statements
required to be stated therein in accordance with, and complied in all material respect with the
requirements of, the 1940 Act and (ii) did not include any untrue statement of material fact or
omit to state a material fact necessary to make the statements therein not misleading. The Company
has not filed with the Commission any notice of withdrawal of the BDC Election pursuant to Section
54(c) of the 1940 Act, the BDC Election remains in full force and effect, and, to the Companys
knowledge, no order of suspension or revocation of the BDC Election under the 1940 Act has been
issued or proceedings therefore initiated or threatened by the Commission. The operations of the
Company are in compliance in all material respects with all applicable provisions of the 1940 Act
and the rules and regulations of the Commission thereunder, including the provisions applicable to
BDCs.
(m) Authorization and Description of Common Shares. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Prospectus and the Disclosure
Package as of the date thereof under the caption Capitalization. The Common Shares (including
the Shares) conform in all material respects to the description thereof contained in the Prospectus
and the Disclosure Package. All issued and outstanding Common Shares of the Company have been duly
authorized and validly issued and are fully paid and non-assessable, and have been offered and sold
or exchanged by the Company in compliance with all applicable laws (including, without limitation,
federal and state securities laws). None of the outstanding Common Shares of the Company was issued
in violation of the preemptive or other similar rights of any security holder of the Company, nor
does any person have any preemptive right of first refusal or other right to acquire any of the
Shares covered by this Agreement. No shares of preferred stock of the Company have been designated,
offered, sold or issued and none of such shares of preferred stock are currently outstanding. The
description of the Companys stock option, stock bonus and other stock plans or arrangements, and
the options, restricted stock or other rights granted thereunder, set forth in the Prospectus and
the Disclosure Package accurately and fairly presents the information required to be shown with
respect to such plans, arrangements, options, awards and rights. The Shares to be sold pursuant to
this Agreement have been duly authorized by the Board of Directors of the Company for issuance and
sale to the Underwriters and, when issued and delivered by the Company pursuant to this Agreement
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against payment of the consideration set forth herein, will be validly issued, fully paid and
non-assessable.
(n) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required. None of the Main Street Entities are in violation of or default under (i) their
respective charter, by-laws, or any similar organizational document; (ii) any indenture, mortgage,
loan or credit agreement, note, contract, franchise, lease or other instrument, including any
Portfolio Company Agreement to which they are a party or bound or to which any of the properties or
assets are subject; or (iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over them or any of their properties, as applicable, except with respect to
clauses (ii) and (iii) herein, for such violations or defaults as would not, individually or in the
aggregate, have a Material Adverse Effect. No person has the right to act as an underwriter or as
a financial advisor to the Company in connection with or by reason of the offer and sale of the
Shares contemplated hereby.
The execution, delivery and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby and by the Prospectus and the Disclosure Package (i) have
been duly authorized by all necessary corporate action, have been effected in accordance with
Section 23(b) of the 1940 Act (subject to the provisions applicable to BDCs under, and pursuant to
Section 63 of the 1940 Act) and will not result in any violation of the provisions of the charter
or bylaws of the Company, (ii) will not conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, or require the consent of any other party to, any existing
instrument, except for such conflicts, breaches, defaults, liens, charges or encumbrances as would
not, individually or in the aggregate, result in a Material Adverse Effect and (iii) will not
result in any violation of any law, administrative regulation or administrative or court decree
applicable to the Company. No consent, approval, authorization or other order of, or registration
or filing with, any court or other governmental or regulatory authority or agency, is required for
the execution, delivery and performance of this Agreement by the Company or consummation of the
transactions contemplated hereby and by the Prospectus and the Disclosure Package, except such as
have already been obtained or made under the 1933 Act and the 1940 Act and such as may be required
under any applicable state securities or blue sky laws, from the Financial Industry Regulatory
Authority, Inc. (FINRA) or under the rules and regulations of the Nasdaq Global Select Market
(NASDAQ).
(o) Material Agreements. Each material agreement described in the Disclosure Package
and Prospectus (each such agreement, a Material Agreement and collectively, the Material
Agreements) has been accurately and fully described in all material respects. The Company has not
sent or received notice of, or otherwise communicated or received communication with respect to,
termination of any Material Agreement, nor has any such termination been threatened by any person.
(p) Reserved.
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(q) Investment Adviser Status. None of the Main Street Entities are currently subject
to registration as an investment adviser under the Investment Advisers Act of 1940, as amended.
(r) Lock-Up Agreements. The Company has obtained for the benefit of the Underwriters
the agreement (a Lock-Up Agreement), in the form set forth as Schedule D hereto from
Vincent D. Foster, Todd A. Reppert, Rodger A. Stout, Curtis L. Hartman, Dwayne L. Hyzak, David L.
Magdol, Michael Appling, Jr., Joseph E. Cannon, Arthur L. French, William D. Gutermuth, Jason B.
Beauvais and Michael S. Galvan.
(s) Intellectual Property Rights. The Main Street Entities own or possess sufficient
trademarks, trade names, patent rights, copyrights, domain names, licenses, approvals, trade
secrets and other similar rights (collectively, Intellectual Property Rights) reasonably
necessary to conduct their businesses as described in the Prospectus and the Disclosure Package;
and the expected expiration of any of such Intellectual Property Rights would not result in a
Material Adverse Effect. None of the Main Street Entities have received any notice of infringement
or conflict with asserted intellectual property rights of others, which infringement or conflict,
if the subject of an unfavorable decision, would result in a Material Adverse Effect. To the
Companys knowledge, none of the technology employed by the Company has been obtained or is being
used by the Company in violation of any contractual obligation binding on the Company or any of its
officers, directors or employees or otherwise in violation of the rights of any persons.
(t) All Necessary Permits, etc. The Main Street Entities each possess such valid and
current certificates, authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective businesses, and the Company has
not received any notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could result in a Material
Adverse Effect.
(u) Absence of Proceedings. There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or body, domestic or foreign,
now pending, or, to the knowledge of the Company, threatened, against the Main Street Entities,
which is required to be disclosed in the Registration Statement, the Prospectus or the Disclosure
Package (other than as disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder. The aggregate of all pending legal or governmental
proceedings to which any Main Street Entity is a party or of which any of such Main Street Entitys
property or assets is the subject which are not described in the Registration Statement, the
Prospectus or the Disclosure Package, including ordinary routine litigation incidental to the
business, could not reasonably be expected to have a Material Adverse Effect.
(v) Accuracy of Exhibits. There are no contracts or documents that are required to be
described in the Registration Statement, the Prospectus or the Disclosure Package or to be filed as
exhibits thereto that have not been so described and filed as required; provided, however, that
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the Company will file this Agreement in a post-effective amendment to the Registration
Statement pursuant to Rule 462(d) under the 1933 Act.
(w) Regulated Investment Company. The Company has been and is in compliance with the
requirements of Subchapter M of the Code to qualify as a regulated investment company under the
Code. The Company will direct the investment of the net proceeds of the Offering of the Shares and
continue to conduct its activities in such a manner as to comply with the requirements of
Subchapter M of the Code.
(x) Registered Management Investment Company Status. None of the Main Street Entities
are, or after giving effect to the Offering and sale of the Shares, will be a registered
management investment company or an entity controlled by a registered management investment
company, as such terms are used under the 1940 Act.
(y) Insurance. The Company and the Funds maintain insurance covering their
properties, operations, personnel and business as the Company and the Funds deem adequate; such
insurance insures against such losses and risks to an extent which is adequate in accordance with
customary industry practice to protect the Company and the Funds and their business; all such
insurance is fully in force on the date hereof and will be fully in force at the time of purchase
of the Shares.
(z) Statistical, Demographic or Market-Related Data. Any statistical, demographic or
market-related data included in the Registration Statement, the Disclosure Package or the
Prospectus is based on or derived from sources that the Company believes to be reliable and
accurate and all such data included in the Registration Statement, the Disclosure Package or the
Prospectus accurately reflects the materials upon which it is based or from which it was derived.
(aa) Investments. Save for those provided in the 1940 Act, the Code and the Small
Business Investment Act of 1958 and the regulations promulgated thereunder (the SBA Regulations),
there are no material restrictions, limitations or regulations with respect to the ability of the
Company or the Funds to invest their assets as described in the Disclosure Package or the
Prospectus.
(bb) Tax Law Compliance. Each of the Main Street Entities has filed all necessary
federal, state and foreign income and franchise tax returns and have paid all taxes required to be
paid by any of them and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them. The Company has made adequate charges, accruals and reserves in the
applicable financial statements referred to in the Prospectus and the Disclosure Package in respect
of all federal, state and foreign income and franchise taxes for all periods as to which the tax
liability of the Main Street Entities (other than the Investment Advisor) has not been finally
determined. The Company is not aware of any tax deficiency that has been or might be asserted or
threatened against any of the Main Street Entities that could result in a Material Adverse Effect.
(cc) Small Business Investment Company Status. Each of SBIC Fund I and SBIC Fund II
is licensed to operate as a Small Business Investment Company (SBIC) by the U.S.
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Small Business Administration (SBA). The SBIC license for each of SBIC Fund I and SBIC Fund
II is in good standing with the SBA and no adverse regulatory findings contained in any
Examinations Reports prepared by the SBA regarding the Funds are outstanding or unresolved. The
method of operation of the Funds will permit it to continue to meet the requirements for
qualification as an SBIC.
(dd) SBA Debentures. The Funds are eligible to sell securities guaranteed by the SBA
in the amounts and on the terms described in the Disclosure Package and the Prospectus. The Funds
are not in default under the terms of any debenture which it has issued to the SBA for guaranty by
the SBA or any other material monetary obligation, and no event, which with the passage of time,
notice or both has occurred, which would be a default or event of default thereunder.
(ee) Distribution of Offering Materials. The Company has not distributed and will not
distribute any offering material in connection with the Offering and sale of the Shares other than
the Registration Statement, the Prospectus or the Disclosure Package.
(ff) Absence of Registration Rights. Except as disclosed in the Prospectus and the
Disclosure Package, there are no persons with registration rights or other similar rights to have
any securities registered pursuant to the Registration Statement or otherwise registered by the
Company under the 1933 Act.
(gg) Nasdaq Global Select Market. The Common Shares are registered pursuant to Section
12(b) of the 1934 Act and have been approved for quotation on the NASDAQ and the Company has taken
no action designed to, or likely to have the effect of, terminating the registration of the Common
Shares under the 1934 Act or delisting the Common Shares from the NASDAQ, nor has the Company
received any notification that the Commission or the NASDAQ is contemplating terminating such
registration or listing. The Company has continued to satisfy, in all material respects, all
requirements for listing the Common Shares for trading on the NASDAQ.
(hh) No Price Stabilization or Manipulation. The Company has not taken and will not
take, directly or indirectly, any action designed to or that might be reasonably 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 Common Shares.
(ii) Material Relationship with the Underwriters. Except as disclosed in the
Disclosure Package and the Prospectus, none of the Main Street Entities have any material lending
or other relationship with a bank or lending institution affiliated with any of the Underwriters.
(jj) No Unlawful Contributions or Other Payments. None of the Main Street Entities
nor, to the Companys knowledge, any employee or agent of the Main Street Entities, has made any
contribution or other payment to any official of, or candidate for, any federal, state or foreign
office in violation of any law or of the character required to be disclosed in the Prospectus and
the Disclosure Package.
11
(kk) No Outstanding Loans or Other Indebtedness. There are no outstanding loans,
advances (except normal advances for business expenses in the ordinary course of business) or
guarantees or indebtedness by the Company to or for the benefit of any of the officers or directors
of the Company, except as disclosed in the Prospectus and the Disclosure Package.
(ll) Compliance with Laws. Each of the Main Street Entities (i) is conducting its
business in compliance with all laws, rules, regulations, decisions, directives and orders except
for such failure to comply which would not reasonably be expected to result in a Material Adverse
Effect and (ii) is conducting its business in compliance in all material respects with the
applicable requirements of the SBA and the 1940 Act.
(mm) Compliance with the Sarbanes-Oxley Act of 2002. The Company and, to its
knowledge, its officers and directors (in such capacity) are in compliance with the provisions of
the Sarbanes-Oxley Act of 2002 and the Commissions published rules promulgated thereunder that are
applicable to the Company as of the date hereof.
(nn) Anti-Money Laundering, Foreign Corrupt Practices Act Compliance. The operations
of the Main Street Entities are and have been conducted at all times in compliance in all material
respects with applicable financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, also known as the Bank Secrecy Act, the USA
Patriot Act, the money laundering statues of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental entity having jurisdiction over the Main Street
Entities (collectively, the Money Laundering Laws) and no proceeding by or before any court or
governmental or regulatory agency, authority or body or any arbitrator involving any Main Street
Entity with respect to the Money Laundering Laws is pending or, to the knowledge of the Company,
threatened. No Main Street Entity, or, to the knowledge of the Company, any director, officer,
partner, manager, employee or affiliate of any Main Street Entity has (i) used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political
activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government
official or employee; (iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; (iv) made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment; or (v) made any payment of funds to any Main Street Entity or received or
retained funds in violation of any such law, rule or regulation.
(oo) No Sanctions by the Office of Foreign Assets Control. None of the Main Street
Entities nor, to the knowledge of the Company, any director, officer, employee or affiliate of the
Main Street Entities is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (OFAC); and the Company will not directly
or indirectly use the proceeds of the Offering, or lend, contribute or otherwise make available
such proceeds to any other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by the OFAC.
12
(pp) Certificates. Any certificate signed by any officer of the Company and delivered
to the Underwriters or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) Firm Shares. On the basis of the representations, warranties and covenants
contained herein and subject to the terms and conditions set forth herein, the Company agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not
jointly, agrees to purchase from the Company, at the price of $14.0125 per share (representing a
public offering price of $14.75 per share, less an underwriting discount of $0.7375 per share), the
number of Firm Shares set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Firm Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) Option Shares. In addition, on the basis of the representations and warranties
contained herein and subject to the terms and conditions set forth herein, the Company hereby
grants an option to the Underwriters, severally and not jointly, to purchase up to an additional
375,000 Common Shares, at the price per share set forth in Section 2(a) above, less the per
share amount of any dividend or other distribution declared by the Company, the record date of
which occurs during the period from the Closing Time through the Date of Delivery (as defined
below) with respect thereto. Said option may be exercised only to cover over-allotments which may
be made in connection with the Offering and distribution of the Firm Shares by the Underwriters.
The option granted hereby may be exercised only by written notice from Morgan Keegan, on behalf of
the Underwriters, to the Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Option Shares to be purchased and the time and
date of payment and delivery for such Option Shares. Any such time and date of delivery (the Date
of Delivery) shall be determined by the Underwriters, but shall not be later than seven (7) full
business days and no earlier than three (3) full business days after the exercise of said option,
nor in any event prior to the Closing Time. If the option is exercised as to all or any portion of
the Option Shares, each of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Shares then being purchased which the number of Firm
Shares set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Firm Shares, subject in each case to such adjustments as Morgan Keegan in its discretion
shall make to eliminate any sales or purchases of a fractional number of Option Shares plus any
additional number of Option Shares which such Underwriter may become obligated to purchase pursuant
to the provisions of Section 10 hereof.
(c) Payment. Payment of the purchase price for, and delivery of certificates, if any,
for the Firm Shares shall be made at the offices of Sutherland Asbill & Brennan LLP, 1275
Pennsylvania Avenue, NW, Washington, D.C. 20004, or at such other place as shall be agreed upon by
the Underwriters and the Company, at 10:00 a.m. (Eastern Standard Time) on the third (fourth, if
the pricing occurs after 4:30 P.M. (Eastern Standard Time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten (10) business days after such date as shall be agreed upon by the
Underwriters and the Company (such time and date of payment and delivery being herein
13
called Closing Time). In addition, in the event that any or all of the Option Shares are
purchased by the Underwriters, payment of the purchase price for such Option Shares shall be made
at the above-mentioned offices, or at such other place as shall be agreed upon by the Underwriters
and the Company, on the Date of Delivery as specified in the notice from the Underwriters to the
Company.
Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company, against delivery to the Underwriters for the respective accounts
of the Underwriters of the Shares to be purchased by them. It is understood that each Underwriter
has authorized Morgan Keegan, for its account, to accept delivery of, receipt for, and make payment
of the purchase price for, the Firm Shares and the Option Shares, if any, which it has agreed to
purchase. Morgan Keegan, individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Firm Shares or the Option
Shares, if any, to be purchased by any Underwriter whose funds have not been received by the
Closing Time or the Date of Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Firm Shares and the Option
Shares, if any, shall be in such denominations and registered in such names as the Underwriters may
request in writing at least two (2) full business days before the Closing Time or the relevant Date
of Delivery, as the case may be. The certificates for the Firm Shares and the Option Shares, if
the Company determines to issue any such certificates, will be made available for examination and
packaging by the Underwriters in Washington, D.C. no later than 10:00 a.m. (Eastern Standard Time)
on the business day prior to the Closing Time or the relevant Date of Delivery, as the case may be.
The Firm Shares and the Option Shares to be purchased hereunder shall be delivered at the Closing
Time or the Date of Delivery, as the case may be, through the facilities of the Depository Trust
Company or another mutually agreeable facility, against payment of the purchase price therefore in
immediately available funds to the order of the Company.
Section 3. Covenants.
The Company agrees with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The Company will
comply with the requirements of Rule 430C, and will notify the Underwriters as soon as practicable,
and, in the cases clauses (ii)-(iv) of this Section 3(a), confirm the notice in writing,
(i) when any post-effective amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of the Prospectus, or of the suspension
of the qualification of the Shares for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceedings for any of such purposes. The Company will promptly effect the
filings required by Rule 497 and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing
14
under Rule 497 was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order suspending the effectiveness of the Registration Statement pursuant to
Section 8(d) of the 1933 Act, and, if any such stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriters notice of its
intention to file or prepare any amendment to the Registration Statement, or any supplement or
revision to either the Preliminary Prospectus or to the Prospectus, and will furnish the
Underwriters with copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to which the
Underwriters or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or will deliver to
the Underwriters and counsel for the Underwriters, without charge, signed copies of the
Registration Statement as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all consents and certificates
of experts, and will also deliver to the Underwriters, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto (without exhibits) for
each of the Underwriters. The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each Underwriter, without
charge, as many copies of the Preliminary Prospectus (and will deliver as many copies of the
Prospectus) as such Underwriter reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will furnish to each Underwriter,
without charge, during the period when the Prospectus is required to be delivered under the 1933
Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with the 1933
Act so as to permit the completion of the distribution of the Shares as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by the 1933 Act to
be delivered in connection with sales of the Shares, any event shall occur or condition shall exist
as a result of which it is necessary, in the reasonable opinion of counsel for the Underwriters or
for the Company, to amend the Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in
the opinion of such counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of
15
the 1933 Act, the Company will promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with such requirements, and
the Company will furnish to the Underwriters such number of copies of such amendment or supplement
as the Underwriters may reasonably request.
(f) Amendments or Supplements to the Disclosure Package. If there occurs an event or
development as a result of which the Disclosure Package would include an untrue statement of a
material fact or would omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances then prevailing, not misleading, the Company will promptly
notify the Underwriters so that any use of the Disclosure Package may cease until it is amended or
supplemented (at the sole cost and expense of the Company).
(g) Blue Sky Qualifications. The Company will use its best efforts, in cooperation
with the Underwriters, to qualify the Shares for offering and sale under the applicable securities
laws of such states and other jurisdictions (domestic or foreign) as the Underwriters may designate
and to maintain such qualifications in effect so long as required for the distribution of the
Shares; provided, however, that the foregoing shall not apply to the extent that the Shares are
covered securities that are exempt from state regulation of securities offerings pursuant to
Section 18 of the 1933 Act; and provided, further, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so subject.
(h) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as
are necessary in order to make generally available to its security holders as soon as practicable,
but in any event not later than 16 months after the date hereof, an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of
the 1933 Act.
(i) Use of Proceeds. The Company will use the net proceeds received by it from the
sale of the Shares in the manner specified in the Prospectus and the Disclosure Package under Use
of Proceeds.
(j) Listing. The Company will use its reasonable best efforts to cause the Shares to
be duly authorized for listing on the NASDAQ, prior to the date the Shares are issued.
(k) Restriction on Sale of Shares. During a period of 60 days from the date of the
Prospectus Supplement (the Lock-Up Period), the Company will not, without the prior written
consent of Morgan Keegan (which will not be unreasonably withheld), (i) directly or indirectly,
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 Common Shares or any securities convertible into or exercisable or exchangeable for
Common Shares or file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership of the Common
Shares,
16
whether any such swap or transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or such other securities, in cash or otherwise. Notwithstanding the
foregoing, if (1) during the last 17 days of the Lock-Up Period, the Company issues an earnings
release or material news or a material event relating to the Company occurs; or (2) prior to the
expiration of the Lock-Up Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the Lock-Up Period, the restrictions imposed
by this Agreement shall continue to apply until the expiration of the 18-day period beginning on
the issuance of the earnings release or the occurrence of the material news or material event. The
restrictions in this Section shall not apply to (A) the Shares to be sold hereunder, (B) the Common
Shares issued pursuant to the Companys Dividend Reinvestment Plan or (C) any options or Common
Shares granted or withheld pursuant to the Companys stock option, stock bonus, restricted stock or
other stock plan or arrangements referred to in the Prospectus.
(l) Reporting Requirements. The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file all documents required to be filed with the
Commission pursuant to the 1940 Act and the 1934 Act within the time periods required by the 1940
Act and the 1934 Act.
(m) Subchapter M. The Company has elected to be taxed as a regulated investment
company, and will use its best efforts to maintain qualification as a regulated investment company
under Subchapter M of the Code.
(n) No Manipulation of Market for Shares. Except for the authorization of actions
permitted to be taken by the Underwriters as contemplated herein or in the Prospectus, the Company
will not take, directly or indirectly, any action designed to cause or to result in, or that might
reasonably be expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares in violation of federal or
state securities laws.
(o) Reserved
(p) Continued Compliance with SBA Requirements. The Funds will continue to comply
with the requirements for qualification as an SBIC, which is eligible to borrow from the SBA as
described in the Prospectus.
The Underwriters covenant to the Company as follows:
(q) FINRA No Objection Letter. The Underwriters agree to use their best efforts to
obtain a no objection letter from FINRA regarding the fairness and reasonableness of the
underwriting terms and arrangements with respect to the Offering.
Section 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and filing of the
17
Registration Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the Shares, (iii) the
preparation, issuance and delivery of the certificates for the Shares, if any, to the Underwriters,
including any stock or other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Shares to the Underwriters, (iv) the fees and disbursements of the
Companys counsel, accountants and other advisers, (v) the printing and delivery to the
Underwriters of copies of the Prospectus and any amendments or supplements thereto, (vi) the fees
and expenses of any transfer agent or registrar for the Shares, (vii) the filing fees incident to
the review by FINRA of the terms of the sale of the Shares, (viii) the fees and expenses incurred
in connection with the listing of the Shares on the NASDAQ, and (ix) the transportation, lodging,
graphics and other expenses of the Company and its officers related to the preparation for and
participation by the Company and its officers in the road show.
(b) Termination of Agreement. If this Agreement is terminated by the Underwriters in
accordance with the provisions of Section 5 or Section 9(a) hereof, the Company
shall reimburse, or arrange for an affiliate to reimburse, the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
Section 5. Conditions of Underwriters Obligations.
The obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or in
certificates of any officer of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement shall be
effective and at the Closing Time (and at the Date of Delivery) no stop order or other temporary or
permanent order or decree (whether under the 1933 Act or otherwise) suspending the effectiveness of
the Registration Statement or the use of the Prospectus shall have been issued or otherwise be in
effect, and no proceedings with respect to either shall have been initiated or, to the Companys
knowledge, threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable satisfaction of counsel to
the Underwriters. The Prospectus shall have been filed with the Commission in accordance with Rule
497.
(b) Opinions of Counsel for the Company. At Closing Time, the Underwriters shall have
received the opinion, dated as of Closing Time, from Sutherland Asbill & Brennan LLP, counsel for
the Company, as to matters set forth in Schedule C hereto.
(c) Opinion of Counsel for Underwriters. At Closing Time, the Underwriters shall have
received the favorable opinion, dated as of Closing Time, from Bass, Berry & Sims PLC, counsel for
the Underwriters, together with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the Registration Statement, the Prospectus and other
18
related matters as the Underwriters may reasonably require. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the
State of Tennessee and the federal law of the United States, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and certificates of public officials.
(d) Officers Certificate. At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the Prospectus, any
Material Adverse Change or any development involving a prospective Material Adverse Change, and the
Underwriters shall have received a certificate of a duly authorized officer of the Company and of
the chief financial or chief accounting officer of the Company dated as of Closing Time, to the
effect that (i) there has been no such Material Adverse Change, (ii) the representations and
warranties in Section 1 hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or prior to Closing Time,
and (iv) no stop order suspending the effectiveness of the Registration Statement, pursuant to
Section 8(d) of the 1933 Act, has been issued and no proceedings for any such purpose have been
instituted or, to the knowledge of the Company, are pending or are contemplated by the Commission.
(e) Accountants Comfort Letter. At the time of the execution of this Agreement, the
Underwriters shall have received from Grant Thornton LLP a letter, dated such date, in form and
substance satisfactory to the Underwriters, 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, including any pro forma financial information
contained in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Underwriters shall have received
from Grant Thornton LLP a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to Section 5(e) of this Agreement.
(g) No Objection. FINRA has confirmed that it has not raised any objection with
respect to the fairness and reasonableness of the underwriting terms and arrangements of the
Offering.
(h) Lock-Up Agreements. The Company shall have procured for the benefit of the
Underwriters Lock-Up Agreements, in the form of Schedule D attached hereto, from Vincent D.
Foster, Todd A. Reppert, Rodger A. Stout, Curtis L. Hartman, Dwayne L. Hyzak, David L. Magdol,
Michael Appling, Jr., Joseph E. Cannon, Arthur L. French, William D. Gutermuth, Jason B. Beauvais
and Michael S. Galvan.
(i) Additional Documents. At Closing Time and at each Date of Delivery, counsel for
the Underwriters shall have been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and sale of the Shares as herein
contemplated, or in order to evidence the accuracy of any of the representations
19
or warranties, or the fulfillment of any of the conditions herein contained; and all
proceedings taken by the Company in connection with the issuance and sale of the Shares as herein
contemplated shall be reasonably satisfactory in form and substance to the Underwriters and counsel
for the Underwriters.
(j) Reserved.
(k) Conditions to Purchase of Option Shares. In the event that the Underwriters
exercise their option provided in Section 2(b) hereof to purchase all or any portion of the
Option Shares, the representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true and correct as of
the Date of Delivery and, at the Date of Delivery, the Underwriters shall have received:
(i) Officers Certificates. Certificates, dated the Date of Delivery, of a
duly authorized officer of the Company, of the chief financial or chief accounting
officer of the Company confirming that the information contained in the certificate
delivered by each of them at the Closing Time pursuant to Section 5(d)
hereof remains true and correct as of the Date of Delivery.
(ii) Opinions of Counsel for the Company. The opinion of Sutherland Asbill
& Brennan LLP, acting as counsel for the Company dated the Date of Delivery,
relating to the Option Shares to be purchased on the Date of Delivery and otherwise
to the same effect as the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for the Underwriters. The opinion of Bass, Berry &
Sims PLC, counsel for the Underwriters, dated the Date of Delivery, relating to the
Option Shares to be purchased on the Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from Grant Thornton LLP in form and
substance satisfactory to the Underwriters and dated the Date of Delivery,
substantially in the same form and substance as the letter furnished to the
Underwriters pursuant to Section 5(f) hereof.
(l) Termination of Agreement. If any condition specified in this Section 5
shall not have been fulfilled when and as required to be fulfilled, this Agreement, or, in the case
of any condition to the purchase of Option Shares, on the Date of Delivery which is after the
Closing Time, the obligations of the several Underwriters to purchase the relevant Option Shares,
may be terminated by the Underwriters by notice to the Company at any time at or prior to Closing
Time or the Date of Delivery, as the case may be, and such termination shall be without liability
of any party to any other party except as provided in Section 4 and except that Section
1, Section 6, Section 7, Section 8 and Section 12 shall survive
any such termination and remain in full force and effect.
Section 6. Indemnification.
20
(a) Indemnification of Underwriters. The Company agrees to indemnify, defend and hold
harmless each Underwriter, its partners, directors, officers and employees, and any person who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, and the successors and assigns of all of the foregoing persons, from and against:
(i) any and all loss, damage, expense, liability or claim whatsoever (including the
reasonable cost of any investigation incurred in connection therewith) which,
jointly or severally, any such Underwriter or any such person may incur under the
1933 Act, the 1934 Act, the 1940 Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon (A) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or (B) any untrue statement or alleged
untrue statement of a material fact included in the Disclosure Package or the
Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, damage, expense, liability or claim whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever arises out of or is based upon
any such untrue statement or omission referred to in clause (i); provided that
(subject to Section 6(e) below) any such settlement is effected with the
written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by Morgan Keegan), reasonably incurred in
investigating, preparing or defending against any actual or threatened litigation
(including the fees and disbursements of counsel chosen by Morgan Keegan), or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that any
such expense is not paid under clauses (i) or (ii) above.
Notwithstanding the foregoing, the indemnification provisions set forth in this
Section 6(a) shall not apply to any loss, damage, expense, liability or
claim to the extent arising out of or based upon any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through Morgan
Keegan or its counsel expressly for use in the Registration Statement (or any
amendment thereto), the Disclosure Package or the Prospectus (or any amendment or
supplement thereto), it being understood and agreed upon that the only such
information furnished by any Underwriter consists of the information
21
set forth in Section 6(f) below. Moreover, that the Company will not be
liable to any Underwriter with respect to the Prospectus and the Disclosure Package
to the extent that the Company shall sustain the burden of proving that any such
loss, damage, expense, liability or claim resulted from the fact that such
Underwriter, in contravention of a requirement of this Agreement or applicable law,
sold Shares to a person to whom such Underwriter failed to send or give, at or prior
to the Closing Time, a copy of the Prospectus, as then amended or supplemented if:
(i) the Company shall have previously furnished copies of the Prospectus
(sufficiently in advance of the Closing Time to allow for distribution by the
Closing Time) to the Underwriter and the loss, damage, expense, liability or claim
against such Underwriter resulted from an untrue statement or omission of a material
fact contained in or omitted from the Disclosure Package which was corrected in the
Prospectus prior to the Closing Time and such Prospectus was required by law to be
delivered at or prior to the written confirmation of sale to such person and (ii)
such failure to give or send such Prospectus by the Closing Time to the party or
parties asserting such loss, damage, expense, liability or claim would have
constituted a defense to the claim asserted by such person.
(b) Indemnification of the Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, officers, and each
person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, damage, expense, liability or claim described
in Section 6(a), as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or any amendment
thereto), the Disclosure Package or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the Company by such
Underwriter through Morgan Keegan or its counsel expressly for use in the Registration Statement
(or any amendment thereto) or the Disclosure Package or the Prospectus (or any amendment or
supplement thereto), it being understood and agreed upon that the only such information furnished
by any Underwriter consists of the information set forth in Section 6(f) below.
(c) Actions against Parties; Notification. Each indemnified party shall give notice
as promptly as reasonably practicable to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a), counsel to the indemnified parties shall be
selected by Morgan Keegan, and, in the case of parties indemnified pursuant to Section
6(b), counsel to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the indemnified party) also
be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general allegations or
22
circumstances. No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of
the nature contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such request prior to the
date of such settlement; provided that an indemnifying party shall not be liable for any such
settlement effected without its consent if such indemnifying party, prior to the date of such
settlement, (1) reimburses such indemnified party in accordance with such request for the amount of
such fees and expenses of counsel as the indemnifying party believes in good faith to be
reasonable, and (2) provides written notice to the indemnified party that the indemnifying party
disputes in good faith the reasonableness of the unpaid balance of such fees and expenses.
(e) Limitations on Indemnification. Any indemnification by the Company shall be
subject to the requirements and limitations of Section 17(i) of the 1940 Act and 1940 Act Release
11330.
(f) Information Provided By Underwriters. The Company and the Underwriters
acknowledge and agree that (i) the concession and reallowance figures appearing under the caption
UnderwritingUnderwriting Discounts in the Prospectus, (ii) the statements set forth in the
first sentence of each of the first and third paragraphs under the caption UnderwritingPrice
Stabilization, Short Positions and Penalty Bids in the Prospectus, (iii) the statements set forth
in the first sentence under the caption UnderwritingPassive Market Making Pursuant to Regulation
M in the Prospectus, and (iv) the list of Underwriters and their respective participation in the
sale of the Shares, which is set forth in the table under the caption Underwriting in the
Prospectus, constitute the only information furnished in writing by or on behalf of the several
Underwriters for inclusion in the Prospectus.
Section 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any reason unavailable
to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such
23
indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters on the other hand
from the offering of the Shares pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriters on the other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Underwriters on the
other hand in connection with the Offering of the Shares pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the Offering of the Shares
pursuant to this Agreement (before deducting expenses) received by the Company and the total
underwriting discount received by the Underwriters (whether from the Company or otherwise), in each
case as set forth on the cover of the Prospectus Supplement bear to the aggregate public offering
price of the Shares as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on the other hand shall
be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
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 which such Underwriter has otherwise been required to
pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation.
24
For purposes of this Section 7, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as such Underwriter, and each director and officer of the Company and each
person, if any, who controls the Company, within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The
Underwriters respective obligations to contribute pursuant to this Section 7 are several
in proportion to the number of Firm Shares set forth opposite their respective names in
Schedule A hereto and not joint.
Any contribution by the Company shall be subject to the requirements and limitations of
Section 17(i) of the 1940 Act and 1940 Act Release 11330.
Section 8. Representations and Warranties to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the Shares to the
Underwriters.
Section 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this Agreement, by notice to
the Company, at any time at or prior to Closing Time (i) if there has been, since the time of
execution of this Agreement or since the date of the Prospectus Supplement, any Material Adverse
Change whether or not arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the international
financial markets, any material outbreak of hostilities or material escalation thereof or other
calamity or crisis or any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the effect of which is such
as to make it, in the judgment of the Underwriters, impracticable or inadvisable to market the
Shares or to enforce contracts for the sale of the Shares, or (iii) if trading in the Common Shares
of the Company has been suspended or materially limited by the Commission or the NASDAQ, or if
trading generally on the New York Stock Exchange has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the Commission, the NASDAQ or
any other governmental authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (iv) if a banking moratorium
has been declared by either Federal or New York state authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as provided in
Section 4 hereof, and provided further that Section 1, Section 6,
Section 7, Section 8, Section 11, Section 12 and Section 13
shall survive such termination and remain in full force and effect.
25
Section 10. Default by One or More of the Underwriters.
(a) If one or more of the Underwriters shall fail at Closing Time or the Date of Delivery to
purchase the Shares which it or they are obligated to purchase under this Agreement (the Defaulted
Shares), the Underwriters shall have the right, within 24 hours thereafter, to make arrangements
for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Shares in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Underwriters shall not have completed such arrangements within
such 24-hour period, then:
(i) if the number of Defaulted Shares does not exceed 10% of the number of Shares to
be purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Shares exceeds 10% of the number of Shares to be
purchased on such date, this Agreement or, with respect to any Date of Delivery
which occurs after the Closing Time, the obligation of the Underwriters to purchase
and of the Company to sell the Option Shares to be purchased and sold on such Date
of Delivery shall terminate without liability on the part of any non-defaulting
Underwriter.
(b) No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
(c) In the event of any such default which does not result in a termination of this Agreement
or, in the case of the Date of Delivery which is after the Closing Time, which does not result in a
termination of the obligation of the Underwriters to purchase and the Company to sell the relevant
Option Shares, as the case may be, either the Underwriters or the Company shall have the right to
postpone the Closing Time or the Date of Delivery, as the case may be, for a period not exceeding
seven (7) days in order to effect any required changes in the Registration Statement or Prospectus
Supplement or in any other documents or arrangements. As used herein, the term Underwriter
includes any person substituted for an Underwriter under this Section 10.
Section 11. Notices.
All communications hereunder shall be in writing and shall be mailed, hand delivered or
telecopied and confirmed to the parties hereto as follows:
|
|
|
If to the Underwriters:
|
|
with a copy to: |
|
|
|
Morgan Keegan & Company, Inc.
|
|
Bass, Berry & Sims PLC |
50 North Front Street,12th Floor
|
|
100 Peabody Place, Suite 900 |
Memphis, Tennessee 38103
|
|
Memphis, Tennessee 38103 |
Facsimile: (901) 579-4891
|
|
Facsimile: (901) 543-5999 |
Attention: Larry M. Herman
|
|
Attention: John A. Good, Esq. |
26
|
|
|
If to the Company:
|
|
with a copy to: |
|
|
|
Main Street Capital Corporation
|
|
Sutherland Asbill & Brennan LLP |
1300 Post Oak Boulevard, Suite 800
|
|
1275 Pennsylvania Avenue |
Houston, Texas 77056
|
|
Washington, D.C. 20004 |
Facsimile: (713) 350-6042
|
|
Facsimile: (202) 637-3593 |
Attention: Vincent Foster
|
|
Attention: Harry S. Pangas, Esq. |
Any party hereto may change the address for receipt of communications by giving written notice to
the others.
Section 12. Parties.
This Agreement shall each inure to the benefit of and be binding upon the Underwriters, the
Company, and their respective partners and successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company, and their respective successors and the controlling persons and officers
and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company, and
their respective partners and successors, and said controlling persons and officers, directors and
their heirs and legal representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Shares from any Underwriter shall be deemed to be a successor by reason merely of
such purchase.
Section 13. No Fiduciary Obligation.
The Company acknowledges and agrees that each of the Underwriters have acted, and are acting,
solely in the capacity of an arms-length contractual counterparty to the Company with respect to
the Offering of the Shares contemplated hereby (including in connection with determining the terms
of the Offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or
any other person. Additionally, the Underwrites have not advised, and are not advising, the
Company or any other person as to any legal, tax, investment, accounting or regulatory matter in
any jurisdiction with respect to the transactions contemplated hereby. The Company shall consult
with its own advisors concerning such matters and shall be responsible for making its own
independent investigation and appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the Company with respect thereto. Any
review by the Underwriters of the Company, the transactions contemplated hereby or other matters
relating to such transactions has been and will be performed solely for the benefit of the
Underwriters and have not been and shall not be on behalf of the Company or any other person. It
is understood that the offering price was arrived at through arms-length negotiations between the
Underwriters and the Company, and that such price was not set or otherwise determined as a result
of expert advice rendered to the Company by any Underwriter. The Company acknowledges and agrees
that the Underwriters are collectively acting as an independent contractor, and any duty of the
Underwriters arising out of this Agreement and the
27
transactions completed hereby shall be contractual in nature and expressly set forth herein.
Notwithstanding anything in this Agreement to the contrary, the Company acknowledges that the
Underwriters may have financial interests in the success of the Offering contemplated hereby that
are not limited to the difference between the price to the public and the purchase price paid to
the Company by the Underwriters for the Shares.
Section 14. Governing Law and Time.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. UNLESS OTHERWISE
EXPLICITLY PROVIDED, SPECIFIED TIMES OF DAY REFER TO ESTERN STANDARD TIME.
Section 15. Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
28
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us a counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Company and the Underwriters and in accordance with its terms.
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|
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Very truly yours,
Main Street Capital Corporation
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|
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By: |
/s/ Vincent D. Foster
|
|
|
|
Name: |
Vincent D. Foster |
|
|
|
Title: |
Chief Executive Officer |
|
|
Confirmed and Accepted,
as of the date first above written:
MORGAN KEEGAN & COMPANY, INC.
For itself and on behalf of the other
Underwriters named in Schedule A hereto.
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|
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By: |
/s/ Larry M. Herman
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Name: |
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Larry M. Herman |
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Title: |
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Senior Vice President |
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29
SCHEDULE A
|
|
|
|
|
|
|
Number of |
Name of Underwriter |
|
Firm Shares |
Morgan Keegan & Company, Inc. |
|
|
875,000 |
|
BB&T Capital Markets, a division of Scott & Stringfellow, LLC |
|
|
625,000 |
|
Ladenburg Thalmann & Co. Inc. |
|
|
437,500 |
|
Janney Montgomery Scott LLC |
|
|
312,500 |
|
Madison Williams and Company LLC |
|
|
250,000 |
|
|
|
|
|
|
Total |
|
|
2,500,000 |
|
SCHEDULE B
Members of the Underwriters selling group orally communicated the following information to their
respective customers:
Main Street Capital Corporation proposes to sell 2,500,000 shares of common stock to the
Underwriters (2,875,000 shares including the underwriters over-allotment option).
The purchase price for the common shares will be $14.0125 per share, which represents a price to
the public of $14.75 per share, less an underwriting discount of $0.7375 per share.
The estimated net proceeds before expenses to Main Street Capital Corporation will be $35 million
(or $40 million with the full exercise of the over-allotment option).