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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-2
[ ] REGISTRATION STATEMENT UNDER THE SECURITIES COMPANY ACT OF 1933
[ ] Pre-Effective Amendment No. ______________
[ ] Post-Effective Amendment No. ______________
and/or
[X] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[ ] Amendment No. ________________
SIRROM FUNDING CORPORATION
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
500 CHURCH STREET
SUITE 200
NASHVILLE, TENNESSEE 37219
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(Address of Principal Executive Office)
CARL W. STRATTON
SIRROM FUNDING CORPORATION
500 CHURCH STREET
SUITE 200
NASHVILLE, TENNESSEE 37219
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(Name and Address of Agent for Service)
---------------------------------------
(Date of Proposed Public Offering)
If any securities being registered on this form will be offered on a delayed or
continuous basis in reliance on Rule 415 under the Securities Act of 1933, other
than securities offered in connection with a dividend reinvestment plan, check
the following box. [ ]
It is proposed that this filing will become effective (check appropriate box)
[ ] when declared effective pursuant to Section 8(c)
The following boxes should only be included and completed if the registrant is a
registered closed-end management investment company or business development
company which makes periodic repurchase offers under Rule 23c-3 under the
Investment Company Act and is making this filing in accordance with Rule 486
under the Securities Act.
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)
[ ] on (date) pursuant to paragraph (a)
If appropriate, check the following boxes:
[ ] this [post-effective] amendment designates a new effective date for a
previously filed [post-effective amendment] [registration statement].
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PART A
GENERAL DESCRIPTION OF THE REGISTRANT
Sirrom Funding Corporation, a Delaware corporation ("SFC"), was
incorporated under the laws of Delaware on December 17, 1996, and is a
non-diversified, closed-end management company. SFC is a wholly-owned,
bankruptcy remote subsidiary of Sirrom Capital Corporation ("Sirrom"), a
closed-end, non-diversified investment company that has elected to be treated as
a business development company. SFC purchases loans originated by Sirrom on a
true-sale basis and holds them as collateral for a $100.0 million credit
facility with ING Baring (U.S.) Capital Markets, Inc. ("ING"). In connection
with the creation of SFC, Sirrom received an exemptive order (Release No.
IC-22430) from the Securities and Exchange Commission (the "Commission")
permitting the creation and operation of SFC. As a condition to the order,
Sirrom agreed that SFC would adopt the same investment objectives and policies
as Sirrom, would have the same directors as Sirrom, except for two additional
outside directors, and would file consolidated financial statements with Sirrom.
The investment objectives and policies of SFC are hereby incorporated by
reference to those set forth in Sirrom's Registration Statement on Form N-2, as
amended (File No. 333-19493), filed with the Commission on January 9, 1997 (the
"Sirrom Registration Statement"). The Risk Factors set forth in the Sirrom
Registration Statement are also incorporated herein by this reference.
MANAGEMENT
The Board of Directors of SFC is the same as Sirrom, except that
Richardson Roberts and John L. Lesser are additional directors of SFC.
Information regarding the directors of SFC is incorporated by reference to the
information regarding the directors of Sirrom contained under caption
"Management" in the Sirrom Registration Statement. The officers of SFC are as
follows:
George M. Miller, II President/Chief Executive Officer
Carl W. Stratton Chief Financial Officer
David M. Resha Chief Operating Officer
Kimberly Stringfield Controller and Treasurer
Maria-Lisa Caldwell Secretary
Information regarding the above-listed officers and compensation of officers and
directors is incorporated by reference to the information about such officers
contained under the caption "Management" in the Sirrom Registration Statement.
The information regarding SFC's custodian is incorporated by reference to the
information regarding Sirrom's custodian set forth under the caption "Custodian,
Transfer and Dividend Paying Agent" in the Sirrom Registration Statement.
Sirrom controls SFC and owns 100% of its outstanding securities.
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CAPITAL STOCK, LONG-TERM DEBT, AND OTHER SECURITIES
The capital stock of SFC consists of 1,000 authorized shares of common
stock, $1.00 par value per share, all of which are issued and outstanding and
owned by Sirrom. The holders of common stock are entitled to one vote per share
on all matters to be voted on by shareholders and are not entitled to cumulative
voting in the election of directors, which means that the holders of a majority
of the shares voting for the election of director can elect all of the directors
then standing for election by the holders of common stock. The holders of common
stock are entitled to share ratably in such dividends, if any, as may be
declared from time to time by the Board of Directors in its discretion out of
funds legally available therefor. The holders of common stock are entitled to
share ratably in any assets remaining after satisfaction of all prior claims
upon liquidation of the Company. The Company's Charter gives holders of common
stock no preemptive or other subscription or conversion rights, and there are no
redemption provisions with respect to such shares. All outstanding shares of
common stock are fully paid and nonassessable.
The information regarding the establishment of a $100.0 million credit
facility with ING Baring (U.S.) Capital Markets, Inc., set forth on page 21 of
the Sirrom Registration Statement under the caption "Financial Condition
Liquidity and Capital Resources," is hereby incorporated by reference.
PART B
TAX STATUS
The information regarding the tax status of SFC and its parent, Sirrom,
under the caption "Tax Status," in the Sirrom Registration Statement is hereby
incorporated by reference.
FINANCIAL STATEMENTS
SFC began operations in January 1997. The following unaudited financial
statements reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim periods presented.
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BALANCE SHEET AT JANUARY 31, 1997
<TABLE>
<S> <C>
Assets
Investments, at fair value
Loans $31,549,415
Warrants 1,372,000
---------------------
Total Investments 32,921,415
Interest receivable 189,759
Other assets 90,279
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Total Assets $33,201,453
=====================
Liabilities and Shareholders' Equity
Liabilities:
Revolving credit facility 7,999,345
Interest payable 39,755
Other liabilities 69,551
---------------------
Total Liabilities 8,108,651
Shareholders' Equity:
Common stock 24,922,070
Undistributed net realized earnings 170,732
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Total Shareholders' Equity 25,092,802
---------------------
Total Liabilities and Shareholders' Equity $33,201,453
=====================
</TABLE>
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STATEMENT OF OPERATIONS
FOR THE ONE MONTH ENDING JANUARY 31, 1997
<TABLE>
January YTD
---------------- --------------
<S> <C> <C>
Operating Income:
Interest on investments $280,038 $280,038
---------------- --------------
Total Operating Income 280,038 280,038
Operating Expenses:
Interest expense 56,897 56,897
Salaries and benefits and
other operating expenses 52,409 52,409
---------------- --------------
Total Operating Expenses 109,306 109,306
---------------- --------------
Net operating income 170,732 170,732
Change in unrealized
depreciation of investments 0 0
---------------- --------------
Net increase in shareholders' equity
resulting from operations $170,732 $170,732
================ ==============
</TABLE>
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STATEMENT OF CASH FLOWS
FOR THE ONE MONTH ENDING JANUARY 31, 1997
<TABLE>
<CAPTION>
ONE MONTH
ENDED
JANUARY 31, 1997
---------------------------
<S> <C>
OPERATING ACTIVITIES:
Net increase in shareholders' equity resulting
from operations $ 170,732
Adjustments to reconcile net increase to net cash provided
by operating activities:
Net unrealized (appreciation) of investments 0
Increase in interest receivable (189,759)
Increase in other assets (90,279)
Increase in other liabilities 69,551
Increase in interest payable 39,755
-----------------
Net cash provided by operating activities $ 0
-----------------
INVESTING ACTIVITIES:
Proceeds from sale of investments $ 0
Investments originated or acquired (7,999,345)
-----------------
Net cash used in investing activities $ (7,999,345)
-----------------
FINANCING ACTIVITIES:
Proceeds from revolving credit facility $ 7,999,345
Repayment of credit facility borrowings 0
-----------------
Net cash provided by financing activities $ 7,999,345
-----------------
Increase in cash and cash equivalents $ 0
Cash and cash equivalents, beginning of period 0
-----------------
Cash and cash equivalents, end of period $ 0
=================
Supplemental Disclosures of Cash Flow Information:
Investments acquired for the issuance of common stock $ 24,922,070
================
</TABLE>
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PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
1. Financial Statements.
Balance Sheet at January 31, 1997
Statement of Operations for the one month ending
January 31, 1997
Statement of Cash Flow for the one month ending
January 31, 1997
2. Exhibits.
a. Certificate of Incorporation
b. Bylaws
f.1 - Master Trust Indenture and Security Agreement Supplement
dated as of December 31, 1996, by and between SFC as
Issuer, the Company as Servicer, First Trust National
Association as Trustee and ING Baring (U.S.) Capital
Markets, Inc. (incorporated by reference to exhibit f.12
contained in the Sirrom's Registration Statement)
f.2 - Revolving Note, Series 1996-1 dated December 31, 1996,
with a principal amount of $100,000,000 made by SFC in
favor of First Trust National Association (incorporated by
reference to exhibit f.13 contained in the Sirrom's
Registration Statement)
f.3 - Loan Sale and Contribution Agreement dated as of December
31, 1996, by and between the Company as Originator and
Servicer and SFC as Buyer (incorporated by reference to
exhibit f.14 contained in the Sirrom's Registration
Statement)
f.4 - Custodial Agreement dated as of December 31, 1996, by and
among SFC, the Company, First Trust National Association
and ING Baring (U.S.) Capital Markets, Inc. (incorporated
by reference to exhibit f.15 contained in the Sirrom's
Registration Statement)
f.5 - Backup Servicing Agreement dated as of December 31, 1996,
by and among First Trust National Association, the Company
and ING Baring (U.S.) Capital Markets, Inc. (incorporated
by reference to exhibit f.16 contained in the Sirrom's
Registration Statement)
f.6 - Fee Agreement dated as of December 31, 1996, by and among
the Company, SFC, and ING Baring (U.S.) Capital Markets,
Inc. (incorporated by reference to exhibit f.17 contained
in the Sirrom's Registration Statement)
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f.7 - ISDA Master Agreement dated as of November 26, 1996, by
and between the Company and NationsBank, N.A. (incorporated
by reference to exhibit f.18 contained in the Sirrom's
Registration Statement)
f.8 - Master Trust Indenture and Security Agreement dated as of
December 31, 1996, by and among SFC as Issuer, the Company
as Servicer and First Trust National Association as Trustee
(incorporated by reference to exhibit f.19 contained in the
Sirrom's Registration Statement)
j.1 - Custodial Services Agreement with First American Trust
Company dated March 13, 1992 (incorporated by reference to
the corresponding exhibit contained in the Sirrom's
Registration Statement)
j.2 - Custodial Services Agreement Supplement with First
American Trust Company dated January 16, 1995 (incorporated
by reference to the corresponding exhibit contained in the
Sirrom's Registration Statement)
r. Financial Data Schedule (for SEC use)
ITEM 25. MARKETING ARRANGEMENTS
Not applicable.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Not applicable.
ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
SFC is controlled by Sirrom. Sirrom has six other wholly-owned
subsidiaries: Tandem Capital, Inc., a Tennessee corporation ("Tandem"); Sirrom
Investments, Inc., a Tennessee corporation ("SII"); SWS1, Inc., a Tennessee
corporation; SWS2, Inc., a Tennessee corporation; SWS3, Inc., a Tennessee
corporation; and Harris Williams & Co., a Virginia corporation ("Harris
Williams"). Sirrom, SFC and SII will file consolidated financial statements and
Harris Williams, Tandem, SWS1, Inc., SWS2, Inc. and SWS3, Inc. will be accounted
for by the equity method of accounting, as they are not investment companies.
ITEM 29. INDEMNIFICATION
Under Section 145 of the Delaware General Corporation Law, a corporation
may indemnify any of its directors and officers against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with a threatened, pending or
completed action, suit or proceeding brought against him by reason of the fact
that he is or was a director or officer (i) if any such person acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation and (ii) in connection with any criminal action or
proceeding if such person had no reasonable cause to believe such conduct was
unlawful.
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In actions brought by or in the right of the corporation, however, Section 145
provides that no indemnification may be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of such person's duty to the
corporation unless, and only to the extent that, the Court of Chancery of the
State of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
review of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Not applicable.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
SFC maintains at its principal office physical possession of each
account, book or other document required to be maintained by Section 31(a) of
the 1940 Act.
ITEM 32. MANAGEMENT SERVICES
Not applicable.
ITEM 33. UNDERTAKINGS
Not applicable.
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SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Nashville,
and State of Tennessee, on this 27th day of March, 1997.
SIRROM FUNDING CORPORATION
By: /s/ George M. Miller, II
-----------------------------
George M. Miller, II
Chief Executive Officer and President
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EXHIBITS
Item No. Description
- -------- ------------------------------------------------------------------
a. Certificate of Incorporation
b. Bylaws
f.1 - Master Trust Indenture and Security Agreement Supplement
dated as of December 31, 1996, by and between SFC as Issuer,
the Company as Servicer, First Trust National Association as
Trustee and ING Baring (U.S.) Capital Markets, Inc.
(incorporated by reference to exhibit f.12 contained in the
Sirrom's Registration Statement)
f.2 - Revolving Note, Series 1996-1 dated December 31, 1996, with a
principal amount of $100,000,000 made by SFC in favor of
First Trust National Association (incorporated by reference
to exhibit f.13 contained in the Sirrom's Registration
Statement)
f.3 - Loan Sale and Contribution Agreement dated as of December 31,
1996, by and between the Company as Originator and Servicer
and SFC as Buyer (incorporated by reference to exhibit f.14
contained in the Sirrom's Registration Statement)
f.4 - Custodial Agreement dated as of December 31, 1996, by and
among SFC, the Company, First Trust National Association
and ING Baring (U.S.) Capital Markets, Inc. (incorporated
by reference to exhibit f.15 contained in the Sirrom's
Registration Statement)
f.5 - Backup Servicing Agreement dated as of December 31, 1996, by
and among First Trust National Association, the Company and
ING Baring (U.S.) Capital Markets, Inc. (incorporated by
reference to exhibit f.16 contained in the Sirrom's
Registration Statement)
f.6 - Fee Agreement dated as of December 31, 1996, by and among the
Company, SFC, and ING Baring (U.S.) Capital Markets, Inc.
(incorporated by reference to exhibit f.17 contained in the
Sirrom's Registration Statement)
f.7 - ISDA Master Agreement dated as of November 26, 1996, by and
between the Company and NationsBank, N.A. (incorporated by
reference to exhibit f.18 contained in the Sirrom's
Registration Statement)
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Item No. Description
- -------- ------------------------------------------------------------------
f.8 - Master Trust Indenture and Security Agreement dated as of
December 31, 1996, by and among SFC as Issuer, the Company
as Servicer and First Trust National Association as Trustee
(incorporated by reference to exhibit f.19 contained in the
Sirrom's Registration Statement)
j.1 - Custodial Services Agreement with First American Trust Company
dated March 13, 1992 (incorporated by reference to the
corresponding exhibit contained in the Sirrom's Registration
Statement)
j.2 - Custodial Services Agreement Supplement with First American
Trust Company dated January 16, 1995 (incorporated by
reference to the corresponding exhibit contained in the
Sirrom's Registration Statement)
27.r - Financial Data Schedule (for SEC use)
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EXHIBIT a.
CERTIFICATE OF INCORPORATION
FOR
SIRROM FUNDING CORPORATION
FIRST: The name of this corporation is Sirrom Funding
Corporation (hereinafter called the "Corporation").
SECOND: The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
THIRD: The nature of the business or purposes to be conducted
or promoted by the Corporation are:
(a) to enter into, perform and comply with a Loan Sale and
Contribution Agreement (the "Loan Sale Agreement") among Sirrom Capital
Corporation, a Tennessee corporation (the "Seller") and/or with any
subsidiary of the Seller as may become a "Seller" under the Loan Sale
Agreement, pursuant to which agreements the Corporation may purchase
from the Seller and such other "Sellers" some or all of their small
business loans and related intangible property (the "Loans");
(b) to own, hold and service (or arrange for an agent to
service) the Loans;
(c) to fund the Corporation's purchases of Loans by selling
interests in the Loans to, or borrowing from, one or more trusts,
banks, financial institutions, commercial paper issuers, insurance
companies or similar entities, and, in connection with any such
financing arrangements, to pledge as security all or substantially all
of its assets, including, without limitation, all of its right, title
and interest to and in the Loans so purchased;
(d) to enter into, perform and comply with:
1. Master Trust Indenture and Security Agreement
with First Trust National Association, as
Trustee (or its duly appointed successors), and
supplements thereto (the "Indenture");
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2. Notes ("Notes") executed pursuant to the
Indenture;
3. Note purchase agreements with respect to Notes;
4. Custodial agreements relating to custody of
documentation pertaining to the Loans; and
5. Assignment and contribution agreements with
the Seller.
(e) to invest the proceeds derived from the sale or
ownership of the Loans as determined by the Corporation's
Board of Directors;
(f) to enter into currency hedging arrangements in
connection with the purchase of any Loans denominated in
foreign currencies; and
(g) to engage in any lawful act or activity and to exercise
any powers permitted to corporations organized under the General
Corporation Law of Delaware that, in either case, are incidental to and
necessary or convenient for the accomplishment of the above-mentioned
purposes.
FOURTH: The total number of shares of all classes of stock that the
Corporation is authorized to issue is One Thousand (1,000) shares, all of which
shares shall be common stock, $1.00 par value per share ("Common Stock"). All
shares of Common Stock will be identical and will entitle the holders thereof to
the same rights and privileges.
(a) Voting Rights. Except as set forth herein or as otherwise
required by law, each outstanding share of Common Stock shall be
entitled to vote on each matter on which the stockholders of the
Corporation shall be entitled to vote, and each holder of Common Stock
shall be entitled to one vote for each share of such stock held by such
holder.
(b) Dividends and Other Distributions. The Board of
Directors of the Corporation may cause dividends to be paid
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to holders of shares of Common Stock out of funds legally available for
the payment of dividends. Any dividend or distribution on the Common
Stock shall be payable on shares of all Common Stock share and share
alike.
(c) Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, after
payment or provision for payment of the debts and other liabilities of
the Corporation, the holders of shares of Common Stock shall be
entitled to share ratably, share alike, in the remaining net assets of
the Corporation.
FIFTH: In furtherance and not in limitation of the powers conferred by
statute, the Corporation's Board of Directors is expressly authorized to alter,
amend, repeal or adopt the By-Laws of the Corporation; provided, however, that
any such alteration, amendment, repeal or adoption that relates to or affects in
any way the criteria for, qualifications of, or requirement that the Corporation
maintain two "Independent Directors" (as such terms are defined in the Seventh
Article), must receive the prior affirmative vote or written consent of each
such Independent Director.
SIXTH: Elections of directors need not be by written ballot
unless, and to the extent, so provided in the Corporation's
By-Laws.
SEVENTH: The Corporation shall at all times, except as noted hereafter,
have at least two directors (each, an "Independent Director") each of whom (i)
is not a stockholder (whether direct, indirect or beneficial), customer or
supplier of Sirrom Capital Corporation or any of its affiliates; (ii) is not a
director, officer, employee, affiliate or associate of Sirrom Capital
Corporation and any of its affiliates (other than the Corporation); (iii) is not
a person related to any person referred to in clauses (i) or (ii); (iv) is not a
trustee, conservator or receiver for any affiliates of Sirrom Capital
Corporation; and (v) has (A) prior experience as an independent director for a
corporation whose charter documents required the unanimous consent of all
independent directors thereof before such corporation could consent to the
institution of bankruptcy or insolvency proceedings against it or could file a
petition
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seeking relief under any applicable federal or state law relating to bankruptcy
and (B) at least three years of employment experience with one or more entities
that provide, in the ordinary course of their respective businesses, advisory,
management or placement services to issuers of securitization or structured
finance instruments, agreements or securities. The Corporation shall cause each
independent director to be paid directors fees of at least $1,000 per meeting
attended. In the event of the death, incapacity, resignation or removal of any
Independent Director, the Board of Directors shall promptly appoint a
replacement Independent Director; provided, however, that the Board of Directors
shall not vote on any matter unless and until at least two Independent Directors
have been duly appointed to serve on the Board.
EIGHTH: To the extent permitted under the Delaware General Corporation
Law, none of the Corporation's directors shall be liable to the Corporation or
its stockholders for monetary damages as a result of breaching any fiduciary
duty as a director. Any repeal or modification of this Eighth Article by the
Corporation's stockholders shall be prospective only and shall not adversely
affect any limitation on the personal liability of any director of the
Corporation existing at the time of such repeal or modification.
NINTH: Subject to the limitations of an Independent Director or an
Independent Officer in the Seventh Article, to the extent permitted under the
Delaware General Corporation Law, any person (including, but not limited to,
stockholders, directors, officers and employees of the Corporation or any
affiliate of the Corporation) may engage in or possess an interest in other
business ventures of every nature and description, independently or with others,
whether such ventures are competitive with the Corporation or otherwise, and
neither the Corporation nor its stockholders shall have any right in or to such
independent ventures or to the income or profits derived therefrom.
TENTH: Notwithstanding any other provision of this
Certificate of Incorporation and any provision of law, the
Corporation shall not do any of the following:
(a) engage in any business or activity other than as
set forth in the Third Article hereof:
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(b) without the affirmative vote of all of the members of the
Board of Directors of the Corporation (which must include the
affirmative vote of all duly appointed Independent Directors), (i)
dissolve or liquidate, in whole or in part, or institute proceedings to
be adjudicated bankrupt or insolvent, (ii) consent to the institution
of bankruptcy or insolvency proceedings against it, (iii) file a
petition seeking or consent to reorganization or relief under any
applicable federal or state law relating to bankruptcy, (iv) consent to
the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Corporation or a
substantial part of its property, (v) make a general assignment for the
benefit of creditors, (vi) admit in writing its inability to pay its
debts generally as they become due or (vii) take any corporate action
in furtherance of the actions set forth in clauses (i) through (vi) of
this paragraph; or
(c) merge or consolidate with any other corporation, company
or entity or, except to the extent permitted by the Purchase Agreement,
sell all or substantially all of its Assets or acquire all or
substantially all of the assets or capital stock or other ownership
interest of any other corporation, company or entity.
ELEVENTH: The Corporation shall ensure at all times that (a) it
conducts its business from an office that is separate and distinct from those of
Sirrom Capital Corporation and their affiliates even if such office space is
subleased from, or is on or near premises occupied by, Sirrom Capital
Corporation or any of their affiliates; (b) it maintains separate corporate
records and books of account from those of Sirrom Capital Corporation and their
affiliates; (c) none of the Corporation's assets will be commingled with those
of Sirrom Capital Corporation or any of their affiliates; and (d) any employee,
consultant or agent of the Corporation or any other operating expense incurred
by the Corporation will be paid from the assets of the Corporation.
TWELFTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in any
manner now or hereafter provided herein or by statute and, except as provided in
the Fifth Article, all rights, preferences and privileges conferred
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by this Certificate of Incorporation upon stockholders, directors or any other
person are granted subject to such right; provided, however, that the
Corporation shall not amend, alter, change or repeal any provision of the Third,
Fifth, Seventh, Tenth, Eleventh or Twelfth Article of this Certificate of
Incorporation (the "Restricted Articles") without the affirmative vote of all
Independent Directors or until after the termination of the Purchase Agreement;
and provided, further, that the Corporation shall not amend or change any
provision of any Article other than the Restricted Articles so as to be
inconsistent with the Restricted Articles
THIRTEENTH: When exercising any vote provided for in the Seventh and
Twelfth Articles hereof and paragraphs (a), (c) and (d) of the Tenth Article
hereof, each director shall cast its vote recognizing that it owes its fiduciary
duty or other obligation with respect to such vote to the Corporation
(including, without limitation, the Corporation's creditors) as well as to the
stockholders of the Corporation. When exercising any vote on whether the
Corporation will take any action described in paragraph (b) of the Tenth Article
hereof, each Director shall cast its vote recognizing that it owes its primary
fiduciary duty or other obligation with respect to such vote to the Corporation
(including, without limitation, the Corporation's creditors) and not to the
stockholders of the Corporation (except as may specifically be required by the
law of any applicable jurisdiction). Every stockholder of the Corporation shall
be deemed to have consented to the foregoing by virtue of such stockholder's
consent to this Certificate of Incorporation.
Executed this _____ day of December, 1996.
----------------------------------
Bob F. Thompson, Sole Incorporator
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EXHIBIT b.
BY-LAWS
OF
SIRROM FUNDING CORPORATION
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
New Castle County, State of Delaware.
Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the Board of Directors may from
time to time determine or the business of the corporation may require.
Section 3. The corporation shall maintain a business office through
which its business will be conducted separate from those of Sirrom Capital
Corporation, a Tennessee corporation, and its affiliates.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Meetings of stockholders shall be held at any place within
or outside the State of Delaware designated by the Board of Directors. In the
absence of any such designation, stockholders' meetings shall be held at the
principal executive office of the corporation.
Section 2. The annual meeting of stockholders shall be held each year
on a date and at a time designated by the Board of Directors. At each annual
meeting, directors shall be elected and any other proper business may be
transacted.
Section 3. A majority of the stock issued and outstanding and entitled
to vote at any meeting of stockholders, the holders of which are present in
person or represented by proxy, shall constitute a quorum for the transaction of
business except as otherwise provided by law, by the Certificate of
Incorporation, or by these By-Laws. A quorum, once established, shall not be
broken by the withdrawal of enough votes to leave less than a quorum and
<PAGE> 2
the votes present may continue to transact business until adjournment. If,
however, such quorum shall not be present or represented at any meeting of the
stockholders, a majority of the voting stock represented in person or by proxy
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. If the adjournment is for more than thirty days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote thereat.
Section 4. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes, or
the Certificate of Incorporation, or these By-Laws, a different vote is required
in which case such express provision shall govern and control the decision of
such question.
Section 5. At each meeting of the stockholders, each stockholder having
the right to vote may vote in person or may authorize another person or persons
to act for him by proxy appointed by an instrument in writing subscribed by such
stockholder and bearing a date not more than three years prior to said meeting,
unless said instrument provides for a longer period. All proxies must be filed
with the Secretary of the corporation at the beginning of each meeting in order
to be counted in any vote at the meeting. Each stockholder shall have one vote
for each share of stock having voting power, registered in his name on the books
of the corporation on the record date set by the Board of Directors as provided
in Article V, Section 6 hereof. All elections shall be had and all questions
decided by a plurality vote.
Section 6. Special meetings of the stockholders, for any purpose, or
purposes, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called by the President and shall be called by the
President or the Secretary at the request in writing of a majority of the Board
of Directors, or at the request in writing of stockholders owning a majority in
amount
2
<PAGE> 3
of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 7. Whenever stockholders are required or permitted to take any
action at a meeting, a written notice of the meeting shall be given which notice
shall state the place, date and hour of the meeting, and, in the case of a
special meeting, the purpose or purposes for which the meeting is called. The
written notice of any meeting shall be given to each stockholder entitled to
vote at such meeting not less than ten nor more than sixty days before the date
of the meeting. If mailed, notice is given when deposited in the United States
mail, postage prepaid, directed to the stockholder at his address as it appears
on the records of the corporation.
Section 8. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 9. Unless otherwise provided in the Certificate of
Incorporation, any action required to be taken at any annual or special meeting
of stockholders of the corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which
3
<PAGE> 4
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole
Board shall be not less than two nor more than twelve. The directors need not be
stockholders or citizens of the United States or residents of the State of
Delaware. The corporation shall at all times, except as noted hereafter, have at
least two Independent Directors (as such term is defined in the corporation's
Certificate of Incorporation). In the event of the death, incapacity,
resignation or removal of any Independent Director, or in the event that any
director acting as an Independent Director shall cease to satisfy the
eligibility conditions for an Independent Director, the Board of Directors shall
promptly appoint a replacement Independent Director; provided, however, that the
Board of Directors shall not vote on any matter requiring the vote of an
Independent Director unless and until at least two Independent Directors have
been duly appointed to serve on the Board. The directors shall be elected at the
annual meeting of the stockholders, except as provided in Section 2 of this
Article, and each director elected shall hold office until his successor is
elected and qualified; provided, however, that unless otherwise restricted by
the Certificate of Incorporation or by law, any director or the entire Board of
Directors may be removed, either with or without cause, from the Board of
Directors at any meeting of stockholders by a majority of the stock represented
and entitled to vote thereat.
Section 2. Vacancies on the Board of Directors by reason of death,
resignation, retirement, disqualification, or increase in the authorized number
of directors may, subject to Section 1 above, be filled by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. The directors so chosen shall hold office until the next annual
election of directors and until their successors are duly elected and shall
qualify, unless sooner displaced. If there are no directors in office, then an
election of directors may be held in the manner
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<PAGE> 5
provided by statute. If, at the time of filling any vacancy, the directors then
in office shall constitute less than a majority of the whole Board (as
constituted immediately prior to any such increase), the Court of Chancery may,
upon application of stockholders holding at least ten percent of the total
number of the shares at the time outstanding having the right to vote for such
directors, summarily order an election to be held to fill any such vacancies or
newly created directorships, or to replace the directors chosen by the directors
then in office.
Section 3. The property and business of the corporation shall be
managed by or under the direction of its Board of Directors. In addition to the
powers and authorities by these By-Laws expressly conferred upon them, the Board
may exercise all such powers of the corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
By-Laws directed or required to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The directors may hold their meetings and have one or more
offices, and keep the books of the corporation outside of the State of Delaware.
Section 5. Regular meetings of the Board of Directors may be held
without notice at such time and place as shall from time to time be determined
by the Board.
Section 6. Special meetings of the Board of Directors may be called by
the President on forty-eight hours' notice to each director, either personally,
by telegram or by telecopy; special meetings shall be called by the President or
the Secretary in like manner and on like notice on the written request of two
directors unless the Board consists of only one director; in which case special
meetings shall be called by the President or Secretary in like manner or on like
notice on the written request of the sole director.
Section 7. At all meetings of the Board of Directors, one-half of the
entire Board of Directors shall be necessary and sufficient to constitute a
quorum for the transaction of business, and the vote of a majority of the
directors present at any meeting
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<PAGE> 6
at which there is a quorum, shall be the act of the Board of Directors, except
as may be otherwise specifically provided by statute, by the Certificate of
Incorporation or by these By-Laws and except that two Independent Directors must
be present to form a quorum for any matter which, pursuant to the Certificate of
Incorporation or these By-Laws, requires the vote of each Independent Director.
If a quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
If only one director is authorized, such sole director shall constitute a
quorum.
Section 8. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.
Section 9. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.
COMMITTEES OF DIRECTORS
Section 10. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each such
committee to consist of one or more of the directors of the corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may
6
<PAGE> 7
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of Directors,
and subject to the requirements of Article III, shall have and may exercise all
the powers and authority of the Board of Directors in the management of the
business and affairs of the corporation, and may authorize the seal for the
corporation to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, recommending to the
stockholders a dissolution of the corporation or a revocation of a dissolution,
amending the By-Laws of the corporation, or taking any other action which,
pursuant to the Certificate of Incorporation, requires the vote of each
Independent Director; and, unless the resolution or the Certificate of
Incorporation expressly so provides, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock.
Section 11. Each committee shall keep regular minutes of its meetings
and report the same to the Board of Directors when required.
COMPENSATION OF DIRECTORS
Section 12. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, the Board of Directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director; provided, however, that services provided by any director
which are determined by the Board of Directors to be ministerial and of
negligible value will not be compensated. No such payment shall preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be allowed
like compensation for attending committee meetings.
7
<PAGE> 8
INDEMNIFICATION
Section 13. The corporation shall indemnify every person who was or is
a party or is or was threatened to be made a party to any action, suit, or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director, officer or employee of the corporation
or, while a director, officer or employee of the corporation, is or was serving
at the request of the corporation as a director, officer, employee, agent or
trustee of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including counsel fee),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding, to the full extent
permitted by applicable law.
ARTICLE IV
OFFICERS
Section 1. The officers of this corporation shall be chosen by the
Board of Directors and shall include a President, a Secretary, and a Treasurer.
The corporation may also have at the discretion of the Board of Directors such
other officers as are desired, including a Chairman of the Board, one or more
Vice Presidents, one or more Assistant Secretaries and Assistant Treasurers, and
such other officers as may be appointed in accordance with the provisions of
Section 2 hereof. In the event there are two or more Vice Presidents, then one
or more may be designated as Executive Vice President, Senior Vice President, or
other similar or dissimilar title. At the time of the election of officers, the
directors may by resolution determine the order of their rank. Any number of
offices may be held by the same person, unless the Certificate of Incorporation
or these By-Laws otherwise provide.
Section 2. The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board.
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<PAGE> 9
Section 3. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.
Section 4. The officers of the corporation shall hold office until
their successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors. If the office of any
officer or officers becomes vacant for any reason, the vacancy shall be filled
by the Board of Directors.
CHAIRMAN OF THE BOARD
Section 5. The Chairman of the Board, if such an officer be elected,
shall, if present, preside at all meetings of the Board of Directors and
exercise and perform such other powers and duties as may be from time to time
assigned to him by the Board of Directors or prescribed by these By-Laws. If
there is no President, the Chairman of the Board shall in addition be the Chief
Executive Officer of the corporation and shall have the powers and duties
prescribed in Section 6 of this Article IV.
PRESIDENT
Section 6. Subject to such supervisory powers, if any, as may be given
by the Board of Directors to the Chairman of the Board, if there be such an
officer, the President shall be the Chief Executive Officer of the corporation
and shall, subject to the control of the Board of Directors, have general
supervision, direction and control of the business and officers of the
corporation. He shall preside at all meetings of the stockholders and, in the
absence of the Chairman of the Board, or if there be none, at all meetings of
the Board of Directors. He shall be an ex-officio member of all committees and
shall have the general powers and duties of management usually vested in the
office of President and Chief Executive Officer of corporations, and shall have
such other powers and duties as may be prescribed by the Board of Directors or
these By-Laws.
9
<PAGE> 10
VICE PRESIDENTS
Section 7. In the absence or disability of the President, the Vice
Presidents in order of their rank as fixed by the Board of Directors, or if not
ranked, the Vice President designated by the Board of Directors, shall perform
all the duties of the President, and when so acting shall have all the powers of
and be subject to all the restrictions upon the President. The Vice Presidents
shall have such other duties as from time to time may be prescribed for them,
respectively, by the Board of Directors.
SECRETARY AND ASSISTANT SECRETARY
Section 8. The Secretary shall attend all sessions of the Board of
Directors and all meetings of the stockholders and record all votes and the
minutes of all proceedings in a book to be kept for that purpose; and shall
perform like duties for the standing committees when required by the Board of
Directors. He shall give, or cause to be given, notice of all meetings of the
stockholders and of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or these By-Laws. He shall keep
in safe custody the seal of the corporation, and when authorized by the Board,
affix the same to any instrument requiring it, and when so affixed it shall be
attested by his signature or by the signature of an Assistant Secretary. The
Board of Directors may give general authority to any other officer to affix the
seal of the corporation and to attest the affixing by his signature.
Section 9. The Assistant Secretary, or if there be more than one, the
Assistant Secretaries in the order determined by the Board of Directors, or if
there be no such determination, the Assistant Secretary designated by the Board
of Directors, shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.
10
<PAGE> 11
TREASURER AND ASSISTANT TREASURER
Section 10. The Treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects, in the name and to the credit of the corporation, in
such depositories as may be designated by the Board of Directors. He shall
disburse the funds of the corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the Board of Directors, at its regular meetings, or when the Board of Directors
so requires, an account of all his transactions as Treasurer and of the
financial condition of the corporation. If required by the Board of Directors,
he shall give the corporation a bond, in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors, for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 11. The Assistant Treasurer, or if there shall be more than
one, the Assistant Treasurers in the order determined by the Board of Directors,
or if there be no such determination, the Assistant Treasurer designated by the
Board of Directors, shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer and shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe.
ARTICLE V
CERTIFICATES OF STOCK
Section 1. Every holder of stock of the corporation shall be entitled
to have a certificate signed by, or in the name of the corporation by, the
Chairman or Vice Chairman of the Board of Directors, or the President or a Vice
President, and by the Secretary or an Assistant Secretary, or the Treasurer or
an Assistant Treasurer of the corporation, certifying the number of
11
<PAGE> 12
shares represented by the certificate owned by such stockholder in
the corporation.
Section 2. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent, or registrar at the date of issue.
Section 3. If the corporation shall be authorized to issue more than
one class of stock or more than one series of any class, the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualification,
limitations or restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate which the
corporation shall issue to represent such class or series of stock, provided
that, except as otherwise provided in section 202 of the General Corporation Law
of Delaware, in lieu of the foregoing requirements, there may be set forth on
the face or back of the certificate, which the corporation shall issue to
represent such class or series of stock, a statement that the corporation will
furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
LOST STOLEN OR DESTROYED CERTIFICATES
Section 4. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to
12
<PAGE> 13
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.
TRANSFERS OF STOCK
Section 5. Upon surrender to the corporation, or the transfer agent of
the corporation, of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
Section 6. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of the stockholders, or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix a record date which shall
not be more than sixty nor less than ten days before the date of such meeting,
nor more than sixty days prior to any other action. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meetings; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
REGISTERED STOCKHOLDERS
Section 7. The corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim or
interest in such share on the part of
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<PAGE> 14
any other person, whether or not it shall have express or other notice thereof,
except as expressly provided by the laws of the State of Delaware.
ARTICLE VI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject
to the provisions of the Certificate of Incorporation, if any, may be declared
by the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the Certificate of Incorporation.
Section 2. Before payment of any dividend there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interests of the
corporation, and the directors may abolish any such reserve. The corporation
will not pay dividends out of funds other than retained earnings unless the
Board of Directors determines that the funds to be paid as dividends are no
longer needed by the corporation in the operations of its business and that the
corporation will not require any additional capital contributions after the
payment of such dividend.
CHECKS
Section 3. All checks, drafts or other orders for the payment of money
issued in the name of the Corporation shall be signed by such officers,
employees or agents of the Corporation as shall from time to time be designated
by the Chairman of the Board, the President, the Vice President-Finance, the
Treasurer or an Assistant Treasurer.
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<PAGE> 15
All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as shall from time to time be designated
by the Chairman of the Board, the President, the Vice President-Finance, the
Treasurer or an Assistant Treasurer; and such officers may designate any type of
depository arrangement (including but not limited to depository arrangements
resulting in net debits against the Corporation) as from time to time offered or
available.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.
SEAL
Section 5. The corporation shall have no seal.
NOTICES
Section 6. Whenever, under the provisions of the statutes or of the
Certificate of Incorporation or of these By-Laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by facsimile.
Section 7. Whenever any notice is required to be given under the
provisions of the statutes or of the Certificate of Incorporation or of these
By-Laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
to be equivalent.
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<PAGE> 16
ANNUAL STATEMENT
Section 8. The Board of Directors shall present at each annual meeting,
and at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
ARTICLE VII
AMENDMENTS
Section 1. These By-Laws may be altered, amended or repealed or new
By-Laws may be adopted by the stockholders or by the Board of Directors, when
such power is conferred upon the Board of Directors by the Certificate of
Incorporation, at any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the stockholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
By-Laws be contained in the notice of such special meeting; provided, however,
that any such alteration, amendment, repeal or adoption that relates to or
effects in any way the criteria for, qualifications of, or requirement that the
corporation maintain two Independent Directors must receive the prior
affirmative vote or written consent of each Independent Director. If the power
to adopt, amend or repeal By-Laws is conferred upon the Board of Directors by
the Certificate of Incorporation, it shall not divest or limit the power of the
stockholders to adopt, amend or repeal By-Laws.
16
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