1
Exhibit 1
5,000,000 Shares
MCM CAPITAL GROUP, INC.
Common Stock
UNDERWRITING AGREEMENT
______________, 1999
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/o CIBC World Markets Corp.
CIBC Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several Underwriters named on Schedule I attached hereto.
Ladies and Gentlemen:
MCM Capital Group, Inc., a Delaware corporation (the "Company"),
and certain existing stockholders named on Schedule II to this Agreement (the
"Selling Stockholders") propose, subject to the terms and conditions contained
herein, to sell to you and the other underwriters named on Schedule I to this
Agreement (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), an aggregate of 5,000,000 shares (the "Firm Shares") of the
Company's Common Stock, $0.01 par value per share (the "Common Stock"). Of the
5,000,000 Firm Shares, 3,333,333 shares are to be issued and sold by the Company
and an aggregate of 1,666,667 shares are to be sold by the Selling Stockholders
in the amounts listed opposite their respective names on Schedule II to this
Agreement. The respective amounts of the Firm Shares to be purchased by each of
the several Underwriters are set forth opposite their names on Schedule I
hereto. In addition, the Company proposes to grant to the Underwriters an option
to purchase up to an additional 750,000 shares (the "Option Shares") of Common
Stock, for the purpose of covering over-allotments in connection with the sale
of the Firm Shares. The Firm Shares and the Option Shares are together called
the "Shares."
1. Sale and Purchase of the Shares.
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
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(a) The Company agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase
from the Company, at a price of $_____ per share (the "Initial Price"),
the number of Firm Shares set forth opposite the name of such
Underwriter under the column "Number of Firm Shares to be Purchased
from the Company" on Schedule I to this Agreement, subject to
adjustment in accordance with Section 11 hereof. Each of the Selling
Stockholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from each of the Selling Stockholders, at the
Initial Price, the number of Firm Shares set forth opposite the name of
such Underwriter under the column in its name under "Number of Firm
Shares to be Purchased from the Selling Stockholders" on Schedule I to
this Agreement, subject to adjustment in accordance with Section 12
hereof.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage (adjusted by
the Representatives to eliminate fractions) of the total number of
Option Shares to be purchased by the Underwriters as such Underwriter
is purchasing of the Firm Shares. Such option may be exercised only to
cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the
Firm Shares Closing Date (as defined below), and thereafter from time
to time within 30 days after the date of this Agreement, in each case
upon written or telegraphic notice, or oral or telephonic notice
confirmed by written or telegraphic notice, by the Representatives to
the Company no later than 12:00 noon, New York City time, on the
business day before the Firm Shares Closing Date or at least two
business days before the Option Shares Closing Date (as defined below),
as the case may be, setting forth the number of Option Shares to be
purchased and the time and date (if other than the Firm Shares Closing
Date) of such purchase.
2. Delivery and Payment. The Shares shall be represented by
definitive certificates and shall be registered in such names and shall be in
such denominations as the Representatives shall request at least two full
business days before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the option as described in Section
1(b). The Firm Shares shall be delivered by or on behalf of the Company and the
Selling Stockholders, with any transfer taxes thereon duly paid by the Company
or the Selling Stockholders, as the case may be, to the Representatives through
the facilities of The Depository Trust Company ("DTC"), for the respective
accounts of the several Underwriters, against payment of the purchase price to
the Company and the Selling Stockholders by wire transfers of Federal or other
funds immediately available in New York City. The certificates representing the
Firm Shares shall be made available for inspection not later than 9:30 a.m., New
York City time, on the business day prior to the Firm Shares Closing Date at the
office of DTC or its designated custodian. The time and date of delivery and
payment for the Firm Shares shall be 9:00 a.m., New York City time, on the third
business day following the date of this Agreement, or at such
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time on such other date, not later than ten business days after the date of this
Agreement, as shall be agreed upon by the Company, the Selling Stockholders and
the Representatives (such time and date of delivery and payment are called the
"Firm Shares Closing Date"). The documents to be delivered on the Firm Shares
Closing Date on behalf of the parties hereto shall be delivered at the offices
of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 and the Firm Shares shall be delivered at the office of DTC or its
designated custodian on the Firm Shares Closing Date.
In the event the option with respect to the Option Shares is
exercised, delivery by the Company of the Option Shares to the Representatives
for the respective accounts of the Underwriters and payment of the purchase
price to the Company shall take place as specified above with respect to the
Firm Shares at the time and on the date (which may be the same date as, but in
no event shall be earlier than, the Firm Shares Closing Date) specified in the
notice referred to in Section 1(b) (such time and date of delivery and payment
are called the "Option Shares Closing Date"). The Firm Shares Closing Date and
the Option Shares Closing Date are called, individually, a "Closing Date" and,
together, the "Closing Dates."
3. Registration Statement and Prospectus; Public Offering. The
Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "Commission") a Registration Statement (as hereinafter
defined) on Form S-1 (No. 333-77483), including a preliminary prospectus
relating to the Shares, and such amendments thereto as may have been required to
the date of this Agreement. Copies of such Registration Statement (including all
amendments thereof) and of the related Preliminary Prospectus (as hereinafter
defined) have heretofore been delivered by the Company to you. The term
"Preliminary Prospectus" means any preliminary prospectus (as described in Rule
430 of the Rules) included at any time as a part of the Registration Statement
or filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules. The term "Registration
Statement" as used in this Agreement means the initial registration statement
(including all exhibits and financial schedules), as amended at the time and on
the date it becomes effective (the "Effective Date"), including the information
(if any) deemed to be part thereof at the time of effectiveness pursuant to Rule
430A of the Rules. If the Company has filed an abbreviated registration
statement to register additional Shares pursuant to Rule 462(b) under the Rules
(the "462(b) Registration Statement") then any reference herein to the
Registration Statement shall also be deemed to include such 462(b) Registration
Statement. The term "Prospectus" as used in this Agreement means the prospectus
included in the Registration Statement in the form first used to confirm sales
of the Shares.
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the Prospectus, as soon after the Effective Date and the date of
this Agreement as the Representatives deem advisable. The Company and the
Selling Stockholders hereby confirm that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each Preliminary Prospectus
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and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
4. Representations and Warranties of the Company. The Company
hereby represents and warrants to each Underwriter and to each Selling
Stockholder as follows:
(a) On the Effective Date, the Registration Statement complied,
and on the date of the Prospectus, the date any post-effective
amendment to the Registration Statement becomes effective, the date any
supplement or amendment to the Prospectus is filed with the Commission
and each Closing Date, the Registration Statement and the Prospectus
(and any amendment thereof or supplement thereto) will comply, in all
material respects, with the applicable provisions of the Securities Act
and the Rules and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission
thereunder. The Registration Statement did not, as of the Effective
Date, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading. On the Effective Date
and on the other dates referred to above, the Prospectus did not and
will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. When any Preliminary Prospectus was first filed with
the Commission (whether filed as part of the Registration Statement or
any amendment thereto or pursuant to Rule 424(a) of the Rules) and when
any amendment thereof or supplement thereto was first filed with the
Commission, such preliminary prospectus as amended or supplemented
complied in all material respects with the applicable provisions of the
Securities Act and the Rules and did not contain 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. Notwithstanding the
foregoing, none of the representations and warranties in this paragraph
4(a) shall apply to statements in, or omissions from, the Registration
Statement or the Prospectus made in reliance upon, and in conformity
with, information herein or otherwise furnished in writing (i) with
respect to the representations and warranties made in this paragraph
4(a) to any Underwriter, by the Representatives on behalf of the
several Underwriters for use in the Registration Statement or the
Prospectus, and (ii) with respect to the representations and warranties
made in this paragraph 4(a) to any Selling Stockholder, by such Selling
Stockholder for use in the Registration Statement or the Prospectus.
With respect to the preceding sentence, the Company acknowledges that
the only information furnished in writing (i) by the Representatives on
behalf of the several Underwriters for use in the Registration
Statement or the Prospectus are the following paragraphs contained
under the caption "Underwriting" in the Prospectus: (A) the table in
the second full paragraph; (B) the fourth full paragraph, concerning
the terms of the offering, excluding the first sentence thereof; (C)
the tenth full paragraph, concerning discretionary sales; (D) the
twelfth full paragraph and (E) the thirteenth full paragraph, including
the text set forth in bullet points, concerning stabilization and
syndicate covering transactions, and (ii) by Selling Stockholders for
use in the
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Registration Statement or the Prospectus is (A) the information with
respect to such Selling Stockholder and, if applicable, its members,
contained under the caption "Principal and Selling Stockholders" and
(B) the information, if any, referring to such Selling Stockholder
contained under the caption "Certain Transactions."
(b) The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have
been instituted or are threatened under the Securities Act. Any
required filing of the Prospectus and any supplement thereto pursuant
to Rule 424(b) of the Rules has been or will be made in the manner and
within the time period required by such Rule 424(b).
(c) The financial statements of the Company (including all notes
and schedules thereto) included in the Registration Statement and
Prospectus present fairly the financial condition, the results of
operations, the statements of cash flows and the statements of
stockholders' equity and the other information purported to be shown
therein of the Company at the respective dates and for the respective
periods to which they apply; and such financial statements and related
schedules and notes have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the
periods involved, and all adjustments necessary for a fair presentation
of the results for such periods have been made.
The summary and selected financial data included in the
Prospectus present fairly the information shown therein as at the
respective dates and for the respective periods specified and the
summary and selected financial data have been presented on a basis
consistent with the consolidated financial statements so set forth in
the Prospectus and other financial information.
(d) Ernst & Young LLP, whose reports are filed with the
Commission as a part of the Registration Statement are, and during the
periods covered by their reports, were independent public accountants
as required by the Securities Act and the Rules.
(e) Each of the Company and each of its Subsidiaries (as
hereinafter defined) is a corporation duly incorporated, validly
existing and in good standing under the laws of its respective
jurisdiction of incorporation. Each of the Company and each such
subsidiary or other entity controlled directly or indirectly by the
Company, as set forth on Schedule III hereto (collectively, the
"Subsidiaries") is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
nature of the business conducted by it or location of the assets or
properties owned, leased or licensed by it requires such qualification,
except for such jurisdictions where the failure to so qualify
individually or in the aggregate would not have a material adverse
effect on the assets or properties, business, results of operations or
financial condition of the Company (a "Material Adverse Effect"). The
Company does not own, lease or license any asset or property or conduct
any business
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outside the United States of America. The Company and each of its
Subsidiaries have all requisite corporate power and authority, and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory
bodies or any other person or entity (collectively, the "Permits"), to
own, lease and license its assets and properties and conduct its
business, all of which are valid and in full force and effect, as
described in the Registration Statement and the Prospectus, except
where the lack of such Permits individually or in the aggregate would
not have a Material Adverse Effect. The Company and each of its
Subsidiaries have fulfilled and performed in all material respects all
of their material obligations with respect to such Permits and no event
has occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the Company thereunder. Except as may be
required under the Securities Act and state and foreign Blue Sky laws,
no other Permits are required to enter into, deliver and perform this
Agreement and to issue and sell the Shares.
(f) Each of the Company and its Subsidiaries owns or possesses
adequate and enforceable rights to use all trademarks, trademark
applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other similar rights and
proprietary knowledge (collectively, "Intangibles") described in the
Prospectus as being owned by it and necessary for the conduct of its
business. Neither the Company nor any of its Subsidiaries has received
any notice of, or is aware of, any infringement of or conflict with
asserted rights of others with respect to any Intangibles, which
infringement or conflict would have a Material Adverse Effect.
(g) Each of the Company and each of its Subsidiaries has good and
marketable title in fee simple to all items of real property and good
and marketable title to all personal property described in the
Prospectus as being owned by it, in each case except for (A) personal
property disposed of since the date of the consolidated statement of
financial condition included in the Registration Statement in the
ordinary course of business and (B) such liens, encumbrances and
defects as are described in the Prospectus, or which do not materially
interfere with the use made of such property by the Company or its
Subsidiaries. Any real property and buildings described in the
Prospectus as being held under lease by the Company and each of its
Subsidiaries is held by it under valid, existing and enforceable
leases, free and clear of all liens, encumbrances, claims, security
interests and defects, except such as are described in the Registration
Statement and the Prospectus or would not individually or in the
aggregate have a Material Adverse Effect.
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(h) There is no litigation or governmental proceeding to which
the Company or its Subsidiaries is subject or which is pending or, to
the knowledge of the Company, threatened, against the Company or any of
its Subsidiaries, which, if determined adversely to the Company or any
of its Subsidiaries, could reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect or affect the
consummation of this Agreement or which is required to be disclosed in
the Registration Statement and the Prospectus that is not so disclosed.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
described therein: (A) there has not been any material adverse change
with regard to the assets or properties, business, results of
operations or financial condition of the Company; (B) neither the
Company nor its Subsidiaries has sustained any loss or interference
with its assets, businesses or properties (whether owned or leased)
from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree which would
have a Material Adverse Effect; and (C) since the date of the latest
balance sheet included in the Registration Statement and the
Prospectus, except as reflected therein, neither the Company nor its
Subsidiaries has (i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, except such
liabilities or obligations incurred in the ordinary course of business
or set forth or contemplated in the Prospectus, (ii) entered into any
transaction not in the ordinary course of business or (iii) declared or
paid any dividend or made any distribution on any shares of its stock
or redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or otherwise acquire any shares of its stock.
(j) There is no document, contract or other agreement of a
character required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required by the Securities Act or
the Rules. Each description of a contract, document or other agreement
in the Registration Statement and the Prospectus accurately reflects in
all material respects the terms of the underlying document, contract or
agreement as required to be described by the Rules. Each agreement
described in the Registration Statement and Prospectus or listed in the
Exhibits to the Registration Statement is in full force and effect and
is valid and enforceable against and, to the Company's knowledge by,
the Company or one or more of its Subsidiaries, as the case may be, in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles. Neither the Company nor any of its
Subsidiaries, if any Subsidiary is a party, nor to the Company's
knowledge, any other party, is in default in the observance or
performance of any term or obligation to be performed by it under any
such agreement, and no event has occurred which with notice or lapse of
time or both would constitute such a default by the Company or any of
its Subsidiaries, nor to the Company's knowledge, any other party, in
any such case which default or event individually or in the
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aggregate would have a Material Adverse Effect. No default exists, and
no event has occurred which with notice or lapse of time or both would
constitute a default, in the due performance and observance of any
term, covenant or condition, by the Company or any of its Subsidiaries,
if any Subsidiary is a party thereto, of any other agreement or
instrument to which the Company or any of its Subsidiaries is a party
or by which it or its properties or business may be bound or affected
which default or event individually or in the aggregate would have a
Material Adverse Effect.
(k) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of its charter or by-laws or of any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation individually or in
the aggregate would have a Material Adverse Effect.
(l) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including the issuance and sale of
the Shares to be sold by the Company) will give rise to a right to
terminate or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision of, or
constitute a default (or an event which with notice or lapse of time or
both would constitute a default) under, or require any consent or
waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or
any of its Subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which either the
Company or any of its Subsidiaries or any of their properties or
businesses is bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company or
any of its Subsidiaries or violate any provision of the charter or
by-laws of the Company or any of its Subsidiaries, in each case except
for such consents or waivers which have already been obtained and are
in full force and effect.
(m) The Company has authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and
have been duly authorized for issuance by the Company. All of the
issued and outstanding shares of Common Stock have been duly and
validly issued and are fully paid and nonassessable. There are no
statutory preemptive or other similar rights to subscribe for or to
purchase or acquire any shares of Common Stock of the Company or its
Subsidiaries or any such rights pursuant to its respective Certificate
of Incorporation or by-laws or any agreement or instrument to or by
which the Company or any of its Subsidiaries is a party or bound,
except for options to acquire shares of Common Stock as disclosed in
the Prospectus and Registration Statement. The Shares, when issued and
sold pursuant to this Agreement, will be duly and validly issued, fully
paid and nonassessable and none of them will be issued in violation of
any preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there
is no commitment, plan or
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arrangement to issue, any share of stock of the Company or its
Subsidiaries or any security convertible into, or exercisable or
exchangeable for, such stock. The Common Stock and the Shares conform
in all material respects to all statements in relation thereto
contained in the Registration Statement and the Prospectus. All
outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued, and are fully paid and nonassessable and
are owned directly by the Company or by another wholly-owned subsidiary
of the Company, free and clear of any security interests, liens,
encumbrances, equities or claims.
(n) No holder of any security of the Company has the right to
have any security owned by such holder included in the Registration
Statement or to demand registration of any security owned by such
holder during the period ending 180 days after the date of this
Agreement. Each stockholder, director and executive officer of the
Company has delivered to the Representatives his enforceable written
lock-up agreement in the form attached to this Agreement as Schedule IV
(the "Lock-Up Agreement").
(o) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares
to be sold by the Company. This Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(p) Neither the Company nor any of its Subsidiaries is involved
in any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened, which dispute individually or in the aggregate
would have a Material Adverse Effect. The Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
principal suppliers or contractors which individually or in the
aggregate would have a Material Adverse Effect. The Company is not
aware of any threatened or pending litigation between the Company or
its Subsidiaries and any of its executive officers which individually
or in the aggregate, if adversely determined, could have a Material
Adverse Effect and has received no notice that such officers will not
remain in the employment of the Company.
(q) No transaction has occurred between or among the Company and
any of its officers, directors or 5% or greater stockholders or any
affiliate or affiliates of any such officer, director or 5% or greater
stockholder that is required to be described in and is not described in
the Registration Statement and the Prospectus.
(r) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or
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which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of any of the Shares.
(s) The Company and its Subsidiaries have filed all material
Federal, state, local and foreign tax returns which are required to be
filed through the date hereof, or have received extensions thereof, and
have paid all taxes shown on such returns and all assessments received
by them to the extent that the same are material and have become due.
There are no tax audits or investigations pending which if adversely
determined would have a Material Adverse Effect; nor are there any
material proposed additional tax assessments against the Company and
any of its Subsidiaries.
(t) The Shares have been duly authorized for quotation on the
Nasdaq National Market ("Nasdaq") of The Nasdaq Stock Market, Inc. A
registration statement has been filed on Form 8-A pursuant to Section
12 of the Exchange Act, which registration statement complies in all
material respects with the Exchange Act.
(u) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its Subsidiaries. The Company and each
of its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally
accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(v) The Company and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and
in such amounts as are customary in the businesses in which they are
engaged or propose to engage after giving effect to the transactions
described in the Prospectus and neither the Company nor any Subsidiary
has since January 1, 1996 been denied any insurance coverage which it
has sought or for which it has applied. Neither the Company nor any
Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse
Effect.
(w) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to
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be obtained or performed by the Company (except such additional steps
as may be necessary to qualify the Shares for public offering by the
Underwriters under the state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.
(x) There are no affiliations with the National Association of
Securities Dealers, Inc. (the "NASD") among the Company's officers,
directors or, to the best knowledge of the Company, any stockholder of
the Company, except as set forth in the Registration Statement.
(y) (i) Each of the Company and its Subsidiaries is in compliance
in all material respects with all rules, laws and regulations relating
to the use, treatment, storage and disposal of toxic substances and
protection of health or the environment ("Environmental Laws") which
are applicable to its business; (ii) none of the Company or its
Subsidiaries has received any notice from any governmental authority or
third party of an asserted claim under Environmental Laws; (iii) each
of the Company and its Subsidiaries has received all permits, licenses
or other approvals required of it under applicable Environmental Laws
to conduct its business and is in compliance with all terms and
conditions of any such permit, license or approval, except where the
lack of any such permits, licenses or approvals, individually or in the
aggregate, would not have a Material Adverse Effect; (iv) to the
Company's knowledge, no facts currently exist that will require the
Company or its Subsidiaries to make future material capital
expenditures to comply with Environmental Laws; and (v) no property
which is or has been owned, leased or occupied by the Company or its
Subsidiaries has been designated as a Superfund site pursuant to the
Comprehensive Environmental Response, Compensation of Liability Act of
1980, as amended (42 U.S.C. Section 9601, et. seq.) or otherwise
designated as a contaminated site under any other Environmental Law.
(z) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of proceeds thereof as
described in the Prospectus, will not be an "investment company" or an
entity controlled by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company
Act").
(aa) Neither the Company, its Subsidiaries nor, to the knowledge
of the Company, any other person associated with or acting on behalf of
the Company or its Subsidiaries, including any director, officer, agent
or employee of the Company or its Subsidiaries has, directly or
indirectly, while acting on behalf of the Company or its Subsidiaries
(i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political
activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; (iii) violated any provision
of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any other unlawful payment.
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12
(bb) All material disclosure regarding year 2000 compliance that
is required to be described under the Securities Act and the
regulations and pronouncements of the Commission has been included in
the Prospectus. Neither the Company nor any Subsidiary reasonably
believes that it will incur material operating expenses or costs to
ensure that its information systems will be year 2000 complaint, other
than as disclosed in the Prospectus.
5. Representations and Warranties of the Selling Stockholders.
Each of the Selling Stockholders hereby represents and warrants, severally and
not jointly, to each Underwriter as follows:
(a) Each of this Agreement and the Lock-Up Agreement has been
duly authorized, executed and delivered by or on behalf of the Selling
Stockholder and, assuming due authorization, execution and delivery by
the other parties hereto and thereto, each constitutes the valid and
legally binding agreement of the Selling Stockholder, enforceable
against the Selling Stockholder in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
(b) The execution and delivery by the Selling Stockholder of this
Agreement and the performance by the Selling Stockholder of its
obligations under this Agreement (i) will not contravene any provision
of applicable law, statute, regulation or filing or any agreement or
other instrument binding upon the Selling Stockholder or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Selling Stockholder, (ii) does not require any
consent, approval, authorization or order of or registration or filing
with any court or governmental agency or body having jurisdiction over
it, except such as may be required by the Blue Sky laws of the various
states in connection with the offer and sale of the Shares which have
been or will be effected in accordance with this Agreement and (iii)
will not result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Selling Stockholder
pursuant to the terms of any agreement or instrument to which the
Selling Stockholder is a party or by which the Selling Stockholder may
be bound or to which any of the property or assets of the Selling
Stockholder is subject.
(c) The Selling Stockholder has, and on the Firm Shares Closing
Date will have, valid title to the Shares to be sold by the Selling
Stockholder free and clear of any lien, claim, security interest or
other encumbrance, including any restriction on transfer (other than
the interests of the several Underwriters under this Agreement).
(d) The Selling Stockholder has, and on the Firm Shares Closing
Date will have, full legal right, power and authorization, and any
approval required by law (except such additional steps as may be
necessary to qualify the Shares to be sold by it for public offering by
the Underwriters under the state securities or Blue Sky laws), to
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13
sell, assign, transfer and deliver the Shares to be sold by the Selling
Stockholder in the manner provided by this Agreement.
(e) Assuming the Underwriters are "protected purchasers" (as
defined under Section 8-303 of the New York Commercial Code, upon
delivery by the Selling Stockholder of the certificates for the Shares
to be sold by it pursuant to this Agreement against payment therefor by
the several Underwriters as provided hereunder, the several
Underwriters will acquire such Shares free of any "adverse claims"
within the meaning of Section 8-102 of the New York Commercial Code.
(f) All information relating to the Selling Stockholder furnished
in writing by the Selling Stockholder expressly for use in the
Registration Statement and Prospectus is, and on each Closing Date will
be, true, correct and complete in all material respects, and does not,
and on each Closing Date will not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
information therein, in light of the circumstances under which it was
made, not misleading. The Company and the Underwriters acknowledge that
the statements, if any, relating to the Selling Stockholder under the
captions "Principal and Selling Stockholders" and "Certain
Transactions" in the Registration Statement and the Prospectus
constitute the only information furnished by or on behalf of such
Selling Stockholder for inclusion in the Registration Statement or
Prospectus.
(g) The Selling Stockholder has reviewed the Registration
Statement and Prospectus and, although the Selling Stockholder has not
independently verified the accuracy or completeness of all the
information contained therein, nothing has come to the attention of the
Selling Stockholder that would lead the Selling Stockholder to believe
that (i) on the Effective Date, the Registration Statement contained
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein in order to make the
statements made therein not misleading and (ii) on the Effective Date,
the Prospectus contained, and on each Closing Date contains, any untrue
statement of a material fact or omitted or omits 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.
(h) The sale of Shares by the Selling Stockholder pursuant to
this Agreement is not prompted by the Selling Stockholder's knowledge
of any material non-public information concerning the Company or its
Subsidiaries which is not set forth in the Prospectus.
(i) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Shares.
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14
(j) The Selling Stockholder has no knowledge that any
representation or warranty of the Company set forth in Section 4 above
is untrue or inaccurate in any material respect.
6. Conditions of the Underwriters' Obligations. The obligations
of the Underwriters under this Agreement are several and not joint. The
respective obligations of the Underwriters to purchase the Shares are subject to
each of the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 8(a)(i) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall be in effect and no order suspending
the effectiveness of the Registration Statement shall be in effect and
no proceedings for such purpose shall be pending before or threatened
by the Commission, and any requests for additional information on the
part of the Commission (to be included in the Registration Statement or
the Prospectus or otherwise) shall have been complied with to the
satisfaction of the Commission and the Representatives.
(c) The representations and warranties of the Company and the
Selling Stockholders contained in this Agreement and in the
certificates delivered pursuant to Sections 6(d) and 6(e) shall be true
and correct when made and on and as of each Closing Date as if made on
such date. The Company and the Selling Stockholders shall have
performed all covenants and agreements and satisfied all the conditions
contained in this Agreement required to be performed or satisfied by
them at or before such Closing Date.
(d) The Representatives shall have received on each Closing Date
a certificate, addressed to the Representatives and dated such Closing
Date, of the chief executive officer and the chief financial officer of
the Company to the effect that (i) they have carefully examined the
Registration Statement, the Prospectus and this Agreement and that the
representations and warranties of the Company in this Agreement are
true and correct on and as of such Closing Date with the same effect as
if made on such Closing Date and the Company has performed all
covenants and agreements and satisfied all conditions contained in this
Agreement required to be performed or satisfied by it at or prior to
such Closing Date, and (ii) no stop order suspending the effectiveness
of the Registration Statement has been issued and to the best of their
knowledge, no proceedings for that purpose have been instituted or are
pending under the Securities Act.
(e) The Representatives shall have received on the Firm Shares
Closing Date a certificate, addressed to the Representatives and dated
such Closing Date, of each Selling Stockholder, to the effect that the
signer of such certificate has reviewed the Registration Statement, the
Prospectus and this Agreement and that the
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15
representations and warranties of such Selling Stockholder in this
Agreement are true and correct on and as of such Closing Date with the
same effect as if made on such Closing Date and such Selling
Stockholder has performed all covenants and agreements and satisfied
all conditions contained in this Agreement required to be performed or
satisfied by it at or prior to such Closing Date.
(f) The Representatives shall have received at the time this
Agreement is executed and on each Closing Date a signed letter from
Ernst & Young LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance reasonably satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of
the Securities Act and the Rules, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them and
stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration
Statement and the Prospectus and reported on by them comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act and the Rules;
(ii) on the basis of a reading of the amounts included in
the Registration Statement and the Prospectus under the headings
"Prospectus Summary - Summary Financial Data" and "Selected
Financial Data," carrying out other procedures which do not
constitute an audit conducted in accordance with generally
accepted auditing standards and would not necessarily reveal
matters of significance with respect to the comments set forth in
such letter, a reading of the minutes of the meetings of the
stockholders and directors of the Company, and inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters of the Company as to
transactions and events subsequent to the date of the latest
audited financial statements, except as disclosed in the
Registration Statement and the Prospectus, nothing came to their
attention which caused them to believe that:
(A) the amounts in "Prospectus Summary - Summary
Financial Data," and "Selected Financial Data" included in
the Registration Statement and the Prospectus do not agree
with the corresponding amounts in the audited and unaudited
financial statements from which such amounts were derived;
or
(B) with respect to the Company, there were, at a
specified date not more than five business days prior to
the date of the letter, any increases in the current
liabilities and long-term liabilities of the Company or any
decreases in net income or in working capital or the
stockholders' equity in the Company, as compared with the
amounts shown on the Company's audited balance sheet for
the year ended
- 15 -
16
December 31, 1998 and the unaudited balance sheet for the
three months ended March 31, 1999 included in the
Registration Statement;
(iii) they have performed certain other procedures as may
be permitted under Generally Acceptable Auditing Standards as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the
Registration Statement and the Prospectus and reasonably
specified by the Representatives agrees with the accounting
records of the Company; and
(iv) based upon the procedures set forth in clauses (ii)
and (iii) above and a reading of the amounts included in the
Registration Statement under the headings "Prospectus Summary -
Summary Financial Data" and "Selected Financial Data" included in
the Registration Statement and Prospectus and a reading of the
financial statements from which certain of such data were
derived, nothing has come to their attention that gives them
reason to believe that the "Prospectus Summary - Summary
Financial Data" and "Selected Financial Data" included in the
Registration Statement and Prospectus do not comply as to form in
all material respects with the applicable accounting requirements
of the Securities Act and the Rules or that the information set
forth therein is not fairly stated in relation to the financial
statements included in the Registration Statement or Prospectus
from which certain of such data were derived and is not in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements included in the Registration Statement and
Prospectus.
References to the Registration Statement and the Prospectus in
this paragraph (f) are to such documents as amended and supplemented at
the date of the letter.
(g) The Representatives shall have received on each Closing Date
from Xxxxx & Xxxxxx L.L.P., counsel for the Company, an opinion,
addressed to the Representatives and dated such Closing Date, and
stating in effect that:
(i) The Company and each of Midland Receivables 98-1
Corporation, a Delaware corporation, and Midland Funding 98-A
Corporation, a Delaware corporation (collectively, the "Delaware
Subsidiaries"), has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware. Each of the Company and the Delaware Subsidiaries is
duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its
assets or properties (owned, leased or licensed) or the nature of
its businesses makes such qualification necessary, except for
such jurisdictions where the failure to so qualify individually
or in the aggregate would not have a Material Adverse Effect.
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17
(ii) Each of the Company and the Delaware Subsidiaries has
all requisite corporate power and authority to own, lease and
license its assets and properties and conduct its business as now
being conducted and as described in the Registration Statement
and the Prospectus and, with respect to the Company, to enter
into, deliver and perform this Agreement and to issue and sell
the Shares to be sold by the Company.
(iii) The Company has authorized and issued capital stock
as set forth in the Registration Statement and the Prospectus
under the caption "Capitalization"; the certificates evidencing
the Shares to be sold by the Company are in due and proper legal
form and have been duly authorized for issuance by the Company;
all of the outstanding shares of Common Stock of the Company have
been duly and validly authorized and issued and are fully paid
and nonassessable and, to our knowledge, none of them was issued
in violation of any preemptive or other similar right. The Shares
to be sold by the Company, when issued and sold pursuant to this
Agreement, will be duly and validly issued, outstanding, fully
paid and nonassessable and, to such counsel's knowledge, none of
them will have been issued in violation of any preemptive or
other similar right. There are no preemptive rights or any
restrictions upon the voting or transfer of any securities of the
Company pursuant to the Company's Certificate of Incorporation or
by-laws or other governing documents or any other instrument
known to us to which the Company is a party or by which it may be
bound. To such counsel's knowledge, except as disclosed in the
Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the
issuance of, and no commitment, plan or arrangement to issue, any
share of stock of the Company or any security convertible into,
exercisable for, or exchangeable for stock of the Company. The
capital stock of the Company, including the Common Stock and the
Shares to be sold by the Company, conforms in all material
respects to the descriptions thereof contained in the
Registration Statement and the Prospectus. The issued and
outstanding shares of capital stock of each of the Delaware
Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and are owned by Midland Credit
Management, Inc., a Kansas corporation, free and clear of any
perfected security interest or, to the knowledge of such counsel,
any other security interests, liens, encumbrances, equities or
claims, other than those contained in the Registration Statement
and the Prospectus.
(iv) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery
and performance of this Agreement and the issuance and sale of
the Shares to be sold by the Company. This Agreement has been
duly and validly authorized, executed and delivered by the
Company.
- 17 -
18
(v) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including the issuance and sale
by the Company of the Shares to be sold by it) will (A) give rise
to a right to terminate or accelerate the due date of any payment
due under, or conflict with or result in the breach of any term
or provision of, or constitute a default (or any event which with
notice or lapse of time, or both, would constitute a default)
under, or require consent or waiver under, or result in the
execution or imposition of any lien, charge or encumbrance upon
any properties or assets of the Company or any Subsidiary
pursuant to (x) the terms of any material indenture, mortgage,
deed of trust, note or other agreement or instrument of which
such counsel is aware and to which the Company or any Subsidiary
is a party or by which the Company or any Subsidiary or any of
their properties or businesses is bound, or (y) any judgment,
decree, order, statute, rule or regulation of which such counsel
is aware, in the case of this clause (y) only, which would have a
Material Adverse Effect, or (B) violate any provision of the
charter or by-laws of the Company or any Subsidiary.
(vi) No consent, approval, authorization or order of any
court or governmental agency or regulatory body of the United
States of America is required for the execution, delivery or
performance of this Agreement by the Company or the consummation
of the transactions contemplated hereby, except such as have been
obtained under the Securities Act and such as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the several
Underwriters.
(vii) To such counsel's knowledge, except as described in
the Registration Statement and the Prospectus, there is no
litigation or governmental or other proceeding or investigation,
before any court or before or by any public body or board pending
or threatened against, or involving the assets, properties or
businesses of, the Company or its Subsidiaries which individually
or in the aggregate could have a Material Adverse Effect.
(viii) The statements in the Prospectus under the captions
"Business - Government Regulation," "Management Employment
Agreements," "Management - Compensation Under Plans," "Certain
Transactions - Stockholders' Agreements," "Description of Capital
Stock" and "Shares Eligible for Future Sale," and the statements
describing the Company's warehouse facility and revolving line of
credit under "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital
Resources," insofar as such statements constitute a summary of
documents referred to therein or matters of law, are fair
summaries in all material respects and accurately present the
information called for with respect to such documents and matters
(provided that such counsel need express no opinion with respect
the completeness of the descriptions of such
- 18 -
19
documents or matters of law). To our knowledge, accurate copies
of all contracts and other documents required to be filed as
exhibits to, or described in, the Registration Statement have
been so filed with the Commission or are fairly described in the
Registration Statement, as the case may be.
(ix) The Registration Statement, the Preliminary Prospectus
dated June __, 1999 and the Prospectus and each post-effective
amendment or supplement thereto (except for the financial
statements and schedules and other financial and statistical data
included therein, as to which such counsel expresses no opinion)
comply as to form in all material respects with the requirements
of the Securities Act and the Rules.
(x) The Registration Statement is effective under the
Securities Act, and no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to such counsel's
knowledge, are threatened, pending or contemplated. Any required
filing of the Prospectus and any supplement thereto pursuant to
Rule 424(b) under the Securities Act has been made in the manner
and within the time period required by such Rule 424(b).
(xi) The Shares have been approved for listing on the
Nasdaq National Market.
(xii) The Company is not an "investment company" or an
entity controlled by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
To the extent deemed advisable by such counsel, it may rely as to
matters of fact on certificates of responsible officers of the Company
and public officials. Copies of such certificates shall be furnished to
the Representatives and counsel for the Underwriters. Such counsel's
opinion shall be limited as to matters which are governed by the laws
of the State of Arizona, the State of Delaware and the laws of the
United States.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the Representatives and representatives
of the independent certified public accountants of the Company, at
which conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the Prospectus (except as specified in
the foregoing opinions), on the basis of the foregoing, no facts have
come to the attention of such counsel which lead such counsel to
believe that the Registration Statement at the time it became effective
(except with respect to the financial statements and schedules and
other financial and statistical data, as to which such counsel need
express no belief) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus as amended or supplemented (except with respect to the
financial statements and schedules and other financial and statistical
data, as to which
- 19 -
20
such counsel need make no statement) on the date thereof contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h) The Representatives shall have received on each Closing Date
from Xxxxxxx X. Xxxxxxxx, Esquire, general counsel for the Company, an
opinion, addressed to the Representatives and dated such Closing Date,
and stating in effect that:
(i) The only Subsidiaries of the Company are Midland Credit
Management, Inc., a Kansas corporation ("Midland Credit
Management"); Midland Receivables 98-1 Corporation, a Delaware
corporation; Midland Funding 98-A Corporation, a Delaware
corporation; and Midland Financial Services, Inc., a Kansas
corporation ("Financial"). Financial has no assets, no revenues
and no operations of any kind. Midland Credit Management has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Kansas. Midland Credit
Management is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or
location of its assets or properties (owned, leased or licensed)
or the nature of its businesses makes such qualification
necessary, except for such jurisdictions where the failure to so
qualify individually or in the aggregate would not have a
Material Adverse Effect.
(ii) Midland Credit Management has all requisite corporate
power and authority to own, lease and license its assets and
properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus.
(iii) The issued and outstanding shares of capital stock of
Midland Credit Management have been duly authorized and validly
issued, are fully paid and nonassessable and are owned by the
Company free and clear of any perfected security interest or, to
the knowledge of such counsel, any other security interests,
liens, encumbrances, equities or claims, other than those
described in the Registration Statement and the Prospectus.
(iv) Neither the execution, delivery and performance of
this Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including the issuance and sale
by the Company of the Shares to be sold by it) will give rise to
a right to terminate or accelerate the due date of any payment
due under, or conflict with or result in the breach of any term
or
- 20 -
21
provision of, or constitute a default (or any event which with
notice or lapse of time, or both, would constitute a default)
under, or require consent or waiver under, or result in the
execution or imposition of any lien, charge or encumbrance upon
any properties or assets of the Company or any Subsidiary
pursuant to the terms of any franchise, license or permit of
which such counsel is aware.
(v) To the best of such counsel's knowledge, no default
exists, and no event has occurred which with notice or lapse of
time, or both, would constitute a default in the due performance
and observance of any term, covenant or condition by the Company
or any Subsidiary of any indenture, mortgage, deed of trust, note
or any other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their assets,
properties or businesses may be bound or affected, where the
consequences of such default individually or in the aggregate
would have a Material Adverse Effect.
(vi) To the best of such counsel's knowledge, neither the
Company nor any of its Subsidiaries is in violation of any (A)
term or provision of its charter or by-laws or (B) any judgment,
decree, order, statute, rule or regulation of the United States
of America (except where the consequences of any violation of
this subsection (B), individually or in the aggregate, would not
have a Material Adverse Effect).
(i) (i) The Representatives shall have received on the Firm
Shares Closing Date from Xxxxxx, Xxxxxxxx & Co., Bahamian counsel
for C.P. International Investments Limited ("CPII"), an opinion,
addressed to the Representatives and dated such Closing Date, and
stating in effect that:
(A) Each of this Agreement and the Lock-Up Agreement has
been duly and validly authorized, executed and delivered by
CPII.
(B) CPII has full legal right, power and authority to enter
into this Agreement and the Lock-Up Agreement and to sell,
transfer and deliver in the manner provided in this Agreement,
the Shares to be sold by CPII hereunder.
(C) The transfer and sale by CPII of the Shares to be sold
by it as contemplated by this Agreement will not conflict with
or result in a breach of Bahamian law.
(D) No consent, approval, authorization, license,
certificate, permit or order of any Bahamian court,
governmental or regulatory agency, authority or body is
required in connection with the performance of this Agreement
by CPII or the consummation by CPII of the transactions
contemplated hereby,
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22
including the delivery and sale of the Shares to be delivered and
sold by CPII.
(ii) The Representatives shall have received on the Firm Shares
Closing Date from Debevoise & Xxxxxxxx, special New York counsel
for CPII, an opinion, addressed to the Representatives and dated
such Closing Date, and stating in effect that:
(A) Assuming the due authorization, execution and delivery
of this Agreement and the Lock-Up Agreement by CPII and the
other parties thereto, each of this Agreement and the Lock-Up
Agreement constitutes the legal, valid and binding obligation
of CPII enforceable against CPII in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(B) Upon (i) payment for the Shares to be sold by CPII in
accordance with this Agreement and (ii) delivery to the
underwriters in the State of New York of certificates
evidencing such Shares endorsed to such Underwriters or in
blank by an effective endorsement, the several Underwriters
will acquire such Shares free of any "adverse claim" (as
defined in Section 8-102 of the New York Commercial Code as
currently in effect), assuming each Underwriter does not have
"notice" (within the meaning of Section 8-105 of the New York
Commercial Code) of any "adverse claim" (as defined in Section
8-102 of the New York Commercial Code) to such Shares.
(C) No consent, approval, authorization, license,
certificate, permit or order of any New York or United States
federal court, governmental or regulatory agency, authority or
body or financial institution is required in connection with
the performance of this Agreement by CPII or the consummation
by CPII of the transactions contemplated hereby, including the
delivery and sale of the Shares to be delivered and sold by
CPII, except such as may be required under state securities or
blue sky laws in connection with the purchase and distribution
of the Shares by the several Underwriters.
(iii) The Representatives shall have received on the Firm Shares
Closing Date from _____________, general counsel of CPII, an
opinion, addressed to the Representatives and dated such Closing
Date, and stating in effect that the transfer and sale by CPII of
the Shares to be sold by it as contemplated by this Agreement will
not conflict with, result in a breach of, or constitute a default
under any agreement or instrument known to such counsel to which
CPII is a party or by which CPII or any of its properties may be
bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation of the State of New York or the United
States, excluding for purposes of this opinion federal and state
securities laws and regulations.
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23
(j) The Representatives shall have received on the Firm Shares
Closing Date from Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, special
counsel for MCM Holding Company, LLC ("MCM Holding"), an opinion,
addressed to the Representatives and dated such Closing Date, and
stating in effect that:
(i) This Agreement has been duly and validly authorized,
executed and delivered by or on behalf of MCM Holding.
(ii) The Lock-Up Agreement has been duly and validly
authorized, executed and delivered by or on behalf of MCM Holding
and constitutes the valid and legally binding obligation of MCM
Holding enforceable against MCM Holding in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(regardless of whether enforceability is considered in a proceeding
in equity or at law).
(iii) MCM Holding has all necessary limited liability company
power and authority to enter into this Agreement and the Lock-Up
Agreement and to sell, transfer and deliver in the manner provided
in this Agreement, the Shares to be sold by MCM Holding hereunder.
(iv) The transfer and sale by MCM Holding of the Shares to be
sold by it as contemplated by this Agreement will not violate or
result in a breach of, or constitute a default under any material
agreement or instrument identified to such counsel and listed on
Schedule I to such opinion to which MCM Holding is a party or by
which MCM Holding or any of its properties may be bound, or any
franchise, license, permit, judgment, decree, order, statute, rule
or regulation of the State of New York or of the United States,
excluding for purposes of this paragraph (iv) federal and state
securities laws and regulations.
(v) Upon (a) payment for the Shares to be sold by MCM Holding
in accordance with this Agreement and (b) delivery to the
underwriters in the State of New York of certificates evidencing
such Shares endorsed to such Underwriters or in blank by an
effective endorsement, the several Underwriters will acquire such
Shares free of any "adverse claim" (as defined in Section 8-102 of
the New York Commercial Code as currently in effect), assuming such
Underwriter does not have "notice" (within the meaning of Section
8-105 of the New York Commercial Code) of any "adverse claim" (as
defined in Section 8-102 of the New York Commercial Code) to such
Shares.
(vi) No consent, approval, authorization, license,
certificate, permit or order of any State of New York or United
States federal court, governmental or regulatory agency, authority
or body or financial institution is required in connection with the
performance of this Agreement by MCM Holding or the
- 23 -
24
consummation by MCM Holding of the transactions contemplated hereby,
including the delivery and sale of the Shares to be delivered and
sold by MCM Holding, except such as may be required under state
securities or blue sky laws in connection with the purchase and
distribution of the Shares by the several Underwriters.
To the extent deemed advisable by such counsel, it may rely as to
matters of fact on certificates of responsible officers of MCM Holding
and public officials and on the opinions of other counsel satisfactory
to the Representatives as to matters which are governed by laws other
than the laws of the State of New York, the General Corporation Law of
the State of Delaware and the Federal laws of the United States;
provided that such counsel shall state that in their opinion the
Underwriters and they are justified in relying on such other opinions.
Copies of such certificates and other opinions shall be furnished to
the Representatives and counsel for the Underwriters.
(k) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and their
counsel and the Underwriters shall have received from Xxxxxx, Xxxx &
Xxxxxxxx LLP a favorable opinion, addressed to the Representatives and
dated such Closing Date, with respect to the Shares, the Registration
Statement and the Prospectus, and such other related matters, as the
Representatives may reasonably request, and the Company and the Selling
Stockholders shall have furnished to Xxxxxx, Xxxx & Xxxxxxxx LLP such
documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(l) The Representatives shall have received copies of the Lock-Up
Agreements executed by each entity or person described in Section 4(n).
(m) The Company and the Selling Stockholders shall have furnished
or caused to be furnished to the Representatives such further
certificates or documents as the Representatives shall have reasonably
requested.
7. Conditions of the Selling Stockholders' Obligations. The
obligations of the respective Selling Stockholders to sell the Shares to be sold
by them are subject to a Selling Stockholder having received copies of
certificates, letters and opinions delivered pursuant to Sections 6(d), (f), (g)
and (h) above, together with written permission from the party delivering such
document that such Selling Stockholder may rely on such certificate, letter or
opinion as if addressed to them (it being understood that the Representatives
and not the Selling Stockholders shall have the right to determine if the form
and substance of the documents delivered pursuant to Sections 6(d), (f), (g) and
(h) are satisfactory).
8. Covenants of the Company.
(a) The Company covenants and agrees with each Underwriter as
follows:
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25
(i) The Company shall prepare the Prospectus in a form
approved by the Representatives and file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the Commission's
close of business on the second business day following the execution
and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the Representatives in
writing (A) when any amendment to the Registration Statement shall
have become effective, (B) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for any
additional information, (C) of the prevention or suspension of the
use of any preliminary prospectus or the Prospectus or of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (D) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company shall not file any amendment of the
Registration Statement or supplement to the Prospectus unless the
Company has furnished the Representatives and the Selling
Stockholders a copy for their review prior to filing and shall not
file any such proposed amendment or supplement to which the
Representatives or the Selling Stockholders reasonably object. The
Company shall use its best efforts to prevent the issuance of any
such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Securities Act and the Rules,
any event occurs as a result of which the Prospectus as then amended
or supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which
they were made not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Securities Act or
the Rules, the Company promptly shall prepare and file with the
Commission, subject to the second sentence of paragraph (ii) of this
Section 8(a), an amendment or supplement which shall correct such
statement or omission or an amendment which shall effect such
compliance.
(iv) The Company shall make generally available to its
security holders and to the Representatives as soon as practicable,
but not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company during
which the Effective Date occurs (or 90 days if such 12-month period
coincides with the Company's fiscal year), an earning statement
(which need not be audited) of the Company, covering such 12-month
period, which shall
- 25 -
26
satisfy the provisions of Section 11(a) of the Securities Act or
Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including all exhibits thereto and
amendments thereof) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and all amendments
thereof and, so long as delivery of a prospectus by an Underwriter
or dealer may be required by the Securities Act or the Rules, as
many copies of any preliminary prospectus and the Prospectus and any
amendments thereof and supplements thereto as the Representatives
may reasonably request.
(vi) The Company shall cooperate with the Representatives and
their counsel in endeavoring to qualify the Shares for offer and
sale in connection with the offering under the laws of such
jurisdictions as the Representatives may designate and shall
maintain such qualifications in effect so long as required for the
distribution of the Shares; provided, however, that the Company
shall not be required in connection therewith, as a condition
thereof, to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction or subject itself
to taxation as doing business in any jurisdiction.
(vii) Without the prior written consent of CIBC World Markets
Corp., for a period of 180 days after the date of this Agreement,
the Company shall not (A) issue, register with the Commission (other
than on Form S-8 or on any successor form), offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant
to purchase, lend or otherwise transfer or dispose of, directly or
indirectly, any equity securities of the Company or any securities
convertible into, exercisable for or exchangeable for equity
securities of the Company, or (B) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of equity securities in the
Company, whether any such transaction described in clause (A) or (B)
above is to be settled by delivery of Common Stock or other equity
securities, in cash or otherwise. The foregoing sentence shall not
apply to the issuance of the Shares pursuant to the Registration
Statement and the issuance of shares pursuant to the Company's stock
option plan as described in the Registration Statement and the
Prospectus or pursuant to the exercise of existing options described
in the Prospectus. In the event that during this period, (1) any
shares are issued pursuant to the Company's existing stock option
plan that are exercisable during such 180-day period or (2) any
registration is effected on Form S-8 or on any successor form
relating to shares that are exercisable during such 180-day period,
the Company shall cause each such grantee or purchaser or holder of
such registered securities to enter into a Lock-Up Agreement in the
form set forth on Schedule IV hereto.
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27
(viii) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and
by the Nasdaq National Market (including any required registration
under the Exchange Act).
(ix) The Company shall file timely and accurate reports in
accordance with the provisions of Florida Statutes Section 517.075,
or any successor provision, and any regulation promulgated
thereunder, if at any time after the Effective Date, the Company or
any of its affiliates commences engaging in business with the
government of Cuba or any person or affiliate located in Cuba.
(x) The Company will apply the net proceeds from the offering
of the Shares in the manner set forth under "Use of Proceeds" in the
Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of
the obligations of the Company and the Selling Stockholders under this
Agreement, including those relating to: (i) the preparation, printing,
filing and distribution of the Registration Statement, including all
exhibits thereto, each preliminary prospectus, the Prospectus, all
amendments and supplements to the Registration Statement and the
Prospectus, and the printing, filing and distribution of this
Agreement; (ii) the preparation and delivery of certificates for the
Shares to the Underwriters; (iii) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of
the various jurisdictions referred to in Section 8(a)(vi), including
the reasonable fees and disbursements of counsel for the Underwriters
in connection with such registration and qualification and the
preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs
of shipping and mailing) to the Representatives and to the Underwriters
of copies of each preliminary prospectus, the Prospectus and all
amendments or supplements to the Prospectus, and of the several
documents required by this Section to be so furnished, as may be
reasonably requested for use in connection with the offering and sale
of the Shares by the Underwriters or by dealers to whom Shares may be
sold; (v) the filing fees of the NASD in connection with its review of
the terms of the public offering and reasonable fees and disbursements
of counsel for the Underwriters in connection with such review; (vi)
inclusion of the Shares for quotation on the Nasdaq National Market;
and (vii) all transfer taxes, if any, with respect to the sale and
delivery of the Shares by the Company and the Selling Stockholders to
the Underwriters. Subject to the provisions of Section 11, the
Underwriters agree to pay, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated, all costs and
expenses incident to the performance of the obligations of the
Underwriters under this Agreement not payable by the Company pursuant
to the preceding sentence, including the fees and disbursements of
counsel for the Underwriters.
9. Indemnification.
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28
(a) The Company and the Selling Stockholders agree, jointly and
severally, to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Securities Act, the
Exchange Act or other Federal or state law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment thereof
or supplement thereto, or arise out of or are based upon any omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that such indemnity shall not inure to
the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such Underwriter
if such untrue statement or omission or alleged untrue statement or
omission was made in such preliminary prospectus, the Registration
Statement or the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with information furnished in writing
to the Company by the Representatives on behalf of any Underwriter
specifically for use therein. Notwithstanding the foregoing, the
liability of each Selling Stockholder pursuant to the provisions of
Section 9(a) shall be (i) limited to an amount equal to the aggregate
net proceeds received by such Selling Stockholder from the sale of the
Shares sold by such Selling Stockholder hereunder and (ii) subordinate
to the liability of the Company, such that the Underwriters may pursue
claims for indemnification hereunder against the Company and the
Selling Stockholders, or any one or more of them, at any time and in
any manner they may choose, but may not collect any indemnification
payment against a Selling Stockholder until they have taken all
commercially reasonable steps to collect any indemnification obligation
first from the Company, after which they may collect from the Selling
Stockholders that amount which is still due and has not been paid by
the Company. The foregoing provisions are subject to the following: (a)
the limitation in subsection (ii) above shall not apply to information
about a Selling Stockholder under the sections entitled "Principal and
Selling Stockholders" and "Certain Transactions" in the Prospectus; and
(b) each Selling Stockholder shall be severally and not jointly liable
with the other Selling Stockholder as to its own information contained
in such sections. Nothing herein shall affect the Company's
indemnification obligations as to the information in such sections.
This indemnity agreement will be in addition to any liability which the
Company and the Selling Stockholders may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Selling Stockholders
and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or
- 28 -
29
Section 20 of the Exchange Act, each director of the Company, and each
officer of the Company who signs the Registration Statement, to the
same extent as the foregoing indemnity from the Company and the Selling
Stockholders to each Underwriter, but only insofar as such losses,
claims, damages or liabilities arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission
with respect to such Underwriter which was made in any preliminary
prospectus, the Registration Statement or the Prospectus, or any
amendment thereof or supplement thereto, contained in the following
paragraphs appearing under the caption "Underwriting" in the
Prospectus: (i) the table in the second full paragraph; (ii) the fourth
full paragraph, concerning the terms of the offering, excluding the
first sentence thereof; (iii) the tenth full paragraph, concerning
discretionary sales; (iv) the twelfth full paragraph; and (v) the
thirteenth full paragraph, including the text set forth in the bullet
points, concerning stabilization and syndicate covering transactions.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served. No indemnification provided for in Section 9(a) or
9(b) shall be available to any party who shall fail to give notice as
provided in this Section 9(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice, but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or
other expenses, except as provided below and except for the reasonable
costs of investigation subsequently incurred by such indemnified party
in connection with the defense thereof. The indemnified party shall
have the right to employ its counsel in any such action, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have been advised by counsel
that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying
party (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified
party) or (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable time
after notice of the commencement
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30
thereof, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying parties. An indemnifying party
shall not be liable for any settlement of any action, suit, proceeding
or claim effected without its written consent.
10. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 9(a) or 9(b) for any reason is held to be unavailable to or insufficient
to hold harmless an indemnified party under Section 9(a) or 9(b), then each
indemnifying party shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting any contribution
received by any person entitled hereunder to contribution from any person who
may be liable for contribution) to which the indemnified party may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Stockholders on the one hand and the Underwriters on
the other from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 9
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Selling Stockholders and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the offering (net of underwriting
discounts but before deducting expenses) received by the Company or the Selling
Stockholders, as set forth in the table on the cover page of the Prospectus,
bear to (y) the underwriting discounts received by the Underwriters, as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company and the Selling Stockholders or the Underwriters shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact related to information supplied by the Company and
the Selling Stockholders or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 10 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. Notwithstanding the provisions of this Section 10, (i) in no
case shall any Underwriter (except as may be provided in the Agreement Among
Underwriters) be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder; (ii) the Company shall be liable and responsible for any amount in
excess of such underwriting discount; and (iii) in no case shall any Selling
Stockholder be liable and responsible for any amount in excess of the aggregate
net proceeds of the sale of Shares received by such Selling Stockholder;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Further notwithstanding the foregoing, the liability of the
Selling Stockholders hereunder for contribution shall be subordinate to the
liability of the Company,
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31
such that the Underwriters may pursue claims for contribution hereunder against
the Company and the Selling Stockholders, or any one or more of them, at any
time and in any manner they may choose, but may not collect any contribution
payment against a Selling Stockholder until they have taken all commercially
reasonable steps to collect any contribution obligation first from the Company,
after which they may collect from the Selling Stockholders that amount which is
still due and has not been paid by the Company. The foregoing provisions are
subject to the following: (a) the limitations in the preceding sentence shall
not apply to information about a Selling Stockholder under the sections entitled
"Principal and Selling Stockholders" and "Certain Transactions" in the
Prospectus; and (b) each Selling Stockholder shall be severally and not jointly
liable with the other Selling Stockholder as to its own information contained in
such sections. Nothing herein shall affect the Company's contribution
obligations as to the information in such sections. For purposes of this Section
10, each person, if any, who controls an Underwriter within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Company within the meaning of the Section 15 of the Securities
Act or Section 20(a) of the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to
clauses (i) and (ii) in the immediately preceding sentence of this Section 10.
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section, notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriter's obligations to contribute
pursuant to this Section 10 are several in proportion to their respective
underwriting commitments and not joint.
11. Termination. This Agreement may be terminated with respect to
the Shares to be purchased on a Closing Date by the Representatives by notifying
the Company and the Selling Stockholders at any time:
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted,
or in the opinion of the Representatives will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representatives,
inadvisable to proceed with the offering; (iii) if there shall be such
a material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of
the Representatives, inadvisable or impracticable to market the Shares;
(iv) if trading in the Shares has been suspended by the Commission or
trading generally on the New York Stock Exchange, Inc., on the
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32
American Stock Exchange, Inc. or the Nasdaq National Market has been
suspended or limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities have been required, by said exchanges or by order of the
Commission, the NASD or any other governmental or regulatory authority;
(v) if a banking moratorium has been declared by any state or Federal
authority; or (vi) if, in the judgment of the Representatives, there
has occurred a Material Adverse Effect; or
(b) at or before any Closing Date, that any of the conditions
specified in Section 6 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, neither the Company nor the Selling Stockholders shall be under any
liability to any Underwriter, and no Underwriter shall be under any liability to
the Company or the Selling Stockholders, except that (y) if this Agreement is
terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company or the Selling Stockholders to
comply with the terms or to fulfill any of the conditions of this Agreement, the
Company will reimburse the Underwriters for all out-of-pocket expenses
(including the reasonable fees and disbursements of their counsel) incurred by
them in connection with the proposed purchase and sale of the Shares or in
contemplation of performing their obligations hereunder and (z) no Underwriter
who shall have failed or refused to purchase the Shares agreed to be purchased
by it under this Agreement, without some reason sufficient hereunder to justify
cancellation or termination of its obligations under this Agreement, shall be
relieved of liability to the Company, the Selling Stockholders or to the other
Underwriters for damages occasioned by its failure or refusal.
12. Substitution of Underwriters. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 11) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters, the Representatives may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Representatives may deem advisable or one or more of the remaining Underwriters
may agree to purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated to
purchase such Shares on the terms herein set forth in proportion to
their respective obligations hereunder; provided, that in no event
shall the maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 12
by more than one-ninth of such number of Shares without the written
consent of such Underwriter, or
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33
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to one additional business day
within which it may, but is not obligated to, find one or more
substitute underwriters reasonably satisfactory to the Representatives
to purchase such Shares upon the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall
have the right to postpone the applicable Closing Date for a period of not more
than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement
or Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company or the Selling
Stockholders and without liability on the part of the Company and the Selling
Stockholders, except in both cases as provided in Sections 8(b), 9, 10 and 11.
The provisions of this Section shall not in any way affect the liability of any
defaulting Underwriter to the Company, the Selling Stockholders or the
nondefaulting Underwriters arising out of such default. A substitute underwriter
hereunder shall become an Underwriter for all purposes of this Agreement.
13. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers, of
the Selling Stockholders and of the Underwriters set forth in or made pursuant
to this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, any Selling Stockholder
or the Company or any of the officers, directors or controlling persons referred
to in Sections 9 and 10 hereof, and shall survive delivery of and payment for
the Shares. The provisions of Sections 8(b), 9, 10 and 11 shall survive the
termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters, the Company and the Selling Stockholders and their respective
successors and assigns, and, to the extent expressed herein, for the benefit of
persons controlling any of the Underwriters or the Company, and directors and
officers of the Company, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
Shares from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Representatives, c/o CIBC World Markets Corp., CIBC
Xxxxxxxxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. XxXxxxxxxx, with a copy to Xxxxxx,
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Xxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx X. Xxxxxx, (b) if to the Company, to its agent for service as such
agent's address appears on the cover page of the Registration Statement with a
copy to Xxxxx & Xxxxxx, L.L.P., Xxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxx, (c) if to CPII at 0xx Xxxxx, Xxxxx X, Xxxxxx Court
Street, Stephen's Green, Dublin, Ireland, Attention: Xxxxx Xxxx, with a copy to
Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxx X. Xxxxx, Xx., and (d) if to MCM Holding, to Triarc Companies, Inc., 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxx,
with a copy to Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxx Xxxxxx. Any such
notices or communications shall take effect when so delivered personally, or if
mailed, on the date of receipt thereof; or if by telephone or telegraph, when
written confirmation is delivered personally or if such confirmation is mailed,
on the date of receipt thereof. The Company and the Selling Stockholders shall
be entitled to act and rely upon any notice or communication given or made on
behalf of the Underwriters by CIBC World Markets Corp. on behalf of the
Representatives and the Company and the Underwriters shall be entitled to act
and rely upon any notice or communication given or made on behalf of a Selling
Stockholder by the Custodian.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflict
of laws.
This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
MCM CAPITAL GROUP, INC.
By
Title:
SELLING STOCKHOLDERS:
C.P. International Investments Limited
By
Title:
MCM Holding Company, LLC
By
Title:
Confirmed:
CIBC WORLD MARKETS CORP.
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto.
By: CIBC WORLD MARKETS CORP.
By
Title:
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36
SCHEDULE I
Number of Firm Shares to be Purchased
------------------------------------------------------------
Name From the Company From the Selling Stockholders
---- ------------------- --------------------------------------
C.P.
International
Investments MCM Holding
Limited Company, LLC
---------------- -------------
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
[others]
Total 3,333,333
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SCHEDULE II
Name of Selling Stockholder Number of Firm Shares
--------------------------- to be Sold
-------------------------
C.P. International Investments Limited
MCM Holding Company, LLC
Total 1,666,667
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SCHEDULE III
SUBSIDIARIES OF THE COMPANY
Midland Credit Management, Inc., a Kansas corporation
Midland Receivables 98-1 Corporation, a Delaware corporation
Midland Funding 98-A Corporation, a Delaware corporation
Midland Financial Services, Inc., a Kansas corporation
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39
SCHEDULE IV
[FORM OF LOCK-UP AGREEMENT FOR OFFICERS, DIRECTORS AND
STOCKHOLDERS]
__________ __, 1999
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/o CIBC World Markets Corp.
CIBC Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands and agrees as follows:
1. CIBC World Markets Corp. ("CIBC") and U.S. Bancorp Xxxxx Xxxxxxx
Inc. ("Piper") propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") with MCM Capital Group, Inc., a Delaware
corporation (the "Company"), and C.P. International Investments Limited
and MCM Holding Company, LLC (together, the "Selling Stockholders"),
providing for the public offering (the "Public Offering") by the several
Underwriters, including CIBC and Piper (the "Underwriters"), of 5,000,000
shares (the "Shares") of the Common Stock, $0.01 par value, of the Company
(the "Common Stock"), and in connection therewith, the Company has filed a
registration statement, File No. 333-77483 (the "Registration Statement")
with the Securities and Exchange Commission.
2. After consultation, the Company and CIBC and Piper, acting as
representatives of the Underwriters for the Public Offering, have agreed
that sales by the officers, directors and stockholders of the Company
within the 180-day period after the date of effectiveness of the
Registration Statement could have an adverse effect on the market price
for the Common Stock and that the public to whom the Common Stock is being
offered should be protected for a reasonable time from the impact of such
sales.
3. It is in the best interest of the Company and its officers,
directors and stockholders to have a successful public offering and stable
and orderly public market thereafter.
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of CIBC on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 180 days after the date of the final prospectus relating
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to the Public Offering, (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any equity securities of the Company or any
securities convertible into or exercisable or exchangeable for equity securities
of the Company or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
equity securities of the Company, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
_______________________________________
(Name)
_______________________________________
_______________________________________
(Address)
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