EXHIBIT 1.1
______ SHARES(1)
XXXXXX BUSINESS SERVICES CORP.
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
PURCHASE AGREEMENT
_____________________, 2003
U. S. BANCORP XXXXX XXXXXXX INC.
XXXXXXX XXXXX & COMPANY, L.L.C.
As Representatives of the several
Underwriters named in Schedule II hereto
c/o U. S. Bancorp Xxxxx Xxxxxxx Inc.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Xxxxxx Business Services Corp., a Pennsylvania corporation ("MBSC"), the
sole shareholder of Xxxxxx Leasing Corporation, a Delaware corporation ("MLC"),
together with the shareholders of MBSC listed in Schedule I hereto (the "Selling
Shareholders"), severally propose to sell to the several Underwriters named in
Schedule II hereto (the "Underwriters") an aggregate of shares (the "Firm
Shares") of common stock of MBSC, $.01 par value per share (the "Common Stock").
The Firm Shares consist of authorized but unissued shares of Common Stock to be
issued and sold by MBSC and outstanding shares of Common Stock to be sold by the
Selling Shareholders. MBSC and certain of the Selling Shareholders have also
granted to the several Underwriters an option to purchase up to and additional
shares of Common Stock, respectively, on the terms and for the purposes set
forth in Section 3 hereof (the "Option Shares"). The Firm Shares and any Option
Shares purchased pursuant to this Purchase Agreement are herein collectively
called the "Securities."
MBSC and the Selling Shareholders hereby confirm their agreement with
respect to the sale of the Securities to the several Underwriters, for whom you
are acting as representatives (the "Representatives"). Unless otherwise
specified herein, or unless the context otherwise requires, MBSC and MLC are
collectively referred to herein as "the Company" and references to a
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(1) Plus an option to purchase up to _______ additional shares to cover
over-allotments.
"subsidiary of the Company" or "subsidiaries of the Company" shall be deemed to
include all of the direct and indirect subsidiaries of both MBSC and MLC.
1. REGISTRATION STATEMENT AND PROSPECTUS. A registration statement on Form
S-1 (File No. 333-108530) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by MBSC in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations ("Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and has been filed with the Commission;
one or more amendments to such registration statement have also been so prepared
and have been, or will be, so filed; and, if MBSC has elected to rely upon Rule
462(b) of the Rules and Regulations to increase the size of the offering
registered under the Act, MBSC will prepare and file with the Commission a
registration statement with respect to such increase pursuant to Rule 462(b).
Copies of such registration statement(s) and amendments and each related
preliminary prospectus have been delivered to you.
If MBSC has elected not to rely upon Rule 430A of the Rules and
Regulations, MBSC has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If MBSC has elected
to rely upon Rule 430A of the Rules and Regulations, it will prepare and file a
prospectus (or a term sheet meeting the requirements of Rule 434) pursuant to
Rule 424(b) that discloses the information previously omitted from the
prospectus in reliance upon Rule 430A. Such registration statement as amended at
the time it is or was declared effective by the Commission, and, in the event of
any amendment thereto after the effective date and prior to the First Closing
Date (as hereinafter defined), such registration statement as so amended (but
only from and after the effectiveness of such amendment), including a
registration statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Rules and
Regulations, is hereinafter called the "Registration Statement." The prospectus
included in the Registration Statement at the time it is or was declared
effective by the Commission is hereinafter called the "Prospectus," except that
if any prospectus (including any term sheet meeting the requirements of Rule 434
of the Rules and Regulations provided by MBSC for use with a prospectus subject
to completion within the meaning of Rule 434 in order to meet the requirements
of Section 10(a) of the Rules and Regulations) filed by MBSC with the Commission
pursuant to Rule 424(b) (and Rule 434, if applicable) of the Rules and
Regulations or any other such prospectus provided to the Underwriters by MBSC
for use in connection with the offering of the Securities (whether or not
required to be filed by MBSC with the Commission pursuant to Rule 424(b) of the
Rules and Regulations) differs from the prospectus on file at the time the
Registration Statement is or was declared effective by the Commission, the term
"Prospectus" shall refer to such differing prospectus (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations) from and after the
time such prospectus is filed with the Commission or transmitted to the
Commission for filing pursuant to such Rule 424(b) (and Rule 434, if applicable)
or from and after the time it is first provided to the Underwriters by MBSC for
such use. The term "Preliminary Prospectus" as used herein means any preliminary
prospectus included in the Registration Statement prior to the time it becomes
or became effective under the Act and any prospectus subject to completion as
described in Rule 430A or 434 of the Rules and Regulations.
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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SHAREHOLDERS.
(a) The Company represents and warrants to, and agrees with, the
several Underwriters as follows:
(i) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission and each
Preliminary Prospectus, at the time of filing thereof, (A) did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; except that the foregoing shall not apply to statements in or
omissions from any Preliminary Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by you, or
by any Underwriter through you, specifically for use in the preparation
thereof and (B) conformed in all material respects to the requirements of
the Act and the Rules and Regulations.
(ii) As of the time the Registration Statement (or any
post-effective amendment thereto, including a registration statement (if
any) filed pursuant to Rule 462(b) of the Rules and Regulations increasing
the size of the offering registered under the Act) is or was declared
effective by the Commission, upon the filing or first delivery to the
Underwriters of the Prospectus (or any supplement to the Prospectus
(including any term sheet meeting the requirements of Rule 434 of the
Rules and Regulations)) and at the First Closing Date and Second Closing
Date (as hereinafter defined), (A) the Registration Statement and
Prospectus (in each case, as so amended and/or supplemented) conformed or
will conform in all material respects to the requirements of the Act and
the Rules and Regulations, (B) the Registration Statement (as so amended)
did not or will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (C) the Prospectus (as so
supplemented) did not or will not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they are or were made, not misleading; except that
the foregoing shall not apply to statements in or omissions from any such
document in reliance upon, and in conformity with, written information
furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof. If the Registration
Statement has been declared effective by the Commission, no stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceeding for that purpose has been initiated or, to the
Company's knowledge, threatened by the Commission.
(iii) The consolidated financial statements of the Company,
together with the related notes, set forth in the Registration Statement
and Prospectus comply in all material respects with the requirements of
the Act and fairly present the consolidated financial condition of the
Company as of the dates indicated and the consolidated results of
operations and changes in cash flows for the periods therein specified in
conformity with generally accepted accounting principles consistently
applied throughout the periods involved; and the supporting schedules
included in the Registration Statement present
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fairly the information required to be stated therein. No other financial
statements or schedules are required to be included in the Registration
Statement or Prospectus. To the Company's knowledge, KPMG LLP, which has
expressed its opinion with respect to the financial statements and
schedules filed as a part of the Registration Statement and included in
the Registration Statement and Prospectus, is an independent public
accounting firm within the meaning of the Act and the Rules and
Regulations and such accountants are not in violation of the auditor
independence requirements of the Xxxxxxxx-Xxxxx Act of 2002 (the
"Xxxxxxxx-Xxxxx Act"). The pro forma information included in the
Registration Statement and Prospectus presents fairly the information
presented therein, has been prepared in accordance with generally accepted
accounting principles and the Commission's rules and guidelines with
respect to pro forma information, has been properly prepared and presented
on the pro forma basis described therein and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate under the circumstances.
(iv) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation, limited liability
company or other entity in good standing (to the extent such concept is
applicable) under the laws of its jurisdiction of organization. Each of
the Company and its subsidiaries has full corporate power and authority to
own its properties and conduct its business as currently being carried on
and as described in the Registration Statement and Prospectus and is duly
qualified to do business as a foreign corporation in good standing in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business makes such qualification necessary and in which
the failure to so qualify would have a material adverse effect upon the
business, prospects, properties, operations, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries,
taken as a whole (a "Material Adverse Effect").
(v) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus; (a) neither the Company nor any of its
subsidiaries has incurred any material liabilities or obligations, direct
or contingent, or entered into any material transactions, or declared or
paid any dividends or made any distribution of any kind with respect to
its capital stock; and (b) there has not been any change in the capital
stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares issued pursuant to the Reorganization
described in the Registration Statement and Prospectus or upon the
exercise of outstanding options), or any material change in the short-term
or long-term debt, or any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock, of the Company
or any of its subsidiaries, or any material adverse change in the general
affairs, condition (financial or otherwise), business, prospects,
property, operations or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Change") or any
development involving a prospective Material Adverse Change.
(vi) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened or contemplated,
any action, suit or proceeding to
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which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company is the subject before or by any court or
governmental agency, authority or body, or any arbitrator, which, the
Company reasonably believes, individually or in the aggregate, would
result in a Material Adverse Change.
(vii) There are no statutes, regulations, contracts or
documents that are required to be described in the Registration Statement
and Prospectus or be filed as exhibits to the Registration Statement by
the Act or by the Rules and Regulations that have not been so described or
filed.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding
obligation of the Company, enforceable in accordance with its terms,
except as rights to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, (i) any statute, any agreement or instrument to which the
Company is a party or by which it is bound or to which any of its property
is subject, (ii) the Company's charter or by-laws, or (iii) any order,
rule, regulation or decree of any court or governmental agency or body
having jurisdiction over the Company or any of its properties that would,
in the case of (i) and (iii), individually or in the aggregate have a
Material Adverse Effect; no consent, approval, authorization or order of,
or filing with, any court or governmental agency or body is required for
the execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, including the
issuance or sale of the Securities by MBSC, except such as may be required
under the Act or state securities or blue sky laws; and the Company has
full corporate power and authority to enter into this Agreement and to
authorize, issue and sell the Securities as contemplated by this
Agreement.
(ix) All of the issued and outstanding shares of capital stock
of the Company, including the outstanding shares of Common Stock, are duly
authorized and validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities that have not been waived in
writing (a copy of which has been delivered to counsel to the
Representatives), and the holders thereof are not subject to personal
liability by reason of being such holders; the Securities which may be
sold hereunder by MBSC have been duly authorized and, when issued,
delivered and paid for in accordance with the terms of this Agreement,
will have been validly issued and will be fully paid and nonassessable,
and the holders thereof will not be subject to personal liability by
reason of being such holders; and the capital stock of the Company,
including the Common Stock, conforms to the description thereof in the
Registration Statement and Prospectus. Except as otherwise stated in the
Registration Statement and Prospectus, or as set forth in the Third
Amended and Restated Stockholders Agreement by and among MLC and certain
of its stockholders (which agreement shall terminate upon the
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closing of the sale of the Firm Shares covered by this Agreement) there
are no preemptive rights or other rights to subscribe for or to purchase,
or any restriction upon the voting or transfer of, any shares of Common
Stock pursuant to the Company's charter, by-laws or any agreement or other
instrument to which the Company is a party or by which the Company is
bound. Except as described in the Registration Statement and Prospectus,
neither the filing of the Registration Statement nor the offering or sale
of the Securities as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any shares of Common Stock
or other securities of the Company. All of the issued and outstanding
shares of capital stock of each of the Company's subsidiaries have been
duly and validly authorized and issued and are fully paid and
nonassessable, and, (i) except as otherwise described in the Registration
Statement and Prospectus, (ii) except for any directors' qualifying shares
and (iii) except for the pledge by the Company of shares in certain of its
securitization subsidiaries to secure the 11% Subordinated Notes of MLC
due March 30, 2006, the Company owns of record and beneficially, free and
clear of any security interests, claims, liens, proxies, equities or other
encumbrances, all of the issued and outstanding shares of such stock.
Except as described in the Registration Statement and the Prospectus,
there are no options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from the Company or any subsidiary of the
Company any shares of the capital stock of the Company or any subsidiary
of the Company. The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement, except for
subsequent issuances of capital stock pursuant to the Reorganization and
the issuance of stock in respect of the exercise of stock options by
employees under existing employee benefit plans.
(x) The Company and each of its subsidiaries holds, and is
operating in compliance in all material respects with, all franchises,
grants, authorizations, licenses, permits, easements, consents,
certificates and orders of any governmental or self-regulatory body
required for the conduct of its business and all such franchises, grants,
authorizations, licenses, permits, easements, consents, certifications and
orders are valid and in full force and effect, except to the extent that
such non-compliance therewith would not have a Material Adverse Effect;
and the Company and each of its subsidiaries is in compliance in all
material respects with all applicable federal, state, local and foreign
laws, regulations, orders and decrees, except to the extent that such
non-compliance therewith would not have a Material Adverse Effect.
(xi) Each subsidiary of the Company that is engaged in the
business of insurance or reinsurance (collectively, the "Insurance
Subsidiaries") holds such insurance licenses, certificates and permits
from governmental authorities as are necessary to the conduct of its
business as described in the Prospectus (the "Insurance Licenses"); the
Company and each Insurance Subsidiary have fulfilled and performed all
obligations necessary to maintain the Insurance Licenses; except as
disclosed in the Prospectus, there is no pending or, to the knowledge of
the Company, threatened action, suit, proceeding or investigation that
would reasonably be expected to result in the revocation, termination or
suspension of any Insurance License that would reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect; and
except as disclosed in the Prospectus, no insurance regulatory agency or
body has issued, or commenced any
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proceeding for the issuance of, any order or decree impairing, restricting
or prohibiting the payment of dividends by any Insurance Subsidiary to its
parent.
(xii) The Company and its subsidiaries have good and
marketable title to all property (whether real or personal) described in
the Registration Statement and Prospectus as being owned by them, in each
case free and clear of all liens, claims, security interests, other
encumbrances or defects except such as are described in the Registration
Statement and the Prospectus. The property held under lease by the Company
and its subsidiaries is held by them under valid, subsisting and
enforceable leases with only such exceptions with respect to any
particular lease as do not interfere in any material respect with the
conduct of the business of the Company or its subsidiaries.
(xiii) The Company and each of its subsidiaries owns or
possesses all patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets and rights necessary for
the conduct of the business of the Company and its subsidiaries as
currently carried on and as described in the Registration Statement and
Prospectus; except as stated in the Registration Statement and Prospectus,
no name which the Company or any of its subsidiaries uses and no other
aspect of the business of the Company or any of its subsidiaries is
expected to give rise to any infringement of, or license or similar fees
for, any patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets or other similar rights of
others material to the business or prospects of the Company and neither
the Company nor any of its subsidiaries has received any notice alleging
any such infringement or fee, in each case except as would not be expected
to have a Material Adverse Effect.
(xiv) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in breach of or
otherwise in default, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default in the performance
of any material obligation, agreement or condition contained in any bond,
debenture, note, indenture, loan agreement or any other material contract,
lease or other instrument to which it is subject or by which any of them
may be bound, or to which any of the material property or assets of the
Company or any of its subsidiaries is subject.
(xv) The Company and its subsidiaries have timely filed all
federal, state, local and foreign tax returns required to be filed, which
returns are true and correct in all material respects, and are not in
default in the payment of any taxes which were payable pursuant to said
returns or any assessments with respect thereto, other than any which the
Company or any of its subsidiaries is contesting in good faith.
(xvi) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the offering
and sale of the Securities other than any Preliminary Prospectus or the
Prospectus or other materials permitted by the Act to be distributed by
the Company. The Company has not taken and will not take during the
offering period (including any time after the effective date of the
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Registration Statement during which the Underwriters are deemed to be
making a public offering), directly or indirectly, any action designed to
or which has constituted or which might reasonably expected to cause or
result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(xvii) The Securities have been approved for listing on the
Nasdaq National Market under the symbol "MRLN" upon official notice of
issuance and, on the date the Registration Statement became or becomes
effective, MBSC's Registration Statement on Form 8-A or other applicable
form under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), became or will become effective.
(xviii) Other than the subsidiaries of the Company listed in
Exhibit 21.1 to the Registration Statement, the Company, directly or
indirectly, owns no capital stock or other equity or ownership or
proprietary interest in any corporation, partnership, association, trust
or other entity except to the extent that the Company or any of its
subsidiaries owns capital stock or other equity, ownership or proprietary
interests as were received as full or partial payment of delinquent
amounts owed to the Company or its subsidiaries in the ordinary course of
business.
(xix) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (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 existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. The Company has adopted
disclosure controls and procedures (as such term is defined in Rule 13a-14
under the Exchange Act) that management of the Company reasonably believes
will be effective in ensuring that information required to be disclosed by
the Company in the reports that it will file or submit under the Exchange
Act is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Commission, including,
without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it
will file or submit under the Exchange Act is accumulated and communicated
to the Company's management, including its principal executive officer or
officers and its principal financial officer or officers, as appropriate
to allow timely decisions regarding required disclosure.
(xx) Other than as contemplated by this Agreement, the Company
has not incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
(xxi) Neither the Company nor any of its affiliates is
presently doing business with the government of Cuba or with any person or
affiliate located in Cuba.
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(xxii) The Company carries, or is covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties and as is customary for companies
engaged in similar businesses in similar industries.
(xxiii) None of the Directed Stock Participants (as defined
below) are residents of any jurisdiction outside the United States.
(xxiv) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment company,"
as such term is defined in the Investment Company Act of 1940, as amended.
(xxv) There is and has been no failure on the part of the
Company and any of the Company's directors or officers, in their
capacities as such, to comply with any applicable provision of the
Xxxxxxxx-Xxxxx Act and the rules and regulations promulgated in connection
therewith.
(xxvi) Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is aware of or has
taken any action, directly or indirectly, that would result in a violation
by such persons of the FCPA (as defined below), including, without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an officer, payment,
promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of
anything of value to any "foreign official" (as such term is defined in
the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA and
the Company, its subsidiaries and, to the knowledge of the Company, its
affiliates have conducted their businesses in compliance with the FCPA and
have instituted and maintain policies and procedures designed to ensure,
and which are reasonably expected to continue to ensure, continued
compliance therewith. "FCPA" means the Foreign Corrupt Practices Act of
1977, as amended, and the rules and regulations thereunder.
(xxvii) The operations of the Company and its subsidiaries are
and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency (collectively,
the "Money Laundering Laws") and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with respect
to the Money Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
(xxviii) Neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject
to any U.S. sanctions administered
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by the Office of Foreign Assets Control of the U.S. Department of the
Treasury ("OFAC"); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
(xxix) All offers and sales of securities of the Company prior
to the date hereof were at all relevant times exempt from the registration
requirements of the 1933 Act and the 1933 Act Regulations and were duly
registered or subject to an available exemption from the registration
requirements of the applicable state securities or Blue Sky laws.
(xxx) No transaction has occurred between or among the Company
and its subsidiaries, on the one hand, and any of the Company's officers,
directors or 5% shareholders or any affiliate or affiliates of any such
officer, director or 5% shareholders that is required to be described in
and is not described in the Registration Statement and the Prospectus.
(xxxi) As of or immediately prior to the Closing Date, the
transactions described in the Registration Statement and Prospectus under
the heading "Reorganization" shall have become effective in all respects
as described therein including, without limitation, the following
transactions: (i) the conversion of all shares of Class A, Class C and
Class D Convertible Preferred Stock into shares of Class A common stock of
MLC, (ii) the cashless exercise of all warrants to purchase shares of
Class A common stock of MLC, (iii) the cashless exercise of all warrants
to purchase Class B common stock of MLC and the simultaneous conversion of
all such shares of Class B common stock into shares of Class A common
stock of MLC, (iv) the consummation of a forward stock split of MLC's
Class A common stock on a 1.4 to 1 basis, (v) the exchange of all
outstanding options to purchase shares of Class A common stock of MLC
under MLC's 1997 Equity Compensation Plan for options to purchase shares
of MBSC's common stock pursuant to the Company's 2003 Equity Compensation
Plan and (vi) following completion of the transactions referred to in (i),
(ii) (iii) and (iv), the merger of a subsidiary of MBSC with and into MLC
and the exchange of one share of MBSC's common stock for each share of
MLC's Class A common stock, with the result that MLC will have become a
direct, wholly-owned subsidiary of MBSC (the "Merger" and collectively
with the transactions referred to in (i), (ii), (iii) (iv) and (v), the
"Reorganization"). The Merger shall have qualified as a tax free
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended.
(b) Each Selling Shareholder severally represents and warrants to,
and agrees with, the several Underwriters as follows:
(i) Such Selling Shareholder is the record and beneficial
owner of, and has, and on the First Closing Date and/or the Second Closing
Date, as the case may be, will have, valid and marketable title to the
Securities to be sold by such Selling Shareholder, free and clear of all
security interests, claims, liens, restrictions on transferability,
legends,
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proxies, equities or other encumbrances; and upon delivery of and payment
for such Securities hereunder, the several Underwriters will acquire valid
and marketable title thereto, free and clear of any security interests,
claims, liens, restrictions on transferability, legends, proxies, equities
or other encumbrances. Such Selling Shareholder is selling the Securities
to be sold by such Selling Shareholder for such Selling Shareholder's own
account and is not selling such Securities, directly or indirectly, for
the benefit of the Company, and no part of the proceeds of such sale
received by such Selling Shareholder will inure, either directly or
indirectly, to the benefit of the Company other than as described in the
Registration Statement and Prospectus.
(ii) Such Selling Shareholder has duly authorized, executed
and delivered a Letter of Transmittal and Custody Agreement ("Custody
Agreement"), which Custody Agreement is a valid and binding obligation of
such Selling Shareholder, to MLC, as Custodian (the "Custodian"); pursuant
to the Custody Agreement the Selling Shareholder has placed in custody
with the Custodian, for delivery under this Agreement, the certificates
representing the Securities to be sold by such Selling Shareholder; and
such certificates were duly and properly endorsed in blank for transfer,
or were accompanied by all documents duly and properly executed that are
necessary to validate the transfer of title thereto, to the Underwriters,
free of any legend, restriction on transferability, proxy, lien or claim,
whatsoever.
(iii) Such Selling Shareholder has the power and authority to
enter into this Agreement and to sell, transfer and deliver the Securities
to be sold by such Selling Shareholder; and such Selling Shareholder has
duly authorized, executed and delivered to Xxxxxx X. Xxxx and Xxxxxx X.
Xxxxxx, as attorneys-in-fact (the "Attorneys-in-Fact"), an irrevocable
power of attorney (a "Power of Attorney") authorizing and directing the
Attorneys-in-Fact, or either of them, to effect the sale and delivery of
the Securities being sold by such Selling Shareholder, to enter into this
Agreement and to take all such other action as may be necessary hereunder.
(iv) This Agreement, the Custody Agreement and the Power of
Attorney have each been duly authorized, executed and delivered by or on
behalf of such Selling Shareholder and each constitutes a valid and
binding agreement of such Selling Shareholder, enforceable in accordance
with its terms, except as rights to indemnity hereunder or thereunder may
be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
laws affecting the rights of creditors generally and subject to general
principles of equity. The execution and delivery of this Agreement, the
Custody Agreement and the Power of Attorney and the performance of the
terms hereof and thereof and the consummation of the transactions herein
and therein contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
material agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder is bound, or any law,
regulation, order or decree applicable to such Selling Shareholder except
where any such breach or violation would not, individually or in the
aggregate, materially impair such Selling Shareholder's ability to meet
its obligations under this Agreement; no consent, approval, authorization
or order of, or filing with, any court or
-11-
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Custody Agreement and the Power of
Attorney or for the consummation of the transactions contemplated hereby
and thereby, including the sale of the Securities being sold by such
Selling Shareholder, except such as may be required under the Act or state
securities laws or blue sky laws.
(v) Such Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with
the offering and sale of the Securities other than any Preliminary
Prospectus or the Prospectus or other materials permitted by the Act to be
distributed by such Selling Shareholder.
(vi) Other than as contemplated by this Agreement and except
as disclosed in the Registration Statement and Prospectus, there is no
broker, finder or other party that is entitled to receive from such
Selling Shareholder any brokerage or finder's fee or any other fee,
commission or payment as a result of the transactions contemplated by this
Agreement.
(vii) Such Selling Shareholder has reviewed the Registration
Statement and the Prospectus and neither the Registration Statement nor
the Prospectus contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading regarding such Selling
Shareholder but only to the extent that any statements in or omissions
from the Registration Statement or the Prospectus are based on written
information furnished to the Company by such Selling Shareholder under the
caption "Principal and Selling Shareholders" specifically for use therein.
(c) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby; any certificate signed by or on behalf of any Selling
Shareholder as such and delivered to you or to counsel for the Underwriters
shall be deemed a representation and warranty by such Selling Shareholder to
each Underwriter as to the matters covered thereby.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, MBSC
agrees to issue and sell Firm Shares, and each Selling Shareholder agrees,
severally and not jointly, to sell the number of Firm Shares set forth opposite
the name of such Selling Shareholder in Schedule I hereto, to the several
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from MBSC and the Selling Shareholders the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule II hereto. The purchase
price for each Firm Share shall be $ per share. The obligation of each
Underwriter to each of MBSC and the Selling Shareholders shall be to purchase
from each of MBSC and the Selling Shareholders that number of Firm Shares (to be
adjusted by the Representatives to avoid fractional shares) which represents the
same proportion of the number of Firm Shares to be sold by each of MBSC and the
Selling Shareholders pursuant to this Agreement as the number of Firm Shares set
forth opposite the name
-12-
of such Underwriter in Schedule II hereto represents to the total number of Firm
Shares to be purchased by all Underwriters pursuant to this Agreement. In making
this Agreement, each Underwriter is contracting severally and not jointly;
except as provided in paragraph (c) of this Section 3 and in Section 8 hereof,
the agreement of each Underwriter is to purchase only the respective number of
Firm Shares specified in Schedule II.
It is understood that shares of the Firm Shares ("Directed
Stock") will initially be reserved by the Underwriters for offer and sale to
employees and persons having relationships with the Company or its employees
("Directed Stock Participants") upon the terms and conditions set forth in the
Prospectus and in accordance with the rules and regulations of the National
Association of Securities Dealers ("Directed Stock Program"). Under no
circumstance will the Representatives or any Underwriter be liable to the
Company or to any Directed Stock Participant for any action taken or omitted to
be taken in good faith in connection with such Directed Stock Program. To the
extent that any shares of Directed Stock are not affirmatively reconfirmed for
purchase by any Directed Stock Participant on or immediately after the date of
this Agreement, such Directed Stock may be offered to the public as part of the
public offering contemplated hereby.
The Firm Shares will be delivered by MBSC and the Custodian to you
for the accounts of the several Underwriters against payment of the purchase
price therefor by wire transfer of same day funds payable to the order of MBSC
and the Custodian, as appropriate, at the offices of U. S. Bancorp Xxxxx Xxxxxxx
Inc., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable, at 9:00 a.m. Central time on the
third (or if the Securities are priced, as contemplated by Rule 15c6-1(c) under
the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day
following the date hereof, or at such other time and date as you and the Company
determine pursuant to Rule 15c6-1(a) under the Exchange Act, such time and date
of delivery being herein referred to as the "First Closing Date." If the
Representatives so elect, delivery of the Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives. Certificates representing the Firm Shares, in
definitive form and in such denominations and registered in such names as you
may request upon at least two business days' prior notice to MBSC and the
Custodian, will be made available for checking and packaging not later than
10:30 a.m., Central time, on the business day next preceding the First Closing
Date at the offices of U. S. Bancorp Xxxxx Xxxxxxx Inc., U.S. Bancorp Center,
000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be
mutually acceptable.
(b) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company, with respect to of the Option Shares, and certain of the
Selling Shareholders, with respect to the number of Option Shares set forth
opposite the name of such Selling Shareholder in Schedule I hereto, hereby grant
to the several Underwriters an option to purchase all or any portion of the
Option Shares at the same purchase price as the Firm Shares, for use solely in
covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
in whole or in part at any time (but not more than once) within 30 days after
the effective date of this Agreement upon notice (confirmed in writing) by the
Representatives to the Company and to the Attorneys-in-Fact setting forth the
aggregate number of Option Shares as to
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which the several Underwriters are exercising the option, the names and
denominations in which the certificates for the Option Shares are to be
registered and the date and time, as determined by you, when the Option Shares
are to be delivered, such time and date being herein referred to as the "Second
Closing" and "Second Closing Date", respectively; provided, however, that the
Second Closing Date shall not be earlier than the First Closing Date nor earlier
than the second business day after the date on which the option shall have been
exercised. If the option is exercised, the obligation of each Underwriter shall
be to purchase from the Selling Shareholders granting an option to purchase the
Option Shares, on a pro rata basis up to Option Shares, that number of
Option Shares (to be adjusted by the Representatives to avoid fractional shares)
which represents the same proportion that the number of Option Shares granted by
each such Selling Shareholder bears to the total number of Option Shares granted
by all such Selling Shareholders, and, to the extent the option to purchase
Option Shares exceeds , from MBSC up to an aggregate of Option
Shares. The number of Option Shares to be purchased by each Underwriter shall be
the same percentage of the total number of Option Shares to be purchased by the
several Underwriters as the number of Firm Shares to be purchased by such
Underwriter is of the total number of Firm Shares to be purchased by the several
Underwriters, as adjusted by the Representatives in such manner as the
Representatives deem advisable to avoid fractional shares. No Option Shares
shall be sold and delivered unless the Firm Shares previously have been, or
simultaneously are, sold and delivered.
The Option Shares will be delivered by the Custodian and MBSC, as
appropriate, to you for the accounts of the several Underwriters against payment
of the purchase price therefor by wire transfer of same day funds payable to the
order of the Custodian or MBSC, as appropriate, at the offices of U.S. Bancorp
Xxxxx Xxxxxxx Inc., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxx, or such other location as may be mutually acceptable at 9:00 a.m.,
Central time, on the Second Closing Date. If the Representatives so elect,
delivery of the Option Shares may be made by credit through full fast transfer
to the accounts at The Depository Trust Company designated by the
Representatives. Certificates representing the Option Shares in definitive form
and in such denominations and registered in such names as you have set forth in
your notice of option exercise, will be made available for checking and
packaging not later than 10:30 a.m., Central time, on the business day next
preceding the Second Closing Date at the office of U.S. Bancorp Xxxxx Xxxxxxx
Inc., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable.
(c) It is understood that you, individually and not as
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment to MBSC or the Selling Shareholders, on behalf of any Underwriter
for the Securities to be purchased by such Underwriter. Any such payment by you
shall not relieve any such Underwriter of any of its obligations hereunder.
Nothing herein contained shall constitute any of the Underwriters an
unincorporated association or partner with the Company or any Selling
Shareholder.
-14-
4. COVENANTS.
(a) The Company covenants and agrees with the several Underwriters
as follows:
(i) If the Registration Statement has not already been
declared effective by the Commission, MBSC will use its best efforts to
cause the Registration Statement and any post-effective amendments thereto
to become effective as promptly as possible; MBSC will notify you promptly
of the time when the Registration Statement or any post-effective
amendment to the Registration Statement has become effective or any
supplement to the Prospectus (including any term sheet within the meaning
of Rule 434 of the Rules and Regulations) has been filed and of any
request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or additional information; if MBSC
has elected to rely on Rule 430A of the Rules and Regulations, MBSC will
prepare and file a Prospectus (or term sheet within the meaning of Rule
434 of the Rules and Regulations) containing the information omitted
therefrom pursuant to Rule 430A of the Rules and Regulations with the
Commission within the time period required by, and otherwise in accordance
with the provisions of, Rules 424(b), 430A and 434, if applicable, of the
Rules and Regulations; if MBSC has elected to rely upon Rule 462(b) of the
Rules and Regulations to increase the size of the offering registered
under the Act, MBSC will prepare and file a registration statement with
respect to such increase with the Commission within the time period
required by, and otherwise in accordance with the provisions of, Rule
462(b); MBSC will prepare and file with the Commission, promptly upon your
request, any amendments or supplements to the Registration Statement or
Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) that, in your opinion, are necessary in connection
with the distribution of the Securities by the Underwriters; and MBSC will
not file any amendment or supplement to the Registration Statement or
Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) to which you shall reasonably object by notice to
MBSC after having been furnished a copy a reasonable time prior to the
filing.
(ii) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceeding for any such purpose; and the Company
will promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such a stop order should be issued.
(iii) Within the time during which a prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and Regulations)
relating to the Securities is required to be delivered under the Act, the
Company will comply as far as it is able with all requirements imposed
upon it by the Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as necessary to permit
the continuance of sales of or dealings in the Securities as contemplated
by the provisions hereof and the Prospectus. If during such period any
event occurs as a result of which the Prospectus
-15-
would include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period
it is necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act, the Company will promptly notify you
and will amend the Registration Statement or supplement the Prospectus (at
the expense of the Company) so as to correct such statement or omission or
effect such compliance.
(iv) The Company will furnish to the Underwriters and counsel
for the Underwriters, without charge, copies of the Registration Statement
(three of which will be signed and will include all consents and exhibits
filed therewith), each Preliminary Prospectus, the Prospectus, and all
amendments and supplements (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations) to such documents, in each case as
soon as available and in such quantities as you may from time to time
reasonably request.
(v) During a period of five years commencing with the date
hereof, the Company will furnish to the Representatives, and to each
Underwriter who may so request in writing, copies of all periodic and
special reports furnished to the Shareholders of MBSC and all information,
documents and reports filed with the Commission, the National Association
of Securities Dealers, Inc., the Nasdaq Stock Market or any securities
exchange (other than any such information, documents and reports that are
filed with the Commission electronically via XXXXX or any successor
system).
(vi) MBSC will make generally available to its security
holders as soon as practicable, but in any event not later than 15 months
after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period beginning
after the effective date of the Registration Statement that shall satisfy
the provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
(vii) The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented from
becoming effective under the provisions of Section 9(a) hereof or is
terminated, will pay or cause to be paid (A) all reasonable expenses
(including transfer taxes allocated to the respective transferees)
incurred in connection with the delivery to the Underwriters of the
Securities, (B) all reasonable expenses and fees (including, without
limitation, fees and expenses of the Company's accountants and counsel
but, except as otherwise provided below, not including fees of the
Underwriters' counsel) in connection with the preparation, printing,
filing, delivery, and shipping of the Registration Statement (including
the financial statements therein and all amendments, schedules, and
exhibits thereto), the Securities, each Preliminary Prospectus, the
Prospectus, and any amendment thereof or supplement thereto, and the
printing, delivery, and shipping of this Agreement and other underwriting
documents, including Blue Sky Memoranda (covering the states and other
applicable jurisdictions), (C) all filing fees and reasonable fees and
disbursements of the Underwriters' counsel incurred in connection with the
qualification of the Securities for offering and sale by the Underwriters
or by dealers under the securities or blue sky laws of the states and
-16-
other jurisdictions which you shall designate or are necessary to
distribute the Directed Stock, (D) the fees and expenses of any transfer
agent or registrar, (E) all filing fees and reasonable fees and
disbursements of the Underwriters' counsel incident to any required review
by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities, (F) listing fees, if any, and (G) all other
reasonable costs and expenses incident to the performance of its
obligations hereunder that are not otherwise specifically provided for
herein. If the sale of the Securities provided for herein is not
consummated by reason of action by the Company pursuant to Section 9(a)
hereof which prevents this Agreement from becoming effective, or by reason
of any failure, refusal or inability on the part of the Company or the
Selling Shareholders to perform any agreement on its or their part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling
Shareholders is not fulfilled, the Company agrees to reimburse the several
Underwriters for all out-of-pocket disbursements (including fees and
disbursements of counsel) incurred by the Underwriters in connection with
their investigation, preparing to market and marketing the Securities or
in contemplation of performing their obligations hereunder. The Company
shall in no event be liable to any of the Underwriters for loss of
anticipated profits from the transactions covered by this Agreement.
(viii) MBSC will apply the net proceeds from the sale of the
Securities to be sold by it hereunder for the purposes set forth in the
Prospectus and will report the application of the proceeds therefrom as
may be required in accordance with Rule 463 of the Rules and Regulations.
(ix) Neither the Company nor any subsidiary will, without the
prior written consent of U.S. Bancorp Xxxxx Xxxxxxx Inc., from the date of
execution of this Agreement and continuing to and including the date which
is 180 days after the date of the Prospectus (the "Lock-Up Period"), (i)
offer, pledge, sell, assign, encumber, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock, or (ii) enter into any swap transaction or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of any Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
Notwithstanding the foregoing, nothing herein shall prohibit (A) sales to
the Underwriters pursuant to this Agreement, (B) sales by the Company in
connection with the exercise of options granted or the granting of options
to purchase up to an additional shares of Common Stock under the
2003 Equity Compensation Plan, (C) the exchange of shares of MLC Class A
Common Stock for shares of the Common Stock in connection with the Merger
immediately prior to the First Closing Date or (D) the issuance of shares
of Common Stock in connection with the Reorganization. The Company agrees
not to accelerate the vesting of any option or warrant or the lapse of any
repurchase right prior to the expiration of the Lock-Up Period.
-17-
(x) The Company either has caused to be delivered to you or
will cause to be delivered to you prior to the effective date of the
Registration Statement a letter from each of the Company's directors and
officers previously identified by you in writing stating that such person
agrees that he or she will not, without the prior written consent of U.S.
Bancorp Xxxxx Xxxxxxx Inc., from the date the Prospectus to and concluding
the date that is 180 days after the date of the Prospectus, (i) offer,
pledge, sell, assign, encumber, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock, or (ii) enter into any swap transaction or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise
(the "Lock-Up Agreements"), subject to such exceptions thereto and other
provisions thereof as are specified in the Lock-Up Agreements. The Company
will enforce the terms of each Lock-Up Agreement and issue stop-transfer
instructions to the transfer agent for the Common Stock with respect to
any transaction or contemplated transaction that would constitute a breach
of or default under the applicable Lock-Up Agreement.
(xi) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected
to cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of MBSC to facilitate the sale
or resale of the Securities, and has not effected any sales of Common
Stock which are required to be disclosed in response to Item 701 of
Regulation S-K under the Act which have not been so disclosed in the
Registration Statement.
(xii) The Company will not incur any liability for any
finder's or broker's fee or agent's commission in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(xiii) In connection with the Directed Stock Program, to
ensure that the Directed Stock will be restricted to the extent required
by the National Association of Securities Dealers or the rules of such
association from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of the effectiveness of the
Registration Statement, the Company will direct the transfer agent to
place stop-transfer restrictions upon such securities for such period of
time. Should the Company release, or seek to release, from such
restrictions any of the Directed Stock, the Company agrees to reimburse
the Underwriters for any reasonable expense (including, without
limitation, legal expenses) they incur with such release.
(xiv) MBSC will file with the Commission such periodic and
special reports as required by the Rules and Regulations.
-18-
(xv) The Company and its subsidiaries will maintain such
controls and other procedures, including without limitation those
contemplated by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act and the
applicable regulations thereunder, that are designed to ensure that
information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the Commission's rules
and forms, including without limitation, controls and procedures designed
to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company's management, including its principal
executive officer and its principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure, to ensure that material information
relating to Company, including its subsidiaries, is made known to them by
others within those entities. The Company and its subsidiaries will comply
with all other applicable provisions of the Xxxxxxxx-Xxxxx Act.
(b) Each Selling Shareholder severally covenants and agrees with the
several Underwriters as follows:
(i) Without limiting any reimbursement right which the Selling
Shareholders may have from the Company, such Selling Shareholder will pay
all taxes, if any, on the transfer and sale, respectively, of the
Securities being sold by such Selling Shareholder and the fees of such
Selling Shareholder's counsel.
(ii) The Securities to be sold by such Selling Shareholder,
represented by the certificates on deposit with the Custodian pursuant to
the Custody Agreement of such Selling Shareholder, are subject to the
interest of the several Underwriters; the arrangements made for such
custody are, except as specifically provided in the Custody Agreement,
irrevocable; and the obligations of such Selling Shareholder hereunder
shall not be terminated, except as provided in this Agreement or in the
Custody Agreement, by any act of such Selling Shareholder, by operation of
law, whether by the liquidation, dissolution or merger of such Selling
Shareholder, by the death of such Selling Shareholder, or by the
occurrence of any other event. If any Selling Shareholder should
liquidate, dissolve or be a party to a merger or if any other such event
should occur before the delivery of the Securities hereunder, certificates
for the Securities deposited with the Custodian shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as
if such liquidation, dissolution, merger or other event had not occurred,
whether or not the Custodian shall have received notice thereof.
(iii) Such Selling Shareholder has not taken and will not
take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of MBSC to facilitate the sale or resale of
the Securities.
(iv) Such Selling Shareholder shall immediately notify you if
any event occurs, or of any change in information relating to such Selling
Shareholder, which results
-19-
in the Prospectus (as supplemented) including an untrue statement of a
material fact or omitting to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, but only to the extent that any statements in or
omissions from the Prospectus are based on written information furnished
to the Company by such Selling Shareholder under the caption "Principal
and Selling Shareholders" specifically for use therein.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the several
Underwriters hereunder are subject to the accuracy, as of the date hereof and at
each of the First Closing Date and the Second Closing Date (as if made at each
such Closing Date), of and compliance with all representations, warranties and
agreements of the Company and the Selling Shareholders contained herein, to the
performance by the Company and the Selling Shareholders of their respective
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 p.m., Central time, on the date of this Agreement, or such later time
and date as you, as Representatives of the several Underwriters, shall approve
and all filings required by Rules 424, 430A and 434 of the Rules and Regulations
shall have been timely made; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereof shall have been issued; no
proceedings for the issuance of such an order shall have been initiated or
threatened; and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or supplement
thereto (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations), contains an untrue statement of fact which, in your opinion,
is material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, neither the Company nor any of its subsidiaries shall have
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock; and there
shall not have been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of shares upon
the exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt of the Company, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock
of the Company or any of its subsidiaries, or any Material Adverse Change or any
development involving a prospective Material Adverse Change (whether or not
arising in the ordinary course of business), that, in your judgment, makes it
impractical or inadvisable to offer or deliver the Securities on the terms and
in the manner contemplated in the Prospectus.
(d) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded to any securities issued in connection with any
of the Company's fixed-rate, term note securitization facilities by any
"nationally recognized statistical rating organization," as that
-20-
term is defined by the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of such
securities;
(e) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of , counsel
for the Company, dated such Closing Date and addressed to you, to the effect
that:
(i) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation, limited liability
company or other entity in good standing under the laws of its
jurisdiction of organization. Each of the Company and its subsidiaries has
full corporate power and authority to own its properties and conduct its
business as currently being carried on and as described in the
Registration Statement and Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business makes such qualification necessary and in which
the failure to so qualify would have a Material Adverse Effect.
(ii) The capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock." All of the issued and outstanding
shares of the capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, and the holders
thereof are not subject to personal liability by reason of being such
holders. The Securities to be issued and sold by the Company hereunder
have been duly authorized and, when issued, delivered and paid for in
accordance with the terms of this Agreement, will have been validly issued
and will be fully paid and nonassessable, and the holders thereof will not
be subject to personal liability by reason of being such holders. Except
as otherwise stated in the Registration Statement and Prospectus, there
are no preemptive rights or other rights to subscribe for or to purchase,
or any restriction upon the voting or transfer of, any shares of Common
Stock pursuant to the Company's charter, by-laws or any agreement or other
instrument known to such counsel to which the Company is a party or by
which the Company is bound. To such counsel's knowledge, except as
described in the Registration Statement and Prospectus neither the filing
of the Registration Statement nor the offering or sale of the Securities
as contemplated by this Agreement gives rise to any rights for or relating
to the registration of any shares of Common Stock or other securities of
the Company.
(iii) All of the issued and outstanding shares of capital
stock of each of the Company's subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and, to such
counsel's knowledge, except as otherwise described in the Registration
Statement and Prospectus, the Company owns of record and beneficially,
free and clear of any security interests, claims, liens, proxies, equities
or other encumbrances, all of the issued and outstanding shares of such
stock. To such counsel's knowledge, except as described in the
Registration Statement and Prospectus, there are no options, warrants,
agreements, contracts or other rights in existence to purchase or acquire
-21-
from the Company or any subsidiary any shares of the capital stock of the
Company or any subsidiary of the Company.
(iv) The Registration Statement has become effective under the
Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
such counsel, threatened by the Commission.
(v) The descriptions in the Registration Statement and
Prospectus of statutes, regulations, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel does not know of any
statutes, regulations, legal or governmental proceedings or contracts or
other documents required to be described in the Prospectus or included as
exhibits to the Registration Statement that are not described or included
as required.
(vi) The Company has full corporate power and authority to
enter into this Agreement, and this Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid, legal and
binding obligation of each of them enforceable in accordance with its
terms (except as rights to indemnity hereunder may be limited by federal
or state securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity); the execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, rule or regulation, any agreement or
instrument known to such counsel to which the Company is a party or by
which either is bound or to which any of their respective property is
subject, the charter or by-laws of the Company, or any order or decree
known to such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of their respective properties; and
no consent, approval, authorization or order of, or filing with, any court
or governmental agency or body is required for the execution, delivery and
performance of this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance or sale of the Securities by
MBSC, except such as may be required under the Act or state securities
laws.
(vii) The agreement among MBSC, MLC and MRLN Acquisition Sub,
Inc. dated as of August 27, 2003 (the "Merger Agreement"), was duly
authorized, executed and delivered by each of MBSC and MLC and constitutes
a valid, legal and binding obligation of each of them enforceable in
accordance with its terms; the execution, delivery and performance of the
Merger Agreement and the consummation of the transactions therein
contemplated did not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute, rule or
regulation, any agreement or instrument known to such counsel to which
MBSC or MLC is or was a party or by which either is or was bound or to
which any of their respective property is or was subject, the charter or
by-laws of either MBSC or MLC, or any order or decree known to such
counsel of any court or governmental agency or body having jurisdiction
over MBSC or MLC or any of their respective properties; and no consent,
approval,
-22-
authorization or order of, or filing with, any court or governmental
agency or body was required for the execution, delivery and performance of
the Merger Agreement or for the consummation of the transactions
contemplated thereby, including the issuance or sale of Common Stock by
MBSC as required thereby, except for the filing of articles of merger with
the Secretary of State for the State of Pennsylvania, which filing was
duly and properly made.
(viii)The Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto (including any term sheet within
the meaning of Rule 434 of the Rules and Regulations), comply as to form
in all material respects with the requirements of the Act and the Rules
and Regulations; and on the basis of conferences with officers of the
Company, examination of documents referred to in the Registration
Statement and Prospectus and such other procedures as such counsel deemed
appropriate, nothing has come to the attention of such counsel that causes
such counsel to believe that the Registration Statement or any amendment
thereof, at the time the Registration Statement became effective and as of
such Closing Date (including any Registration Statement filed under Rule
462(b) of the Rules and Regulations), contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus (as of its date and as of such Closing Date), as amended or
supplemented, includes any untrue statement of material fact or omits to
state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; it being
understood that such counsel need express no opinion as to the financial
statements or other financial data included in any of the documents
mentioned in this clause.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Pennsylvania and federal law and matters arising under the
Delaware General Corporation Law, upon the opinion or opinions of local counsel
provided that the extent of such reliance is specified in such opinion and that
such counsel shall state that such opinion or opinions of local counsel are
satisfactory to them and that they believe they and you are justified in relying
thereon and (ii) as to matters of fact, to the extent such counsel deems
reasonable upon certificates of officers of the Company and its subsidiaries
provided that the extent of such reliance is specified in such opinion.
(f) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of , counsel
for the Selling Shareholders, dated such Closing Date and addressed to you,
substantially to the [COLLECTIVE](2) effect that:
(i) Each of the Selling Shareholders is the sole record and
beneficial owner of the Securities to be sold by such Selling Shareholder
and delivery of the certificates for the Securities to be sold by each
Selling Shareholder pursuant to this Agreement, upon payment therefor by
the Underwriters, will pass marketable title to such Securities to the
Underwriters and the Underwriters will acquire all the rights of such
-------------
2 If more than one counsel.
-23-
Selling Shareholder in the Securities (assuming the Underwriters have no
knowledge of an adverse claim), free and clear of any security interests,
claims, liens or other encumbrances.
(ii) Each of the Selling Shareholders has the power and
authority to enter into the Custody Agreement, the Power of Attorney and
this Agreement and to perform and discharge such Selling Shareholder's
obligations thereunder and hereunder; and this Agreement, the Custody
Agreements and the Powers of Attorney have been duly and validly
authorized, executed and delivered by (or by the Attorneys-in-Fact, or
either of them, on behalf of) the Selling Shareholders and are valid and
binding agreements of the Selling Shareholders, enforceable in accordance
with their respective terms (except as rights to indemnity hereunder or
thereunder may be limited by federal or state securities laws and except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally and
subject to general principles of equity).
(iii) The execution and delivery of this Agreement, the
Custody Agreement and the Power of Attorney and the performance of the
terms hereof and thereof and the consummation of the transactions herein
and therein contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
statute, rule or regulation, or any agreement or instrument known to such
counsel to which such Selling Shareholder is a party or by which such
Selling Shareholder is bound or to which any of its property is subject,
any such Selling Shareholder's charter, by-laws or other governing
document, or any order or decree known to such counsel of any court or
government agency or body having jurisdiction over such Selling
Shareholder or any of its respective properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance of
this Agreement, the Custody Agreement and the Power of Attorney or for the
consummation of the transactions contemplated hereby and thereby,
including the sale of the Securities being sold by such Selling
Shareholder, except such as may be required under the Act or state
securities laws or blue sky laws.
In rendering such opinion such counsel may rely (i) as to matters of
law other than [INSERT APPROPRIATE JURISDICTIONS] and federal law, upon the
opinion or opinions of local counsel provided that the extent of such reliance
is specified in such opinion and that such counsel shall state that such opinion
or opinions of local counsel are satisfactory to them and that they believe they
and you are justified in relying thereon and (ii) as to matters of fact, to the
extent such counsel deems reasonable upon certificates of officers of the
Selling Shareholders provided that the extent of such reliance is specified in
such opinion.
(g) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, such opinion or opinions from
Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel for the several Underwriters, dated such
Closing Date and addressed to you, with respect to the formation of MBSC, the
validity of the Securities, the Registration Statement, the Prospectus and other
related matters as you reasonably may request, and such counsel shall have
received such papers and information as they request to enable them to pass upon
such matters. In rendering such opinion, Sidley Xxxxxx Xxxxx & Xxxx LLP may
rely, as to the incorporation of MBSC, on the opinion of
referred to above.
-24-
(h) On each Closing Date you, as Representatives of the several
Underwriters, shall have received a letter of KPMG LLP, dated such Closing Date
and addressed to you, confirming that they are independent public accountants
within the meaning of the Act and are in compliance with the applicable
requirements relating to the qualifications of accountants under Rule 2-01 of
Regulation S-X of the Commission, and stating, as of the date of such letter
(or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of such
letter), the conclusions and findings of said firm with respect to the financial
information and other matters covered by its letter delivered to you
concurrently with the execution of this Agreement, and the effect of the letter
so to be delivered on such Closing Date shall be to confirm the conclusions and
findings set forth in such prior letter.
(i) On each Closing Date, there shall have been furnished to you, as
Representatives of the Underwriters, a certificate, dated such Closing Date and
addressed to you, signed by the chief executive officer and by the chief
financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, in all material respects, as if made at
and as of such Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to such Closing Date;
(ii) No stop order or other order suspending the effectiveness
of the Registration Statement or any amendment thereof or the
qualification of the Securities for offering or sale has been issued, and
no proceeding for that purpose has been instituted or, to the best of
their knowledge, is contemplated by the Commission or any state or
regulatory body; and
(iii) The signers of said certificate have carefully examined
the Registration Statement and the Prospectus, and any amendments thereof
or supplements thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), and (A) such documents contain all
statements and information required to be included therein, the
Registration Statement, or any amendment thereof, does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and the Prospectus, as amended or supplemented, does not
include any untrue statement of material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) since the
effective date of the Registration Statement, there has occurred no event
required to be set forth in an amended or supplemented prospectus which
has not been so set forth, (C) subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries has incurred
any material liabilities or obligations, direct or contingent, or entered
into any material transactions, not in the ordinary course of business, or
declared or paid any dividends or made any distribution of any kind with
respect to its capital stock, and except as disclosed in the Prospectus,
there has not been any change in the capital stock (other than a change in
the number of
-25-
outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants), or any material change in
the short-term or long-term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock, of
the Company, or any of its subsidiaries, or any Material Adverse Change or
any development involving a prospective Material Adverse Change (whether
or not arising in the ordinary course of business), and (D) except as
stated in the Registration Statement and the Prospectus, there is not
pending, or, to the knowledge of the Company, threatened or contemplated,
any action, suit or proceeding to which the Company or any of its
subsidiaries is a party before or by any court or governmental agency,
authority or body, or any arbitrator, which might reasonably result in any
Material Adverse Change.
(j) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, a certificate or certificates,
dated such Closing Date and addressed to you, signed by each of the Selling
Shareholders or either of such Selling Shareholders' Attorneys-in-Fact to the
effect that the representations and warranties of such Selling Shareholder
contained in this Agreement are true and correct as if made at and as of such
Closing Date, and that such Selling Shareholder has complied with all the
agreements and satisfied all the conditions on such Selling Shareholder's part
to be performed or satisfied at or prior to such Closing Date.
(k) No Underwriter shall have notice of an adverse claim on the
Securities within the meaning of Section 8-105 of the Uniform Commercial Code.
(l) Each Selling Shareholder shall have delivered to you, as
Representatives of the several Underwriters, a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury department regulations in lieu thereof).
(m) The Company shall have furnished to you, as Representatives of
the several Underwriters, and counsel for the Underwriters such additional
documents, certificates and evidence as you or they may have reasonably
requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and counsel for the Underwriters. The Company will furnish
you with such conformed copies of such opinions, certificates, letters and other
documents as you shall reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities to which such
Underwriter may become subject, joint or several, under the Act or otherwise
(including in settlement of any litigation if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness pursuant to Rules 430A and
434(d) of the Rules and Regulations, if applicable, any
-26-
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), or in any materials or information provided to investors by, or
with the approval of, the Company in connection with the marketing of the
offering of the Common Stock ("Marketing Materials"), including any roadshow or
investor presentations made to investors by the Company (whether in person or
electronically) or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any such amendment or supplement,
or in any Marketing Materials, in reliance upon and in conformity with written
information furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof; further provided, however, that
with respect to any Preliminary Prospectus, the foregoing indemnity agreement
shall not inure to the benefit of any Underwriter, or any person controlling
such Underwriter, from whom the person asserting any loss, claim, liability or
expense purchased shares if copies of the Prospectus were timely delivered to
the Underwriter pursuant to this Agreement and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of shares to such Person and if the Prospectus (as so
amended and supplemented) would have cured the defect giving rise to such loss,
claim, liability, damage or expense.
In addition to its other obligations under this Section 6(a), the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 6(a), it will reimburse each Underwriter on a monthly basis for all
reasonable legal fees or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Underwriter that received such payment shall promptly return it to
the Company, together with interest, compounded daily, determined on the basis
of the prime rate (or other commercial lending rate for borrowers of the highest
credit standing) announced from time to time by ____________________ (the "Prime
Rate"). Any such interim reimbursement payments which are not made to an
Underwriter within 30 days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request. This indemnity agreement shall be
in addition to any liabilities which the Company may otherwise have.
(b) Each Selling Shareholder severally agrees to indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities to
which such Underwriter may
-27-
become subject, joint or several, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness pursuant to Rules 430A and
434(d) of the Rules and Regulations, if applicable, any Preliminary Prospectus,
the Prospectus, or any amendment or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), or in any
Marketing Materials, including any roadshow or investor presentations made to
investors by the Company (whether in person or electronically) or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
against such loss, claim, damage, liability or action; provided, however, that
the Selling Shareholders shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any Preliminary Prospectus, the Prospectus,
or any such amendment or supplement, or in any Marketing Materials, in reliance
upon and in conformity with written information furnished to the Company by such
Selling Shareholders under the caption "Principal and Selling Shareholders"
specifically for use in the preparation thereof; further provided, however, that
with respect to any Preliminary Prospectus, the foregoing indemnity agreement
shall not inure to the benefit of any Underwriter, or any person controlling
such Underwriter, from whom the person asserting any loss, claim, liability or
expense purchased shares if copies of the Prospectus were timely delivered to
the Underwriter pursuant to this Agreement and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of shares to such Person and if the Prospectus (as so
amended and supplemented) would have cured the defect giving rise to such loss,
claim, liability, damage or expense; and further provided, however, that in no
event shall any Selling Shareholder be liable under the provisions of this
Section 6 for any amount in excess of the aggregate amount of proceeds after
underwriting commissions and discounts which such Selling Shareholder received
from the sale of the Securities pursuant to this Agreement.
(c) Each Underwriter will indemnify and hold harmless the Company
and each Selling Shareholder against any losses, claims, damages or liabilities
to which the Company and the Selling Shareholders may become subject, under the
Act or otherwise (including in settlement of any litigation, if such settlement
is effected with the written consent of such Underwriter), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto (including
any term sheet within the meaning of Rule 434 of the Rules and Regulations), or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any Preliminary
Prospectus, the
-28-
Prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by you, or by such
Underwriter through you, specifically for use in the preparation thereof, and
will reimburse the Company and the Selling Shareholders for any legal or other
expenses reasonably incurred by the Company or any such Selling Shareholder in
connection with investigating or defending against any such loss, claim, damage,
liability or action.
In addition to their other obligations under this Section 6(c), the
Underwriters, jointly and severally, agree that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other proceedings
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in this Section 6(c), they will reimburse the Company on
a monthly basis for all reasonable legal fees or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the respective recipient
of such payment shall promptly return it to the party or parties that made such
payment, together with interest, compounded daily, determined on the basis of
the Prime Rate. Any such interim reimbursement payments which are not made to
the Company within 30 days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request. This indemnity agreement shall be
in addition to any liabilities which the Underwriters may otherwise have.
Notwithstanding the provisions of this Section 6(c), to the extent any claim,
action, investigation, inquiry or other proceeding referred to in the first
sentence of this paragraph is accompanied by, is a part of or is in connection
with one or more claims, actions, investigations, inquiries or other proceedings
contemplated by Section 6(a), the interim payment provisions of the second
paragraph of Section 6(a) shall control and this paragraph shall not apply.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party except to the extent such indemnifying
party has been materially prejudiced by such failure. In case any such action
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 satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that if, in the sole judgment of the Representatives, it is advisable for the
Underwriters to be represented as a group by separate counsel, the
Representatives shall have the right to employ a single counsel to represent the
Representatives and all Underwriters who may be subject to liability arising
from any claim in respect of which indemnity may be sought
-29-
by the Underwriters under subsection (a) or (b) of this Section 6, in which
event the reasonable fees and expenses of such separate counsel shall be borne
by the indemnifying party or parties and reimbursed to the Underwriters as
incurred (in accordance with the provisions of the second paragraph in
subsection (a) above). An indemnifying party shall not be obligated under any
settlement agreement relating to any action under this Section 6 to which it has
not agreed in writing.
(e) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or (c)
above, (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Shareholders on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and Selling Shareholders bear to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Shareholders or the Underwriters and the parties' relevant
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (e) were to be 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 in the first sentence of this subsection (e). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
action or claim which is the subject of this subsection (e). Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and the liability under this subsection (e) of each
Selling Shareholder shall be limited to an amount equal to the aggregate amount
of proceeds after underwriting commissions and discounts such Selling
Shareholder received from the sale of securities pursuant to this Agreement. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
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The Underwriters' obligations in this subsection (e) to contribute are several
in proportion to their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Shareholders
under this Section 6 shall be in addition to any liability which the Company and
the Selling Shareholders may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 6 shall be in addition to any liability that the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with his
consent, is named in the Registration Statement as about to become a director of
the Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company or any Selling
Shareholder within the meaning of the Act.
(g) The Underwriters severally confirm and the Company and each
Selling Shareholder acknowledges that the statements with respect to the public
offering of the Securities by the Underwriters set forth on the cover page of,
and the concession and reallowance figures appearing under the caption
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
(h) In connection with the offer and sale of the Directed Stock, the
Company agrees, promptly upon a request in writing, to indemnify and hold
harmless the Underwriters from and against any and all losses, liabilities,
claims, damages and expenses incurred by them as a result of the failure of the
Directed Stock Participants to affirmatively reconfirm the Directed Stock for
purchase as of the date of this Agreement or to pay for and accept delivery of
the Directed Stock by the end of the First Closing Date.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company and the Selling
Shareholders herein or in certificates delivered pursuant hereto, and the
agreements of the several Underwriters, the Company and the Selling Shareholders
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person thereof, or the Company or any of its officers,
directors, or controlling persons, or any Selling Shareholders or any
controlling person thereof, and shall survive delivery of, and payment for, the
Securities to and by the Underwriters hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Firm Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Firm Shares in accordance with the
terms hereof, and the amount of Firm Shares not purchased does not aggregate
more than 10% of the total amount of Firm Shares set forth in Schedule II
hereto, the remaining Underwriters shall be obligated to take up and pay for (in
proportion to their respective underwriting obligations hereunder as set forth
in Schedule II hereto except as may otherwise be determined by you) the Firm
Shares that the withdrawing or defaulting Underwriters agreed but failed to
purchase.
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(b) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Firm Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Firm Shares in accordance with the
terms hereof, and the amount of Firm Shares not purchased aggregates more than
10% of the total amount of Firm Shares set forth in Schedule II hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other
persons are not made within 36 hours thereafter, this Agreement shall terminate.
In the event of any such termination none of the Company nor any Selling
Shareholder shall be under any liability to any Underwriter (except to the
extent provided in Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof)
nor shall any Underwriter (other than an Underwriter who shall have failed,
otherwise than for some reason permitted under this Agreement, to purchase the
amount of Firm Shares agreed by such Underwriter to be purchased hereunder) be
under any liability to the Company or the Selling Shareholders (except to the
extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the
non-defaulting Underwriters or by any other party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8.
9. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m., Central
time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of the
Registration Statement as you in your discretion shall first release the
Securities for sale to the public; provided, that if the Registration Statement
is effective at the time this Agreement is executed, this Agreement shall become
effective at such time as you in your discretion shall first release the
Securities for sale to the public. For the purpose of this Section, the
Securities shall be deemed to have been released for sale to the public upon
release by you of an electronic communication authorizing commencement of the
offering the Securities for sale by the Underwriters or other securities
dealers. By giving notice as hereinafter specified before the time this
Agreement becomes effective, you, as Representatives of the several
Underwriters, or the Company, may prevent this Agreement from becoming effective
without liability of any party to any other party, except that the provisions of
Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof shall at all times be
effective.
(b) You, as Representatives of the several Underwriters, shall have
the right to terminate this Agreement by giving notice as hereinafter specified
at any time at or prior to the First Closing Date, and the option referred to in
Section 3(b), if exercised, may be cancelled at any time prior to the Second
Closing Date, if (i) the Company shall have failed, refused or been unable, at
or prior to such Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the Underwriters' obligations
hereunder is not fulfilled, (iii) trading on the Nasdaq National Market, New
York Stock Exchange or the American Stock Exchange shall have been wholly
suspended, (iv) minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the Nasdaq
National Market, New York Stock Exchange or the American Stock Exchange, by such
Exchange or by order of the
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Commission or any other governmental authority having jurisdiction, (v) a
banking moratorium shall have been declared by federal or state authorities, or
(vi) there shall have occurred any outbreak or escalation of hostilities between
the United States and any foreign power or terrorist organization or any change
in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof shall at
all times be effective.
(c) If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Section, the Company and an
Attorney-in-Fact, on behalf of the Selling Shareholders, shall be notified
promptly by you by telephone, confirmed by letter. If the Company elects to
prevent this Agreement from becoming effective, you and an Attorney-in-Fact, on
behalf of the Selling Shareholders, shall be notified by the Company by
telephone, confirmed by letter.
10. DEFAULT BY ONE OR MORE OF THE SELLING SHAREHOLDERS OR THE COMPANY. If
(a) one or more of the Selling Shareholders shall fail at the First Closing Date
to sell and deliver the number of Securities which such Selling Shareholder or
Selling Shareholders are obligated to sell hereunder and (b) the remaining
Selling Shareholders do not exercise the right hereby granted to increase, pro
rata or otherwise, the number of Securities to be sold by them hereunder to the
total number of Securities to be sold by all Selling Shareholders as set forth
in Schedule I and (c) the Securities that such Selling Shareholder(s) failed to
sell and deliver constitute in excess of [ ] percent of the total number of
Securities to be purchased by the Underwriters hereunder (not including Option
Shares), then the Underwriters may at your option, by notice from you to the
Company and the non-defaulting Selling Shareholders, either (x) terminate this
Agreement without any liability on the part of any non-defaulting party or (y)
elect to purchase the Securities which MBSC and the non-defaulting Selling
Shareholders have agreed to sell hereunder.
In the event of a default by any Selling Shareholder as referred to
in this Section, either you or the Company or, by joint action only, the
non-defaulting Selling Shareholders shall have the right to postpone the First
Closing Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements.
If MBSC shall fail at the First Closing Date to sell and deliver the
number of Securities which it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any
non-defaulting party.
No action taken pursuant to this Section shall relieve the Company
or any Selling Shareholders so defaulting from liability, if any, in respect of
such default.
11. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing and, if to the Underwriters, shall be mailed or
delivered by hand to the Representatives c/o U. S. Bancorp Xxxxx Xxxxxxx Inc.,
U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, except
that notices given to an Underwriter pursuant to Section 6 hereof shall be sent
to such Underwriter at the address stated in the Underwriters' Questionnaire
furnished by such
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Underwriter in connection with this offering; if to the Company, shall be mailed
or delivered to it at 000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxx Xxxxxx
00000, Attention: Xx. Xxxxxx X. Xxxx; if to any of the Selling Shareholders, at
the address of the Attorneys-in-Fact as set forth in the Powers of Attorney, or
in each case to such other address as the person to be notified may have
requested in writing. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice of a new
address for such purpose.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original and all such counterparts
shall together constitute one and the same instrument.
[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of
this letter whereupon this letter will become a binding agreement between the
Company, the Selling Shareholders and the several Underwriters in accordance
with its terms.
Very truly yours,
XXXXXX BUSINESS SERVICES CORP.
By _______________________________________
[TITLE]
XXXXXX LEASING CORPORATION
By _______________________________________
[TITLE]
SELLING SHAREHOLDERS
By _______________________________________
Attorney-in-Fact
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
U.S. BANCORP XXXXX XXXXXXX INC.
By__________________________________
Managing Director
SCHEDULE I
Selling Shareholders
Number of Maximum Number of
Firm Shares Option Shares
Name to be Sold Subject to Option
----------- -----------------
----------- -----------------
Total. . . . . . . . .
=========== =================
SCHEDULE II
Underwriter Number of Firm Shares (1)
----------- -------------------------
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
---------------
Total. . . . . . . . . . . . . . . . .
===============
-----------------
(1) The Underwriters may purchase up to an additional ------ Option Shares, to
the extent the option described in Section 3(b) of the Agreement is
exercised, in the proportions and in the manner described in the
Agreement.
