UNDERWRITING AGREEMENT

Exhibit 1.1

 

MORTON’S RESTAURANT GROUP, INC.

 

Common Stock

 

UNDERWRITING AGREEMENT

 

dated February [ l ], 2006

 

Wachovia Capital Markets, LLC

 

Underwriting Agreement

 

February [ l ], 2006

 

Wachovia Capital Markets, LLC

As Representative of the several Underwriters

7 St. Paul Street

Baltimore, Maryland 21202

 

Ladies and Gentlemen:

 

Introductory . Morton’s Restaurant Group, Inc., a Delaware corporation (the “ Company ”), proposes to issue and sell to the several underwriters named in Schedule  A (the “ Underwriters ”) an aggregate of [ l ] shares of its Common Stock, par value $0.01 per share (the “ Common Stock ”), and the stockholders of the Company named in Schedule  B (collectively, the “ Selling Stockholders ”) severally propose to sell to the Underwriters an aggregate of [ l ] shares of Common Stock. The [ l ] shares of Common Stock to be sold by the Company and the [ l ] shares of Common Stock to be sold by the Selling Stockholders are collectively called the “ Firm Shares .” In addition, the Company has granted to the Underwriters an option to purchase up to an additional [ l ] shares of Common Stock as provided in Section 2. The additional [ l ] shares to be sold by the Company pursuant to such option are collectively called the “ Optional Shares .” The Firm Shares and, if and to the extent such option is exercised, the Optional Shares are collectively called the “ Shares .” Wachovia Capital Markets, LLC (“ Wachovia ”) has agreed to act as representative of the several Underwriters (in such capacity, the “ Representative ”) in connection with the offering and sale of the Shares.

 

The Company, the Selling Stockholders and the Underwriters agree that up to 5% of the Firm Shares to be purchased by the Underwriters (the “ Reserved Shares ”) shall be reserved for sale by the Underwriters to the Company’s directors, officers, employees, business associates and related persons (the “ Reserved Share Offerees ”) as part of the distribution of the Shares by the Underwriters, subject to the terms of this Agreement, the applicable rules, regulations and interpretations of the National Association of Securities Dealers, Inc. (the “ NASD ”) and all other applicable laws, rules and regulations. To the extent that any such Reserved Shares are not confirmed for purchase by any such Reserved Shares Offeree before 5:00 P.M. (New York City time) on February [ l ], 2006, such Reserved Shares may, at the sole and absolute discretion of Wachovia, be offered to the public as part of the public offering contemplated hereby or offered and sold to any other Reserved Shares Offerees.

The Company contemplates that, prior to the execution and delivery of this Agreement on the date hereof (in the case of the matters described in clauses (a) through (f) below) and prior to the purchase of the Firm Shares by the Underwriters on the First Closing Date referred to in Section 2(b) (in the case of the matters described in clauses (g) through (j) below):

 

(a) the Company’s charter and by-laws have been amended and restated and MHCI’s (as defined below) charter has been amended, the amended and restated charter and by-laws of the Company and the amended charter of MHCI are in the respective forms previously delivered to the Representative and such amended and restated charter of the Company and amendment to the charter of MHCI have been filed with the Secretary of State of the State of Delaware (collectively, the “ Amendment and Restatement ”);

 

(b) the Company has effected a 10,098.5-for-one stock split of the Common Stock (the “Company Stock Split”) and MHCI has effected a 10,098.5-for-one stock split of its outstanding common stock (the “MHCI Stock Split;” the Company Stock Split and MHCI Stock Split are hereinafter called, collectively, the “ Stock Split ”);

 

(c) the Company has received sufficient tenders and consents from holders in its tender offer and consent solicitation (the “ Tender Offer ”) for its 7.5% Senior Secured Notes due 2010 (the “ 7.5% Notes ”) to (i) amend the indenture under which the 7.5% Notes were issued (the “ 7.5% Indenture ”) and the terms of the 7.5% Notes in the manner described in the Company’s Offer to Purchase and Solicitation of Consents for Amendment of the Related Indenture dated January 3, 2006 (the “ Indenture Amendments ”) pursuant to a supplemental indenture (the “ Supplemental Indenture ”) executed by the Company and The Bank of New York as trustee (the “ Trustee ”) and (ii) to permit the Company, on the First Closing Date (as defined below), to purchase not less than $68.25 million aggregate principal amount at maturity of the 7.5% Notes pursuant to the Tender Offer and to redeem all of the remaining outstanding 7.5% Notes (collectively, the “ Repurchase and Redemption ”);

 

(d) the Company and the Trustee shall have executed and delivered the Supplemental Indenture;

 

(e) Morton’s Holding Company, Inc., a Delaware corporation (“ MHCI ”) and the Company shall have executed and delivered an Agreement and Plan of Merger by and between MHCI and the Company dated as of February l , 2006 (the “ Merger Agreement ”);

 

(f) the Redemption Agreement by and among Merrill Lynch PCG, Inc., MHCI and the Company (the “ Redemption Agreement ”) relating to MHCI’s 14% Senior Secured Notes due 2010 (the “ 14% Notes ”) has been duly executed and delivered by the parties thereto and provides for (1) the Company to repurchase, on the First Closing Date, all of the outstanding 14% Notes at the purchase price set forth in the Prospectus (as defined below) (the “ 14% Note Redemption ”) and (2) the termination and release of the pledge of, security interest in and all other liens on the shares of Common Stock created pursuant to the Pledge Agreement dated June 4, 2004 (the “ MHCI Pledge Agreement ”) between MHCI and Merrill Lynch, PCG, Inc. (the “ Termination and Release ”);

 

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(g) the Company and MHCI shall have filed a certificate of merger (the “ Merger Certificate ”) with the Secretary of State of the State of Delaware and MHCI shall have merged with and into the Company, with the Company as the surviving corporation, all as provided in the Merger Certificate and the Merger Agreement (the “ Merger ”);

 

(h) all shares of Common Stock held by Morton’s Holdings, LLC (“ MHLLC ”), upon the consummation of the Merger, shall have been distributed to MHLLC’s unitholders (the “ Distribution ”) in accordance with the terms of MHLLC’s Second Amended and Restated Limited Liability Company Agreement dated as of October 29, 2002, as amended if applicable (the “ LLC Agreement ”);

 

(i) the Credit Agreement by and among the Company, Morton’s of Chicago, Inc. as borrower, Wachovia Bank, National Association as administrative agent, Royal Bank of Canada as syndication agent and the other parties thereto (the “ Credit Agreement ”) shall have been executed and delivered by the parties thereto; and

 

(j) the Company shall have accepted the tendered 7.5% Notes for payment (subject to appropriate pro ration if the tender offer is over-subscribed) by a written notice to the depositary for the Tender Offer and otherwise in accordance with the terms of the Tender Offer (the “ Acceptance ”);

 

all on the terms contemplated by the Statutory Prospectus (as defined below), the Prospectus and this Agreement. The Amendment and Restatement, the Stock Split, the receipt of sufficient tenders and consents to effect the Indenture Amendments and the Repurchase and Redemption, the execution and delivery of the Supplemental Indenture by the parties thereto, the execution and delivery of the Merger Agreement by the parties thereto, the Merger, the Distribution, the execution and delivery of the Redemption Agreement by the parties thereto, the execution and delivery of the Credit Agreement by the parties thereto and the Acceptance are hereinafter called, collectively, the “ Pre-Closing Transactions ”.

 

At and simultaneously with the purchase of the Firm Shares by the Underwriters on the First Closing Date referred to in Section 2(b):

 

(a) the management agreement entered into on July 25, 2002 and amended on July 7, 2003 between MHLLC and Castle Harlan, Inc. (the “ Management Agreement ”) shall have been terminated;

 

(b) the agreement dated October 29, 2002 among Castle Harlan, Inc., Laurel Crown Capital, LLC: Series One-LC/Morton’s and MHLLC regarding management fees with respect to MHLLC and its subsidiaries (the “ Laurel Crown Agreement ”) shall have been terminated;

 

(c) the senior secured working capital facility dated July 7, 2003 among the Company, Wells Fargo Foothill, Inc. and the borrower and guarantors thereunder (the “ Prior Working Capital Facility ”) shall have been terminated and all pledges, security interests and other liens relating thereto shall have been terminated and released and all pledges, security interests and other liens relating thereto shall have been terminated and released;

 

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(d) all outstanding 14% Notes shall have been redeemed by the Company pursuant to the Redemption Agreement at the price and on the other terms reflected in the Prospectus and the Termination and Release shall have been effected;

 

(e) all outstanding 7.5% Notes shall have been repurchased or redeemed by the Company at the price and on the other terms reflected in the Prospectus and all pledges, security interests and other liens relating thereto shall have been terminated and released; and

 

(f) the Company shall have made a borrowing under the Credit Agreement in the amount contemplated under “Use of Proceeds” in the Prospectus;

 

all on the terms contemplated by the Statutory Prospectus, the Prospectus and this Agreement. The items set forth in (a) through (f) immediately above are hereinafter called, collectively, the “ Closing Transactions ”.

 

As used herein, the term “ Unitholders Agreement ” means the Amended and Restated Unitholders Agreement dated as of October 29, 2002 among MHLLC, Castle Harlan Partners III, L.P. and the other parties thereto, as amended, if applicable.

 

The Company and each of the Selling Stockholders hereby confirms its agreement with the Underwriters as follows:

 

Section 1. Representations and Warranties .

 

A. Representation and Warranties of the Company . The Company represents, warrants and covenants to each Underwriter as of the date hereof, as of the Initial Sale Time referred to in Section 1(A)(c) hereof, as of the First Closing Date referred to in Section 2(b) and 2(c) hereof, and as of each Subsequent Closing Date (if any) referred to in Section 2(c) hereof, as follows:

 

(a) Filing of the Registration Statement . The Company has prepared and filed with the Securities and Exchange Commission (the “ Commission ”) a registration statement on Form S-1 (File No. 333-130072), which contains a form of prospectus to be used in connection with the public offering and sale of the Shares. Such registration statement, as amended, including the financial statements, exhibits and schedules thereto, in the form in which it was declared effective by the Commission under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the “ Securities Act ”), and including any information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A under the Securities Act, or pursuant to the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder (collectively, the “ Exchange Act ”), is called the “ Registration Statement .” Any related registration statement filed by the Company pursuant to Rule 462(b) under the Securities Act is called the “ Rule 462(b) Registration Statement ,” and from and after the date and time of filing of the Rule 462(b) Registration Statement the term “ Registration Statement ” shall include the Rule 462(b) Registration Statement. Such prospectus, in the form first filed pursuant to Rule 424(b) under the Securities Act after the date and time that this Agreement is executed and delivered by the parties hereto (the “ Execution Time ”), or, if no filing pursuant to Rule 424(b) under the Securities Act is required, the form of final prospectus relating to the Shares included in the Registration Statement at the effective date of the

 

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Registration Statement, is called the “ Prospectus .” The term “ Statutory Prospectus ” shall mean the preliminary prospectus dated January 23, 2006 prepared by the Company in connection with the offering of the Shares. All references in this Agreement to the Registration Statement, the Rule 462(b) Registration Statement, any preliminary prospectus included in the Registration Statement (each a “ preliminary prospectus ”), the Prospectus, the Statutory Prospectus or any amendments or supplements to any of the foregoing, shall include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“ EDGAR ”). Any reference to a “Prospectus wrapper” or similar reference shall include, without limitation, any so-called “Canadian wrapper”, whether in preliminary or final form, prepared in connection with the private placement of Shares in certain provinces of Canada.

 

(b) Compliance with Registration Requirements . The Registration Statement has been declared effective by the Commission under the Securities Act. To the Company’s knowledge, it has complied to the Commission’s satisfaction with all requests of the Commission for additional or supplemental information. No stop order preventing or suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened by the Commission.

 

Each preliminary prospectus, the Statutory Prospectus and the Prospectus when filed complied in all material respects with the Securities Act and, if filed by electronic transmission pursuant to EDGAR (except as may be permitted by Regulation S-T under the Securities Act), was identical in content to the copy thereof delivered to the Underwriters for use in connection with the offer and sale of the Shares other than with respect to any artwork and graphics that were not filed. Each of the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendment thereto, at the time it became effective, complied, and at all subsequent times will comply, in each instance in all material respects with the Securities Act and did not and will not contain any 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. The Prospectus (including any Prospectus wrapper), as amended or supplemented if applicable, as of its date and at all subsequent times, did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences do not apply to statements in or omissions from the Registration Statement, any Rule 462(b) Registration Statement, or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by any Underwriter through the Representative expressly for use therein, it being understood and agreed that the only such information furnished by the Representative consists of the information described as such in the penultimate sentence of Section 7(b) hereof. There are no contracts or other documents required by the Securities Act to be described in the Prospectus or to be filed as exhibits to the Registration Statement that have not been described or filed as required.

 

(c) Disclosure Package . The term “ General Disclosure Package ” shall mean (i) the Statutory Prospectus, (ii) any Issuer Free Writing Prospectus (as defined below) identified in Schedule D to this Agreement, (iii) the terms set forth in Schedule E to this Agreement, and (iv)

 

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any other free writing prospectus (as defined in Rule 405 under the Securities Act) that the parties hereto expressly agree, prior to the date hereof, in writing to treat as part of the General Disclosure Package. The term “ Reserved Shares Disclosure Package ” shall mean (i) the Statutory Prospectus, (ii) any Issuer Free Writing Prospectus identified in Schedule D hereto, (iii) the Issuer Free Writing Prospectus identified in Schedule F hereto and (iv) any other free writing prospectus (as defined in Rule 405 under the Securities Act) that the parties hereto expressly agree, prior to the date hereof, in writing to treat as part of the Reserved Shares Disclosure Package. The term “ Issuer Free Writing Prospectus ” shall mean any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act relating to the Shares, including, without limitation, any such issuer free writing prospectus that (i) is required to be filed with the Commission by the Company, (ii) is a “road show for an offering that is a written communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Shares or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form required to be retained in the Company’s records pursuant to Rule 433(g) and including, without limitation, all electronic roadshows relating to the offering of the Shares. The General Disclosure Package and the Reserved Shares Disclosure Package are hereinafter sometimes referred to, individually, as a “Disclosure Package” and, collectively, as the “ Disclosure Packages .” As of [ l ] a.m. (New York City time) on [ l ], 2006 (the “ Initial Sale Time ”), (i) neither of the Disclosure Packages and (ii) no individual Issuer Free Writing Prospectus when considered together with each Disclosure Package, will contain any untrue statement of a material fact or will omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Disclosure Package made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through the Representative expressly for use therein, it being understood and agreed that the only such information furnished by the Representative consists of the information described as such in the penultimate sentence of Section 7(b) hereof.

 

(d) Company Not Ineligible Issuer . (i) At the time of filing the Registration Statement and (ii) as of the date of the execution and delivery of this Agreement (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405 of the Securities Act).

 

(e) Issuer Free Writing Prospectuses . No Issuer Free Writing Prospectus includes any information that conflicts with the information contained in the Registration Statement. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through the Representative expressly for use therein, it being understood and agreed that the only such information furnished by the Representative consists of the information described as such in the penultimate sentence of Section 7(b) hereof.

 

(f) Bona Fide Electronic Road Show . The Company has made available a “bona fide electronic road show,” within the meaning of and in compliance with Rule 433(d)(8)(ii) under the Securities Act, such that no filing of any “road show” (as defined in Rule 433(h) under the Securities Act) is required in connection with the offering of the Shares.

 

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(g) Distribution of Offering Material By the Company . The Company has not distributed and will not distribute, prior to the later of the last Subsequent Closing Date (as defined below) and the completion of the Underwriters’ distribution of the Shares, any offering material in connection with the offering and sale of the Shares other than the Statutory Prospectus, the Prospectus (including any Prospectus wrapper reviewed and consented to by the Representative), any Issuer Free Writing Prospectus reviewed and consented to by the Representative or the Registration Statement.

 

(h) The Underwriting Agreement . This Agreement has been duly authorized, executed and delivered by the Company.

 

(i) Authorization of the Shares . The Shares to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement, will be validly issued, fully paid and nonassessable; the issuance and sale of the Shares to be purchased by the Underwriters from the Company are not subject to any preemptive rights, right of first refusal or other similar rights to subscribe for or purchase such Shares.

 

(j) No Applicable Registration or Other Similar Rights . There are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, other than the Selling Stockholders with respect to the Shares included in the Registration Statement.

 

(k) No Material Adverse Change . Except as otherwise disclosed in each Disclosure Package, subsequent to the dates as of which information is given in each Disclosure Package: (i) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business, operations or prospects, whether or not arising from transactions in the ordinary course of business, of (a) the Company and its subsidiaries, considered as one entity (any such change is called a “ Company Material Adverse Change ”) or (b) MHCI and its subsidiaries, considered as one entity (any such change is called a “ MHCI Material Adverse Change ”); (ii) neither the Company and its subsidiaries, considered as one entity, nor MHCI, have incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; and (iii) there has been no dividend or distribution of any kind declared, paid or made by MHCI or the Company or, except for dividends paid to the Company or other subsidiaries, any of its subsidiaries on any class of capital stock or repurchase or redemption by MHCI or the Company or any of its subsidiaries of any class of capital stock. As used herein, the term “ Material Adverse Change ” means a Company Material Adverse Change or a MHCI Material Adverse Change, and statements to the effect that there has not been or will not be a Material Adverse Change or that certain events or circumstances will not cause or result in a Material Adverse Change and other similar statements mean that there has not or will not be, or such event or circumstance has not caused or will not cause, as the case may be, either a Company Material Adverse Change or a MHCI Material Adverse Change or both.

 

(l) Independent Accountants . KPMG LLP, who have expressed their opinion with respect to the financial statements (which term as used in this Agreement includes the related

 

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notes thereto) filed with the Commission as a part of the Registration Statement and included in each Disclosure Package and the Prospectus, is an independent registered public accounting firm with respect to the Company and MHCI as required by the Securities Act and the Exchange Act.

 

(m) Preparation of the Financial Statements . The financial statements of the Company and the financial statements of MHCI filed with the Commission as a part of the Registration Statement, and included in each Disclosure Package and the Prospectus, present fairly in all material respects the consolidated financial position of the Company and its subsidiaries and MHCI and its subsidiaries, respectively, as of and at the dates indicated and the results of their respective operations and cash flows for the periods specified. Such financial statements comply as to form in all material with the applicable accounting requirements of the Securities Act and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. The pro forma financial data included in each of the Registration Statement, each Disclosure Package and the Prospectus present fairly in all material respects the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial data and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. No other financial statements or supporting schedules are required to be included in the Registration Statement. The financial data set forth in each of the Statutory Prospectus and the Prospectus under the captions “Prospectus Summary—Summary Consolidated Historical and Unaudited Pro Forma Financial Data,” “Capitalization” and “Selected Consolidated Financial Data” fairly present the information set forth therein on a basis consistent with that of the audited financial statements contained in the Registration Statement.

 

(n) Incorporation and Good Standing of the Company and its Subsidiaries and MHCI . Each of the Company and its subsidiaries and MHCI has been duly incorporated and is validly existing as a corporation (or, in the case of any subsidiary that is not a corporation, as the type of entity that it purports to be) in good standing under the laws of the jurisdiction of its organization and has power (corporate or other, as the case may be) and authority to own, lease and operate its properties and to conduct its business as described in each Disclosure Package and the Prospectus and, in the case of the Company, to enter into and perform its obligations under this Agreement, the Merger Agreement, the Redemption Agreement, the Supplemental Indenture and the Credit Agreement and to consummate the Pre-Closing Transactions and the Closing Transactions, and, in the case of MHCI, to enter into and perform its obligations under the Merger Agreement and the Redemption Agreement. The Company and each of its subsidiaries is duly qualified as a foreign corporation (or, in the case of any subsidiary that is not a corporation, as the type of entity that it purports to be) to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse Change. All of the issued and outstanding capital stock of or other equity interests in each subsidiary of the Company have been duly authorized and validly issued, are fully paid and (except in the case of partnership interests) nonassessable and are owned by the Company, directly or through subsidiaries. As of the time of the sale and purchase of the Firm Shares as provided herein on the First Closing Date, the outstanding capital stock of and

 

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other equity interests in each of the Company’s subsidiaries will be free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim other than those securing obligations under the Credit Agreement. From January 2, 2005 until the consummation of the Merger, all of the outstanding shares of Common Stock have been and will be owned, directly, by MHCI and, at all times from the time of the Merger until the time of the Distribution, all of the outstanding shares of Common Stock will be owned by MHLLC. At all times from January 2, 2005 until the MHCI Stock Split, the only issued and outstanding shares of capital stock of MHCI consisted of 1,000 shares of its common stock, par value $.01 per share; and, at all times from the time of the MHCI Stock Split until the consummation of the Merger, the only issued and outstanding shares of capital stock of MHCI consisted and will consist of 10,098,500 shares of its common stock, par value $.01 per share. The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Exhibit 21 to the Registration Statement. Since the time of its organization, MHCI has not engaged in any operating business and, at all times until consummation of the Merger, MHCI has not had and will not have any assets other than the Common Stock of the Company and cash. MHCI does not have any direct or indirect subsidiaries other than the Company and the Company’s direct and indirect subsidiaries.

 

(o) Capitalization and Other Capital Stock Matters . The authorized, issued and outstanding capital stock of the Company is as set forth in the Statutory Prospectus and the Prospectus under the caption “Capitalization” (other than for subsequent issuances, if any, pursuant to this Agreement or pursuant to employee benefit plans described in the Statutory Prospectus and the Prospectus or upon exercise of outstanding options described in the Statutory Prospectus and Prospectus, as the case may be). The Common Stock (including the Shares) conforms in all material respects to the description thereof contained in each Disclosure Package and the Prospectus. All of the issued and outstanding shares of Common Stock (including the shares of Common Stock owned by Selling Stockholders) have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with federal and state securities laws. None of the outstanding shares of Common Stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those described in each Disclosure Package and the Prospectus. The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in each Disclosure Package and the Prospectus accurately and fairly presents in all material respects the information required to be shown with respect to such plans, arrangements, options and rights. As of the time of the purchase of Shares by the Underwriters on the First Closing Date and each Subsequent Closing Date (if any), the Shares will be free and clear of any and all security interests, mortgages, pledges, liens, encumbrances, claims and equities other than those arising in favor of the Underwriters pursuant to this Agreement or the Custody Agreements (as defined below).

 

(p) Quotation . The Shares have been approved for listing on the New York Stock Exchange under the symbol “MRT,” subject only to official notice of issuance.

 

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(q) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required . Neither the Company nor any of its subsidiaries nor MHCI (i) is in violation of its charter or by laws or other organizational documents, as applicable, (ii) is in default (or, with the giving of notice or lapse of time, would be in default) (“ Default ”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company or any of its subsidiaries or MHCI is a party or by which it or any of them may be bound (including, without limitation, such agreements and contracts filed as exhibits to the Registration Statement or to which any of the property or assets of the Company or any of its subsidiaries or MHCI is subject (each, an “ Existing Instrument ”)) or (iii) assuming compliance with all applicable state securities or “Blue Sky” laws and Canadian securities laws, is in violation of any law, administrative regulation or administrative, arbitration or court order or decree applicable to the Company or any subsidiary or MHCI, except, solely with respect to clauses (ii) and (iii) for such violations or Defaults as would not, individually or in the aggregate, result in a Material Adverse Change. The Company’s execution, delivery and performance of this Agreement, the Merger Agreement, the Redemption Agreement, the Supplemental Indenture and the Credit Agreement and consummation of the transactions contemplated hereby and by each Disclosure Package and the Prospectus (including the Pre-Closing Transactions and the Closing Transactions, the issuance and sale of the Shares to be sold by the Company and the use of proceeds from the sale of the Shares, together with borrowings under the Credit Agreement and available cash, as described in the Statutory Prospectus and in the Prospectus under “Use of Proceeds”) and MHCI’s execution, delivery and performance of the Merger Agreement and the Redemption Agreement and the consummation of the MHCI Stock Split (i) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the charter or by laws or other organizational documents, as the case may be, of the Company or any subsidiary or MHCI, (ii) will not conflict with or constitute a breach of, or Default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries or MHCI pursuant to, or require the consent of any other party to, any Existing Instrument, except for such conflicts, breaches, Defaults, liens, charges or encumbrances as would not, individually or in the aggregate, result in a Material Adverse Change and except for liens, charges and encumbrances created pursuant to the Credit Agreement to secure obligations of the Company and its subsidiaries thereunder and (iii) will not result in any violation of any law, administrative regulation or administrative or court order or decree applicable to the Company or any subsidiary or MHCI. (A) No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, (B) no authorization, approval, vote or other consent of any stockholder or creditor of the Company or any of its subsidiaries or MHCI or any member of MHLLC, (C) no waiver, consent or other action under any Existing Instrument, and (D) to the Company’s knowledge, no authorization, approval, vote or other consent of any other person or entity, is necessary is required for the Company’s execution, delivery and performance of this Agreement, the Merger Agreement, the Redemption Agreement, the Supplemental Indenture and the Credit Agreement and consummation of the transactions contemplated hereby and by each Disclosure Package and the Prospectus (including the Pre-Closing Transactions and the Closing Transactions, the issuance and sale of the Shares to be sold by the Company and the use of proceeds from the sale of the Shares, together with borrowings under the Credit Agreement and available cash, as described in the Statutory Prospectus and in the Prospectus under “Use of Proceeds”) and MHCI’s execution, delivery and performance of the Merger Agreement and the

 

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Redemption Agreement and the consummation of the MHCI Stock Split, except such as have been obtained or made or will be obtained or made by the Company, in each instance on or prior to the First Closing Date, and are and will be in full force and effect and except that no representation or warranty is made with respect to those required under applicable state securities or “blue sky” laws or applicable Canadian securities laws or those required in connection with the review of the terms of the offering by the NASD.

 

(r) No Material Actions or Proceedings . Except as otherwise disclosed in each Disclosure Package and the Prospectus, there are no legal or governmental actions, suits or proceedings pending or, to the Company’s knowledge, threatened (i) against or affecting the Company or any of its subsidiaries or MHCI, (ii) which have as the subject thereof any officer or director (in such capacities) of, or property owned or leased by, the Company or any of its subsidiaries or MHCI or (iii) relating to environmental or discrimination matters, where in any such case (A) there is a reasonable possibility that such action, suit or proceeding might be determined adversely to the Company or such subsidiary or MHCI and (B) any such action, suit or proceeding, if so determined adversely, would reasonably be expected to result in a Material Adverse Change or adversely affect the consummation of the transactions contemplated by this Agreement (including, without limitation, the Pre-Closing Transactions and the Closing Transactions, the issuance and sale of the Shares to be sold by the Company and the use of proceeds from the sale of the Shares, together with borrowings under the Credit Agreement and available cash, as described in the Statutory Prospectus and in the Prospectus under “Use of Proceeds”). No material labor dispute with the employees of the Company or any of its subsidiaries or MHCI exists or, to the Company’s knowledge, is threatened or imminent, except for such disputes or disturbances as would not, individually or in the aggregate, result in a Material Adverse Change.

 

(s) Intellectual Property Rights . The Company and its subsidiaries and MHCI own or possess sufficient trademarks, trade names, patent rights, copyrights, domain names, licenses, approvals, trade secrets and other similar rights (collectively, “ Intellectual Property Rights ”) reasonably necessary to conduct their businesses as now conducted; and the expected expiration of any of such Intellectual Property Rights would not result in a Material Adverse Change. Neither the Company nor any of its subsidiaries nor MHCI has received any notice of infringement or conflict with asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of an unfavorable decision, would result in a Material Adverse Change. Neither the Company nor any of its subsidiaries nor MHCI is a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Statutory Prospectus and the Prospectus and are not described in all material respects. None of the technology employed by the Company or any of its subsidiaries or MHCI has been obtained or is being used by the Company or any of its subsidiaries or MHCI in violation of any contractual obligation binding on it or, to the Company’s knowledge, any of its officers, directors or employees or otherwise in violation of the rights of any persons.

 

(t) All Necessary Permits, etc . Except as otherwise disclosed in each Disclosure Package and the Prospectus or except as would not result, individually or in the aggregate, in a Material Adverse Change, the Company and each subsidiary and MHCI possess such valid and current licenses, certificates, authorizations or permits issued by the appropriate state, federal or

 

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foreign regulatory agencies or bodies necessary to conduct the businesses now operated by them, and neither the Company nor any subsidiary nor MHCI has received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such license, certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could result in a Material Adverse Change.

 

(u) Title to Properties . The Company and each of its subsidiaries and MHCI have good and marketable title to all the properties and assets reflected as owned in the financial statements referred to in Section 1(A)(m) above (or elsewhere in each Disclosure Package and the Prospectus), in each case, except as disclosed in each Disclosure Package and in the Prospectus, free and clear of any security interests, mortgages, liens, encumbrances, equities, claims and other defects, except such as do not materially and adversely affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by the Company or such subsidiary or MHCI, as the case may be. The real property, improvements, equipment and personal property held under lease by the Company or any subsidiary or MHCI are held under valid and enforceable leases, with such exceptions that do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary or MHCI, as the case may be.

 

(v) Tax Law Compliance . The Company and its consolidated subsidiaries and MHCI have filed all necessary federal, state, local and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them or have requested extensions thereof and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except for any such tax, assessment, fine or penalty which is currently being contested in good faith by appropriate actions and except for such taxes, assessments, fines or penalties, the non-payment of which would not, individually or in the aggregate, result in a Material Adverse Change. The Company and MHCI have made what the Company believes are adequate charges, accruals and reserves in the applicable financial statements referred to in Section 1(A)(m) above in respect of all federal, state, local and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its consolidated subsidiaries or MHCI or any of its consolidated subsidiaries, as the case may be, has not been finally determined.

 

(w) Company Not an “Investment Company .” The Company is not, and after receipt of payment for the Shares to be sold by the Company and the application of the proceeds thereof, together with borrowings under the Credit Agreement and available cash, as contemplated under the caption “Use of Proceeds” in each of the Statutory Prospectus and the Prospectus and consummation of the Pre-Closing Transactions and the Closing Transactions will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”), and will conduct its business in a manner so that it will not become subject to the Investment Company Act.

 

(x) Insurance . Each of the Company and its subsidiaries are insured by recognized, financially sound and reputable institutions, with policies in such amounts and with such deductibles and covering such risks as the Company reasonably believes are adequate and customary for their businesses including, but not limited to, policies covering real and personal property owned or leased by the Company and its subsidiaries against theft, damage, destruction,

 

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acts of vandalism and earthquakes. The Company reasonably believes that it and each of its subsidiaries will be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change. Neither of the Company nor any subsidiary has been denied any insurance coverage which it has sought or for which it has applied.

 

(y) No Price Stabilization or Manipulation . Neither the Company nor MHCI has taken nor will take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Shares.

 

(z) Related Party Transactions . There are no business relationships or related-party transactions involving MHCI, the Company or any subsidiary or any other person required to be described in the Registration Statement, the Statutory Prospectus or the Prospectus that have not been described as required.

 

(aa) Disclosure Controls and Procedures . The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, (ii) are evaluated for effectiveness as of the end of each fiscal quarter and fiscal year of the Company and (iii) are effective in all material respects to perform the functions for which they were established. The Company is not aware of (a) any significant deficiency in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data or any material weaknesses in internal controls or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls.

 

(bb) Accounting System . Each of the Company and MHCI maintains a system of 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.

 

(cc) No Unlawful Contributions or Other Payments . Neither the Company nor any of its subsidiaries nor MHCI nor, to the Company’s knowledge, any employee or agent of the Company or any of its subsidiary or MHCI, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the character required to be disclosed in the Registration Statement, the Statutory Prospectus or the Prospectus.

 

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(dd) Compliance with Environmental Laws . Except as would not, individually or in the aggregate, result in a Material Adverse Change (i) neither the Company nor any of its subsidiaries nor MHCI is in violation of any federal, state, local or foreign law or regulation relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products (collectively, “ Materials of Environmental Concern ”), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environment Concern (collectively, “ Environmental Laws ”), which violation includes, but is not limited to, noncompliance with any permits or other governmental authorizations required for the operation of the business of the Company or its subsidiaries or MHCI under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of its subsidiaries or MHCI received any written communication, whether from a governmental authority, citizens’ group, employee or otherwise, that alleges that the Company or any of its subsidiaries or MHCI is in violation of any Environmental Law; (ii) there is no claim, action or cause of action filed with a court or governmental authority, no investigation with respect to which the Company or MHCI has received written notice, and no written notice by any person or entity alleging potential liability for investigatory costs, cleanup costs, governmental responses costs, natural resources damages, property damages, personal injuries, attorneys’ fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by the Company or any of its subsidiaries or MHCI, now or in the past (collectively, “ Environmental Claims ”), pending or, to the best of the Company’s knowledge, threatened against the Company or any of its subsidiaries or MHCI or any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law; and (iii) to the best of the Company’s knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that reasonably could result in a violation of any Environmental Law or form the basis of a potential Environmental Claim against the Company or any of its subsidiaries or MHCI or against any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries or MHCI has retained or assumed either contractually or by operation of law.

 

(ee) ERISA Compliance . Any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ ERISA ”)) established or maintained by the Company, its subsidiaries, MHCI or their “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA. “ ERISA Affiliate ” means, with respect to the Company or a subsidiary or MHCI, any member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “ Code ”) of which the Company or such subsidiary or MHCI is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its subsidiaries, MHCI or any of their ERISA Affiliates. Neither the Company, its subsidiaries, MHCI nor any of their ERISA Affiliates has incurred or

 

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reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971 or 4975 of the Code. Each “employee benefit plan” established or maintained by the Company, its subsidiaries or MHCI that is intended to be qualified under Section 401(a) of the Code has received a favorable termination letter and nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.

 

(ff) Compliance with Sarbanes-Oxley Act of 2002 . To the extent that the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith have been applicable to the Company, there is and has been no failure on the part of the Company to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith.

 

(gg) Statistical Data . The statistical, demographic and market-related data prepared by third parties included in the Statutory Prospectus and the Prospectus is based on or derived from sources that are reliable and accurate in all material respects.

 

(hh) Pre-Closing Transactions . The Pre-Closing Transactions have been or will be consummated prior to the execution and delivery of this Agreement or the First Closing Date, as the case may be, all in the manner, at the times and on the terms contemplated by this Agreement, the Statutory Prospectus and the Prospectus. As of the date hereof, to the knowledge of the Company, there is no fact or circumstance that will prevent or delay the Company or MHCI from consummating any of the Pre-Closing Transactions.

 

(ii) Closing Transactions. The Closing Transactions will be consummated at and simultaneously with the sale and purchase of the Firm Shares as provided herein on the First Closing Date, all in the manner, at the times and on the terms contemplated by this Agreement, the Statutory Prospectus and the Prospectus. As of the date hereof, to the knowledge of the Company, there is no fact or circumstance that will prevent or delay the Company, MHCI or MHLLC from consummating any of the Closing Transactions.

 

(jj) Parties to Lock-Up Agreements . Each of the Company’s directors and officers and each of the persons listed on Schedule C hereto has executed and delivered to the Representative a lock-up agreement in the form of Exhibit E hereto. Schedule C hereto contains a true, complete and correct list of all directors and officers of the Company.

 

(kk) Merger Agreement . The Merger Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company and MHCI, enforceable against the Company and MHCI in accordance with its terms, except as enforcement thereof may be subject to or limited by bankruptcy, insolvency or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

 

(ll) Merger. The Company agrees to treat the Merger as a tax-free reorganization pursuant to Section 368(a)(1) of the Internal Revenue Code of 1986, as amended, and to take no action inconsistent with such treatment. The consummation of the Merger will not result in a Material Adverse Change.

 

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(mm) Tender Offer . The Tender Offer (including the related consent solicitation), the Indenture Amendments and the Repurchase and Redemption have been or will be conducted or obtained in accordance with the provisions of the 7.5% Indenture, as, in the case of the Repurchase and Redemption, amended by the Supplemental Indenture.

 

(nn) Supplemental Indenture. The Supplemental Indenture has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be subject to or limited by bankruptcy, insolvency or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles; and the Supplemental Indenture has been executed and delivered by the Trustee.

 

(oo) Redemption Agreement. The Redemption Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company and MHCI, enforceable against the Company and MHCI in accordance with its terms, except as enforcement thereof may be subject to or limited by bankruptcy, insolvency or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles; and the Redemption Agreement has been executed and delivered by the other parties thereto.

 

(pp) Termination of Lien. All pledges of, security interests in and liens on any shares of Common Stock created by or pursuant to the MHCI Pledge Agreement or otherwise securing the 7.5% Notes or any obligations relating thereto will be released and terminated prior to or simultaneously with the purchase of the Shares by the Underwriters on the First Closing Date and, without limitation to the foregoing, all of the Shares purchased by the Underwriters pursuant to this Agreement will, at the time of such purchase, be free and clear of any and all pledges, security interests, liens and other encumbrances. All of the pledges of, security interests in and mortgages and other liens on any other property or assets (tangible or intangible) created by or pursuant to the MHCI Pledge Agreement, the Purchase Agreement dated as of June 4, 2004 between MHCI and Merrill Lynch PCG, Inc. with respect to the 14% Notes (the “ 14% Notes Purchase Agreement ”), the 7.5% Indenture or the Working Capital Facility or otherwise securing the 7.5% Notes, the 14% Notes or borrowings under the Working Capital Facility or any other obligations relating the 7.5% Notes, the 14% Notes or the Working Capital Facility will be released and terminated prior to or simultaneously with the purchase of the Shares by the Underwriters on the First Closing Date.

 

(qq) Credit Agreement. On or prior to the First Closing Date, the Credit Agreement and all security agreements, guarantees and other instruments and agreements to be executed by the Company or any of its subsidiaries in connection therewith or pursuant thereto (including the Pledge Agreement dated as of February [ l ], 2006 among Wachovia Bank, National Association, as administration agent under the Credit Agreement, and the Guarantors and Pledgors named there in and the Security Agreement dated as of February [ l ], 2006 among Wachovia Bank National Association, as administration agent under the Credit Agreement, and the Guarantors and Obligors named therein) will have been duly authorized, executed and delivered by, and will be valid and binding obligations of, the Company and such subsidiaries, as the case may be, enforceable against the Company and such subsidiaries in accordance with their respective terms, except as enforcement thereof may be subject to or limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws relating to or affecting

 

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creditors’ rights generally and by general equitable principles; and the Credit Agreement will have been executed and delivered by the other parties thereto.

 

Any certificate signed by an officer of the Company pursuant to this Agreement and delivered to the Representative or to counsel for the Underwriters shall be deemed to be a representation and warranty by the Company to each Underwriter as to the matters set forth therein.

 

The Company acknowledges that the Underwriters and, for purposes of the opinions to be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

 

B. Representations and Warranties of the Selling Stockholders.

 

(a) Each of Castle Harlan Partners III, L.P., Castle Harlan Offshore Partners III, L.P., Castle Harlan Affiliates III, L.P., Frogmore Forum Family Fund LLC, Brandford Castle Holdings, Inc.. Leonard M. Harlan and Allen J. Bernstein, severally and not jointly, represents, warrants and covenants to each Underwriter as follows:

 

(i) The Underwriting Agreement . This Agreement has been duly authorized (if such Selling Stockholder is not a natural person), and has been duly executed and delivered, by such Selling Stockholder.

 

(ii) The Power of Attorney and Custody Agreement . Certificates in negotiable form representing all of the Shares to be sold by such Selling Stockholder hereunder will, prior to 9:00 a.m. New York time on the First Closing Date, be placed in custody under a Letter of Transmittal and Custody Agreement, in the form heretofore furnished to you (a “ Custody Agreement ”) between such Selling Stockholder and American Stock Transfer & Trust Company, as custodian (the “ Custodian ”). Such Selling Stockholder has duly authorized (if such Selling Stockholder is not a natural person), and has duly executed and delivered, a power of attorney (a “ Power of Attorney ”) appointing Justin B. Wender and David B. Pittaway, and each of them, as such Selling Stockholder’s attorneys in fact (the “ Attorneys-in-Fact ” or “ Attorneys in Fact ”) each with authority, acting alone, to execute and deliver this Agreement on behalf of such Selling Stockholder, to determine the purchase price to be paid by the Underwriters to such Selling Stockholder as provided in Section 2 hereof, to determine and approve the number of shares to be sold by such Selling Stockholder hereunder, to authorize the delivery of the Shares to be sold by such Selling Stockholder hereunder and otherwise to act on behalf of such Selling Stockholder, to the extent authorized in the Power of Attorney, in connection with the transactions contemplated by this Agreement and the Custody Agreement. Each of the Power of Attorney and the Custody Agreement has been duly authorized (if such Selling Stockholder is not a natural person), and has been duly executed and delivered, by such Selling Stockholder and is a valid and binding agreement of such Selling Stockholder, enforceable against such Selling Stockholder in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization,

 

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moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(iii) Good Standing; Power and Authority . If such Selling Stockholder is not a natural person, such Selling Stockholder has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its organization and, if such Selling Stockholders’ principal place of business is located in a state that is different from the state under whose laws such Selling Stockholder is organized, such Selling Stockholder is duly qualified to transact business and is in good standing in the state in which its principal place of business is located. Such Selling Stockholder has the requisite right, power and authority to execute, deliver and perform its obligations under this Agreement, its Power of Attorney and its Custody Agreement and to sell, transfer and deliver the Shares to be sold by such Selling Stockholder under this Agreement.

 

(iv) Obligations of the Selling Stockholder . The Shares represented by the certificates to be held in custody for such Selling Stockholder under the Custody Agreement are subject to the interests of the Underwriters hereunder; the arrangements made by such Selling Stockholder for such custody, and the appointment by such Selling Stockholder of the Attorneys in Fact by the Power of Attorney, are to that extent irrevocable; the obligations of the Selling Stockholders under the Custody Agreement, the Power of Attorney and this Agreement shall not be terminated by operation of law, whether by the death or incapacity of any individual Selling Stockholder or, in the case of an estate or trust, by the death or incapacity of any executor or trustee or the termination of such estate or trust, or in the case of a partnership, limited liability company or corporation, by the dissolution of such partnership, limited liability company or corporation, or by the occurrence of any other event; if any individual Selling Stockholder or any such executor or trustee should die or become incapacitated, or if any such estate or trust should be terminated, or if any such partnership, limited liability company or corporation should be dissolved, or if any other such event should occur, before the delivery of the Shares hereunder, certificates representing the Shares shall be delivered by or on behalf of such Selling Stockholder in accordance with the terms and conditions of this Agreement and of the Power of Attorney and the Custody Agreement; and actions taken by the Attorneys in Fact pursuant to the Power of Attorney and the Custody Agreement shall be as valid as if such death, incapacity, termination, dissolution or other event had not occurred, regardless of whether or not the Custodian or the Attorneys in Fact, or any of them, shall have received notice of such death, incapacity, termination, dissolution or other event.

 

(v) Title to Shares to be Sold; All Authorizations Obtained . Such Selling Stockholder is, on the date hereof, and will remain, until delivery of such Shares to the Underwriters on the First Closing Date, the sole record owner of all of the Shares to be sold by such Selling Stockholder hereunder and has duly indorsed such Shares in blank or has duly signed (in blank) a stock power assigning all right, title and interest to the Shares to be sold by such Selling Stockholder; at the time that the Shares to be sold by such Selling Stockholder are delivered to the Underwriters pursuant to this Agreement, such Shares will be free and clear of all liens, encumbrances, equities and claims. On the First Closing Date, such Selling Stockholder will deliver the Shares to be sold by such Selling

 

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Stockholder to the Underwriters and, upon payment for the Shares to be sold by such Selling Stockholder as provided in this Agreement, delivery of such Shares to The Depository Trust Company (“DTC”) or its agent, registration of such Shares in the name of Cede & Co. (“Cede”) or such other nominee designated by DTC, and crediting of such Shares to the several Underwriters’ accounts with DTC, each of the Underwriters will become the legal owner of the Shares purchased by it from such Selling Stockholder, free and clear of all liens, encumbrances, equities and claims (except such as may be created by any such Underwriter), Cede or such other nominee designated by DTC, as the case may be, will be a “protected purchaser” (within the meaning of Section 8-303 of the Uniform Commercial Code of the State of New York (the “UCC”)) of such Shares, each of the Underwriters will acquire a valid “security entitlement” (within the meaning of UCC Section 8 102(a)(17)) to the Shares purchased by such Underwriter from such Selling Stockholder, and no action based on any “adverse claim” (within the meaning of UCC Section 8-102(a)(1)) may be asserted against any such Underwriter with respect to such Shares (assuming that such Underwriter is without notice of any such “adverse claim”), it being understood that, for purposes of this representation and warranty, such Selling Stockholder has assumed that, when such payment, delivery and crediting occur, DTC will be registered as a “clearing corporation” within the meaning of Section 8-102(a)(5) of the UCC.

 

(vi) Non-Contravention; No Further Authorizations or Approvals Required. The execution and delivery by such Selling Stockholder of, and the performance by such Selling Stockholder of its obligations under, this Agreement, the Power of Attorney and the Custody Agreement do not and will not contravene or conflict with, result in a breach of, or constitute a Default under, or require any consent, approval or waiver (other than any such consent, approval or waiver as may have already been obtained or waived) of any other party pursuant to, (i) the charter or by-laws, certificate of limited partnership or partnership agreement, certificate of formation or limited liability company agreement, certificate of trust or trust agreement or other organizational documents of such Selling Stockholder (if such Selling Stockholder is not a natural person), or (ii) the LLC Agreement, the Unitholders Agreement, the Registration Rights Agreements and any other agreement or instrument to which such Selling Stockholder is a party or by which it is bound or under which it is entitled to any right or benefit, or (iii) any provision of applicable law or any judgment, order, decree or regulation applicable to such Selling Stockholder of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over such Selling Stockholder except, solely in the case of subclause (ii) of this paragraph and solely insofar as relates to agreements or instruments other than the LLC Agreement, the Unitholders Agreements and the Registration Rights Agreement, for any such contravention, conflict, breach or Default or failure to obtain such consent which would not, individually or in the aggregate, impair the ability of such Selling Stockholder to consummate the transactions contemplated by this Agreement, the Power of Attorney and the Custody Agreement. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental authority or agency, is required for the consummation by such Selling Stockholder of the transactions contemplated in this Agreement, except such as have been obtained or made and are in full force and effect under the Securities Act, and except that no representation or warranty is made with respect to those required under applicable state securities or “blue

 

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sky” laws or applicable Canadian securities laws or those required in connection with the review of the terms of the offering by the NASD.

 

(vii) No Registration or Other Similar Rights . Such Selling Stockholder does not have any registration or other similar rights to have any equity or debt securities registered for sale by the Company under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights that have been waived.

 

(viii) Absence of Rights of First Refusal . The Shares to be sold by such Selling Stockholder under this Agreement are not subject to any option, warrant, put, call, right of first refusal or other right to purchase or otherwise acquire any such Shares other than pursuant to this Agreement.

 

(ix) Disclosure Made by Such Selling Stockholder in the Prospectus . All information relating to such Selling Stockholder furnished by or on behalf of such Selling Stockholder in writing expressly for use in the Registration Statement, the Statutory Prospectus, the Prospectus or any free writing prospectus as defined in Rule 405 of the Securities Act (“ Free Writing Prospectus ”) or any amendment or supplement thereto used by the Company or any Underwriter, as the case may be, is and, as of the Initial Sale Time, the First Closing Date and each Subsequent Closing Date, if any, will be, true, correct, and complete in all material respects and does not and, as of the Initial Sale Time, the First Closing Date and each Subsequent Closing Date, if any, will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such information, in light of the circumstances under which they were made, not misleading. In addition, such Selling Stockholder confirms as accurate as of the date of the Statutory Prospectus, the date of the Prospectus and the First Closing Date the number of shares of Common Stock set forth opposite such Selling Stockholder’s name in each of the Statutory Prospectus and the Prospectus under the caption “Principal and Selling Stockholders” (both prior to and after giving effect to the sale of the Shares).

 

(x) No Price Stabilization or Manipulation . Such Selling Stockholder has not taken and will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares during the Prospectus Delivery Period (as defined below).

 

(xi) Confirmation of Company Representations and Warranties . Nothing has come to the attention of such Selling Stockholder that has caused such Selling Stockholder to believe that the representations and warranties of the Company contained in Section 1(A) hereof are not true and correct, such Selling Stockholder has no knowledge of any material fact, condition or information not disclosed in the Registration Statement, the Statutory Prospectus or the Prospectus which has had or which could reasonably be expected to have a Material Adverse Change, and such Selling Stockholder is not prompted to sell shares of Common Stock by any information concerning the Company which is not set forth in the Registration Statement or the Statutory Prospectus.

 

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(xii) No Free Writing Prospectuses . Such Selling Stockholder represents that it has not prepared or had prepared on its behalf or used or referred to, any Free Writing Prospectus, and represents that it has not distributed any written materials in connection with the offer or sale of the Shares that would otherwise constitute a Free Writing Prospectus required to be filed with the Commission or retained under Rule 433 of the Securities Act.

 

Any certificate signed by or on behalf of any Selling Stockholder (including any certificate signed by an Attorney-in-Fact pursuant to the Power of Attorney) and delivered to the Representative or to counsel for the Underwriters shall be deemed to be a representation and warranty by such Selling Stockholder to each Underwriter as to the matters covered thereby.

 

Such Selling Stockholder acknowledges that the Underwriters and, for purposes of the opinion to be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

 

(b) Laurel Crown Capital, LLC: Series One – LC/Morton’s (“ Laurel Crown ”) represents, warrants and covenants to each Underwriter as follows:

 

(i) The Underwriting Agreement . This Agreement has been duly authorized, executed and delivered by Laurel Crown.

 

(ii) The Power of Attorney and Custody Agreement . Certificates in negotiable form representing all of the Shares to be sold by Laurel Crown hereunder will, prior to 9:00 a.m. New York time on the First Closing Date, be placed in custody under a Custody Agreement in the form heretofore furnished to you between Laurel Crown and the Custodian. Laurel Crown has duly authorized, executed and delivered, a Power of Attorney appointing Justin B. Wender and David B. Pittaway, and each of them, as such Selling Stockholder’s Attorneys-in-Fact, each with authority, acting alone, to execute and deliver this Agreement on behalf of Laurel Crown, to determine the purchase price to be paid by the Underwriters to Laurel Crown as provided in Section 2 hereof, to authorize the delivery of the Shares to be sold by Laurel Crown hereunder and otherwise to act on behalf of Laurel Crown, to the extent authorized in the Power of Attorney, in connection with the transactions contemplated by this Agreement and the Custody Agreement. Each of the Power of Attorney and the Custody Agreement has been duly authorized, executed and delivered by Laurel Crown and is a valid and binding agreement of Laurel Crown, enforceable against Laurel Crown in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(iii) Good Standing; Power and Authority . Laurel Crown has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its organization and, if Laurel Crown’s principal place of business is located in a state that is different from the state under whose laws Laurel Crown is organized, Laurel Crown is duly qualified to transact business and is in good standing in the state in which

 

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its principal place of business is located. Laurel Crown has the requisite limited liability company power and authority to execute, deliver and perform its obligations under this Agreement, its Power of Attorney and its Custody Agreement and to sell, transfer and deliver the Shares to be sold by it under this Agreement.

 

(iv) Obligations of Laurel Crown . The Shares represented by the certificates to be held in custody for Laurel Crown under the Custody Agreement are subject to the interests of the Underwriters hereunder; the arrangements made by Laurel Crown for such custody, and the appointment by Laurel Crown of the Attorneys in Fact by the Power of Attorney, are to that extent irrevocable; the obligations of Laurel Crown under the Custody Agreement, the Power of Attorney and this Agreement shall not be terminated by operation of law, whether by the dissolution of Laurel Crown, or by the occurrence of any other event; if Laurel Crown should be dissolved, or if any other such event should occur, before the delivery of the Shares hereunder, certificates representing the Shares shall be delivered by or on behalf of Laurel Crown in accordance with the terms and conditions of this Agreement and of the Power of Attorney and the Custody Agreement; and actions taken by the Attorneys in Fact pursuant to the Power of Attorney and the Custody Agreement shall be as valid as if such dissolution or other event had not occurred, regardless of whether or not the Custodian or the Attorneys in Fact, or any of them, shall have received notice of such dissolution or other event.

 

(v) Title to Shares to be Sold; All Authorizations Obtained . Laurel Crown is, on the date hereof, and will remain, until delivery of such Shares to the Underwriters on the First Closing Date, the sole record owner of all of the Shares to be sold by Laurel Crown hereunder and has duly indorsed such Shares in blank or has duly signed (in blank) a stock power assigning all right, title and interest to the Shares to be sold by Laurel Crown; at the time that the Shares to be sold by Laurel Crown are delivered to the Underwriters pursuant to this Agreement, such Shares will be free and clear of all liens, encumbrances, equities and claims. On the First Closing Date, Laurel Crown will deliver the Shares to be sold by it to the Underwriters and, upon payment for the Shares to be sold by Laurel Crown as provided in this Agreement, delivery of such Shares to DTC or its agent, registration of such Shares in the name of Cede or such other nominee designated by DTC, and crediting of such Shares to the several Underwriters’ accounts with DTC, each of the Underwriters will become the legal owner of the Shares purchased by it from Laurel Crown, free and clear of all liens, encumbrances, equities and claims (except such as may be created by any such Underwriter), Cede or such other nominee designated by DTC, as the case may be, will be a “protected purchaser” (within the meaning of Section 8-303 of the UCC) of such Shares, each of the Underwriters will acquire a valid “security entitlement” (within the meaning of UCC Section 8 102(a)(17)) to the Shares purchased by such Underwriter from Laurel Crown, and no action based on any “adverse claim” (within the meaning of UCC Section 8-102(a)(1)) may be asserted against any such Underwriter with respect to such Shares (assuming that such Underwriter is without notice of any such “adverse claim”), it being understood that, for purposes of this representation and warranty, Laurel Crown has assumed that, when such payment, delivery and crediting occur, DTC will be registered as a “clearing corporation” within the meaning of Section 8-102(a)(5) of the UCC.

 

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(vi) Non-Contravention; No Further Authorizations or Approvals Required. The execution and delivery by Laurel Crown of, and the performance by Laurel Crown of its obligations under, this Agreement, the Power of Attorney and the Custody Agreement do not and will not contravene or conflict with, result in a breach of, or constitute a Default under, or require the consent, approval or waiver (other than any such consent, approval or waiver as may have already been obtained or waived) of any other party pursuant to, (i) the certificate of formation or limited liability company agreement or other organizational documents of Laurel Crown or (ii) the LLC Agreement, the Unitholders Agreement, the Registration Rights Agreement and any other agreement or instrument to which Laurel Crown is a party or by which it is bound or under which it is entitled to any right or benefit, or (iii) any provision of applicable law or any judgment, order, decree or regulation applicable to Laurel Crown of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over Laurel Crown except, solely in the case of subclause (ii) of this paragraph and solely insofar as relates to agreements or instruments other than the LLC Agreement, the Unitholders Agreement and the Registration Rights Agreement, for any such contravention, conflict, breach or Default or failure to obtain such consent which would not, individually or in the aggregate, impair the ability of Laurel Crown to consummate the transactions or to perform its obligations contemplated by this Agreement, the Power of Attorney and the Custody Agreement. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental authority or agency, is required for the consummation by Laurel Crown of the transactions contemplated in this Agreement, except such as have been obtained or made and are in full force and effect under the Securities Act, applicable state securities or blue sky laws and from the NASD.

 

(vii) No Registration or Other Similar Rights . Laurel Crown does not have any registration or other similar rights to have any equity or debt securities registered for sale by the Company under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights that have been waived.

 

(viii) Absence of Rights of First Refusal . The Shares to be sold by Laurel Crown under this Agreement are not subject to any option, warrant, put, call, right of first refusal or other right to purchase or otherwise acquire any such Shares other than pursuant to this Agreement.

 

(ix) Disclosure Made by Laurel Crown in the Prospectus . All information relating to Laurel Crown furnished by or on behalf of Laurel Crown in writing expressly for use in the Registration Statement, the Statutory Prospectus, the Prospectus or any Free Writing Prospectus or any amendment or supplement thereto used by the Company or any Underwriter, as the case may be, is and, as of the Initial Sale Time, the First Closing Date and each Subsequent Closing Date, if any, will be, true, correct, and complete in all material respects and does not and, as of the Initial Sale Time, the First Closing Date and each Subsequent Closing Date, if any, will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such information, in light of the circumstances under which they were made, not misleading. In addition, Laurel Crown confirms as accurate as of the date of the Statutory Prospectus, the date of the Prospectus and the First Closing Date the number of shares of Common Stock set

 

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forth opposite its name in each of the Statutory Prospectus and the Prospectus under the caption “Principal and Selling Stockholders” (both prior to and after giving effect to the sale of the Shares).

 

(x) No Price Stabilization or Manipulation . Laurel Crown has not taken and will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares during the Prospectus Delivery Period (as defined below).

 

(xi) No Free Writing Prospectuses . Laurel Crown represents that it has not prepared or had prepared on its behalf or used or referred to, any Free Writing Prospectus, and represents that it has not distributed any written materials in connection with the offer or sale of the Shares that would otherwise constitute a Free Writing Prospectus required to be filed with the Commission or retained under Rule 433 of the Securities Act.

 

Any certificate signed by or on behalf of Laurel Crown (including an certificate signed by an Attorney-in-Fact pursuant to the Power of Attorney) and delivered to the Representative or to counsel for the Underwriters shall be deemed to be a representation and warranty by Laurel Crown to each Underwriter as to the matters covered thereby.

 

Laurel Crown acknowledges that the Underwriters and, for purposes of the opinion to be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

 

Section 2. Purchase, Sale and Delivery of the Shares .

 

(a) The Firm Shares . Upon the terms herein set forth, (i) the Company agrees to issue and sell to the several Underwriters an aggregate of [ l ] Firm Shares and (ii) the Selling Stockholders agree to sell to the several Underwriters an aggregate of [ l ] Firm Shares, each Selling Stockholder selling the number of Firm Shares set forth opposite such Selling Stockholder’s name on Schedule B. On the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, each Underwriter agrees, severally and not jointly, to purchase from the Company and the Selling Stockholders the respective number of Firm Shares set forth opposite its name on Schedule A. The purchase price per Firm Share to be paid by the several Underwriters to the Company and the Selling Stockholders shall be $[ l ] per share.

 

(b) The First Closing Date . Delivery of the Firm Shares to be purchased by the Underwriters and payment therefor shall be made at the offices of Schulte, Roth & Zabel, LLP, 919 Third Avenue, New York, NY 10022 (or such other place as may be agreed to by the Company and the Representative) at 9:00 a.m. New York time on February [ l ], 2006, or such other time and date as the Representative shall designate by notice to the Company (the time and date of such closing are called the “ First Closing Date ”). The Company and the Selling Stockholders hereby acknowledge that circumstances under which the Representative may

 

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provide notice to postpone the First Closing Date as originally scheduled include, but are in no way limited to, any determination by the Company, the Selling Stockholders or the Representative to recirculate to the public copies of an amended or supplemented Prospectus or a delay as contemplated by the provisions of Section 9 or Section 18.

 

(c) The Optional Shares; each Subsequent Closing Date . In addition, on the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to an aggregate of [ l ] Optional Shares from the Company at the purchase price per share to be paid by the Underwriters for the Firm Shares. The option granted hereunder may be exercised at any time and from time to time only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of the Firm Shares upon notice by the Representative to the Company which notice may be given at any time within 30 days after the date of this Agreement. Such notice shall set forth (i) the aggregate number of Optional Shares as to which the Underwriters are exercising the option and (ii) the time, date and place at which such Optional Shares will be delivered (which time and date may be simultaneous with, but not earlier than, the First Closing Date; and in the event that such date is the same as the First Closing Date, the term “ First Closing Date ” shall refer to the time and date of delivery of the Firm Shares and the applicable Optional Shares). Each time and date of delivery, if subsequent to the First Closing Date, is called the “ Subsequent Closing Date ” and shall be determined by the Representative and shall not be earlier than three nor later than five business days after delivery of such notice of exercise.

 

If any Optional Shares are to be purchased, (a) each Underwriter agrees, severally and not jointly, to purchase the number of Optional Shares (subject to such adjustments to eliminate fractional shares as the Representative may determine) that bears the same proportion to the total number of Optional Shares to be purchased as the number of Firm Shares set forth on Schedule A opposite the name of such Underwriter bears to the total number of Firm Shares and (b) the Company agrees to sell such Optional Shares. The Representative may cancel the option at any time prior to its expiration by giving written notice of such cancellation to the Company.

 

(d) Public Offering of the Shares . The Representative hereby advise the Company and the Selling Stockholders that the Underwriters intend to offer for sale to the public, as described in the Prospectus, their respective portions of the Shares as soon after this Agreement has been executed and the Registration Statement has been declared effective as the Representat