EXHIBIT 1.1
4,000,000 SHARES
EXCELSIOR-XXXXXXXXX MOTORCYCLE
MANUFACTURING COMPANY
COMMON STOCK
UNDERWRITING AGREEMENT
_________________, 1997
XXXX X. XXXXXXX AND COMPANY, INCORPORATED
XXXXXX, XXXXXXX & XXXXX, INCORPORATED
As Representatives of the Several Underwriters
c/o Xxxx X. Xxxxxxx and Company, Incorporated
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Excelsior-Xxxxxxxxx Motorcycle Manufacturing Company, a Minnesota
corporation (the "Company") proposes to sell to the several underwriters named
in Schedule I hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), an aggregate of Four Million
(4,000,000) shares (the "Firm Shares") of Common Stock, $.01 par value, of the
Company (the "Common Stock"). In addition, to cover overallotments in
connection with the sale of the Firm Shares, the Company proposes to grant to
the Underwriters an option to purchase an additional number of shares not
exceeding 600,000 in the aggregate. The shares subject to the option are herein
called the "Option Shares." The Firm Shares and any Option Shares purchased
pursuant to this Underwriting Agreement are herein called the "Shares." As used
in this Agreement, the term "Underwriter" includes any party substituted for an
Underwriter under Section 8 hereof.
As Representatives, you have advised the Company that (i) you are
authorized to enter into this Underwriting Agreement on behalf of the
Underwriters and (ii) the Underwriters are willing, acting severally and not
jointly, to purchase the numbers of the Firm Shares, aggregating in total
4,000,000 shares, set forth opposite their respective names in Schedule I, plus
their pro rata portion of the Option Shares purchased if you elect to exercise
the overallotment option in whole or in part for the accounts of the
Underwriters.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-_____) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "Act"). If the Company has elected to
rely upon Rule 462(b) under the Act to increase the size of the offering
registered under the Act, the Company will prepare and file with the Commission
a registration statement with respect to such increase pursuant to Rule 462(b).
The registration statement, as amended, including a registration statement (if
any) filed pursuant to Rule 462(b) under the Act and the information (if any)
deemed to be part thereof pursuant to Rules 430A and 434(d) under the Act, is
herein 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 under the Act
provided by the Company 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 Act) filed by the Company with the Commission pursuant to Rule 424(b) (and
Rule 434, if applicable) under the Act or any other such prospectus provided to
the Underwriters by the Company for use in connection with the offering of the
Shares (whether or not required to be filed by the Company with the Commission
pursuant to Rule 424(b) under the Act) 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 under the Act) from and
after the time such prospectus is filed with the Commission or transmitted to
the Commission for filing pursuant to Rule 424(b) (and Rule 434, if applicable)
or from and after the time it is first provided to the Underwriters by the
Company 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 under the Act. Copies of the
Registration Statement, including all exhibits and schedules thereto, any
amendments thereto and all Preliminary Prospectuses have been delivered to you.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) The Registration Statement has been declared effective under
the Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. No stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or
threatened by the Commission.
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(ii) 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, conformed in
all material respects to the requirements of the Act and the rules and
regulations of the Commission promulgated thereunder, and 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 light of the circumstances under which they
were made, not misleading; provided, however, the Company makes no
representation or warranty as to information contained in or omitted
in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter through
the Representatives, expressly for use in the preparation thereof.
(iii) As of the time the Registration Statement was declared
effective by the Commission, upon the filing or first delivery to the
Underwriters of the Prospectus and at the First Closing Date and
Second Closing Date (each as hereinafter defined), (A) the
Registration Statement and Prospectus conformed or will conform in all
material respects to the requirements of the Act and the rules and
regulations of the Commission promulgated thereunder, (B) the
Registration Statement 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 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; provided, however, that the Company makes no
representation or warranty as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such
amendment or supplement, in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives, expressly for use in the
preparation thereof.
(iv) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Minnesota. The Company owns no capital stock or other equity or
ownership or proprietary interest in any corporation, partnership,
association, trust or other entity. The Company has the power and
authority to own or lease its properties and conduct its business as
described in the Prospectus, and is duly qualified to transact
business in all jurisdictions in which the conduct of its business or
its ownership or leasing of property requires such qualification and
the failure so to qualify would have a material adverse effect on the
condition
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(financial or otherwise), business, property, prospects, net worth or
results of operations of the Company.
(v) The Company has the authorized and outstanding
capitalization as set forth under the heading "Capitalization" in the
Prospectus. The outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. The Shares to be issued and sold by the Company to the
Underwriters pursuant to this Agreement have been duly authorized and,
when issued and paid for as contemplated herein, will be validly
issued, fully paid and nonassessable. Except as described in the
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 capital stock of the Company pursuant to
the Company's Restated Articles of Incorporation (as amended), Bylaws
or any agreement or other instrument to which the Company is a party
or by which the Company is bound. Neither the filing of the
Registration Statement nor the offering or the sale of the Shares as
contemplated by this Agreement gives rise to any rights for, or
relating to, the registration of any shares of capital stock or other
securities of the Company, except such rights which have been validly
waived or satisfied. Except as described in the Prospectus, there are
no outstanding options, warrants, agreements, contracts or other
rights to purchase or acquire from the Company any shares of its
capital stock. The outstanding capital stock of the Company conforms,
and the Shares to be issued by the Company to the Underwriters will
conform, to the description thereof contained in the Prospectus.
(vi) The financial statements (together with the notes thereto)
included in the Registration Statement and Prospectus comply in all
material respects with the requirements of the Act and present fairly
the financial position, results of operations and changes in
shareholders' equity and cash flows of the Company on the basis stated
in the Registration Statement, at the indicated dates and for the
indicated periods. Such financial statements have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, and all adjustments necessary
for a fair presentation of results for such periods have been made,
except as otherwise stated therein; and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein. No other financial statements or
schedules are required to be included in the Registration Statement.
The summary and selected consolidated financial data included in the
Registration Statement present fairly the information shown therein on
the basis stated in the Registration Statement and have been compiled
on a basis consistent with the financial statements presented
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therein. Xxxxxx Xxxxxxxx LLP, which has expressed its opinion with
respect to the financial statements filed with the Commission as part
of the Registration Statement, are independent public accountants as
required by the Act and the rules and regulations of the Commission
promulgated thereunder.
(vii) There is no action, suit or proceeding pending or, to the
knowledge of the Company, threatened or contemplated against the
Company before any court or administrative or regulatory agency,
authority or body, or any arbitrator, which might result, individually
or in the aggregate, in a material adverse change in the condition
(financial or otherwise), business, property, prospects, net worth or
results of operations of the Company, except as set forth in the
Registration Statement and the Prospectus.
(viii) The Company has good and marketable title to all
properties and assets reflected as owned in the financial statements
described above or in the Prospectus, in each case free and clear of
all liens, encumbrances, claims, security interests or defects, except
such as are described in the Prospectus or as do not substantially
affect the value of such properties and assets and do not materially
interfere with the use made and proposed to be made of such properties
and assets by the Company; and any real property and buildings held
under lease by the Company are held under valid, subsisting and
enforceable leases with only such exceptions with respect to any
particular lease as are not material and do not interfere in any
material respect with the use made and proposed to be made of such
property and buildings by the Company.
(ix) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (A) there has not
been any material adverse change in or affecting, or any event,
occurrence or development in the business of the Company that, taken
together with other events, occurrences and developments with respect
to such business, would have or would reasonably be expected to have a
material adverse effect on, the general affairs, condition (financial
or otherwise), business, key personnel, property, prospects, net worth
or results of operations of the Company (whether or not occurring in
the ordinary course of business), (B) the Company has not entered
into any transaction not in the ordinary course of business that is
material to the Company, other than transactions described or
contemplated in the Registration Statement and the Prospectus, (C) the
Company has not incurred any material liabilities or obligations,
direct or contingent, other than described or contemplated in the
Registration Statement and the Prospectus, (D) the Company has not
sustained any material loss or interference with its business or
properties from fire, flood, windstorm, accident or other calamity,
whether or not covered by insurance, (E) there has not
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been any change in the capital stock of the Company (other than upon
the exercise of options and warrants described in the Registration
Statement and the Prospectus), or any material increase in the short-
term or long-term debt (including capitalized lease obligations) of
the Company, and (F) there has not been any issuance of warrants,
options, convertible securities or other rights to purchase or acquire
any capital stock of the Company.
(x) The Company is not in violation of or in default under (A)
its Restated Articles of Incorporation (as amended) or Bylaws, (B) any
statute, rule, regulation, order, judgment, decree or authorization of
any governmental or administrative agency, court or other body having
jurisdiction over the Company or any of its properties, or (C) any
indenture, mortgage, deed of trust, loan agreement, lease, franchise,
license or other agreement or instrument to which the Company is a
party or by which it is bound or to which any property or assets of
the Company are subject, which violation or default would have a
material adverse effect on the business, condition (financial or
otherwise), results of operations, shareholders' equity or prospects
of the Company or the ability of the Company to consummate the
transactions contemplated hereby.
(xi) The Company has the power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by the
Company. The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated (A) will
not result in a breach or violation of any provision of the Restated
Articles of Incorporation (as amended) or Bylaws of the Company or any
statute, rule, regulation, order, judgment, decree or authorization of
any governmental or administrative agency, court or other body having
jurisdiction over the Company or any of its properties, and (B) will
not conflict with, result in a breach or violation of, or constitute,
either by itself or upon notice or passage of time or both, a default
under any indenture, mortgage, deed of trust, loan agreement, lease,
franchise, license or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any
property or assets of the Company are subject. No approval, consent,
order, authorization, designation, declaration or filing by or with
any governmental or administrative agency, court or other body is
required for the execution and delivery by the Company of this
Agreement and the consummation of the transactions herein
contemplated, except as may be required under the Act or any state
securities or blue sky laws.
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(xii) The Company holds and is operating in compliance with all
licenses, authorizations, approvals, certificates and permits from
governmental and regulatory authorities, foreign and domestic, which
are necessary to the conduct of its business as described in the
Prospectus.
(xiii) No labor disturbance or dispute by the employees or
consultants or contractors to the Company exists or, to the Company's
knowledge, is threatened that could reasonably be expected to have a
material adverse effect on the conduct of the Company's business as
described in the Prospectus or on the condition (financial or
otherwise), property, prospects, net worth or results of operations of
the Company.
(xiv) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and
(D) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xv) The Company has not taken and will not take, directly or
indirectly, any action designed to, or which has constituted, or which
might reasonably be expected to cause or result in, stabilization or
manipulation of the price of the Common Stock.
(xvi) The Company's application for listing on the Nasdaq
National Market ("Nasdaq") has been approved, and, on the date the
Registration Statement became effective, the Company's Registration
Statement on Form 8-A or other applicable form under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), became
effective.
(xvii) The Company has obtained and delivered to the
Representatives written agreements, in form and substance satisfactory
to the Representatives, of (A) each of its directors and executive
officers (other than Xxxxxx Xxxxxx and Xxxxx Xxxxxx), that no offer,
sale, contract to sell, or other disposition of any Common Stock of
the Company will be made for a period of 180 days after the First
Closing Date, directly or indirectly, by such holder otherwise than
with the prior written consent of Xxxx X. Xxxxxxx and Company,
Incorporated ("Xxxxxxx") and (B) each of Xxxxxx Xxxxxx and Xxxxx
Xxxxxx, that no offer, sale, contract to sell, or other
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disposition of any Common Stock of the Company will be made for a
period of 365 days after the First Closing Date, directly or
indirectly, by such individual otherwise than with the prior written
consent of Xxxxxxx, except that each of Xxxxxx Xxxxxx and
Xxxxx Xxxxxx may sell, offer, pledge or otherwise dispose of up to
50,000 shares of Common Stock following the date 180 days after the
First Closing Date without any prior consent from Xxxxxxx.
(xviii) The Company has not released and will not release
holders of the Company's Series A Convertible Preferred Stock from
their existing 180 day lock-up agreements otherwise than with the
prior written consent of Xxxxxxx.
(xix) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectus
or the Prospectus or other materials permitted by the Act to be
distributed by the Company.
(xx) The Company has filed all federal, state, local and
foreign tax returns or reports required to be filed by it and has paid
in full all taxes indicated by said returns or reports and all
assessments received by it to the extent that such taxes have become
due and payable, except where the Company is contesting in good faith
such taxes and assessments.
(xxi) The Company maintains insurance of the type and in the
amounts generally deemed adequate for its business and consistent with
insurance coverage maintained by similar companies and businesses,
including without limitation, product liability insurance and
insurance covering all real and personal property owned or leased by
it, all of which is in full force and effect.
(xxii) The Company owns or is licensed to use all patents,
patent applications, inventions, trademarks, tradenames, applications
for registration of trademarks, copyrights, know-how, trade secrets,
licenses and rights in any thereof that are material to the business
of the Company as now conducted and as proposed to be conducted, in
each case as described in the Prospectus (the "Proprietary Rights").
The Company does not have knowledge of, and the Company has not given
or received any notice of any pending conflicts with or infringement
of, the rights of others with respect to any Proprietary Rights or
with respect to any license of Proprietary Rights. No action, suit,
arbitration or legal, administrative or other proceeding, or domestic
or foreign governmental investigation is pending, or to the best of
the Company's knowledge, threatened, which involves any Proprietary
Rights. The Company is not subject to any judgment, order, writ,
injunction or decree of any court or any federal, state, local,
foreign or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or any arbitrator, or
has entered into or is a party to any contract which
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restricts or impairs the use of any such Proprietary Rights. To the
best of the Company's knowledge, no Proprietary Rights used by the
Company conflict with or infringe upon any proprietary rights of or
available to any third party. The Company has not received written
notice of any pending conflict with or infringement upon such third-
party proprietary rights. The Company has not entered into any
consent, indemnification, forbearance to xxx or settlement agreement
with respect to Proprietary Rights other than in the ordinary course
of business. No claims have been asserted by any person with respect
to the validity of or the Company's ownership or right to use the
Proprietary Rights and, to the best knowledge of the Company, there is
no reasonable basis for any such claim to be successful. The
Proprietary Rights are valid and enforceable and no registration
relating thereto has lapsed, expired or been abandoned or cancelled or
is the subject of cancellation or other adversarial proceedings, and
all applications therefor are pending and are in good standing. The
Company has complied with its respective contractual obligations
relating to the protection of the Proprietary Rights used pursuant to
licenses. To the best knowledge of the Company, no person is
infringing on or violating the Proprietary Rights owned or used by the
Company.
(xxiii) To the Company's knowledge, none of the Company's
officers, directors or security holders has any affiliations with the
National Association of Securities Dealers, Inc., except as set forth
in the Registration Statement or as otherwise disclosed in writing to
the Representatives.
(xxiv) The Company intends to apply the proceeds from the sale
of the Shares by it to the purposes and substantially in the manner
set forth in the Prospectus.
(xxv) No person is entitled, directly or indirectly, to
compensation from the Company or the Underwriters for services as a
finder in connection with the transactions contemplated by this
Agreement.
(xxvi) The conditions for use of a registration statement on
Form S-1 for the distribution of the Shares have been satisfied with
respect to the Company.
(xxvii) The Company has not sold any securities in violation of
Section 5 of the Act.
(xxviii) The Company has complied and will comply with all
provisions of Florida Statutes Section 517.075 (Chapter 92-198, Laws
of Florida). Neither the Company, nor any affiliate thereof, does
business
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with the government of Cuba or with any person or affiliate located in
Cuba.
(b) Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel to the Underwriters shall be
deemed to be a representation and warranty of the Company to each
Underwriter as to the matters covered thereby.
2. PURCHASE AND SALE; DELIVERY AND PAYMENT.
(a) On the basis of the representations, warranties, and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Company agrees to sell to each of the Underwriters, and each of the
Underwriters agree, severally and not jointly, to purchase, at a purchase
price equal to ninety-three percent (93%) of the per share price to public
of $______, the respective amount of Firm Shares set forth opposite such
Underwriter's name in Schedule I hereto. The Underwriters will
collectively purchase all of the Firm Shares if any are purchased.
(b) On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, the
Company hereby grants an option to the Underwriters to purchase an
aggregate of up to 600,000 Option Shares, at the same purchase price as the
Firm Shares, for use solely in covering any overallotments made by the
Underwriters in the sale and distribution of the Firm Shares. The option
granted hereunder may be exercised at any time (but not more than once)
within 30 days after the date on which the Registration Statement was
declared effective under the Act, as described in Section 1(a)(i) hereof
(the "Effective Date") upon notice (confirmed in writing) by the
Representatives to the Company setting forth the aggregate number of Option
Shares as to which the Underwriters are exercising the option and the date
on which certificates for such Option Shares are to be delivered. Option
Shares shall be purchased severally for the account of each Underwriter in
proportion to the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
(c) The Company will deliver the Firm Shares to the Representatives
at the offices of Xxxxxx & Whitney LLP, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, unless some other place is agreed upon, at
10:00 a.m. Minneapolis time, against payment of the purchase price as set
forth in Section 2(a), on the third full business day after commencement of
the offering or, if the offering commences after 4:30 p.m., on the fourth
full business day after commencement of the offering, or such earlier time
as may be agreed upon by the Representatives and the Company, such time and
place being herein referred to as the "First Closing Date."
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(d) The Company will deliver the Option Shares being purchased by the
Underwriters to the Representatives at the offices of Xxxxxx & Xxxxxxx LLP
as set forth in Section 2(c) above, unless some other place is agreed upon,
at 10:00 a.m. Minneapolis time, against payment of the purchase price at
the same place, on the date determined by the Representatives and of which
the Company has received notice as provided in Section 2(b), which shall
not be earlier than two nor later than three full business days after the
exercise of the option as set forth in Section 2(b), or at such other time
not later than ten full business days thereafter as may be agreed upon by
the Representatives and the Company, such time and date being herein
referred to as the "Second Closing Date."
(e) Certificates for the Shares to be delivered will be registered in
such names and issued in such denominations as the Underwriters shall
request at least two business days prior to the First Closing Date or the
Second Closing Date, as the case may be. The certificates will be made
available to the Underwriters in definitive form for the purpose of
inspection and packaging at least 24 hours prior to each respective closing
date.
(f) Payment to the Company for the Shares sold shall be made by wire
transfer to the account designated by the Company or by certified or
official bank check or checks in Clearing House funds, payable to the order
of the Company.
(g) The Underwriters will make a public offering of the Shares
directly to the public (which may include selected dealers who are members
in good standing of the National Association of Securities Dealers, Inc.
("NASD") or foreign dealers not eligible for membership in the NASD but who
have agreed to abide by the interpretation of the NASD's Board of Governors
with respect to free-riding and withholding) as soon as the Underwriters
deem practicable after the Registration Statement becomes effective at the
public offering price set forth in Section 2(a) above subject to the terms
and conditions of this Agreement and in accordance with the Prospectus;
concessions from the public offering price may be allowed selected dealers
who are members of the NASD as the Underwriters determine and the
Underwriters will furnish the Company with such information about the
distribution arrangements as may be necessary for inclusion in the
Registration Statement. It is understood that the public offering price
and concessions may vary after the public offering. The Underwriters shall
offer and sell the Shares only in jurisdictions in which the offering of
Shares has been duly registered or qualified, or is exempt from
registration or qualification, and shall take reasonable measures to effect
compliance with applicable state securities laws.
(h) It is understood that the Representatives, individually and not
as Representatives, may (but shall not be obligated to) make payment on
behalf
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of any Underwriter or Underwriters for the Shares to be purchased by such
Underwriter or Underwriters. No such payment by the Representatives shall
relieve such Underwriter or Underwriters from any of its or their other
obligations hereunder.
3. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the several Underwriters that:
(a) If the Company has elected to rely on Rule 430A under the Act,
the Company will prepare and file a Prospectus (or term sheet within the
meaning of Rule 434 under the Act) containing the information omitted
therefrom pursuant to Rule 430A under the Act 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, under the Act; if
the Company has elected to rely upon Rule 462(b) under the Act to increase
the size of the offering registered under the Act, the Company 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) under the Act; the Company will prepare
and file with the Commission, promptly upon the request of the
Representatives, any amendments or supplements to the Registration
Statement or Prospectus (including any term sheet within the meaning of
Rule 434 under the Act) that, in the opinion of the Representatives, may be
necessary or advisable in connection with distribution of the Securities by
Underwriters; and the Company will not file any amendment or supplement to
the Registration Statement or Prospectus (including any term sheet within
the meaning of Rule 434 under the Act) to which the Representatives shall
reasonably object by notice to the Company after having been furnished with
a copy a reasonable time prior to the filing.
(b) The Company will advise the Representatives promptly of (i) any
request of the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii)
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the use of the Prospectus,
(iii) the suspension of the qualification of the Shares for offering or
sale in any jurisdiction, or (iv) the institution or threatening of any
proceedings for that purpose, and the Company will use its best efforts to
prevent the issuance of any such stop order preventing or suspending the
use of the Prospectus or suspending such qualification and to obtain as
soon as possible the lifting thereof, if issued.
(c) The Company will endeavor to qualify the Shares for sale under
the securities laws of such jurisdictions as the Representatives may
reasonably have designated in writing and will, or will cause counsel for
the Company to, make such applications, file such documents, and furnish
such information as may be reasonably requested by the Representatives,
provided
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that the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction
where it is not now so qualified or required to file such a consent. The
Company will, from time to time, prepare and file such statements, reports
and other documents as are or may be required to continue such
qualifications in effect for so long a period as the Representatives may
reasonably request for distribution of the Shares.
(d) The Company will furnish the Underwriters with as many copies of
any Preliminary Prospectus as the Representatives may reasonably request
and, during the period when delivery of a prospectus is required under the
Act, the Company will furnish the Underwriters with as many copies of the
Prospectus in final form, or as thereafter amended or supplemented, as the
Representatives may, from time to time, reasonably request. The Company
will deliver to the Representatives, at or before the First Closing Date,
three signed copies of the Registration Statement and all amendments
thereto including all exhibits filed therewith, and will deliver to the
Representatives such number of copies of the Registration Statement,
without exhibits, and of all amendments thereto, as the Representatives may
reasonably request.
(e) If, during the period in which a prospectus is required by law to
be delivered by an Underwriter or dealer, any event shall occur as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading, or if for any other reason it shall be necessary
at any time to amend or supplement the Prospectus to comply with any law,
the Company promptly will prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will not
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein in light of
the circumstances in which they are made, when it is so delivered, not
misleading, or so that the Prospectus will comply with law. In case any
Underwriter is required to deliver a prospectus in connection with sales of
any Shares at any time nine months or more after the effective date of the
Registration Statement, upon the request of the Representatives but at the
expense of such Underwriter, the Company will prepare and deliver to such
Underwriter as many copies as the Representatives may request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the Act.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later
than 16 months after the effective date of the Registration Statement, an
earnings
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statement (which need not be audited) in reasonable detail, covering a
period of at least 12 consecutive months beginning after the effective date
of the Registration Statement, which earnings statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 thereunder and will
advise you in writing when such statement has been so made available.
(g) The Company will, for a period of five years after the First
Closing Date, deliver to the Representatives copies of its annual report
and copies of all other documents, reports and information furnished by the
Company to its security holders or filed with any securities exchange
pursuant to the requirements of such exchange or with the Commission
pursuant to the Act or the Exchange Act.
(h) No offering, sale or other disposition of any Common Stock or
other capital stock of the Company, or warrants, options, convertible
securities or other rights to acquire such Common Stock or other capital
stock (other than pursuant to employee stock option plans, outstanding
options or on the conversion of convertible securities outstanding on the
date of this Agreement) will be made for a period of 180 days after the
date of this Agreement, directly or indirectly, by the Company otherwise
than hereunder or with the prior written consent of the Representatives.
(i) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
purposes set forth under "Use of Proceeds" in the Prospectus and will file
such reports with the Commission with respect to the sale of the Shares and
the application of the proceeds therefrom as may be required in accordance
with Rule 463 under the Act.
(j) The Company will use its best efforts to maintain the designation
of the Common Stock on the Nasdaq National Market.
(k) Subject to the provisions set forth below, the Company shall be
responsible for and pay all costs and expenses incident to the performance
of its obligations under this Agreement including, without limiting the
generality of the foregoing, (i) all costs and expenses in connection with
the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits), Preliminary Prospectuses,
the Prospectus and any amendments thereof or supplements to any of the
foregoing; (ii) all costs and expenses in connection with the issuance and
delivery of the Shares, including taxes, if any; (iii) the cost of all
certificates representing the Shares; (iv) the fees and expenses of the
Transfer Agent for the Shares; (v) the fees and disbursements of counsel
for the Company; (vi) all fees and other charges of the independent public
accountants of the Company; (vii) the cost of furnishing and delivering to
the Underwriters and dealers participating in the offering copies of the
Registration Statement (including appropriate
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exhibits), Preliminary Prospectuses, the Prospectus and any amendments of,
or supplements to, any of the foregoing; (viii) the NASD filing fee; and
(ix) all accountable fees and expenses of counsel for the Company and
counsel for the Representatives incurred in qualifying the Shares for sale
under the laws of such jurisdictions upon which the Representatives and the
Company may agree (including filing fees).
(l) The Company 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 the Company to facilitate the sale or resale of the Shares,
and will not effect any sales of any security of the Company which are
required to be disclosed in response to Item 701 of Regulation S-X of the
Commission which have not been so disclosed in the Registration Statement.
4. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The respective obligations of the Underwriters to purchase and pay for
the Shares as provided herein shall be subject to the accuracy of the
representations and warranties of the Company, in the case of the Firm Shares as
of the date hereof and the First Closing Date (as if made on and as of the First
Closing Date), and in the case of the Option Shares, as of the date hereof and
the Second Closing Date (as if made on and as of the Second Closing Date), to
the performance by the Company (in the case of the First Closing Date) of its
obligations hereunder, and to the satisfaction of the following additional
conditions on or before the First Closing Date in the case of the Firm Shares
and on or before the Second Closing Date in the case of the Option Shares:
(a) All filings required by Rules 424, 430A and 434 under the Act
shall have been timely made; no stop order suspending the effectiveness of
the Registration Statement, as amended from time to time, or any part
thereof shall have been issued and no proceedings for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of the Representatives.
(b) The Representatives shall have received the opinion of Faegre &
Xxxxxx LLP, counsel for the Company, dated as of the First Closing Date or
the Second Closing Date, as the case may be, addressed to the Underwriters
and satisfactory in form and substance to the Representatives and their
counsel, substantially to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Minnesota, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
-15-
Statement and the Prospectus. The Company is duly qualified and in
good standing as a foreign corporation in each jurisdiction where the
conduct of its business makes such qualification necessary and the
failure to so qualify would have a material adverse effect on the
business, properties, condition (financial or otherwise), results of
operations, shareholders' equity or prospects of the Company.
(ii) The Company has authorized and outstanding capital stock
as described in the Prospectus. The outstanding shares of the
Company's capital stock have been duly authorized and validly issued
and are fully paid and nonassessable. The Shares to be issued and sold
by the Company pursuant to this Agreement have been duly authorized
and, when issued and paid for as contemplated herein, will be validly
issued, fully paid and nonassessable. No preemptive rights pursuant
to corporate law or, to the knowledge of such counsel, other
preemptive or similar subscription rights of shareholders of the
Company, or of holders of warrants, options, convertible securities or
other rights to acquire shares of capital stock of the Company, exist
with respect to any of the Shares or the issue and sale thereof. To
the knowledge of such counsel, no rights to register outstanding
shares of the Company's capital stock, or shares issuable upon the
exercise of outstanding warrants, options, convertible securities or
other rights to acquire shares of such capital stock, exist which have
not been validly exercised or waived with respect to the Registration
Statement. The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Prospectus.
(iii) The Registration Statement has become effective under the
Act and, to the knowledge of such counsel, no stop order or
proceedings with respect thereto have been instituted or are pending
or threatened by the Commission.
(iv) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder (except that such counsel need express no
opinion as to the financial statements or related schedules included
therein).
(v) To such counsel's knowledge, there are no statutes,
regulations or legal or governmental proceedings required to be
described in the Prospectus that are not described as required and no
franchises, leases, contracts, agreements or documents of a character
required to be disclosed in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement which are not
disclosed or filed, as required.
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(vi) The statements (A) in the Prospectus under the caption
"Description of Securities" and (B) in the Registration Statement in
Item 14, insofar as such statements constitute a summary of matters of
law, are accurate summaries and fairly present the information called
for with respect to such matters.
(vii) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated do not
and will not conflict with or result in a violation of or default
under the Amended Articles of Incorporation or Bylaws of the Company,
or (assuming compliance with all applicable state securities and blue
sky laws) under any statute, rule or regulation of the United States
or the State of Minnesota applicable to the Company or any permit,
order, judgment or decree known to such counsel, or any indenture,
mortgage, loan agreement or other material agreement, instrument or
obligation known to such counsel to which the Company is a party or by
which it or its material properties are bound.
(viii) The Company has the corporate power and authority to enter
into this Agreement and to authorize, issue and sell the Shares as
contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(ix) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions herein contemplated (other than as may be required by
state securities and blue sky laws, as to which such counsel need
express no opinion) except such as have been obtained or made,
specifying the same.
(x) To such counsel's knowledge, there are no material legal
or governmental proceedings, pending or threatened, before any court
or administrative body or regulatory agency to which the Company is a
party or to which any of the properties of the Company is subject.
(xi) The form of certificate for the Shares is in due and
proper form and complies with all applicable statutory requirements.
In rendering the opinions described above, counsel for the Company may
rely, as to matters of fact with respect to the Company, upon
representations of the Company contained in this Agreement and certificates
of officers of the Company provided that copies of such certificates are
delivered to the Representatives.
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In addition to the matters set forth above, each such opinion shall
also include a statement to the effect that, although such counsel cannot
guarantee the accuracy, completeness or fairness of any of the statements
contained in the Registration Statement or Prospectus and such counsel
makes no representation that it has independently verified the accuracy,
completeness or fairness of such statements, in connection with such
counsel's representation and inquiry of the Company in the preparation of
the Registration Statement and Prospectus, nothing came to the attention of
such counsel which caused it to conclude that, as of the time the
Registration Statement became effective and as of the First Closing Date or
the Second Closing Date, as the case may be, the Registration Statement or
any further amendment thereto (other than the financial statements and
related schedules included therein, as to which such counsel need express
no opinion) contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of the
date of the Prospectus or any amendment or supplement thereto and as of the
First Closing Date or the Second Closing Date, as the case may be, the
Prospectus or any amendment or supplement thereto (other than the financial
statements and related schedules included therein, as to which such counsel
need express no opinion) contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary to
make the statements therein, in light of the circumstances in which they
were made, not misleading.
(c) The Representatives shall have received on the First Closing Date
or the Second Closing Date, as the case may be, the opinion of Faegre &
Xxxxxx LLP, special intellectual property counsel for the Company, dated
the First Closing Date or the Second Closing Date, as the case may be,
addressed to the Underwriters, and satisfactory in form and substance to
the Representatives and their counsel, substantially to the effect that:
(i) To the best of such counsel's knowledge, the statements in
the Registration Statement and the Prospectus under the caption
"Intellectual Property Rights" are accurate and complete statements or
summaries of the matters therein set forth.
(ii) To the best of such counsel's knowledge, the Company owns
or is licensed to use all Proprietary Rights.
(iii) To the best of such counsel's knowledge, there are no
pending legal proceedings relating to the Proprietary Rights, and no
such proceedings are threatened or contemplated.
(iv) To the best of such counsel's knowledge after due inquiry,
the Company is not infringing or otherwise violating, and the conduct
-18-
of the business of the Company as intended to be conducted as
described in the Prospectus will not infringe or otherwise violate,
any patents, trade secrets, trademarks, service marks, copyrights or
other proprietary information or know-how of any persons, and no
person is infringing or otherwise violating any of the Proprietary
Rights in a way which could materially affect the ownership or use
thereof by the Company.
(v) Nothing has come to the attention of such counsel that
causes such counsel to believe that the discussion of the Proprietary
Rights set forth in (A) the Registration Statement or any amendment
thereof, at the time the Registration Statement became effective and
as of the First Closing Date or the Second Closing Date, as the case
may be, contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
(B) the Prospectus as amended or supplemented, as of the date of the
Prospectus or any such amendment of supplement and as of the First
Closing Date or the Second Closing Date, as the case may be, contained
or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(d) The Representatives shall have received on the First Closing Date
or the Second Closing Date, as the case may be, the opinion of Merchant &
Xxxxx, P.A., special intellectual property counsel for the Company, dated
the First Closing Date or the Second Closing Date, as the case may be,
addressed to the Underwriters, and satisfactory in form and substance to
the Representatives and their counsel, substantially to the effect that:
(i) To the best of such counsel's knowledge, the statements in
the Registration Statement and the Prospectus under the caption
"Business-Intellectual Property Rights" are accurate and complete
statements or summaries of the matters therein set forth.
(ii) To the best of such counsel's knowledge, the Company owns
or is licensed to use all Proprietary Rights.
(iii) To the best of such counsel's knowledge, there are no
pending legal proceedings relating to the Proprietary Rights, and no
such proceedings are threatened or contemplated.
(iv) To the best of such counsel's knowledge after due inquiry,
the Company is not infringing or otherwise violating, and the conduct
of the business of the Company as intended to be conducted as
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described in the Prospectus will not infringe or otherwise violate,
any patents, trade secrets, trademarks, service marks, copyrights or
other proprietary information or know-how of any persons, and no
person is infringing or otherwise violating any of the Proprietary
Rights in a way which could materially affect the ownership or use
thereof by the Company.
(v) Nothing has come to the attention of such counsel that
causes such counsel to believe that the discussion of the Proprietary
Rights set forth in (A) the Registration Statement or any amendment
thereof, at the time the Registration Statement became effective and
as of the First Closing Date or the Second Closing Date, as the case
may be, contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
(B) the Prospectus as amended or supplemented, as of the date of the
Prospectus or any such amendment of supplement and as of the First
Closing Date or the Second Closing Date, as the case may be, contained
or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(e) The Representatives shall have received from Xxxxxx & Whitney
LLP, counsel for the Underwriters, an opinion dated the First Closing Date
or the Second Closing Date, as the case may be, with respect to such
matters as the Representatives may reasonably request, and such counsel
shall have received such documents and information as they may reasonably
request to enable them to pass upon such matters.
(f) The Representatives shall have received on each of the date
hereof, the First Closing Date and the Second Closing Date, as the case may
be, a signed letter, dated as of the date hereof, the First Closing Date or
the Second Closing Date, as the case may be, in form and substance
satisfactory to the Representatives, from Xxxxxx Xxxxxxxx LLP, to the
effect that they are independent public accountants with respect to the
Company within the meaning of the Act and the related rules and
regulations, stating that in their opinion the financial statements and
schedules examined by them and included in the Registration Statement
comply in form in all material respects with the applicable accounting
requirements of the Act and the related rules and regulations, and
containing such other statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
-20-
(g) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
contemplated or referred to in the Prospectus, the Company shall not have
incurred any direct or contingent liabilities or obligations material to
the Company, or entered into any material transactions, except liabilities,
obligations or transactions 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 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 exercise of options or warrants described in the
Registration Statement and the Prospectus), or any change in the short-term
debt or long-term debt (including capitalized lease obligations) of the
Company, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock of the Company or any change or
any development involving a prospective change in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public offering
or the delivery of the Shares being delivered on the terms and in the
manner contemplated in the Prospectus.
(h) The Representatives shall have received a written agreement from
each of the officers and directors of the Company (other than Xxxxxx Xxxxxx
and Xxxxx Xxxxxx), that no offer, sale, contract to sell, or other
disposition of any Common Stock of the Company will be made for a period of
180 days after the First Closing Date, directly or indirectly, by such
holder otherwise than with the prior written consent of Xxxxxxx.
(i) The Representatives shall have received a written agreement from
each of Xxxxxx Xxxxxx and Xxxxx Xxxxxx that no offer, sale, contract to
sell, or other disposition of any Common Stock of the Company will be made
for a period of 365 days after the First Closing Date, directly or
indirectly, by such individual otherwise than with the prior written
consent of Xxxxxxx, except that each such individual may sell,
offer, pledge or otherwise dispose of up to 50,000 shares of Common Stock
following the date 180 days after the First Closing Date without any prior
consent from Xxxxxxx.
(j) The Representatives shall have received from the Secretary of the
Company a certificate of incumbency, dated as of the First Closing Date or
Second Closing Date, as the case may be, certifying the names, titles and
signatures of the officers authorized to execute, deliver and perform this
Agreement. Attached to such certificate shall be a copy of the Bylaws of
the Company and the resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance of this Agreement.
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Such certificate shall also certify that such resolutions, the Restated
Articles of Incorporation of the Company and the Bylaws of the Company have
been validly adopted and have not been amended or modified, except as
described in the Prospectus.
(k) The Representatives shall have received from the Company a
certificate, dated as of the First Closing Date or Second Closing Date, as
the case may be, of the chief executive officer, the chief operating
officer and 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 as if made on and as of each Closing
Date. 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 date.
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is pending or, to the knowledge of such
officers, is contemplated under the Act.
(iii) Neither the Registration Statement nor the Prospectus nor
any amendment thereof or supplement thereto included 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, in light of the circumstances in which they were made, not
misleading, and, 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;
provided, however, that such certificate does not require any
representation concerning statements in, or omissions from, the
Registration Statement or Prospectus or any amendment thereof or
supplement thereto, which are based solely upon and conform to written
information furnished to the Company by any of the Underwriters
specifically for use in the preparation of the Registration Statement
or the Prospectus or any such amendment or supplement.
(iv) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, and except
as contemplated or referred to in the Prospectus, the Company has not
incurred any direct or contingent liabilities or obligations material
to the Company, or entered into any material transactions, except
liabilities, obligations or transactions in the ordinary course of
business, or declared or paid any dividend or made any distribution of
any kind with respect to its capital stock, and there has not been any
change in the capital stock (other than a change in the number of
outstanding
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shares of Common Stock due to the exercise of options or warrants
described in the Registration Statement and the Prospectus), short-
term debt, or long-term debt (including capitalized lease obligations)
of the Company, or any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock of the
Company or any material adverse change or any development involving a
prospective material adverse change (whether or not arising in the
ordinary course of business) in or affecting the general affairs,
condition (financial or otherwise), business, key personnel, property,
prospects, net worth or results of operations of the Company.
(v) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, the Company
has not sustained any material loss of, or damage to, its business or
properties, whether or not covered by insurance.
(vi) Except as is otherwise expressly stated in the Registration
Statement and Prospectus there are no material actions, suits or
proceedings pending before any court or governmental agency, authority
or body, or, to such officers' knowledge, threatened, to which the
Company is a party or of which the business or property of the Company
is the subject.
(l) The Shares shall have been approved for listing on the Nasdaq
National Market.
(m) The Company shall have furnished to the Underwriters, dated as of
the date of each closing date, such further certificates and documents as
the Representatives shall have reasonably required.
(n) All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably
satisfactory to the Representatives and their legal counsel. All statements
contained in any certificate, letter or other document delivered pursuant
hereto by, or on behalf of, the Company shall be deemed to constitute
representations and warranties of the Company.
(o) The Representatives may waive in writing the performance of any
one or more of the conditions specified in this Section 4 or extend the
time for their performance.
5. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act against any losses, claims, damages or
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liabilities, joint or several, to which such Underwriter or each such
controlling person may become subject, under the Act, the Exchange Act, the
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of, or are based
upon: (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereof, or
the omission or alleged omission to state in the Registration Statement or
any amendment thereof a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; or (iii) any untrue statement or alleged untrue statement of a
material fact contained in any application or other statement executed by
the Company or based upon written information furnished by the Company and
filed in any jurisdiction in order to qualify the Shares under, or exempt
the Shares or the sale thereof from qualification under, the securities
laws of such jurisdiction, or the omission or alleged omission to state in
such application or statement a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and will reimburse each
Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or controlling person
(subject to the limitations of Section 5(c) below) in connection with
investigating or defending against any such loss, claim, damage, liability
or action; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of, or is based upon, an untrue statement, or alleged untrue
statement, omission or alleged omission, made in reliance upon and in
conformity with information furnished to the Company by, or on behalf of,
any Underwriter in writing specifically for use in the preparation of the
Registration Statement or any such post effective amendment thereof, any
such Preliminary Prospectus or the Prospectus or any such amendment thereof
or supplement thereto. This indemnity agreement is in addition to any
liability that the Company may otherwise have.
(b) Each Underwriter severally, but not jointly, agrees to indemnify
and hold harmless the Company, each of the Company's directors, each of the
Company's officers who has signed the Registration Statement, and each
person who controls the Company within the meaning of Section 15 of the
Act against any losses, claims, damages or liabilities, joint or several,
to which the Company or any such director, officer, or controlling person
may become subject, under the Act, the Exchange Act, the common law or
otherwise, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of, or are based upon: (i) any untrue
statement or alleged
-24-
untrue statement of a material fact contained in the Registration Statement
or any amendment thereof, or the omission or alleged omission to state in
the Registration Statement or any amendment thereof, a material fact
required to be stated therein or necessary to make the statements therein
not misleading; (ii) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading; or (iii) any untrue statement or
alleged untrue statement of a material fact contained in any application or
other statement executed by the Company or by any Underwriter or based upon
written information furnished by the Company or the Underwriters and filed
in any jurisdiction in order to qualify the Shares under, or exempt the
Shares or the sale thereof from qualification under, the securities laws of
such jurisdiction, or the omission or alleged omission to state in such
application or statement a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; in each of the above cases to
the extent, but only the extent, that such untrue statement, alleged untrue
statement, omission or alleged omission, was made in reliance upon and in
conformity with information furnished to the Company by, or on behalf of,
any Underwriter in writing specifically for use in the preparation of the
Registration Statement or any such post-effective amendment thereof, any
such Preliminary Prospectus or the Prospectus or any such amendment thereof
or supplement thereto, or in any application or other statement executed by
the Company or by any Underwriter and filed in any jurisdiction; and each
Underwriter will reimburse any legal or other expenses reasonably incurred
by the Company or any such director, officer, or controlling person in
connection with investigating or defending against any such loss, claim,
damage, liability or action. This indemnity agreement is in addition to
any liability which the Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
5 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against any indemnifying party
under this Section 5, notify in writing the indemnifying party of the
commencement thereof. The omission to so notify the indemnifying party
will not relieve it from any liability under this Section 5 as to the
particular item for which indemnification is then being sought, unless such
omission so to notify prejudices the indemnifying party's ability to defend
such action. In case any such action is brought against any indemnified
party and the indemnified party notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof
with counsel who shall be
-25-
reasonably satisfactory to such indemnified party; and after notice from
the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to
such indemnified party under this Section 5 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 reasonable judgment of the indemnified party or
parties, it is advisable for such party or parties and any controlling
persons to be represented by separate counsel, any indemnified party shall
have the right to employ separate counsel to represent it and other parties
and their controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by any party
hereunder, in which event the fees and expenses of such separate counsel
shall be borne by the indemnifying party. In such event, the indemnifying
party will not be obligated to pay the fees and expenses of more than one
counsel for the indemnified parties with respect to such claim. Any such
indemnifying party shall not be liable to any such indemnified party on
account of any settlement of any claim or action effected without the prior
written consent of such indemnifying party.
6. CONTRIBUTION.
(a) If the indemnification provided for in Section 5 is unavailable
under applicable law to any indemnified party in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, and
the Underwriters from the offering of the Shares 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 parties
in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The Company and the Underwriters agree that
contribution determined by per capita allocation (even if the Underwriters
were considered a single person) would not be equitable. The respective
relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Shares (before deducting expenses) received by the Company
bears to the total underwriting discount received by the Underwriters, in
each case as set forth in the Prospectus. The relative fault of the
parties 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 parties and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The amount
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paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. Notwithstanding the
provisions of this Section 6, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto. The Underwriters' obligation to
contribute pursuant to this Section 6 are several and not joint in
proportion to their respective Underwriting Obligations. 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. For purposes of this Section 6, each
person who controls an Underwriter within the meaning of the Act or the
Exchange Act shall have the same rights to contribution as such
Underwriter, each person who controls the Company within the meaning of the
Act or the Exchange Act shall have the same rights to contribution as the
Company and each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company.
(b) Promptly after receipt by a party to this Agreement of notice of
the commencement of any action, suit, or proceeding, such person will, if a
claim for contribution in respect thereof is to be made against another
party (the "Contributing Party"), notify the Contributing Party of the
commencement thereof, but the omission so to notify the Contributing Party
will not relieve the Contributing Party from any liability which it may
have to any party other than under this Section 6, unless such omission so
to notify prejudices the Contributing Party's ability to defend such
action. Any notice given pursuant to Section 5 hereof shall be deemed to
be like notice hereunder. In case any such action, suit or proceeding is
brought against any party, and such person notifies a Contributing Party of
the commencement thereof, the Contributing Party will be entitled to
participate therein with the notifying party and any other Contributing
Party similarly notified.
7. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective the later of (i) the date
and time that this Agreement is executed and delivered by the parties
hereto and (ii) at 10:00 a.m. Minneapolis time, on the first full business
day following the Effective Date, or at such earlier time after the
Effective Date as the Representatives in their discretion shall first
release the Shares for offering to the public. For purposes of this
Section 7, the Shares shall be deemed to have
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been released to the public upon release by the Representatives of the
publication of a newspaper advertisement relating to the Shares or upon
release of a telegram or a letter offering the Shares for sale to
securities dealers, whichever shall first occur.
(b) The Representatives shall have the right to terminate this
Agreement by giving notice to the Company as hereinafter specified at any
time prior to the First Closing Date, and the option referred to in Section
2(b), if exercised, may be canceled at any time by the Representatives by
giving such notice to the Company at any time prior to the Second Closing
Date, if (i) the Company shall have failed, refused or been unable, at or
prior to the First Closing Date, to perform any material agreement on its
part to be performed hereunder; (ii) any other condition of the
Underwriters' obligations hereunder is not fulfilled; (iii) trading in
securities generally on the New York Stock Exchange, American Stock
Exchange or the Nasdaq Stock Market shall have been suspended, or minimum
or maximum prices for trading shall have been required or established by
the Commission or by any such exchange or the Nasdaq Stock Market; (iv) a
banking moratorium shall have been declared by federal, New York or
Minnesota authorities; (v) there shall have been such a material adverse
change in general economic, monetary, political or financial conditions, or
the effect of international conditions on the financial markets in the
United States shall be such as, in the judgment of the Representatives,
makes it impracticable or inadvisable to proceed with the completion of the
sale of and payment for the Shares; (vi) there shall have been the
enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of any court or other governmental
authority, which in the judgment of the Representatives materially and
adversely affects or will materially and adversely affect the business or
operations of the Company; or (vii) there shall be an outbreak of major
hostilities (or an escalation thereof) in which the United States is
involved or a formal declaration of war by the United States of America
shall have occurred or any other substantial national or international
calamity or any other event or occurrence of a similar character shall have
occurred since the execution of this Agreement that, in the judgment of the
Representatives, makes it impracticable or inadvisable to proceed with the
completion of the sale of and payment for the Shares. Any such termination
shall be without liability of any party to any other party, except as
provided in Sections 5 and 6 hereof; provided, however, that the Company
shall remain obligated to pay costs and expenses to the extent provided in
Section 3(k) hereof.
(c) If the Representatives elect to prevent this Agreement from
becoming effective or to terminate this Agreement as provided in this
Section 7, they shall notify the Company by telegram or telephone,
confirmed by letter sent to the address specified in Section 10 hereof. If
the Company shall elect to prevent this Agreement from becoming effective,
it shall notify the
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Representatives promptly by telegram or telephone, confirmed by letter sent
to the address specified in Section 10 hereof.
(d) If the Company shall fail at the First Closing Date to sell and
deliver the number of Shares which it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
Underwriter. No action taken pursuant to this Section 7(d) shall relieve
the Company from liability, if any, in respect of such default.
8. DEFAULT OF UNDERWRITER.
If on the First Closing Date or the Second Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the portion of the
Shares which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company), you, as
Representatives of the Underwriters, shall use your best efforts to procure
within 36 hours thereafter one or more of the other Underwriters, or any others,
to purchase from the Company such amounts as may be agreed upon, and upon the
terms set forth herein, of the Firm Shares or Option Shares, as the case may be,
which the defaulting Underwriter or Underwriters failed to purchase. If during
such 36 hours you, as Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (A) if the aggregate number of Shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase or (B) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the Company or you
as the Representatives of the Underwriters will have the right, by written
notice given within the next 36-hour period to the parties to this Agreement, to
terminate this Agreement without liability on the part of the non-defaulting
Underwriters or of the Company except for expenses to be borne by the Company,
and the Underwriters as provided in Section 3(k) hereof and the indemnity and
contribution agreements in Sections 5 and 6 hereof. In the event of a default
by any Underwriter or Underwriters, as set forth in this Section 8, the First
Closing Date or Second Closing Date, as the case may be, may be postponed for
such period, not exceeding seven days, as you, as Representatives, may determine
in order that the required changes, not including a reduction in the number of
Firm Shares, in the Registration Statement or in the Prospectus or in any other
documents or arrangements may be effected. The term "Underwriter" includes any
person substituted for a defaulting Underwriter. Any action taken under this
Section 8
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shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
9. SURVIVAL OF INDEMNITIES, CONTRIBUTION AGREEMENTS, WARRANTIES AND
REPRESENTATIONS.
The respective indemnity and contribution agreements of the Company
and the Underwriters contained in Sections 5 and 6, respectively, the
representations and warranties of the Company set forth in Section 1 hereof, and
the covenants of the Company set forth in Section 3 hereof, respectively, shall
remain operative and in full force and effect, regardless of any investigation
made by, or on behalf of, the Underwriters, the Company, any of its officers and
directors, or any controlling person referred to in Sections 5 and 6, and shall
survive the delivery of and payment for the Shares. The aforesaid indemnity and
contribution agreements shall also survive any termination or cancellation of
this Agreement. Any successor of any party or of any such controlling person,
or any legal representatives of such controlling person, as the case may be,
shall be entitled to the benefit of the respective indemnity and contribution
agreements.
10. NOTICES.
All notices or communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, if sent to the Representatives
or any of the Underwriters, shall be mailed, delivered, or telecopied and
confirmed, to Xxxx X. Xxxxxxx and Company, Incorporated, 000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxx Xxxxxxx, with a copy to
Xxxxxxxx X. Xxxxx, Esq., Xxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000; if sent to the Company, shall be mailed,
delivered, or telecopied, and confirmed, to Excelsior-Xxxxxxxxx Motorcycle
Manufacturing Company, 000 Xxxx Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Xxxxxx Xxxxxx, with a copy to Xxxx X. Xxxxxx, Esq., Faegre & Xxxxxx
LLP, 2200 Norwest Center, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000.
11. INFORMATION FURNISHED BY THE UNDERWRITER.
The statements relating to the stabilization activities of the
Underwriters and the statements in paragraphs three and eight under the caption
"Underwriting" in any Preliminary Prospectus and in the Prospectus constitute
the only information furnished by, or on behalf of, the Underwriters in writing
specifically for use in the preparation of the Registration Statement or any
post-effective amendment thereof, any Preliminary Prospectus or the Prospectus
or any amendment thereof or supplement thereto, or in any application or other
statement executed by the Company or by any Underwriter and filed in any
jurisdiction as referred to in Section 5 hereof.
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12. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the
Underwriters and the Company, their respective successors and assigns and the
officers, directors and controlling persons referred to in Sections 5 and 6.
Nothing expressed in this Agreement is intended or shall be construed to give
any person or corporation, other than the parties hereto, their respective
successors and assigns and the controlling persons, officers and directors
referred to in Sections 5 and 6 any legal or equitable right, remedy or claim
under, or in respect of, this Agreement or any provision herein contained, this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective executors, administrators, successors, assigns and such controlling
persons, officers and directors, and for the benefit of no other person or
corporation. No purchaser of any Shares from the Underwriters shall be
construed a successor or assign merely by reason of such purchase.
13. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with the
laws of the State of Minnesota without regard to its conflict of law provisions.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed counterpart of this
Agreement, whereupon it will become a binding agreement between the Company and
each of the Underwriters in accordance with its terms.
Very truly yours,
EXCELSIOR-XXXXXXXXX MOTORCYCLE
MANUFACTURING COMPANY
--------------------------
Xxxxxx X. Xxxxxx
Co-Founder and Co-Chief
Executive Officer
--------------------------
Xxxxx X. Xxxxxx
Co-Founder and Co-Chief
Executive Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted by us
for ourselves and as Representatives of the
Underwriters referred to in the foregoing
Agreement as of the date first above written.
XXXX X. XXXXXXX AND COMPANY,
INCORPORATED
XXXXXX, XXXXXXX & XXXXX, INCORPORATED
By: Xxxx X. Xxxxxxx and Company, Incorporated
--------------------------
By:
Its:
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SCHEDULE I
NAME OF UNDERWRITER NUMBER OF FIRM SHARES
------------------- ---------------------
Xxxx X. Xxxxxxx and Company,
Incorporated
Xxxxxx, Xxxxxxx & Xxxxx,
Incorporated
Total 4,000,000
---------
---------
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