Exhibit 1.1
_________ SHARES (*)
AUGUST TECHNOLOGY CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
, 2000
▇▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
As Representatives of the several Underwriters
c/o Needham & Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
August Technology Corporation, a Minnesota corporation (the "Company"),
proposes to issue and sell ________ shares (the "Firm Shares") of the Company's
Common Stock, $.01 par value per share (the "Common Stock"), to you and to the
several other Underwriters named in Schedule I hereto (collectively, the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"). The Company and the shareholders of the Company named in
Schedule II hereto (the "Selling Shareholders") have also agreed to grant to you
and the other Underwriters an option (the "Option") to purchase up to an
additional ______ shares of Common Stock (the "Company Option Shares") and
______ shares of Common Stock (the "Selling Shareholder Option Shares"),
respectively, on the terms and for the purposes set forth in Section 1(b). The
Firm Shares and the Option Shares are referred to collectively herein as the
"Shares."
The Company and each of the Selling Shareholders confirm as follows their
respective agreements with the Representatives and the several other
Underwriters.
1. AGREEMENT TO SELL AND PURCHASE.
(a) On the basis of the representations, warranties and agreements of
the Company and the Selling Shareholders herein contained and subject to all the
terms and conditions of this Agreement, the Company agrees to issue and sell the
Firm Shares to the several Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase from the Company the respective number of
Firm Shares set forth opposite that Underwriter's name in Schedule I hereto, at
the purchase price of $____ for each Firm Share.
(b) Subject to all the terms and conditions of this Agreement, the
Company and the Selling Shareholders grant the Option to the several
Underwriters to purchase, severally and not jointly, up to the maximum number of
Option Shares set forth in Schedule II hereto at the same price per share as the
Underwriters shall pay for the Firm Shares. The Option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement upon written or telegraphic
notice (the "Option Shares Notice") by the Representatives to the Company and
the Selling Shareholders no later than 12:00 noon, New York City time, at least
--------------------------
(*) Plus an option to purchase up to an additional _______ shares to cover
over-allotments.
two and no more than five business days before the date specified for closing in
the Option Shares Notice (the "Option Closing Date"), setting forth the
aggregate number of Option Shares to be purchased and the time and date for such
purchase. On the Option Closing Date, the Company will issue and sell and the
Selling Shareholders will sell to the Underwriters the number of Option Shares
set forth in the Option Shares Notice, and each Underwriter will purchase such
percentage of the Option Shares as is equal to the percentage of Firm Shares
that such Underwriter is purchasing, as adjusted by the Representatives in such
manner as they deem advisable to avoid fractional shares. If the Option is
exercised, the obligation of each Underwriter shall be to purchase from the
Company and each of the Selling Shareholders, on a pro rata basis, that number
of Option Shares (to be adjusted by the Representations to avoid fractional
shares) that represents the same proportion that the number of Option Shares
granted by the Company and each Selling Shareholder bears to the total number of
Option Shares granted by the Company and all Selling Shareholders.
2. DELIVERY AND PAYMENT. Delivery of the Firm Shares shall be made
to the Representatives for the accounts of the Underwriters against payment of
the purchase price by certified or official bank checks or by wire transfers
payable in same-day funds to the order of the Company at the office of ▇▇▇▇▇▇▇ &
Company, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., New
York City time, on the third (or, if the purchase price set forth in Section
1(b) hereof is determined after 4:30 p.m., Washington D.C. time, the fourth)
business day following the commencement of the offering contemplated by this
Agreement, or at such time on such other date, not later than seven business
days after the date of this Agreement, as may be agreed upon by the Company and
the Representatives (such date is hereinafter referred to as the "Closing
Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters of the purchase price by certified or
official bank checks or by wire transfers payable in same-day funds to the order
of the Company for the Company Option Shares to be sold by it and to
____________, as custodian for the Selling Shareholders (the "Custodian") for
the Option Shares to be sold by the Selling Shareholders at the offices
specified above for the Closing Date at the time and date (which may be the
Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as the Representatives shall
request at least two business days prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the Shares,
the Company agrees to make such certificates available for inspection at least
24 hours prior to the Closing Date or the Option Closing Date, as the case may
be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to the
respective Underwriters shall be borne by the Company. The Company will pay and
save each Underwriter and any subsequent holder of the Shares harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No. 333-___) on Form S-1
relating to the Shares, including a preliminary prospectus and such amendments
to such registration statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The term "preliminary prospectus" as used herein means a
preliminary prospectus as contemplated by Rule 430 or Rule 430A of the Rules and
Regulations included at any time as part of the registration statement. Copies
of such registration statement and amendments and of each related preliminary
prospectus have been delivered to the Representatives. If such registration
statement has not become effective, a further amendment to such registration
statement, including a form of final prospectus, necessary to permit such
registration statement to become effective will be filed promptly by the Company
with the Commission. If such registration statement has become effective, a
final prospectus containing
2
information permitted to be omitted at the time of effectiveness by Rule 430A of
the Rules and Regulations will be filed promptly by the Company with the
Commission in accordance with Rule 424(b) of the Rules and Regulations. The
term "Registration Statement" means the registration statement as amended at the
time it becomes or became effective (the "Effective Date"), including the
financial statements and all exhibits and any information deemed to be included
by Rule 430A and includes any registration statement relating to the offering
contemplated by this Agreement and filed pursuant to Rule 462(b) of the Rules
and Regulations. The term "Prospectus" means the prospectus as first filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no
such filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date.
(b) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission. On the Effective Date, the date
the Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times subsequent to and including the Closing Date and, if
later, the Option Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did and will comply with all applicable
provisions of the Act and the Rules and Regulations and will contain all
statements required to be stated therein in accordance with the Act and the
Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement, the Prospectus or any such amendment or supplement did
or will contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date and, if later, the Option Closing Date, the
Prospectus did not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company acknowledges
that the statements set forth under the heading "Underwriting" in the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives specifically for inclusion in the
Registration Statement.
(c) The Company does not own, and at the Closing Date and, if later,
the Option Closing Date, will not own, directly or indirectly, any shares of
stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any corporation, firm, partnership, joint venture,
association or other entity. The Company is, and at the Closing Date and, if
later, the Option Closing Date, will be, a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. The Company has, and at the Closing Date and, if later, the
Option Closing Date, will have, full power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Registration Statement and the
Prospectus. The Company is, and at the Closing Date and, if later, the Option
Closing Date, will be, duly licensed or qualified to do business and in good
standing as a foreign corporation in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or leased by
it makes such license or qualification necessary, except to the extent that the
failure to be so qualified or be in good standing would not materially and
adversely affect the Company or its business, properties, business prospects,
condition (financial or other) or results of operations. The Company is not,
and at the Closing Date and, if later, the Option Closing Date, will not be,
engaged in any discussions or a party to any agreement or understanding, written
or oral, regarding the acquisition of an interest in any corporation, firm,
partnership, joint venture, association or other entity where such discussions,
agreements or understandings would require amendment to the Registration
Statement pursuant to applicable securities laws. Complete and correct copies
of the Articles of Incorporation and of the by-laws of the Company and all
amendments thereto have been delivered to the Representatives, and no changes
therein will be made subsequent to the date hereof and prior to the Closing Date
or, if later, the Option Closing Date.
(d) All of the outstanding shares of capital stock of the Company
(including the Selling Shareholder Option Shares) have been duly authorized,
validly issued and are fully paid and nonassessable and were issued in
compliance with all applicable state and federal securities laws; the Company
Firm Shares and the Company Option
3
Shares have been duly authorized and when issued and paid for as contemplated
herein will be validly issued, fully paid and nonassessable; no preemptive or
similar rights exist with respect to any of the Shares or the issue and sale
thereof. The description of the capital stock of the Company in the
Registration Statement and the Prospectus is, and at the Closing Date and, if
later, the Option Closing Date, will be, complete and accurate in all respects.
Except as set forth in the Prospectus, the Company does not have outstanding,
and at the Closing Date and, if later, the Option Closing Date, will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of capital stock, or any such warrants,
convertible securities or obligations. No further approval or authority of
shareholders or the Board of Directors of the Company will be required for the
transfer and sale of the Selling Shareholder Option Shares or the issuance and
sale of the Company Firm Shares and Option Shares as contemplated herein.
(e) The financial statements and schedules included in the
Registration Statement and the Prospectus present fairly the financial condition
of the Company as of the respective dates thereof and the results of operations
and cash flows of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise disclosed in
the Prospectus. No other financial statements or schedules of the Company are
required by the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. KPMG LLP (the "Accountants"), who
have reported on such financial statements and schedules, are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations. The summary financial and statistical data included in the
Registration Statement present fairly the information shown therein and have
been compiled on a basis consistent with the financial statements presented
therein.
(f) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the Closing
Date and, if later, the Option Closing Date, except as set forth in or
contemplated by the Registration Statement and the Prospectus, (i) there has not
been and will not have been any change in the capitalization of the Company
(other than in connection with the exercise of options to purchase the Company's
Common Stock granted pursuant to the Company's stock option plan from the shares
reserved therefor as described in the Registration Statement), or any material
adverse change in the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company, arising for
any reason whatsoever, (ii) the Company has not incurred nor will it incur,
except in the ordinary course of business as described in the Prospectus, any
material liabilities or obligations, direct or contingent, nor has the Company
entered into nor will it enter into, except in the ordinary course of business
as described in the Prospectus, any material transactions other than pursuant to
this Agreement and the transactions referred to herein and (iii) the Company has
not and will not have paid or declared any dividends or other distributions of
any kind on any class of its capital stock.
(g) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its business in
a manner that would cause it to become, an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(h) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its officers in their capacity as such, nor any basis therefor, before or by any
federal or state court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, wherein an unfavorable ruling,
decision or finding might materially and adversely affect the Company or the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company.
(i) The Company has, and at the Closing Date and, if later, the
Option Closing Date, will have, performed all the obligations required to be
performed by it, and is not, and at the Closing Date, and, if later, the Option
Closing Date, will not be, in default, under any contract or other instrument to
which it is a party or by which its property is bound or affected, which default
might materially and adversely affect the Company or the business, properties,
business prospects, condition (financial or other) or results of operations of
the Company. To the best knowledge of the Company, no other party under any
contract or other instrument to which it is a party is in default in any respect
thereunder, which default might materially and adversely affect the Company or
the business, properties, business prospects, condition (financial or other) or
results of operations of the Company. The Company is not, and at the
4
Closing Date and, if later, the Option Closing Date, will not be, in violation
of any provision of its Articles of Incorporation or by-laws or other
organizational documents.
(j) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part contemplated herein,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the by-laws
and rules of the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the purchase and distribution by the Underwriters of the
Shares.
(k) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with the terms hereof. The
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company pursuant to the
terms or provisions of, or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, the certificate or Articles of Incorporation or by-laws of the
Company, any indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or other evidence of indebtedness,
lease, contract or other agreement or instrument to which the Company is a party
or by which the Company or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to the
business or properties of the Company.
(l) The Company has good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in the
Prospectus or are not material to the business of the Company. The Company has
valid, subsisting and enforceable leases for the properties described in the
Prospectus as leased by it. The Company owns or leases all such properties as
are necessary to its operations as now conducted or as proposed to be conducted,
except where the failure to so own or lease would not materially and adversely
affect the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company.
(m) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company is a party have been duly
authorized, executed and delivered by the Company, constitute valid and binding
agreements of the Company and are enforceable against and by the Company in
accordance with the terms thereof.
(n) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
Section 6 of this Agreement to be delivered to the Representatives was or will
be, when made, inaccurate, untrue or incorrect.
(o) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action designed, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(p) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement, which rights have not been waived by the holder thereof
as of the date hereof.
(q) The Company has filed a registration statement pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to register the Common Stock, has filed an application to list the Shares
on the Nasdaq National Market ("NNM"), and has received notification that the
listing has been approved, subject to notice of issuance of such Shares.
5
(r) Except as disclosed in or specifically contemplated by the
Prospectus (i) the Company has sufficient trademarks, trade names, patent
rights, mask works, copyrights, licenses, approvals and governmental
authorizations to conduct its business as now conducted, (ii) the Company has no
knowledge of any infringement by it of trademarks, trade name rights, patent
rights, mask work rights, copyrights, licenses, trade secrets or other similar
rights of others, where such infringement could have a material and adverse
effect on the Company or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company, and (iii)
there is no claim being made against the Company, or to the best of the
Company's knowledge, any employee of the Company, regarding trademark, trade
name, patent, mask work, copyright, license, trade secret or other infringement
which could have a material and adverse effect on the Company or the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company.
(s) The Company has filed all federal, state, local and foreign
income tax returns which have been required to be filed and has paid all taxes
and assessments received by it to the extent that such taxes or assessments have
become due. The Company has no tax deficiency which has been or, to the best
knowledge of the Company, might be asserted or threatened against it which could
have a material and adverse effect on the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company.
(t) The Company owns or possesses all authorizations, approvals,
orders, licenses, registrations, other certificates and permits of and from all
governmental regulatory officials and bodies, necessary to conduct its business
as contemplated in the Prospectus, except where the failure to own or possess
all such authorizations, approvals, orders, licenses, registrations, other
certificates and permits would not materially and adversely affect the Company
or the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company. There is no proceeding
pending or threatened (or any basis therefor known to the Company) which may
cause any such authorization, approval, order, license, registration,
certificate or permit to be revoked, withdrawn, cancelled, suspended or not
renewed; and the Company is conducting its business in compliance with all laws,
rules and regulations applicable thereto (including, without limitation, all
applicable federal, state and local environmental laws and regulations) except
where such noncompliance would not materially and adversely affect the Company
or the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company.
(u) The Company maintains insurance of the types and in the amounts
generally deemed adequate for its business, including, but not limited to,
insurance covering real and personal property owned or leased by the Company
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and effect.
(v) Neither the Company nor, to the best of the Company's knowledge,
any of its employees or agents at any time, has during the last five years
(i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof.
(w) There are no business relationships or related-party transactions
involving the Company or any other person required to be described in the
Prospectus which have not been described as required.
(x) The Company 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 as applied in the
United States 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.
(y) All disclosure regarding year 2000 compliance that is required to be
described under the Act (including disclosures required by Staff Legal Bulletin
No. 5) has been included in the Prospectus. The Company will not incur
6
significant operating expenses or costs to ensure that its information systems
will be year 2000 compliant, other than as disclosed in the Prospectus.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLING
SHAREHOLDERS. Each Selling Shareholder, severally and not jointly, represents,
warrants and covenants to each Underwriter that:
(a) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Shareholder of this Agreement and the
Power-of-Attorney and the Custody Agreement (hereinafter referred to as the
"Shareholders' Agreements") hereinafter referred to, and for the sale and
delivery of the Selling Shareholder Option Shares to be sold by such Selling
Shareholder hereunder, have been obtained; and such Selling Shareholder has full
right, power and authority to enter into this Agreement and the Shareholders'
Agreements, to make the representations, warranties and agreements hereunder and
thereunder, and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Shareholder hereunder.
(b) Certificates in negotiable form representing all of the Selling
Shareholder Option Shares to be sold by such Selling Shareholder have been
placed in custody under the Shareholders' Agreement, in the form heretofore
furnished to you, duly executed and delivered by such Selling Shareholder to the
Custodian, and such Selling Shareholder has duly appointed _________ and
___________, and each of them, as such Selling Shareholder's attorney-in-fact
(the "Attorneys-in-Fact") with authority to execute and deliver this Agreement
on behalf of such Selling Shareholder, to determine (subject to the provisions
of the Shareholders' Agreements) the purchase price to be paid by the
Underwriters to the Selling Shareholders as provided in Section 2 hereof, to
authorize the delivery of the Selling Shareholder Option Shares to be sold by
such Selling Shareholder hereunder and otherwise to act on behalf of such
Selling Shareholder in connection with the transactions contemplated by this
Agreement and the Shareholders' Agreements.
(c) Such Selling Shareholder specifically agrees that the Selling
Shareholder Option Shares represented by the certificates held in custody for
such Selling Shareholder under the Shareholders' Agreement are for the benefit
of and coupled with and subject to the interests of the Underwriters, the
Custodian, the Attorneys-in-Fact, each other Selling Shareholder and the
Company, that the arrangements made by such Selling Shareholder for such
custody, and the appointment by such Selling Shareholder of the
Attorneys-in-Fact by the Power-of-Attorney, are to that extent irrevocable, and
that the obligations of such Selling Shareholder hereunder shall not be
terminated by operation of law, whether by the death, disability, incapacity,
liquidation or dissolution of any Selling Shareholder or by the occurrence of
any other event. If any individual Selling Shareholder or any executor or
trustee for a Selling Shareholder should die or become incapacitated, or if any
Selling Shareholder that is an estate or trust should be terminated, or if any
Selling Shareholder that is a partnership or corporation should be dissolved, or
if any other such event should occur, before the delivery of the Selling
Shareholder Option Shares hereunder, certificates representing the Selling
Shareholder Option Shares shall be delivered by or on behalf of the Selling
Shareholders in accordance with the terms and conditions of this Agreement and
of the Shareholders' Agreements, and actions taken by the Attorneys-in-Fact
pursuant to the Powers-of-Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred, regardless
of whether or not the Custodian, the Attorneys-in-Fact, or any of them, shall
have received notice of such death, incapacity, termination, dissolution or
other event.
(d) This Agreement and the Shareholders' Agreements have each been
duly authorized, executed and delivered by such Selling Shareholder and each
such document constitutes a valid and binding obligation of such Selling
Shareholder, enforceable in accordance with its terms.
(e) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the sale of the Selling Shareholder Option Shares by such
Selling Shareholder or the consummation by such Selling Shareholder of the
transactions on its part contemplated by this Agreement and the Shareholders'
Agreements, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or Blue Sky laws
or the by-laws and rules of the NASD in connection with the purchase and
distribution by the Underwriters of the Shares to be sold by such Selling
Shareholder.
7
(f) The sale of the Selling Shareholder Option Shares to be sold by
such Selling Shareholder hereunder and the performance by such Selling
Shareholder of this Agreement and the Shareholders' Agreements and the
consummation of the transactions contemplated hereby and thereby will not result
in the creation or imposition of any lien, charge or encumbrance upon any of the
assets of such Selling Shareholder pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder or any of its properties is bound or
affected, or violate or conflict with any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency or body
applicable to such Selling Shareholder or, if such Selling Shareholder is a
corporation, partnership or other entity, the organizational documents of such
Selling Shareholder.
(g) Such Selling Shareholder has, and at the Option Closing Date,
will have, good and marketable title to the Selling Shareholder Option Shares to
be sold by such Selling Shareholder hereunder, free and clear of all liens,
encumbrances, equities or claims whatsoever; and, upon delivery of such Selling
Shareholder Option Shares and payment therefor pursuant hereto, good and
marketable title to such Selling Shareholder Option Shares, free and clear of
all liens, encumbrances, equities or claims whatsoever, will be delivered to the
Underwriters.
(h) On the Option Closing Date, all stock transfer or other taxes
(other than income taxes) that are required to be paid in connection with the
sale and transfer of the Shares to be sold by such Selling Shareholder to the
several Underwriters hereunder will be have been fully paid or provided for by
such Selling Shareholder and all laws imposing such taxes will have been fully
complied with.
(i) Other than as permitted by the Act and the Rules and Regulations,
such Selling Shareholder has not distributed and will not distribute any
preliminary prospectus, the Prospectus or any other offering material in
connection with the offering and sale of the Shares. Such Selling Shareholder
has not taken and will not at any time take, directly or indirectly, any action
designed, or which might reasonably be expected, to cause or result in, or which
will constitute, stabilization of the price of shares of Common Stock to
facilitate the sale or resale of any of the Shares.
(j) All information with respect to such Selling Shareholder
contained in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement thereto complied or will comply in all
material respects with all applicable requirements of the Act and the Rules and
Regulations and does not and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(k) Such Selling Shareholder has no knowledge of any material fact or
condition not set forth in the Registration Statement or the Prospectus that has
adversely affected, or may adversely affect, the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company, and the sale of the Shares proposed to be sold by such Selling
Shareholder is not prompted by any such knowledge.
(l) Such Selling Shareholder has no reason to believe that the
representations and warranties of the Company contained in Section 3 hereof are
not true and correct.
(m) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated, such Selling
Shareholder agrees to deliver to you prior to or at the Option Closing Date a
properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
5. AGREEMENTS OF THE COMPANY AND THE SELLING SHAREHOLDERS. Each of
the Company and the Selling Shareholders respectively covenants and agrees with
the several Underwriters as follows:
8
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly, and
will confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (ii) of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose or the threat thereof, (iv) of the happening of any event
during the period mentioned in the second sentence of Section 5(e) that in the
judgment of the Company makes any statement made in the Registration Statement
or the Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in the light of the circumstances in which they are made, not
misleading and (v) of receipt by the Company or any representative or attorney
of the Company of any other communication from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A of the Rules and Regulations, the
Company will comply with the provisions of and make all requisite filings with
the Commission pursuant to said Rule 430A and notify the Representatives
promptly of all such filings.
(c) The Company will furnish to each Representative, without charge,
one signed copy of each of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto and will furnish to the Representatives, without charge, for
transmittal to each of the other Underwriters, a copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the
Company will deliver to each of the Underwriters, without charge, as many copies
of the Prospectus or any amendment or supplement thereto as the Representatives
may reasonably request. The Company consents to the use of the Prospectus or
any amendment or supplement thereto by the several Underwriters and by all
dealers to whom the Shares may be sold, both in connection with the offering or
sale of the Shares and for any period of time thereafter during which the
Prospectus is required by law to be delivered in connection therewith. If
during such period of time any event shall occur which in the judgment of the
Company or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto, and
will deliver to each of the Underwriters, without charge, such number of copies
of such supplement or amendment to the Prospectus as the Representatives may
reasonably request.
(f) Prior to any public offering of the Shares, the Company will
cooperate with the Representatives and counsel to the Underwriters in connection
with the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives may
request; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) The Company will, so long as required under the Rules and
Regulations, furnish to its shareholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, Shareholders' equity and cash flow of the Company and its consolidated
subsidiaries, if any, certified by
9
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its Subsidiaries,
if any, for such quarter in reasonable detail.
(h) During the period of five years commencing on the Effective Date,
the Company will furnish to the Representatives and each other Underwriter who
may so request copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
(i) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(j) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company and, unless
otherwise paid by the Company, the Selling Shareholders will pay or reimburse if
paid by the Representatives, in such proportions as they may agree upon
themselves, all costs and expenses incident to the performance of the
obligations of the Company and the Selling Shareholders under this Agreement and
in connection with the transactions contemplated hereby, including but not
limited to costs and expenses of or relating to (i) the preparation, printing
and filing of the Registration Statement and exhibits to it, each preliminary
prospectus, Prospectus and any amendment or supplement to the Registration
Statement or Prospectus, (ii) the preparation and delivery of certificates
representing the Shares, (iii) the printing of this Agreement, the Agreement
Among Underwriters, any Selected Dealer Agreements, any Underwriters'
Questionnaires, the Shareholders' Agreements, any Underwriters' Powers of
Attorney, and any invitation letters to prospective Underwriters,
(iv) furnishing (including costs of shipping and mailing) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold, (v) the listing of the Shares on the NNM, (vi) any
filings required to be made by the Underwriters with the NASD, and the fees,
disbursements and other charges of counsel for the Underwriters in connection
therewith, (vii) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 5(f), including the fees, disbursements and other charges of
counsel to the Underwriters in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (viii) fees,
disbursements and other charges of counsel to the Company (but not those of
counsel for the Underwriters, except as otherwise provided herein) and (ix) the
transfer agent for the Shares. The Underwriters may deem the Company to be the
primary obligor with respect to all costs, fees and expenses to be paid by the
Company and by the Selling Shareholders. The Selling Shareholders will pay
(directly or by reimbursement) all fees and expenses incident to the performance
of their obligations under this Agreement that are not otherwise specifically
provided for herein, including but not limited to any fees and expenses of
counsel for such Selling Shareholders, any fees and expenses of the
Attorneys-in-Fact and the Custodian, and all expenses and taxes incident to the
sale and delivery of the Shares to be sold by such Selling Shareholders to the
Underwriters hereunder.
(k) The Company will not at any time, directly or indirectly, take
any action designed or which might reasonably be expected to cause or result in,
or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds" and shall 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.
(m) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the Prospectus, without the
prior written consent of ▇▇▇▇▇▇▇ & Company, Inc., the Company will
10
not offer, sell, contract to sell, grant options to purchase or otherwise
dispose of any of the Company's equity securities of the Company or any other
securities convertible into or exchangeable with its Common Stock or other
equity security (other than pursuant to employee stock option plans or the
conversion of convertible securities or the exercise of warrants outstanding on
the date of this Agreement).
(n) During the period of 180 days after the date of the Prospectus,
the Company will not, without the prior written consent of ▇▇▇▇▇▇▇ & Company,
Inc., grant options to purchase shares of Common Stock at a price less than the
initial public offering price. During the period of 180 days after the date of
the Prospectus, the Company will not file with the Commission or cause to become
effective any registration statement relating to any securities of the Company
without the prior written consent of ▇▇▇▇▇▇▇ & Company, Inc.
(o) The Selling Shareholders will, and the Company will cause each of
its officers, directors and certain Shareholders designated by the
Representatives to, enter into lock-up agreements with the Representatives to
the effect that they will not, without the prior written consent of ▇▇▇▇▇▇▇ &
Company, Inc., sell, contract to sell or otherwise dispose of any shares of
Common Stock or rights to acquire such shares according to the terms set forth
in Schedule III hereto.
(p) The Company will not file with the Commission any registration
statement on Form S-8 relating to shares of its Common Stock prior to 90 days
after the effective date of the Registration Statement.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 5:00 p.m., New York City
time, on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Representatives and all filings required by
Rule 424 and Rule 430A of the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and the Representatives do
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and, if later, the Option Closing Date and
signed by the Chief Executive Officer and the Chief Financial Officer of the
Company (who may, as to proceedings threatened, rely upon the best of their
information and belief), to the effect of clauses (i), (ii) and (iii) of this
paragraph.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company, whether or not arising from transactions in the
ordinary course of business, in each case other than as described in or
contemplated by the Registration Statement and the Prospectus, and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not described in the
Registration Statement and the Prospectus, if in the judgment of the
Representatives any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares by the Underwriters at the
initial public offering price.
(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers or directors in their capacities as such, before or by any federal,
state or local court, commission, regulatory
11
body, administrative agency or other governmental body, domestic or foreign, in
which litigation or proceeding an unfavorable ruling, decision or finding would,
in the judgment of the Representatives, materially and adversely affect the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company.
(e) Each of the representations and warranties of the Company and the
Selling Shareholders contained herein shall be true and correct in all material
respects at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, and all covenants and agreements contained herein to be
performed on the part of the Company or the Selling Shareholders and all
conditions contained herein to be fulfilled or complied with by the Company or
the Selling Shareholders at or prior to the Closing Date and, with respect to
the Option Shares, at or prior to the Option Closing Date, shall have been duly
performed, fulfilled or complied with.
(f) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to the Representatives and counsel for the
Underwriters from ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A., counsel to the Company and the
Selling Shareholders, with respect to the following matters:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation; has full corporate power and authority to conduct all
the activities conducted by it, to own or lease all the assets owed or
leased by it and to conduct its business as described in the
Registration Statement and Prospectus; and is duly licensed or
qualified to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it
makes such license or qualification necessary and where the failure to
be licensed or qualified would have a material and adverse effect on
the business or financial condition of the Company.
(ii) All of the outstanding shares of capital stock of the
Company (including the Selling Shareholder Option Shares) have been
duly authorized, validly issued and are fully paid and nonassessable,
to such counsel's knowledge, were issued pursuant to exemptions from
the registration and qualification requirements of federal and
applicable state securities laws, and were not issued in violation of
or subject to any preemptive or, to such counsel's knowledge, similar
rights;
(iii) The specimen certificate evidencing the Common Stock filed
as an exhibit to the Registration Statement is in due and proper form
under Minnesota law, the Shares to be sold by the Company hereunder
have been duly authorized and, when issued and paid for as
contemplated by this Agreement, will be validly issued, fully paid and
nonassessable; and no preemptive or similar rights exist with respect
to any of the Shares or the issue and sale thereof.
(iv) To such counsel's knowledge, the Company does not own or
control, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any
equity interest in any corporation, firm, partnership, joint venture,
association or other entity.
(v) The authorized and outstanding capital stock of the
Company is as set forth in the Registration Statement and the
Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement or pursuant to reservations, agreements, employee
benefit plans or the exercise of convertible securities, options or
warrants referred to in the Prospectus). To such counsel's knowledge,
except as disclosed in or specifically contemplated by the Prospectus,
there are no outstanding options, warrants of other rights calling for
the issuance of, and no commitments, plans or arrangements to issue,
any shares of capital stock of the Company or any security convertible
into or exchangeable or exercisable for capital stock of the Company.
The description of the capital stock of the Company in the
Registration Statement and the Prospectus conforms in all material
respects to the terms thereof.
12
(vi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company is
a party or to which any of its properties is subject that are required
to be described in the Registration Statement or the Prospectus but
are not so described.
(vii) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body
is required for the consummation by the Company of the transactions on
its part contemplated under this Agreement, except such as have been
obtained or made under the Act or the Rules and Regulations and such
as may be required under state securities or Blue Sky laws or the
by-laws and rules of the NASD in connection with the purchase and
distribution by the Underwriters of the Shares.
(viii) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The execution and delivery of this Agreement, the
compliance by the Company with all of the terms hereof and the
consummation of the transactions contemplated hereby does not
contravene any provision of applicable law or the Articles of
Incorporation or by-laws of the Company [or any of its Subsidiaries],
and to such counsel's knowledge will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets
of the Company pursuant to the terms and provisions of, result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, or give any party a right to terminate any
of its obligations under, or result in the acceleration of any
obligation under, any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other
evidence of indebtedness, lease, contract or other agreement or
instrument known to such counsel to which the Company is a party or by
which the Company or any of its properties is bound or affected, or
violate or conflict with (i) any judgment, ruling, decree or order
known to such counsel or (ii) any statute, rule or regulation of any
court or other governmental agency or body, applicable to the business
or properties of the Company.
(x) To such counsel's knowledge, there is no document or
contract of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required,
and each description of such contracts and documents that is contained
in the Registration Statement and Prospectus fairly presents in all
material respects the information required under the Act and the Rules
and Regulations.
(xi) The statements under the captions "Risk Factors
Provisions of our articles of incorporation, our by-laws and Minnesota
law could discourage potential acquisition proposals and delay or
prevent a change in control," "Management Benefit Plans,"
"Management Employment Contracts," "Certain Transactions,"
"Description of Capital Stock," and "Shares Eligible for Future Sale"
in the Prospectus, insofar as the statements constitute a summary of
documents referred to therein or matters of law, are accurate
summaries and fairly and correctly present, in all material respects,
the information called for with respect to such documents and matters
(provided, however, that such counsel may rely on representations of
the Company with respect to the factual matters contained in such
statements, and provided further that such counsel shall state that
nothing has come to the attention of such counsel which leads them to
believe that such representations are not true and correct in all
material respects).
(xii) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
The Shares have been duly authorized for listing on the NNM, subject
to notice of issuance.
(xiii) To such counsel's knowledge, no holder of securities of
the Company has rights, which have not been waived, to require the
registration with the Commission shares of Common Stock or other
securities, as part of the offering contemplated hereby.
13
(xiv) The Registration Statement has become effective under the
Act, and to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or is pending,
threatened or contemplated.
(xv) The Registration Statement and the Prospectus comply as to
form in all material respects with the requirement of the Act and the
Rules and Regulations (other than the financial statements, schedules
and other financial data contained in the Registration Statement or
the Prospectus, as to which such counsel need express no opinion).
(xvi) Such counsel has participated in the preparation of the
Registration Statement and Prospectus and has no reason to believe
that, as of the Effective Date the Registration Statement, or any
amendment or supplement thereto, (other than the financial statements,
schedules and other financial data contained therein, as to which such
counsel need express no opinion) contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, or any amendment or supplement
thereto, as of its date and the Closing Date and, if later, the Option
Closing Date, contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading (other than the financial statements,
schedules and other financial data contained therein, as to which such
counsel need express no opinion).
(xvii) This Agreement and the Shareholders' Agreements have each
been duly executed and delivered by or on behalf of each Selling
Shareholder; the Shareholders' Agreements each constitutes a valid and
binding agreement of such Selling Shareholder in accordance with its
terms, except as enforceability may be limited by the application of
bankruptcy, insolvency or other laws affecting creditors' rights
generally or by general principles of equity; the Attorneys-in-Fact
and the Custodian have been duly authorized by such Selling
Shareholder to deliver the Shares on behalf of such Selling
Shareholder in accordance with the terms of this Agreement; and the
sale of the Shares to be sold by such Selling Shareholder hereunder,
the performance by such Selling Shareholder of this Agreement and the
Shareholders' Agreements and the consummation of the transactions
contemplated hereby and thereby will not result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, or give any party a right to terminate any of its
obligations under, or result in the acceleration of any obligation
under any indenture, mortgage, deed of trust, voting trust agreement,
loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to
which such Selling Shareholder is a party or by which such Selling
Shareholder or any of its properties is bound or affected, or violate
or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body
applicable to such Selling Shareholder or, if such Selling Shareholder
is a corporation, partnership or other entity, the organizational
documents of such Selling Shareholder.
(xviii) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body
is required for the consummation by the Selling Shareholders of the
transactions on their part contemplated by this Agreement, except such
as have been obtained or made under the Act or the Rules and
Regulations and such as may be required under state securities or Blue
Sky laws or the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares.
(xix) Each Selling Shareholder has full legal right, power and
authority to enter into this Agreement and the Shareholders'
Agreements and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder hereunder and, upon payment for such
Shares and assuming that the Underwriters are purchasing such Shares
in good faith and without notice of any other adverse claim within the
meaning of the Uniform Commercial Code, the Underwriters will have
acquired all rights of such Selling Shareholder in such Shares free of
any adverse claim, any lien in favor of the Company and any
restrictions on transfer imposed by the Company.
14
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of the Selling Shareholders, officers of the Company and
governmental officials and the representations and warranties of the Company and
the Selling Shareholders contained in this Agreement and the Shareholders'
Agreements, provided that the opinion of counsel to the Company and Selling
Shareholders shall state that they are doing so, that they have no reason to
believe that they and the Underwriters are not entitled to rely on such
certificates and that copies of such opinions or certificates are to be attached
to the opinion.
In rendering such opinion, such counsel may rely upon as to matters of
local law on opinions of counsel satisfactory in form and substance to the
Representatives and counsel for the Underwriters, provided that the opinion of
counsel to the Company and the Selling Shareholders shall state that they are
doing so, that they have no reason to believe that they and the Underwriters are
not entitled to rely on such opinions and that copies of such opinions are to be
attached to the opinion.
(g) The Representatives shall have received an opinion, dated the Closing
Date and the Option Closing Date, from Faegre & ▇▇▇▇▇▇ LLP, counsel to the
Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to the
Representatives.
(h) Concurrently with the execution and delivery of this Agreement, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations and with respect to certain financial and other statistical and
numerical information contained in the Registration Statement. At the Closing
Date and, as to the Option Shares, the Option Closing Date, the Accountants
shall have furnished to the Representatives a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from the Accountants, that nothing has come
to their attention during the period from the date of the letter referred to in
the prior sentence to a date (specified in the letter) not more than five days
prior to the Closing Date and the Option Closing Date, as the case may be, which
would require any change in their letter dated the date hereof if it were
required to be dated and delivered at the Closing Date and the Option Closing
Date.
(i) Concurrently with the execution and delivery of this Agreement and at
the Closing Date and, as to the Option Shares, the Option Closing Date, there
shall be furnished to the Representatives a certificate, dated the date of its
delivery, signed by each of the Chief Executive Officer and the Chief Financial
Officer of the Company, in form and substance satisfactory to the
Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of
such certificate, such documents are true and correct in all material
respects and do not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein
not untrue or misleading and (B) in the case of the certificate
delivered at the Closing Date and the Option Closing Date, since the
Effective Date no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein not untrue or misleading.
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at
the time such certificate is delivered, as if made on and as of such
date, true and correct.
(iii) Each of the covenants required to be performed by the
Company herein on or prior to the date of such certificate has been
duly, timely and fully performed and each condition herein required to
be satisfied or fulfilled on or prior to the date of such certificate
has been duly, timely and fully satisfied or fulfilled.
(j) Concurrently with the execution and delivery of this Agreement and at
the Closing Date and, as to the Option Shares, the Option Closing Date, there
shall be furnished to the Representatives a certificate, dated the date of its
delivery, signed by the Selling Shareholders (or the Attorneys-in-Fact on their
behalf), in form and substance
15
satisfactory to the Representatives, to the effect that the representations and
warranties of the Selling Shareholders contained herein were, when originally
made, true and correct and are true and correct in all material respects on and
as of the date of such certificate as if made on and as of the date of such
certificate, and each of the covenants and conditions required herein to be
performed or complied with by the Selling Shareholders on or prior to the date
of such certificate has been duly, timely and fully performed or complied with.
(k) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 5(o).
(l) The Shares shall be qualified for sale in such jurisdictions as the
Representatives may reasonably request and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
or the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have been duly authorized
for listing on the NNM upon official notice of issuance.
(n) The Company and the Selling Shareholders shall have furnished to the
Representatives such certificates, in addition to those specifically mentioned
herein, as the Representatives may have reasonably requested as to the accuracy
and completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus, as to the accuracy at
the Closing Date and the Option Closing Date of the representations and
warranties of the Company and the Selling Shareholders herein, as to the
performance by the Company and the Selling Shareholders of its and their
respective obligations hereunder, or as to the fulfillment of the conditions
concurrent and precedent to the obligations hereunder of the Representatives.
7. INDEMNIFICATION.
(a) The Company and each of the Selling Shareholders, jointly and
severally, will indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person, if any, who
controls each Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading in the light of the circumstances in which
they were made, or arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of the Company or the Selling
Shareholders contained herein or any failure of the Company or the Selling
Shareholders to perform its or their obligations hereunder or under law in
connection with the transactions contemplated hereby; PROVIDED, HOWEVER, that
(i) the Company and the Selling Shareholders will not be liable to the extent
that such loss, claim, liability, expense or damage arises from the sale of the
Shares in the public offering to any person by an Underwriter and is based on an
untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives, on behalf of any
Underwriter, expressly for inclusion in the Registration Statement, the
preliminary prospectus or the Prospectus; (ii) the Company and the Selling
Shareholders will not be liable to any Underwriter, the directors, officers,
employees or agents of such Underwriter or any person controlling such
Underwriter with respect to any loss, claim, liability, expense, or damage
arising out of or based on any untrue statement or omission or alleged untrue
statement or omission or alleged omission to state a material fact in the
preliminary prospectus which is corrected in the Prospectus if the person
asserting any such loss, claim, liability, charge or damage purchased Shares
from such Underwriter but was not sent or given a copy of the Prospectus at or
prior to the written confirmation of the sale of such Shares to such person; and
(iii) the liability of each Selling Shareholder under this Section 7(a) shall
not exceed the product of the purchase price for each Share set forth in Section
1(a) hereof multiplied by the number of Shares sold by such Selling Shareholder
hereunder. The Company and the Selling Shareholders acknowledge that the
statements set forth under the heading "Underwriting" in the
16
preliminary prospectus and the Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representatives on behalf of the Underwriters expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus. This
indemnity agreement will be in addition to any liability that the Company and
the Selling Shareholders might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each director of the Company, each officer of the Company who signs the
Registration Statement, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and each
Selling Shareholder to the same extent as the foregoing indemnity from the
Company and each Selling Shareholder to each Underwriter, as set forth in
Section 7(a), but only insofar as losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives, on behalf of such Underwriter, expressly for use in the
Registration Statement, the preliminary prospectus or the Prospectus. The
Company and the Selling Shareholders acknowledge that the statements set forth
under the heading "Underwriting" in the preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by the Representatives on behalf of the Underwriters
expressly for inclusion in the Registration Statement, the preliminary
prospectus or the Prospectus. This indemnity will be in addition to any
liability that each Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section 7 shall, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 7, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 7 unless,
and only to the extent that, such omission results in the loss of substantive
rights or defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party,
(ii) the indemnified party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (iii) a conflict or potential conflict exists (based on advice of counsel
to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction at any one time for
all such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. Any indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld).
(d) If the indemnification provided for in this Section 7 is
applicable in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) and (c) of this Section 7 in respect of any losses, claims,
liabilities, expenses and damages referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable (including any investigative, legal and
other expenses reasonably incurred in connection with, and
17
any amount paid in settlement of, any action, suit or proceeding or any claim
asserted, but after deducting any contribution received by the Company or the
Selling Shareholders from persons other than the Underwriters, such as persons
who control the Company within the meaning of the Act, officers of the Company
who signed the Registration Statement and directors of the Company, who also may
be liable for contribution) by such indemnified party as a result of such
losses, claims, liabilities, expenses and damages in such proportion as shall be
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders, on the one hand, and the Underwriters, on the other hand.
The relative benefits received by the Company and the Selling Shareholders, on
the one hand, and the Underwriters, on the other hand, shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholders bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. If,
but only if, the allocation provided by the foregoing sentence is not permitted
by applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits referred
to in the foregoing sentence but also the relative fault of the Company and the
Selling Shareholders, on the one and, and the Underwriters, on the other hand,
with respect to the statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Selling Shareholders or
the Representatives on behalf of the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling Shareholders and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 7(d) shall be deemed to
include, for purposes of this Section 7(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts received by it and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 7(d) are several in proportion to their respective
underwriting obligations and not joint. or purposes of this Section 7(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against any such party in respect of which a claim for
contribution may be made under this Section 7(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 7(d). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company and the Selling
Shareholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of any of the Shares and payment therefor or
(iii) any termination of this Agreement.
8. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other
obligations under Section 7(a) of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon,
in whole or in part, any statement or omission or alleged statement or omission,
or any inaccuracy in the representations and warranties of the Company or the
Selling Shareholder contained herein or failure of the Company or the Selling
Shareholders to perform its or their respective obligations hereunder or under
law, all as described in Section 7(a), notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this Section 8 and the possibility that such payment might
18
later be held to be improper; PROVIDED, HOWEVER, that, to the extent any such
payment is ultimately held to be improper, the persons receiving such payments
shall promptly refund them.
9. TERMINATION. The obligations of the several Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Shares, on or prior to the Option Closing Date), by
notice to the Company and the Selling Shareholders from the Representatives,
without liability on the part of any Underwriter to the Company if, prior to
delivery and payment for the Firm Shares or Option Shares, as the case may be,
in the sole judgment of the Representatives, (i) trading in any of the equity
securities of the Company shall have been suspended by the Commission or by The
Nasdaq Stock Market, (ii) trading in securities generally on the New York Stock
Exchange or The Nasdaq Stock Market shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such
exchange, or additional material governmental restrictions, not in force on the
date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange, by order of the Commission or any court or other
governmental authority, or by the New York Stock Exchange or The Nasdaq Stock
Market, (iii) a general banking moratorium shall have been declared by either
federal, Minnesota State or New York State authorities or (iv) any material
adverse change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or other calamity or crisis shall have
occurred, the effect of which is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with completion of the
public offering or the delivery of and payment for the Shares.
If this Agreement is terminated pursuant to Section 10 hereof, neither the
Company nor any Selling Shareholder shall be under any liability to any
Underwriter except as provided in Sections 5(j), 7 and 8 hereof; but, if for any
other reason the purchase of the Shares by the Underwriters is not consummated
or if for any reason the Company shall be unable to perform its obligations
hereunder, the Company and the Selling Shareholders will reimburse the several
Underwriters for all out-of-pocket expenses (including the fees, disbursements
and other charges of counsel to the Underwriters) incurred by them in connection
with the offering of the Shares.
10. SUBSTITUTION OF UNDERWRITERS. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Firm Shares which it or they have
agreed to purchase hereunder, and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Firm Shares, the other
Underwriters shall be obligated, severally, to purchase the Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so agreed
to purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum number of Firm Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 10 by more than one-ninth of such number of Firm Shares
without the prior written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Firm Shares and the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase exceeds one-tenth of the aggregate number of
the Firm Shares and arrangements satisfactory to the Representatives and the
Company for the purchase of such Firm Shares are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholders for the
purchase or sale of any Shares under this Agreement. In any such case either
the Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Any action taken pursuant to
this Section 10 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
11. MISCELLANEOUS. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: [Chief Executive Officer], with
a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.A., or (b) if to the
Underwriters, to the Representatives at the offices of ▇▇▇▇▇▇▇ & Company, Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance
Department, with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., Faegre & ▇▇▇▇▇▇ LLP. Any such
notice shall be effective only
19
upon receipt. Any notice under such Section 9 or 10 may be made by telex or
telephone, but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, the Selling Shareholders and the controlling persons,
directors and officers referred to in Section 7, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of Shares from any
of the several Underwriters.
Any action required or permitted to be made by the Representatives under
this Agreement may be taken by them jointly or by ▇▇▇▇▇▇▇ & Company, Inc.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby waive any right they may have
to a trial by jury in respect of any claim based upon or arising out of this
Agreement or the transactions contemplated hereby.
20
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the several Underwriters.
Very truly yours,
AUGUST TECHNOLOGY CORPORATION
By:
-----------------------------------
Title:
SELLING SHAREHOLDERS
(named in Schedule II hereto)
By:
-----------------------------------
Attorney-in-Fact
Confirmed as of the date first
above mentioned:
▇▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇,, INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
Acting on behalf of themselves
and as the Representatives of
the other several Underwriters
named in Schedule I hereto.
By: ▇▇▇▇▇▇▇ & COMPANY, INC.
By:
-----------------------------------
Title:
21
SCHEDULE I
UNDERWRITERS
Number of
Firm
Shares
Underwriters to be Purchased
------------ ---------------
▇▇▇▇▇▇▇ & Company, Inc..................................
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.............................
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc................................
---------
Total......................................... ---------
---------
22
SCHEDULE II
Total Number of
Option Shares
to be Sold
----------
August Technology Corporation.....................
[Selling Shareholder 1]...........................
[Selling Shareholder 2]...........................
------
TOTAL........................................
------
------
23
SCHEDULE III
FORM OF LOCK-UP AGREEMENT
[AND DIRECTORS, OFFICERS AND SHAREHOLDERS
OF THE COMPANY WHO SHALL SIGN SUCH AGREEMENT]
The undersigned is a holder of securities of August Technology Corporation,
a Minnesota corporation (the "Company"), and wishes to facilitate the public
offering of shares of the Common Stock (the "Common Stock") of the Company (the
"Offering"). The undersigned recognizes that such Offering will be of benefit
to the undersigned.
In consideration of the foregoing and in order to induce you to act as
underwriters in connection with the Offering, the undersigned hereby agrees that
he, she or it will not, without the prior written approval of ▇▇▇▇▇▇▇ & Company,
Inc., acting on its own behalf and/or on behalf of other representatives of the
underwriters, directly or indirectly, sell, contract to sell, make any short
sale, pledge, or otherwise dispose of, or enter into any hedging transaction
that is likely to result in a transfer of, any shares of Common Stock, options
to acquire shares of Common Stock or securities exchangeable for or convertible
into shares of Common Stock of the Company which he, she or it may own, for a
period commencing as of the date hereof and ending on the date which is one
hundred eighty (180) days after the date of the final Prospectus relating to the
Offering[; provided, however, that the foregoing shall not prohibit any
distribution by a partnership to its partners so long as such partners agree to
be bound by the terms of this Agreement]. The undersigned confirms that he, she
or it understands that the underwriters and the Company will rely upon the
representations set forth in this Agreement in proceeding with the Offering.
The undersigned further confirms that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The undersigned agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of securities held by the undersigned except in compliance
with this Agreement.
This Agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns.
----------------------------------------
24