REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of April 30, 1999 (the
"AGREEMENT"), is made by and between EXCELSIOR-XXXXXXXXX MOTORCYCLE
MANUFACTURING COMPANY, a Minnesota corporation (the "COMPANY"), and the
investors named on the signature pages hereto (the "INITIAL INVESTORS").
W I T N E S S E T H :
WHEREAS, in connection with the Securities Purchase Agreement dated
April 30, 1999 between the Initial Investors and the Company (the "PURCHASE
AGREEMENT"), the Company has agreed, upon the terms and subject to the
conditions of said Purchase Agreement, to issue and sell to the Initial
Investors Ten Million U.S. Dollars ($10,000,000) face amount of the Company's
Series D Convertible Preferred Stock ("PREFERRED SHARES") convertible into
shares of the Company's common stock, par value $0.01 per share (the "COMMON
STOCK"), together with Stock Purchase Warrants (the "WARRANTS") to purchase
additional shares of Common Stock. The shares of Common Stock of the Company
issuable upon conversion of or otherwise pursuant to the Preferred Shares are
collectively referred to herein as the "COMMON SHARES." The shares of Common
Stock issuable upon exercise or otherwise pursuant to the Warrants are
collectively referred to as the "WARRANT SHARES." The rights and privileges
of the holders of the Preferred Shares are set forth in the Statement of
Designation of Rights, Preferences and Limitations of Series D Convertible
Preferred Stock of the Company ("CERTIFICATE OF DESIGNATION").
WHEREAS, to induce the Initial Investors to execute and deliver the
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws with respect to the Common
Shares and Warrant Shares.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investors hereby agree as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
(a) "HOLDERS" are stockholders of the Company who, by virtue of
agreements with the Company, are entitled to include their securities in
certain Registration Statements filed by the Company.
Excelsior-Xxxxxxxxx Motorcycle Manufacturing Company Page 2
Registration Rights Agreement
(b) "INVESTORS" means the Initial Investors and any transferees or
assignees of the Initial Investors who agree to become bound by the
provisions of this Agreement in accordance with Section 9 hereof.
(c) "REGISTRABLE SECURITIES" means the Common Shares and Warrant
Shares issued or issuable with respect to the Preferred Shares and the
Warrants (without regard to any limitations on conversion or exercise) and
any shares of capital stock issued or issuable, from time to time (with any
adjustments), on or in exchange for or otherwise with respect to the
foregoing.
(d) "REGISTRATION PERIOD" means the period between the date of
this Agreement and the earlier of (i) the date on which all of the
Registrable Securities have been sold and no further Registrable Securities
may be issued in the future, or (ii) the date on which all the Registrable
Securities relating to the Preferred Shares (in the opinion of Investors'
counsel) may be immediately sold without registration and without restriction
(including without limitation as to volume by each holder thereof) as to the
number of Registrable Securities to be sold pursuant to Rule 144 (as defined
herein) or otherwise.
(e) "REGISTRATION STATEMENT" means, collectively, each
registration statement filed with the Securities and Exchange Commission (the
"SEC") under the 1933 Act pursuant to the terms hereof.
(f) The terms "REGISTER," "REGISTERED," and "REGISTRATION" refer
to a registration effected by preparing and filing a Registration Statement
or Statements in compliance with the 1933 Act and pursuant to Rule 415 under
the 1933 Act or any successor rule providing for offering securities on a
continuous basis ("RULE 415") and applicable rules and regulations
thereunder, and the declaration or ordering of effectiveness of such
Registration Statement by the SEC.
2. REGISTRATION.
(a) MANDATORY REGISTRATION. The Company will file a Registration
Statement on Form S-3 with the SEC registering the Registrable Securities and
no other securities (other than (i) shares of Common Stock issuable upon
exercise of warrants issued to Shoreline (as defined below) in connection
with the transactions contemplated hereby and under the Securities Purchase
Agreement or (ii) issued or issuable to holders with registration rights
pursuant to the previously granted stock purchase warrants as described in
Section 3.3 of the Purchase Agreement) for resale within twenty (20) business
days of the closing of the initial purchase of the Preferred Shares (the
"CLOSING DATE"). To the extent allowable under the 1933 Act and the rules
promulgated thereunder (including Rule 416), the Registration Statement shall
include the Common Shares and the Warrant Shares and such indeterminate
number of additional shares of Common Stock as may become issuable upon
conversion of the Preferred Shares and exercise of the Warrants to prevent
dilution resulting from stock splits, stock dividends or similar
transactions. The number of shares of Common Stock initially included in
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such Registration Statement shall be no less than (a) the number of shares of
Common Stock issuable upon exercise of the Warrants plus (b) two (2) times
the number of Common Shares that would be issuable upon conversion of the
Preferred Shares at the Market Price (as defined in the Certificate of
Designation) on the Closing Date.
The Company shall use its best efforts to cause such Registration Statement
to be declared effective by the SEC as soon as practicable after filing and
in any event no later than the one hundred twentieth (120th)day following the
Closing Date (the "REQUIRED EFFECTIVE DATE"). Such best efforts shall
include, but not be limited to, promptly responding to all comments received
from the staff of the SEC. Should the Company receive notification from the
SEC that the Registration Statement will receive no action or no review from
the SEC, the Company shall cause such Registration Statement to become
effective within five (5) business days of such SEC notification. Once
declared effective by the SEC, the Company shall cause such Registration
Statement to remain effective throughout the Registration Period, except as
permitted pursuant to Section 3(a).
If (i) at any time after effectiveness of the Registration Statement
sales cannot be made thereunder for any reason for a period of more than ten
(10) consecutive business days, or thirty (30) days in the aggregate, during
any twelve (12) month period or (ii) the Common Stock is not listed or
included for quotation on Nasdaq, Nasdaq SmallCap, the NYSE or AMEX for more
than an aggregate of ten (10) business days in any twelve month period, the
Company will thereafter make cash payments to the Investors as partial
compensation for such delay in an amount equal to one and one-half percent
(1.5%) of the Outstanding Face Amount (as defined below) for each month that
sales cannot be made under the effective Registration Statement or the Common
Stock is not listed or included for quotation on Nasdaq, Nasdaq SmallCap, the
NYSE or AMEX, continuing through the date that sales can be made under the
effective Registration Statement or the Common Stock is not listed or
included for quotation on Nasdaq, Nasdaq SmallCap, the NYSE or AMEX
("ILLIQUIDITY PAYMENTS"). "OUTSTANDING FACE AMOUNT" shall mean the sum of
(x) the Face Amount of the then-outstanding Preferred Shares and (y) in the
case of Registrable Securities issued upon conversion of Preferred Shares and
not previously sold by such Investor, the Face Amount of the Preferred Shares
from which such Registrable Securities were converted. Such payments will be
prorated on a daily basis for partial months and will be paid to each
Investor in cash within five (5) business days following the end of each
month during which Illiquidity Payments accrue or, at each Investor's option,
may be added to the Face Value of the Preferred Shares and thereafter be
convertible into Common Stock at the Conversion Price (as defined in the
Certificate of Designation).
(b) LATE REGISTRATION PAYMENTS. If the Registration Statement
required pursuant to Section 2(a) above has not been declared effective by
the Required Effective Date, the Company will make cash payments to each
Investor as partial compensation for such delay (the "LATE REGISTRATION
PAYMENTS"). The Late Registration Payments will be equal to one and one-half
percent (1.5%) of the Outstanding Face Amount for each month following the
Required Effective Date, continuing through the date the Registration
Statement is declared effective by the SEC. The Late Registration Payments
will be prorated on a daily basis for partial months and will be paid to the
Initial Investors in cash within five (5) business days following the earlier
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of: (i) the end of each month following the Required Effective Date, or (ii)
the effective date of the Registration Statement. Nothing herein shall limit
the Investors' right to pursue actual damages for the Company's failure to
file a Registration Statement or to have it declared effective by the SEC on
or prior to the Required Effective Date in accordance with the terms of this
Agreement.
(c) LIMITATION ON LATE REGISTRATION PAYMENTS AND ILLIQUIDITY
PAYMENTS. Notwithstanding anything in this Agreement or in the Certificate
of Designation to the contrary, (i) the aggregate Late Registration Payments
payable hereunder, if any, together with any Default Amounts (as defined in
the Certificate of Designation) payable with respect to any of the Preferred
Shares pursuant to the Certificate of Designation as a result of a failure to
timely obtain effectiveness of the Registration Statement, shall not exceed
30% of the Face Amount of the Preferred Shares outstanding on the date of
payment, and (ii) the aggregate Illiquidity Payments payable with respect to
any period after effectiveness of the Registration Statement during which
sales cannot be made thereunder or during which the Common Stock is not
listed or included for quotation on Nasdaq, Nasdaq SmallCap, the NYSE or
AMEX, if any, together with any Default Amounts payable with respect to any
of the Preferred Shares as a result of such period of ineffectiveness
pursuant to the Certificate of Designation, shall not exceed 30% of the Face
Amount of the Preferred Shares outstanding on the date of payment. To the
extent the Late Registration Payments or Illiquidity Payments, as applicable,
together with any Default Amounts would exceed the respective limits
specified above in this Section 2(c), the aggregate Default Amounts will be
reduced so that the aggregate Late Registration Payments or Illiquidity
Payments, when added to the Default Amounts paid with respect to such event,
do not exceed such limits, and no further Late Registration Payments or
Illiquidity Payments, as applicable, will thereafter be payable with respect
to any such event.
(d) PIGGYBACK REGISTRATIONS. If, at any time prior to the
expiration of the Registration Period, the Registration Statement is not
effective with respect to all of the Registrable Securities and the Company
decides to register any of its securities for its own account or for the
account of others (excluding registrations by the Company on Form S-4 or S-8
or their equivalents relating to equity securities to be issued solely in
connection with an acquisition of any entity or business or equity securities
issuable in connection with stock option or other employee benefit plans),
the Company will promptly give the Investors written notice thereof, and will
use its best efforts to include in such registration all or any part of the
Registrable Securities so requested by such Investors (excluding any
Registrable Securities previously included in a Registration Statement).
Each Investor's request for registration must be given to the Company in
writing within fifteen (15) days after receipt of the notice from the
Company. If the registration for which the Company gives notice is a public
offering involving an underwriting, the Company will so advise the Investors
as part of the above-described written notice. In such event, if the
managing underwriter(s) of the public offering impose a limitation on the
number of shares of Common Stock which may be included in the Registration
Statement because, in such underwriter(s)' judgment, such limitation would be
necessary to effect an orderly public distribution, then the Company will be
obligated to include only such limited portion, if any, of the Registrable
Securities with respect to which such Investors have requested inclusion
hereunder. Any exclusion of Registrable Securities shall be made pro-rata
among all
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Holders of the Company's securities seeking to include shares of Common Stock
in proportion to the number of shares of Common Stock sought to be included
by such Holders; provided, however, that the Company will not exclude any
Registrable Securities unless the Company has first excluded all outstanding
securities the Holders of which are not entitled by right to inclusion of
securities in such Registration Statement or are not entitled pro rata
inclusion with the Registrable Securities. No right to registration of
Registrable Securities under this Section 2(d) shall be construed to limit in
any way the registration required under Section 2(a) above. The obligations
of the Company under this Section 2(d) will expire upon the earlier of: (i)
the effectiveness of the Registration Statement filed pursuant to Section
2(a) above; (ii) after the Company has afforded the opportunity for the
Investors to exercise registration rights under this Section 2(d) for two
registrations; provided, however, that any Investor who shall have had any
Registrable Securities excluded from any Registration Statement in accordance
with this Section 2(d) shall be entitled to include in any additional
Registration Statement filed by the Company the Registrable Securities so
excluded; or (iii) when all of the Registrable Securities held by any
Investor may be sold by such Investor under Rule 144 under the 1933 Act
without being subject to any volume restrictions.
(e) ELIGIBILITY FOR FORM S-3. The Company represents and warrants
that it meets the requirements for the use of Form S-3 for registration of
the sale by the Investors of the Registrable Securities. The Company shall
file all reports required to be filed by the Company with the SEC in a timely
manner so as to preserve its eligibility for the use of Form S-3.
3. ADDITIONAL OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall have the
following additional obligations:
(a) The Company shall keep the Registration Statement effective
pursuant to Rule 415 under the 1933 Act at all times during the Registration
Period as defined in Section 1(d) above; provided, however, that the
Investors agree that (i) use of the prospectus under the Registration
Statement may be suspended pursuant to Section 3(f) and (ii) upon receipt of
any notice from the Company that, in the judgment of the Company's Board of
Directors, it is advisable to suspend use of the prospectus for a discrete
period of time due to pending corporate developments, public filing with the
SEC or similar events, the Investors will forthwith discontinue, for a period
of up to ten (10) consecutive business days, disposition of such Registrable
Securities covered by such Registration Statement or prospectus until advised
in writing by the Company that use of the applicable prospectus may be
resumed, and until each such Investor has received copies of any additional
or supplemented filings that are incorporated or deemed to be incorporated by
reference in such prospectus. The Company shall use all reasonable efforts to
ensure that the use of the prospectus may be resumed as soon as practicable,
and in any event shall not be entitled to require the Investors to suspend
use of any prospectus for more than thirty (30) days in any twelve month
period.
(b) The Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) filed by the Company
shall not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made,
Page 6
not misleading. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to permit sales pursuant to the
Registration Statement at all times during the Registration Period, and,
during such period, shall comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the Company
covered by the Registration Statement until the termination of the
Registration Period, or if earlier, such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement
(c) The Company shall furnish to each Investor whose Registrable
Securities are included in the Registration Statement and its legal counsel
(i) promptly after the same is prepared and publicly distributed, filed with
the SEC or received by the Company, one copy of the Registration Statement
and any amendment thereto; each preliminary prospectus and final prospectus
and each amendment or supplement thereto; and, in the case of the
Registration Statement required under Section 2(a) above, each letter written
by or on behalf of the Company to the SEC and each item of correspondence
from the SEC or the staff of the SEC, in each case relating to such
Registration Statement (other than any portion of any item thereof which
contains information for which the Company has sought confidential
treatment); and (ii) such number of copies of a prospectus, including a
preliminary prospectus, and all amendments and supplements thereto, and such
other documents as such Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such
Investor.
(d) The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement
under such other securities or blue sky laws of such jurisdictions as each
Investor who holds (or has the right to hold) Registrable Securities being
offered reasonably request, (ii) prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications
in effect at all times during the Registration Period, and (iv) take all
other actions reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions. Notwithstanding the foregoing
provision, the Company shall not be required in connection therewith or as a
condition thereto to (i) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d), (ii)
subject itself to general taxation in any such jurisdiction, (iii) file a
general consent to service of process in any such jurisdiction, (iv) provide
any undertakings that cause material expense or burden to the Company, or (v)
make any change in its charter or bylaws, which in each case the Board of
Directors of the Company determines to be contrary to the best interests of
the Company and its stockholders.
(e) In the event Investors who hold a majority in interest of the
Registrable Securities being offered in an offering pursuant to a
Registration Statement or any amendment or supplement thereto under Section
2(a) or 3(b) select underwriters reasonably acceptable to the Company for
such offering, the Company shall enter into and perform its obligations under
an
Page 7
underwriting agreement in usual and customary form including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering.
(f) The Company shall notify (by telephone and also by facsimile
and reputable overnight courier) each Investor who holds Registrable
Securities being sold pursuant to a Registration Statement of the happening
of any event of which the Company has knowledge as a result of which the
prospectus included in the Registration Statement as then in effect includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (a
"SUSPENSION EVENT"). The Company shall make such notification as promptly as
practicable after the Company becomes aware of such Suspension Event, shall
promptly use its best efforts (but in any event within five business (5)
days) to prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission, and shall deliver a number of
copies of such supplement or amendment to each Investor as such Investor may
reasonably request. Notwithstanding anything contained herein or in the
Securities Purchase Agreement, in the event that the use of the Registration
Statement is suspended by the Company, the Company shall promptly notify all
Investors whose securities are covered by the Registration Statement of such
suspension, and shall promptly notify each such Investor as soon as the use
of the Registration Statement may be resumed. Notwithstanding anything to
the contrary, the Company shall cause the Transfer Agent to deliver
unlegended shares of Common Stock to a transferee of an Investor in
accordance with the terms of the Purchase Agreement in connection with any
sale of Registrable Securities with respect to which such Investor has
entered into a contract for sale prior to receipt of notice of such
suspension and for which such Investor has not yet settled.
(g) Subject to the Company's rights under Section 3(a), the
Company shall use its best efforts to prevent the issuance of any stop order
or other suspension of effectiveness of a Registration Statement and, if such
an order is issued, shall use its best efforts to obtain the withdrawal of
such order at the earliest possible time and to notify each Investor who
holds Registrable Securities being sold (or, in the event of an underwritten
offering, the managing underwriters) of the issuance of such order and the
resolution thereof.
(h) The Company shall permit a single firm of counsel designated
by the Investors who hold a majority in interest of the Registrable
Securities being sold pursuant to such registration to review the
Registration Statement and all amendments and supplements thereto (as well as
all requests for acceleration or effectiveness thereof) a reasonable period
of time prior to their filing with the SEC, and shall not file any document
in a form to which such counsel reasonably objects, unless required by law in
the opinion of the Company's counsel. The sections of such Registration
Statement covering information with respect to the Investors, the Investors'
beneficial ownership of securities of the Company or the Investors' intended
method of disposition of Registrable Securities shall conform to the
information provided to the Company by each of the Investors.
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(i) The Company shall make generally available to its security
Holders as soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement in a form
complying with the provisions of Rule 158 under the 1933 Act.
(j) At the request of the Investors who hold a majority in
interest of the Registrable Securities being sold pursuant to such
registration, the Company shall furnish on the date that Registrable
Securities are delivered to an underwriter for sale in connection with the
Registration Statement (i) a letter, dated such date, from the Company's
independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters; and (ii)
an opinion, dated such date, from counsel representing the Company for
purposes of such Registration Statement, in form and substance as is
customarily given in an underwritten public offering, addressed to the
underwriters and Investors.
(k) The Company shall make available for inspection by any
Investor whose Registrable Securities are being sold pursuant to such
registration, any underwriter participating in any disposition pursuant to
the Registration Statement, and any attorney, accountant or other agent
retained by any such Investor or underwriter (collectively, the
"INSPECTORS"), all pertinent financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "RECORDS"), as
shall be reasonably deemed necessary by each Inspector to enable each
Inspector to exercise its due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information which
any Inspector may reasonably request for purposes of such due diligence;
provided, however, that each Inspector shall hold in confidence and shall not
make any disclosure (except to an Investor) of any Record or other
information which the Company determines in good faith to be confidential,
and of which determination the Inspectors are so notified, unless (i) the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in any Registration Statement, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court or government body
of competent jurisdiction, or (iii) the information in such Records has been
made generally available to the public other than by disclosure in violation
of this or any other agreement (to the knowledge of the relevant Investor).
The Company shall not be required to disclose any confidential information in
such Records to any Inspector until and unless such Inspector shall have
entered into confidentiality agreements (in form and substance satisfactory
to the Company) with the Company with respect thereto, substantially in the
form of this Section 3(k). Each Investor agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt notice to
the Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein shall be deemed to
limit the Investor's ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.
(l) The Company shall hold in confidence and shall not make any
disclosure of information concerning an Investor provided to the Company
pursuant hereto unless (i) disclosure of such information is necessary to
comply with federal or state securities laws, (ii) the
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disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a
court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement or (v) such Investor
consents to the form and content of any such disclosure. The Company agrees
that it shall, upon learning that disclosure of such information concerning
an Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to such Investor
prior to making such disclosure and allow such Investor, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.
(m) The Company shall cause the listing and the continuation of
listing of all the Registrable Securities covered by the Registration
Statement on the Nasdaq National Market System, the Nasdaq Small Cap Market,
the New York Stock Exchange, the American Stock Exchange or any successor
national exchange or market, and cause the Registrable Securities to be
quoted or listed on each additional national securities exchange or quotation
system upon which the Common Stock is then listed or quoted.
(n) The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than
the effective date of the Registration Statement.
(o) The Company shall cooperate with the Investors who hold
Registrable Securities being sold and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to the Registration Statement and enable
such certificate to be in such denominations or amounts as the case may be,
and registered in such names as the managing underwriter or underwriters, if
any, or the Investors may reasonably request, all in accordance with the
provisions set forth in Section V of the Purchase Agreement.
(p) At the request of any Investor, the Company shall promptly
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the prospectus
used in connection with the Registration Statement as may be necessary in
order to change the plan of distribution set forth in such Registration
Statement.
(q) The Company shall comply with all applicable laws related to a
Registration Statement and offering and sale of securities and all applicable
rules and regulations of governmental authorities in connection therewith
(including, without limitation, the 1933 Act and the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated by the SEC).
(r) The Company shall take all other reasonable actions as any
Investor or the underwriters, if any, may reasonably request to expedite and
facilitate disposition by such Investor of the Registrable Securities
pursuant to the Registration Statement.
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(s) Subject to registration rights of holders of warrants referred
to in Section 2(a) hereof, from and after the date of this Agreement, the
Company shall not, and shall not agree to, allow the holders of any
securities of the Company to include any of their securities in any
Registration Statement under Section 2(a) hereof or any amendment or
supplement thereto under Section 3(b) hereof without the consent of the
holders of a majority-in-interest of the Registrable Securities.
4. OBLIGATIONS OF THE INVESTORS. In connection with the registration
of the Registrable Securities, the Investors shall have the following
obligations:
(a) It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of each Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect
the registration of the Registrable Securities. At least ten (10) business
days prior to the first anticipated filing date of the Registration
Statement, the Company shall notify each Investor of the information the
Company requires from each such Investor (the "REQUESTED INFORMATION") if
such Investor elects to have any of such Investor's Registrable Securities
included in the Registration Statement. If within three (3) business days
prior to the filing date the Company has not received the Requested
Information from an Investor (a "NON-RESPONSIVE INVESTOR"), then the Company
may file the Registration Statement without including Registrable Securities
of such Non-Responsive Investor.
(b) Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such
Investor's Registrable Securities from the Registration Statement.
(c) Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f)
or 3(g), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or 3(g) and,
if so directed by the Company, such Investor shall deliver to the Company (at
the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in such Investor's possession (other
than a limited number of file copies), of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
(d) Without limiting any Investor's rights under Sections 2(a)
hereof, no Investor may participate in any underwritten distribution
hereunder unless such Investor (i) agrees to sell such Investor's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the Investors entitled hereunder to approve such arrangements, (ii)
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completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the
terms of such underwriting arrangements, and (iii) agrees to pay its pro rata
share of all underwriting discounts and commissions and other fees and
expenses of investment bankers and any manager or managers of such
underwriting and legal expenses of the underwriter applicable with respect to
its Registrable Securities, in each case to the extent not payable by the
Company pursuant to the terms of this Agreement.
5. EXPENSES OF REGISTRATION. All reasonable expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company, and the reasonable fees and disbursements of one counsel
selected by the Initial Investors pursuant to Section 3(e) hereof, shall be
borne by the Company.
6. INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Investor who holds such Registrable Securities, the
directors, if any, of such Investor, the officers, if any, of such Investor,
each person, if any, who controls any Investor within the meaning of the 1933
Act or the Exchange Act, any underwriter (as defined in the 0000 Xxx) for the
Investors, the directors, if any, of such underwriter and the officers, if
any, of such underwriter, and each person, if any, who controls any such
underwriter within the meaning of the 1933 Act or the Exchange Act (each, an
"INDEMNIFIED PERSON"), against any losses, claims, damages, expenses or
liabilities (joint or several) (collectively together with actions,
proceedings or inquiries by any regulatory or self-regulatory organization,
whether commenced or threatened in respect thereof, "CLAIMS") to which any of
them become subject under the 1933 Act, the Exchange Act or otherwise,
insofar as such Claims arise out of or are based upon any of the following
statements, omissions or violations in the Registration Statement, or any
post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the prospectus (as amended or supplemented, if the Company files
any amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (iii) any violation or
alleged violation by the Company of the 1933 Act, the Exchange Act or any
other law, including without limitation any state securities law or any rule
or regulation thereunder (the matters in the foregoing clauses (i) through
(iii) being, collectively, "VIOLATIONS"). Subject to the restrictions set
forth in Section 6(c) with respect to the number of legal counsel, the
Company shall reimburse the Investors and each such underwriter or
controlling person and each such other Indemnified Person, promptly as such
expenses are incurred and are due and payable, for any legal fees or other
reasonable expenses incurred by
Page 12
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (A) shall not
apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the
Company pursuant to Section 3(c) hereof; and (B) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Indemnified Persons and shall
survive the transfer of the Registrable Securities by the Investors pursuant
to Section 9.
(b) In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to indemnify and hold
harmless, to the same extent and in the same manner set forth in Section
6(a), the Company, each of its directors, each of its officers who signs the
Registration Statement, each person, if any, who controls the Company within
the meaning of the 1933 Act or the Exchange Act, and any other stockholder
selling securities pursuant to the Registration Statement or any of its
directors or officers or any person who controls such stockholder within the
meaning of the 1933 Act or the Exchange Act (an "INDEMNIFIED PARTY"and,
collectively, "INDEMNIFIED PARTIES"), against any Claim to which any of them
may become subject, under the 1933 Act, the Exchange Act or otherwise,
insofar as such Claim arises out of or is based upon any Violation, in each
case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished to the
Company by such Investor expressly for use in connection with such
Registration Statement, and subject to Section 6(c), such Investor will
promptly reimburse any legal or other expenses (promptly as such expenses are
incurred and due and payable) reasonably incurred by all Indemnified Parties
in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Investor, which consent
shall not be unreasonably withheld; provided further, however, that the
Investor shall be liable under this Agreement (including this Section 6(b)
and Section 7) for only that amount of a Claim as does not exceed the net
proceeds actually received by such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant
to Section 9.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and this indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party
so desires, jointly with any other indemnifying party similarly noticed, to
assume control of the defense thereof with counsel
Page 13
mutually satisfactory to the indemnifying parties and the Indemnified Person
or the Indemnified Party, as the case may be; provided, however, that such
Indemnified Party shall diligently pursue such defense and that such
Indemnified Party shall not be entitled to assume such defense and an
Indemnified Person or Indemnified Party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party,
the representation by such counsel of the Indemnified Person or Indemnified
Party and the indemnifying party would be inappropriate due to actual or
potential conflicts of interest between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding or the actual or potential defendants in, or targets of, any such
action including both the Indemnified Person or the Indemnified Party and any
such Indemnified Person or Indemnified Party reasonably determines that there
may be legal defenses available to such Indemnified Person or Indemnified
Party which are different from or in addition to those available to such
indemnifying party. The Company shall pay for only one separate legal counsel
for the Investors; such legal counsel shall be selected by the Investors
holding a majority in interest of the Registrable Securities. The failur to
deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action shall not relieve such indemnifying party
of any liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced in
its ability to defend such action. The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
7. CONTRIBUTION. To the extent any indemnification provided for
herein is prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however, that (i) no contribution shall be made under circumstances
where the maker would not have been liable for indemnification under the
fault standards set forth in Section 6, (ii) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
seller of Registrable Securities who was not guilty of such fraudulent
misrepresentation, and (iii) contribution (together with any indemnification
or other obligations under this Agreement) by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received
by such seller from the sale of such Registrable Securities.
8. REPORTS UNDER THE EXCHANGE ACT. With a view to making available to
the Investors the benefits of Rule 144 promulgated under the 1933 Act or any
similar rule or regulation of the SEC that may at any time permit the
Investors to sell securities of the Company to the public without
registration ("RULE 144"), the Company agrees to:
(a) File with the SEC in a timely manner and make and keep
available all reports and other documents required of the Company under the
1933 Act and the Exchange Act so long as the Company remains subject to such
requirements (it being understood that nothing herein shall limit the
Company's obligations under Section 4.3 of the Securities Purchase Agreement)
and the filing and availability of such reports and other documents is
required for the applicable provisions of Rule 144; and
Page 14
(b) Furnish to each Investor so long as such Investor holds
Preferred Shares, Warrants or Registrable Securities, promptly upon request,
(i) a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the 1933 Act and the Exchange Act, (ii) a
copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company and (iii) such other
information as may be reasonably requested to permit the Investors to sell
such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights of the Investors
hereunder, including the right to have the Company register Registrable
Securities pursuant to this Agreement shall be automatically assigned by the
Investors to transferees or assignees of all or any portion of such
securities only if (i) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment, (ii) the Company
is, within a reasonable time after such transfer or assignment, furnished
with written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment the
further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act and applicable state securities laws, (iv) at
or before the time the Company received the written notice contemplated by
clause (ii) of this sentence, the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein, (v)
such transfer shall have been made in accordance with the applicable
requirements of the Purchase Agreement including, but not limited to, the
covenant of each Investor that it will not transfer any of the Securities in
violation of federal and state securities laws, and (vi) such transferee
shall be an "ACCREDITED INVESTOR" as that term is defined in Rule 501 of
Regulation D promulgated under the 1933 Act.
10. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and Investors who hold a majority interest of
the Registrable Securities (but not an Investor who no longer owns any
Warrants or Registrable Securities and who is not affected by such amendment
or waiver). Any amendment or waiver effected in accordance with this Section
10 shall be binding upon each Investor and the Company. Notwithstanding the
foregoing, no amendment or waiver shall retroactively affect any Investor
without its comment or prospectively adversely affect any Investor who no
longer owns any Warrants or Registrable Securities without its consent.
Neither Article 6 nor Article 7 hereof may be amended or waived in a manner
adverse to an Investor without its consent.
11. MISCELLANEOUS.
(a) CONFLICTING INSTRUCTIONS. A person or entity is deemed to be
a holder of Registrable Securities whenever such person or entity owns of
record such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or
Page 15
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.
(b) NOTICES. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by certified or registered mail
(with return receipt requested) or delivered personally or by courier
(including a nationally recognized overnight delivery service) or by
facsimile transmission. Any notice so given shall be deemed effective three
days after being deposited in the U.S. Mail, or upon receipt if delivered
personally or by courier or facsimile transmission, in each case addressed to
a party at the following address or such other address as each such party
furnishes to the other in accordance with this Section 11(b):
IF TO THE COMPANY:
Excelsior-Xxxxxxxxx Motorcycle Manufacturing Company
000 Xxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Faegre & Xxxxxx LLP
0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
in each case with a copy to:
Shoreline Pacific Institutional Finance
0 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: General Counsel
If to an Investor: To the address set forth immediately below such
Investor's name on the signature pages hereto.
Page 16
Each party shall provide written notice to the other parties of any change in
address.
(c) WAIVER. Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof.
(d) GOVERNING LAW. This Agreement shall be enforced, governed by
and construed in accordance with the laws of the State of Delaware applicable
to the agreements made and to be performed entirely within such state,
without giving effect to rules governing the conflict of laws, and any
disputes arising hereunder will be adjudicated in federal or state court
situated in Delaware. Each party hereto consents to such venue in Delaware
and to the personal and subject matter jurisdiction of said courts and, to
the extent permitted by applicable law, agrees to waive any objection as to
such jurisdiction or venue, and agrees not to assert any defense based on
lack of jurisdiction or venue.
(e) SEVERABILITY. In the event that any provision of this
Agreement is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability
of any other provision hereof.
(f) ENTIRE AGREEMENT. This Agreement, the Securities Purchase
Agreement, the Certificate of Designation, the Escrow Agreement and the
Warrant (including all schedules and exhibits thereto) constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
and thereof. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein or therein. This Agreement
supersedes all prior agreements and understandings among the parties hereto
with respect to the subject matter hereof.
(g) SUCCESSORS AND ASSIGNS. Subject to the requirements of
Section 9 hereof, this Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties hereto.
Notwithstanding anything to the contrary herein, including without
limitation, Section 9, the rights of an Investor hereunder shall be
assignable to and exercisable by a bona fide pledgee of the Registrable
Securities in connection with an Investor's margin or brokerage accounts.
(h) USE OF PRONOUNS. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the
context may require.
(i) HEADINGS. The headings and subheadings in the Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Page 17
(j) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement. This Agreement, once executed
by a party, may be delivered to the other party hereto by facsimile
transmission, and facsimile signatures shall be binding on the parties hereto.
(k) FURTHER ACTS. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(l) CONSENTS. All consents and other determinations to be made by
the Investors pursuant to this Agreement shall be made by the Initial
Investors or the Investors holding a majority of the Registrable Securities,
determined as if all Preferred Shares and all Warrants then outstanding had
been converted into or exercised for Registrable Securities.
Page 18
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
COMPANY:
--------
EXCELSIOR-XXXXXXXXX MOTORCYCLE
MANUFACTURING COMPANY
By:
-----------------------------------
Name:
Title:
INITIAL INVESTORS:
------------------
RGC INTERNATIONAL INVESTORS, LDC
By: Xxxx Xxxx Capital Management, L.P.
Investment Manager
By: RGC General Partner Corp.
By:
----------------------------------
Name:
Its: Managing Director
RESIDENCE: Cayman Islands
ADDRESS:
c/o Xxxx Xxxx Capital Management, L.P.
0 Xxxx Xxxxx Xxxx, Xxxxx 000
000 Xx. Xxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attn: Xx. Xxxxx X. Xxxxx
Page 19
SOCIETE GENERALE
By:
----------------------------------
Name:
Its:
RESIDENCE: France
ADDRESS:
c/o XX Xxxxx Securities Corporation
1221 Avenue of the Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attn: Xx. Xxxxxxxxx Xxxxxx
