EXHIBIT 1.1
3,000,000 Shares
Wilsons The Leather Experts Inc.
Common Stock
UNDERWRITING AGREEMENT
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________ __, 1996
Xxxxxxxxxxx & Co., Inc.
Ladenburg Xxxxxxxx & Co. Inc.
Xxxxx Xxxxxxx Inc.
c/o Oppenheimer & Co., Inc.
Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named in
Schedule I attached hereto.
Gentlemen:
Wilsons The Leather Experts Inc., a Minnesota corporation (the
"Company"), proposes to sell to you and the other underwriters named in Schedule
I to this Agreement (the "Underwriters"), for whom you are acting as
Representatives, an aggregate of 3,000,000 shares (the "Firm Shares") of the
Company's common stock, $0.01 par value (the "Common Stock"). In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional 450,000 shares (the "Option Shares") of Common Stock from it for the
purpose of covering over-allotments in connection with the sale of the Firm
Shares. The Firm Shares and the Option Shares are together called the "Shares."
1. Sale and Purchase of the Shares. On the basis of the
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representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Company, at $[
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] per share (the "Initial Price"), the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I to this Agreement.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares
at the Initial Price. The number of Option Shares to be purchased by each
Underwriter shall be the same percentage (adjusted by the Representatives
to eliminate fractions) of the total number of Option Shares to be
purchased by the Underwriters as such Underwriter is purchasing of the
Firm Shares. Such option may be exercised only to cover over-allotments in
the sales of the Firm Shares by the Underwriters and may be exercised in
whole or in part at any time on or before 12:00 noon, New York City time,
on the business day before the Firm Shares Closing Date (as defined
below), and only once thereafter within 30 days after the date of this
Agreement, in each case upon written or telegraphic notice, or verbal or
telephonic notice confirmed by written or telegraphic notice, by the
Representatives to the Company no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at least
two business days before the Option Shares Closing Date (as defined
below), as the case may be, setting forth the number of Option Shares to
be purchased and the time and date (if other than the Firm Shares Closing
Date) of such purchase.
(c) On the Firm Shares Closing Date, the Company agrees to issue
to each of the Representatives (for their own respective accounts and not
as representatives of the several Underwriters), in exchange for the
payment by each of the Representatives to the Company of $[______] per
underlying share of Common Stock, warrants (the "Warrants") to purchase
the number of shares of the Common Stock set forth opposite the name of
such Representative in Schedule II to this Agreement(the "Warrant Shares")
at an exercise price per Warrant Share equal to 120% of the Price to
Public listed on the cover page of the Prospectus (as defined below). The
Warrants will be exercisable at any time and from time to time on or after
the first anniversary of this Agreement up to the fifth anniversary
hereof. Each Warrant shall be substantially identical to the form of
Warrant filed as an exhibit to the Registration Statement (as defined
below).
2. Delivery and Payment. Delivery by the Company of the Firm
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Shares to the Representatives for the respective accounts of the Underwriters,
and payment of the purchase price by wire transfer of immediately available
funds to the Company, shall take place at the offices of Xxxxxxxxxxx & Co.,
Inc., at Xxxxxxxxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
such other place as the Company and the Representatives mutually select, at
10:00 a.m., New York City time, on the third business day following the date of
this Agreement, provided, however, that if the Shares sold hereunder are priced
after 4:30 p.m., New York time, on any business day, payment and delivery in
respect of the Firm Shares shall take place on the fourth business day following
the date of this Agreement; if it is determined that settlement within the
foregoing time frame is not feasible, then payment and delivery in respect of
the Firm Shares shall occur at such time on such other date, not later than 10
business days after the date of this
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Agreement, as shall be agreed upon by the Company and the Representatives (such
time and date of delivery and payment are called the "Firm Shares Closing
Date").
In the event the option with respect to the Option Shares is
exercised, delivery by the Company of the Option Shares to the Representatives
for the respective accounts of the Underwriters and payment of the purchase
price by wire transfer of immediately available funds to the Company shall take
place at the offices of Xxxxxxxxxxx & Co., Inc. specified above, or such other
place as the Company and the Representatives mutually select, at the time and on
the date (which may be the same date as, but in no event shall be earlier than,
the Firm Shares Closing Date) specified in the notice referred to in Section
1(b) (such time and date of delivery and payment are called the "Option Shares
Closing Date"). The Firm Shares Closing Date and the Option Shares Closing Date
are called, individually, a "Closing Date" and, together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Representatives shall request at least
two full business days before the Firm Shares Closing Date or, in the case of
Option Shares, on the day of notice of exercise of the option as described in
Section l(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, at least one
full business day before the Firm Shares Closing Date (or the Option Shares
Closing Date in the case of the Option Shares).
3. Registration Statement and Prospectus; Public Offering. The
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Company has prepared in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the published rules and
regulations thereunder (the "Rules") adopted by the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (No. 333-
13967), including a preliminary prospectus relating to the Shares, and has filed
with the Commission the Registration Statement and such amendments thereto as
may have been required to the date of this Agreement. Copies of such
Registration Statement (including all amendments thereto) and of the related
preliminary prospectus have heretofore been delivered by the Company to you. The
Company may also file a related registration statement with the Commission
pursuant to Rule 462(b) under the Securities Act for the purpose of registering
additional Shares, which registration shall be effective upon filing with the
Commission. The term "Registration Statement" means (i) the Registration
Statement as amended at the time and on the date it becomes effective (the
"Effective Date"), including all exhibits and information, if any, deemed to be
part of the Registration Statement pursuant to Rule 424(a) and Rule 430A of the
Rules and (ii) any related registration statement filed with the Commission
pursuant to Rule 462(b) of the Rules. The term "preliminary prospectus" means
any preliminary prospectus (as described in Rule 430 of the Rules) included at
any time as a part of the Registration Statement. The term "Prospectus" means
the prospectus in the form first used to confirm sales of the Shares (whether
such prospectus was included in the Registration Statement at the time of
effectiveness or was subsequently filed with the Commission pursuant to Rule
424(b) of the Rules) or the preliminary prospectus forming part of the
Registration Statement at the time it was declared effective together with the
term sheet permitted under Rule 434(b) and filed with the Commission pursuant to
Rule 424(b), as applicable.
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The Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the Prospectus, as soon
after the Effective Date and the date of this Agreement as the Representatives
deem advisable. The Company hereby confirms that the Underwriters and dealers
have been authorized to distribute or cause to be distributed each preliminary
prospectus and are authorized to distribute the Prospectus (as from time to time
amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).
4. Representations and Warranties of the Company. The Company
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hereby represents and warrants to each Underwriter as follows:
(a) On the Effective Date the Registration Statement complied, and on the
date of the Prospectus, on the date any post-effective amendment to the
Registration Statement or any related registration statement filed with the
Commission pursuant to Rule 462(b) of the Rules shall become effective, on
the date any supplement or amendment to the Prospectus is filed with the
Commission and on each Closing Date, the Registration Statement and the
Prospectus (and any amendment thereof or supplement thereto) will comply in
all material respects with the applicable provisions of the Securities Act
and the Rules and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder;
the Registration Statement did not, as of the Effective Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and on the other dates referred to above neither the
Registration Statement, nor any amendment thereof or supplement thereto, will
contain any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and on the other dates referred to above
neither the Prospectus, nor any amendment thereof or supplement thereto, will
contain any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. When any related preliminary prospectus was first filed
with the Commission (whether filed as part of the Registration Statement or
any amendment thereto or pursuant to Rule 424(a) of the Rules) and when any
amendment thereof or supplement thereto was first filed with the Commission,
such preliminary prospectus as amended or supplemented complied in all
material respects with the applicable provisions of the Securities Act and
the Rules and did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. The Company makes no
representation or warranty as to the paragraph with respect to stabilization
on the inside front cover page of the Prospectus and the statements contained
under the caption "Underwriting" in the Prospectus. The Company acknowledges
that such statements constitute the only information furnished in writing by
the Representatives
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on behalf of the several Underwriters specifically for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus.
(b) All contracts and other documents required to be filed as exhibits to
the Registration Statement have been filed with the Commission as exhibits to
the Registration Statement.
(c) The financial statements of the Company (including all notes and
schedules thereto) included in the Registration Statement and Prospectus fairly
present the financial position, the results of operations and cash flows and the
shareholders' equity (deficit) and the other information purported to be shown
therein of the Company at the respective dates and for the respective periods to
which they apply; and such financial statements have been prepared in conformity
with generally accepted accounting principles, consistently applied throughout
the periods involved (except as otherwise noted therein), and all adjustments
necessary for a fair presentation of the results for such periods have been
made. The schedules, if any, included in the Registration Statement present
fairly in all material respects the information required to be stated therein;
and the historical financial information and statistical data set forth in the
Prospectus under the captions "Summary Historical and Pro Forma Consolidated
Financial Data," "Capitalization," and "Selected Historical and Pro Forma
Consolidated Financial Data" are fairly stated in all material respects in
relation to the financial statements from which they have been derived. The pro
forma financial data included in the Registration Statement and the Prospectus
present fairly the information shown therein, comply in all material respects
with the requirements of the Act and the Rules with respect to pro forma
financial statements, have been properly compiled on the pro forma basis
described therein and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein.
(d) Each of Xxxxxx Xxxxxxxx LLP and KPMG Peat Marwick LLP, whose reports
are filed with the Commission as a part of the Registration Statement, is and,
during the periods covered by its reports, were independent public accountants
as required by the Securities Act and the Rules.
(e) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Minnesota. Each
subsidiary of the Company has been duly incorporated or formed and is an
existing corporation in good standing under the laws of the jurisdiction of its
incorporation or organization. Except as disclosed in the Registration Statement
and the Prospectus, all of the capital stock of each subsidiary set forth on
Exhibit 21.1 to the Registration Statement is owned by the Company, free and
clear of any liens or encumbrances. The Company has no subsidiary or
subsidiaries other than as set forth on Exhibit 21.1 to the Registration and
does not control, directly or indirectly, any other corporation, partnership,
joint venture, association or other business organization. Each of the Company
and its subsidiaries is duly qualified and in good standing as a foreign
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corporation in each jurisdiction in which the character or location of its
assets or properties (owned, leased or licensed) or the nature of its business
makes such qualification necessary, except for such jurisdictions where the
failure to so qualify individually or in the aggregate would not have a material
adverse effect on the assets or properties, business, results of operations or
financial condition of the Company and its subsidiaries, taken as a whole.
Except as disclosed in the Registration Statement and the Prospectus, the
Company and its subsidiaries do not own, lease or license any asset or property
or conduct any business outside the United States of America. Each of the
Company and its subsidiaries has all requisite corporate power and authority,
and all necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory bodies or
any other person or entity, to own, lease and license its assets and properties
and conduct its businesses as now being conducted and as described in the
Registration Statement and the Prospectus; no such authorization, approval,
consent, order, license, certificate or permit contains a materially burdensome
restriction other than as disclosed in the Registration Statement and the
Prospectus; and the Company has all such corporate power and authority, and such
authorizations, approvals, consents, orders, licenses, certificates and permits
to enter into, deliver and perform this Agreement and to issue and sell the
Shares (except as may be required under the Securities Act and state and foreign
Blue Sky laws).
(f) Except as disclosed in the Registration Statement and the Prospectus,
the Company owns or possesses adequate and enforceable rights to use all (to the
extent any of them exist) patents, patent applications, trademarks, trademark
applications, service marks, copyrights, copyright applications, licenses and
other similar rights (collectively, the "Intangibles") necessary for the conduct
of its business as now being conducted and as described in the Registration
Statement and the Prospectus. The Company has not infringed, is not infringing,
and has not received any notice of infringement of, any Intangible of any other
person and the Company does not know of any basis therefor. The Company has not
received any notices of infringement of an Intangible of any other person that,
if adversely decided, could have a material adverse effect on the business,
results of operations or financial condition of the Company. The Company has
not received any notice of infringement of any of its Intangibles and the
Company does not know of any basis therefor.
(g) Each of the Company and its subsidiaries has good and marketable
title in fee simple to each of the items of personal property which are
reflected in the financial statements referred to in Section 4(c) or are
referred to in the Registration Statement and the Prospectus as being owned by
it and valid and enforceable leasehold interests in each of the items of real
and personal property which are referred to in the Registration Statement and
the Prospectus as being leased by it, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other than those described
in the Registration Statement and the Prospectus and tax, mechanics and
materialmen's and other similar inchoate liens securing payments that are not
delinquent.
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(h) Except as disclosed in the Registration Statement and the Prospectus,
there is no litigation or governmental or other proceeding or investigation
before any court or before or by any public body or board pending or, to the
Company's best knowledge, threatened (and the Company does not know of any basis
therefor) against, or involving the assets, properties or businesses of, the
Company or any of its subsidiaries which, if determined adversely to the Company
or any of its subsidiaries, would materially adversely affect the value or the
operation of any such assets or properties or the business, results of
operations or financial condition of the Company and its subsidiaries, taken as
a whole.
(i) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as described therein,
there has not been any material adverse change or any material adverse
development or event involving a prospective change in the assets or properties,
earnings, business affairs or business prospects, results of operations or
condition (financial or otherwise) of the Company and its subsidiaries, taken as
a whole, whether or not arising from transactions in the ordinary course of
business; each of the Company and its subsidiaries has not entered into any
transaction, other than in the ordinary course of business, that is material to
the Company or any of its subsidiaries, taken as a whole; each of the Company
and its subsidiaries has not sustained any material loss or interference with
its assets, businesses or properties from fire, explosion, earthquake, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree; and
since the date of the latest balance sheet included in the Registration
Statement and the Prospectus, except as reflected therein, each of the Company
and its subsidiaries has not undertaken any liability or obligation, direct or
contingent, except for liabilities or obligations undertaken in the ordinary
course of business.
(j) Each agreement listed in the Exhibits to the Registration Statement
is in full force and effect and is valid and enforceable by the Company or one
of its subsidiaries in accordance with its terms, assuming the due authorization
thereof by each of the other parties thereto. Neither the Company nor, to the
best of the Company's knowledge, any other party is in default in the observance
or performance of any term or obligation to be performed by it under any such
agreement, and no event has occurred which with notice or lapse of time or both
would constitute such a default which default or event would have a material
adverse effect on the assets or properties, business, results of operations or
financial condition of the Company and its subsidiaries, taken as a whole. No
default exists, and no event has occurred which with notice or lapse of time or
both would constitute a default, in the due performance and observance of any
term, covenant or condition, by the Company of any other indenture, mortgage,
deed of trust, note or any other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which any of them or their properties
or businesses is bound or affected which default or event would have a material
adverse effect on the assets or properties, business, results of operations or
financial condition of the Company and its subsidiaries, taken as a whole.
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(k) Each of the Company and its subsidiaries is not in violation of any
term or provision of its charter or by-laws or of any franchise, license,
permit, judgment, decree, order, statute, rule or regulation, where the
consequences of such violation would have a material adverse effect on the
assets or properties, business, results of operations or financial condition of
the Company and its subsidiaries, taken as a whole.
(l) Neither the execution, delivery and performance of this Agreement by
the Company nor the consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the Company of the
Shares) will (i) give rise to a right to terminate or accelerate the due date of
any payment due under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or any event which with notice or lapse
of time or both would constitute a default) under or require any consent or
waiver under, (except for consents and waivers that have been received), or
result in the execution or imposition of any lien, charge or encumbrance upon
any properties or assets of the Company or any of its subsidiaries pursuant to
the terms of, any indenture, mortgage, deed of trust, note or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which any of them or their properties or businesses is bound, or any franchise,
license, permit, judgment, decree, order, statute, rule or regulation applicable
to the Company or any of its subsidiaries or (ii) violate any provision of the
charter or by-laws of the Company or any of its subsidiaries.
(m) The Company has an authorized and outstanding capitalization as set
forth under the caption "Capitalization" in the Prospectus. The Company has
reserved and will keep available for the exercise of the Warrants such number of
authorized but unissued shares of Common Stock as are sufficient to permit the
exercise in full of the Warrants. All of the outstanding shares of Common Stock
have been duly and validly authorized and have been duly and validly issued and
are fully paid and nonassessable and none of them was issued in violation of any
preemptive or other similar statutory right. The Shares, when issued and sold
pursuant to this Agreement, and the Warrant Shares, when issued and sold
pursuant to the Warrants, will be duly and validly issued, fully paid and
nonassessable and none of them will be issued in violation of any preemptive or
other similar statutory right. Except as disclosed in the Registration
Statement and the Prospectus, there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or agreement to
issue, any share of stock of the Company or any security convertible into, or
exercisable or exchangeable for, stock of the Company. The Common Stock, the
preferred stock, $0.01 par value (the "Preferred Stock"), each of the Company's
outstanding warrants, including the Warrants, and the Shares conform to all
statements in relation thereto contained in the Registration Statement and the
Prospectus.
(n) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as described or
referred to therein, the Company has not (i) issued any securities or incurred
any liability or obligation,
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direct or contingent, for borrowed money, (ii) entered into any transaction not
in the ordinary course of business or (iii) declared or paid any dividend or
made any distribution on any shares of its stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares
of its stock.
(o) No holder of any security of the Company has any right to have any
security owned by such holder included in the Registration Statement or to
demand registration of any security owned by such holder during the period
ending 180 days from the date of this Agreement that has not been heretofore
waived in writing. The Company has obtained from certain officers, directors
and other stockholders of the Company, who together hold all the outstanding
shares of Common Stock, their enforceable written agreement that for a period of
at least 180 days from the date of this Agreement they will not, without the
prior written consent of Xxxxxxxxxxx & Co., Inc., offer, sell, contract to sell,
distribute, pledge, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, or encumber, or exercise any registration rights with
respect to, any shares of Common Stock (or any securities convertible into or
exercisable or exchangeable for any shares of Common Stock or any rights to
acquire Common Stock).
(p) All necessary corporate action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of this Agreement,
the Warrants and the issuance and sale of the Shares, the Warrants and the
Warrant Shares. This Agreement has been duly and validly executed and delivered
by the Company and the Warrants, upon payment therefor by the Representatives
and upon execution and delivery thereof, will be duly and validly executed and
delivered by the Company. This Agreement constitutes, and the Warrants, when
executed and delivered by the Company and paid for by the Representatives will
constitute, the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with their respective terms, except (A) as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles and (B) with respect to this
Agreement, to the extent that rights to indemnity or contribution under this
Agreement may be limited by federal and state securities laws or the public
policy underlying such laws.
(q) Each of the Company and its subsidiaries is conducting its business
in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without limitation,
all applicable local, state and federal environmental laws and regulations,
except where the failure to be so in compliance would not have a material
adverse effect on the assets or properties, business, results of operations or
financial condition of the Company and its subsidiaries, taken as a whole.
(r) No transaction has occurred between or among the Company or any of
its affiliates and any of its officers or directors or any affiliate or
affiliates of any such
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officer or director that is required to be described in and is not described in
the Registration Statement and the Prospectus.
(s) The Company has not taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the Common Stock
to facilitate the sale or resale of any of the Shares.
(t) The Company has filed all federal, state, local and foreign tax
returns which are required to be filed through the date hereof, or has received
extensions thereof, and has paid or reserved for payment all taxes shown on such
returns and all assessments received by it.
(u) The Shares have been approved for quotation on the National
Association of Securities Dealers Automated Quotation ("Nasdaq") National
Market, subject to official notice of issuance.
(v) The Company has complied with all of the requirements and filed the
required forms as specified in Florida Statutes Section 517.075.
5. Conditions of the Underwriters' Obligations. The obligations of
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the Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(A)(a).
(b) The Registration Statement shall have become effective. No order
preventing or suspending the use of any preliminary prospectus or the Prospectus
shall have been or shall be in effect, and no order suspending the effectiveness
of the Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or threatened by the Commission, and any
requests for additional information on the part of the Commission (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the satisfaction of the Representatives.
(c) The representations and warranties of the Company contained in this
Agreement and in the certificates delivered pursuant to Section 5(d) shall be
true and correct when made and on and as of each Closing Date as if made on such
date and the Company shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by it at or before such Closing Date.
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(d) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing Date, of
the chief executive or chief operating officer and the chief financial officer
or chief accounting officer of the Company, to the effect that the signers of
such certificate have carefully examined the Registration Statement, the
Prospectus and this Agreement and that the representations and warranties of the
Company in this Agreement are true and correct on and as of such Closing Date
with the same effect as if made on such Closing Date and the Company has
performed all covenants and agreements and satisfied all conditions contained in
this Agreement required to be performed or satisfied by it at or prior to such
Closing Date.
(e) The Representatives shall have received at the time this Agreement is
executed and on each Closing Date a letter or letters signed by Xxxxxx Xxxxxxxx
LLP, addressed to the Representatives and dated, respectively, the date of this
Agreement and each such Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent public accountants within
the meaning of the Securities Act and the Rules, that the response to Item 10 of
the Registration Statement is correct insofar as it relates to them and stating
in effect that:
(i) in their opinion the audited financial statements and financial
statement schedules and pro forma financial statements included in the
Registration Statement and the Prospectus and reported on by them comply as to
form in all material respects with the applicable accounting requirements of
the Securities Act and the Rules;
(ii) on the basis of a reading of the amounts included in the
Registration Statement and the Prospectus under the headings "Summary
Historical and Pro Forma Consolidated Financial Data" and "Selected Historical
and Pro Forma Consolidated Financial Data;" carrying out certain procedures
(but not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the minutes of
the meetings of the shareholders and directors and audit committee of the
Company, and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company as to
transactions and events subsequent to the date of the latest audited financial
statements, nothing came to their attention which caused them to believe that:
(A) the amounts in "Summary Consolidated Financial Data" and
"Selected Consolidated Financial Data" included in the Registration
Statement and the Prospectus do not agree with the corresponding amounts
in the audited and unaudited financial statements from which such amounts
were derived; or
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(B) (i) with respect to the Company there were, at a
specified date not more than five business days prior to the date of the
letter, any increases in the total current liabilities, long-term debt or
capital stock of the Company or decreases in working capital (deficit),
total current assets, total assets or total stockholders' equity
(deficit), of the Company, as compared with the amounts shown on the
Company's audited August 3, 1996 balance sheet included in the
Registration Statement and the Prospectus, or (ii) for the period from
August 3, 1996 to such specified date not more than five business days
prior to the date of the letter, there were any decreases in revenues,
operating income or net income;
(iii) they have performed certain other procedures as a result
of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company) set forth in the Registration Statement and the Prospectus and
specified by the Representatives agrees with the accounting records of the
Company; and
(iv) on the basis of a reading of the unaudited pro forma financial
statements included in the Registration Statement and the Prospectus (the
"pro forma financial statements"); carrying out certain specified
procedures; inquiries of certain officials of the Company who have
responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro forma financial
statements do not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Registration Statement and the Prospectus in this paragraph
(e) are to such documents as amended and supplemented at the date of the letter.
(f) The Representatives shall have received at the time this Agreement is
executed and on each Closing Date a letter or letters signed by KPMG Peat
Marwick LLP, addressed to the Representatives and dated, respectively, the
date of this Agreement and each such Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are independent
public accountants within the meaning of the Securities Act and the Rules,
that the response to Item 10 of the Registration Statement is correct insofar
as it relates to them and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and pro forma financial statements included
in the Registration Statement and the Prospectus and reported on by them
comply as
- 12 -
to form in all material respects with the applicable accounting requirements
of the Securities Act and the Rules;
(ii) they have performed certain procedures as a result of which they
determined that certain information of an accounting, financial or statistical
nature (which is limited to accounting, financial or statistical information
derived from the general accounting records of the Company) set forth in the
Registration Statement and the Prospectus and specified by the Representatives
agrees with the accounting records of the Company.
References to the Registration Statement and the Prospectus in this paragraph
(f) are to such documents as amended and supplemented at the date of the letter.
(g) The Representatives shall have received on each Closing Date from
Faegre & Xxxxxx LLP, counsel for the Company, an opinion, addressed to the
Representatives and dated such Closing Date, and stating in effect that:
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Minnesota. Each
subsidiary of the Company has been duly incorporated or formed and is an
existing corporation in good standing under the laws of the jurisdiction of
its incorporation or organization.
(ii) Each of the Company, Xxxxxx Centers, Inc., Rosedale Wilsons, Inc.,
River Hills Wilsons, Inc., Bermans the Leather Experts, Inc., Wilsons Leather
Holdings Inc., Wilsons Leather of New York Inc., Wilsons Leather of Ohio Inc.
and Wilsons Leather of Pennsylvania Inc. has all requisite corporate power and
authority to own, lease and license its assets and properties and conduct its
business as now being conducted and as described in the Registration Statement
and the Prospectus; and the Company has all requisite corporate power and
authority and all necessary governmental, and all other necessary
authorizations, approvals, consents, orders, licenses, certificates and
permits, to enter into, deliver and perform this Agreement and the Warrants,
and to issue and sell the Shares, the Warrants and the Warrant Shares, other
than those required under the Securities Act and state and foreign Blue Sky
laws.
(iii) The Company has authorized and outstanding capitalization as set
forth under the caption "Capitalization" in the Prospectus; the certificates
evidencing the Shares are in due and proper legal form and have been duly
authorized for issuance by the Company; all of the outstanding shares of
Common Stock of the Company have been duly and validly authorized and have
been duly and validly issued and are fully paid and nonassessable and none of
them was issued in violation of any preemptive or other similar statutory
right. The Warrant Shares have been duly authorized and reserved by the
Company. The Shares, when issued, sold, and paid for pursuant to this
Agreement, and the
- 13 -
Warrant Shares, when issued, sold and paid for pursuant to the Warrants, will
be duly and validly issued, fully paid and nonassessable and none of them will
have been issued in violation of any preemptive or other similar statutory
right. Except as disclosed in the Registration Statement and the Prospectus,
to such counsel's knowledge there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or agreement to
issue, any share of stock of the Company or any security convertible into, or
exercisable or exchangeable for, stock of the Company. The Common Stock, the
Preferred Stock, each of the Company's outstanding warrants, including the
Warrants, and the Shares conform to all statements in relation thereto
contained in the Registration Statement and the Prospectus.
(iv) All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Agreement and the Warrants and the issuance and sale of the Shares, the
Warrants and the Warrant Shares. This Agreement has been duly and validly
executed and delivered by the Company and constitutes and will constitute the
legal, valid and binding obligation of the Company (and the Warrants, when so
executed and delivered, will constitute the legal, valid and binding
obligation of the Company), enforceable against the Company in accordance with
its terms except (A) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles and (B) to the extent that rights to indemnity or
contribution under this Agreement or the Warrants may be limited by federal or
state securities laws or the public policy underlying such laws.
(v) Neither the execution, delivery and performance of this Agreement by
the Company nor the consummation of any of the transactions contemplated
hereby (including, without limitation, the issuance and sale by the Company of
the Shares) will (i) give rise to a right to terminate or accelerate the due
date of any payment due under, or conflict with or result in the breach of any
term or provision of, or constitute a default (or any event which with notice
or lapse of time, or both, would constitute a default) under, or require any
consent or waiver (except for consents and waivers that have been received)
under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or any of its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust,
note or other agreement or instrument of which such counsel is aware and to
which the Company or any of its subsidiaries is a party or by which any of
them or their properties or businesses is bound, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation of which such
counsel is aware and applicable to the Company or any of its subsidiaries or
(ii) violate any provision of the charter or by-laws of the Company or any of
its subsidiaries.
- 14 -
(vi) To such counsel's knowledge, no default exists, and no event has
occurred which with notice or lapse of time or both would constitute a
default, in the due performance and observance of any term, covenant or
condition of any indenture, mortgage, deed of trust, note or any other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which any of them or their assets or properties or businesses is
bound or affected which default would have a material adverse effect on the
assets or properties, business, results of operations or financial condition
of the Company and its subsidiaries, taken as a whole.
(vii) To such counsel's knowledge, each of the Company and its
subsidiaries is not in violation of any term or provision of its charter or
by-laws or of any franchise, license, permit, judgment, decree, order,
statute, rule or regulation, where the consequences of such violation would
have a material adverse effect on the assets or properties, businesses,
results of operations or financial condition of the Company and its
subsidiaries, taken as a whole.
(viii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the performance of this Agreement
by the Company or the consummation of the transactions contemplated hereby,
except such as have been obtained under the Securities Act and such as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the several Underwriters.
(ix) Except as described in the Registration Statement and the
Prospectus, to such counsel's knowledge, there is no litigation or
governmental or other proceeding or investigation before any court or before
or by any public body or board pending or threatened (and such counsel does
not know of any basis therefor) against, or involving the assets, properties
or businesses of, the Company or any of its subsidiaries which, if determined
adversely to the Company or any of its subsidiaries, would materially
adversely affect the value or the operation of any such assets or properties
or the business, results of operations or financial condition of the Company
and its subsidiaries, taken as a whole.
(x) The agreement of the Company stating that for a period of 180
days from the date of the Prospectus it will not, without Xxxxxxxxxxx & Co.,
Inc.'s prior written consent issue, offer, sell, contract to sell, distribute,
pledge, grant any option for the sale of, or otherwise dispose of, directly or
indirectly, or encumber, or exercise any registration rights with respect to,
or register with the Commission, as applicable, any shares of Common Stock (or
any securities convertible into, exercisable for, or exchangeable for any
shares of Common Stock or any rights to acquire Common Stock) has been duly
and validly delivered by the Company and constitutes a legal, valid and
binding obligations of the Company, enforceable against it in accordance with
its terms, except as
- 15 -
the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
(xi) The statements in the Prospectus under the captions "Risk Factors-
Shares Eligible for Future Sale"; "-Anti-Takeover Considerations; Control by
Current Shareholders"; "The Acquisition"; "Business-Litigation"; Trademark
Protections"; "Management-Compensation Committee Interlocks and Insider
Participation;" "-Executive Compensation and Employment Contracts"; "-Employee
Benefit Plans"; "-Restricted Stock Agreement"; "Certain
Transactions";"Description of Capital Stock"; and "Shares Eligible for Future
Sale", insofar as such statements constitute a summary of documents referred
to therein or matters of law, are fair summaries of the material provisions
thereof and accurately present the information called for with respect to such
documents and matters. All contracts and other documents required to be filed
as exhibits to, or described in, the Registration Statement have been so filed
with the Commission or are fairly described in the Registration Statement, as
the case may be.
(xii) The Registration Statement, all preliminary prospectuses and the
Prospectus and each amendment or supplement thereto (except for the financial
statements and notes and schedules and other financial and statistical data
included therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Securities Act
and the Rules.
(xiii) The Registration Statement has become effective under the
Securities Act, and to such counsel's knowledge no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are threatened, pending or
contemplated.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the State of Minnesota and the federal laws of the United States; provided that
such counsel shall state that in their opinion the Underwriters and they are
justified in relying on such other opinions. Such counsel shall also state that
in connection with rendering the opinion in (iv) of this Section 5(g), such
counsel has assumed that the corporation laws of the State of New York are
identical to the General Corporation Law of the State of Delaware and that in
connection with rendering the opinions in (ii) of this section 5(a), such
counsel has assumed that the corporation laws of the States of New York, Ohio
and Pennsylvania are identical to the corporation laws of Minnesota. Copies of
such certificates and other opinions shall be furnished to the Representatives
and counsel for the Underwriters.
- 16 -
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent certified public accountants of the Company, at which conferences
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except as
specified in the foregoing opinion), on the basis of the foregoing no facts have
come to the attention of such counsel which lead such counsel to believe that
the Registration Statement at the time it became effective (except with respect
to the financial statements and notes and schedules thereto and other financial
and statistical data, as to which such counsel need make no statement) 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 as amended or supplemented (except with
respect to the financial statements and notes and schedules thereto and other
financial and statistical data, as to which such counsel need make no statement)
on the date thereof contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(h) All proceedings taken in connection with the sale of the Firm Shares
and the Option Shares and the issuance of the Warrants as herein contemplated
shall be reasonably satisfactory in form and substance to the Representatives
and their counsel and the Underwriters shall have received from Xxxxxx, Xxxxx
& Xxxxxxx LLP a favorable opinion, addressed to the Representatives and dated
such Closing Date, with respect to the Shares, the Warrants, the Registration
Statement and the Prospectus, and such other related matters, as the
Representatives may reasonably request, and the Company shall have furnished
to Xxxxxx, Xxxxx & Bockius LLP such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(i) The Representatives shall have received on each Closing Date a
certificate, including exhibits thereto, addressed to the Representatives and
dated such Closing Date, of the Secretary or an Assistant Secretary of the
Company, signed in such officer's capacity as such officer, as to the (i)
certificate of incorporation and bylaws of the Company, (ii) resolutions
authorizing the execution and delivery of the Registration Statement, this
Agreement, the Warrants and the performance of the transactions contemplated
by this Agreement, the Warrants, the Registration Statement, the Prospectus
and the offering of the Shares, and (iii) incumbency of the person or persons
authorized to execute and deliver the Registration Statement, this Agreement,
the Warrants and any other documents contemplated by the offering of the
Shares.
(j) The Representatives shall have received on each Closing Date
certificates of the Secretaries of State of each State where the Company or
any of Xxxxxx Centers, Inc., Rosedale Wilsons, Inc., River Hills Wilsons,
Inc., Bermans the Leather Experts, Inc., Wilsons Leather Holdings Inc.,
Wilsons Leather of Ohio Inc., Wilsons Leather of
- 17 -
New York Inc. and Wilsons Leather of Pennsylvania Inc. is incorporated and
doing business as to the good standing of the Company or such subsidiary,
listing all charter documents on file, if applicable, qualification of the
Company or such subsidiary to do business as a foreign corporation, if
applicable, payment of taxes and filing of annual reports. In addition, the
Representatives shall have received copies of all charter documents of the
Company and each of its subsidiaries certified by the Secretary of State of
the State of such corporation's incorporation.
(k) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives, and dated such Closing Date, of
an executive officer of the Company to the effect that the signer of such
certificate has reviewed and understands the provisions of Section 517.075 of
the Florida Statutes, and represents that the Company has complied, and at all
times will comply, with all provisions of Section 517.075 and further, that as
of such Closing Date, neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located
in Cuba.
6. Covenants of the Company.
------------------------
(A) The Company covenants and agrees as follows:
(a) The Company shall prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement, or, if
such second business day would be more than fifteen business days after the
Effective Date of the Registration Statement or any post-effective amendment
thereto, such earlier date as would permit such Prospectus to be filed without
filing a post-effective amendment as set forth in Rule 430A(a)(3) under the
Securities Act, and shall promptly advise the Representatives (i) when the
Registration Statement shall have become effective, (ii) when any amendment
thereof or any related registration statement filed with the Commission
pursuant to Rule 462(b) of the Rules shall have become effective, (iii) of any
request by the Commission for any amendment of the Registration Statement or
the Prospectus or for any additional information, (iv) of the prevention or
suspension of the use of any preliminary prospectus or the Prospectus or of
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. If contemplated by this Agreement, the Company
shall prepare and file with the Commission in conformity with the Securities
Act and the Rules a related registration statement pursuant to Rule 462(b)
under the Securities Act for the purpose of registering additional shares. The
Company shall not file any amendment of the Registration Statement or
amendment or supplement to the Prospectus unless the Company has furnished the
Representatives a copy for its review
- 18 -
prior to filing and shall not file any such proposed amendment or supplement
to which the Representatives reasonably object. The Company shall use its best
efforts to prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is required
to be delivered under the Securities Act and the Rules, any event occurs as a
result of which the Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend or supplement the Prospectus to comply with the Securities Act or the
Rules, the Company promptly shall prepare and file with the Commission,
subject to the third sentence of paragraph (a) of this Section 6(A), an
amendment or supplement which shall correct such statement or omission or an
amendment which shall effect such compliance.
(c) The Company shall make generally available to its security holders
and to the Representatives as soon as practicable, but not later than 45 days
after the end of the 12-month period beginning at the end of the fiscal
quarter of the Company during which the Effective Date occurs (or 90 days if
such 12-month period coincides with the Company's fiscal year), an earnings
statement (which need not be audited) of the Company, covering such 12-month
period, which shall satisfy the provisions of Section 11(a) of the Securities
Act or Rule 158 of the Rules.
(d) The Company shall furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including all exhibits thereto and amendments thereof) and to each other
Underwriter a copy of the Registration Statement (without exhibits thereto)
and all amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Securities Act or the Rules, as
many copies of any preliminary prospectus and the Prospectus and any
amendments thereof and supplements thereto as the Representatives may
reasonably request.
(e) The Company shall cooperate with the Representatives and their
counsel in endeavoring to qualify the Shares for offer and sale under the laws
of such jurisdictions as the Representatives may designate and shall maintain
such qualifications in effect so long as required for the distribution of the
Shares; provided, however, that the Company shall not be required in
connection therewith, as a condition thereof, to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business in any
jurisdiction.
(f) For a period of five years after the date of this Agreement, the
Company shall supply to the Representatives, and to each other Underwriter who
may so request in writing, 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
- 19 -
its capital stock and to furnish to the Representatives a copy of each annual
or other report it shall be required to file with the Commission.
(g) Without the prior written consent of Xxxxxxxxxxx & Co., Inc., for a
period of 180 days after the date of this Agreement, the Company shall not
issue, offer, sell, contract to sell, distribute, grant any option for the
sale of, or register with the Commission, or otherwise encumber or dispose of,
directly or indirectly, any equity securities of the Company (or any
securities convertible into or exercisable or exchangeable for equity
securities of the Company), except for (i) the issuance of the Shares pursuant
to the Registration Statement, (ii) the issuance of shares issuable upon
exercise of currently outstanding options and warrants and (iii) the issuance
of options, and the issuance of shares pursuant to the exercise of those
options, under the Company's 1996 Stock Option Plan.
(h) On or before completion of this offering, the Company shall make all
filings required under applicable securities laws and by the Nasdaq National
Market (including any required registration under the Exchange Act).
(B) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses of the
Company incident to the public offering of the Shares and the performance of the
obligations of the Company under this Agreement including those relating to (i)
the preparation, printing, filing and distribution of the Registration Statement
including all exhibits thereto, each preliminary prospectus, the Prospectus, all
amendments and supplements to the Registration Statement and the Prospectus, and
the printing, filing and distribution of this Agreement; (ii) the preparation
and delivery of certificates for the Shares to the Underwriters; (iii) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred to in Section
6(A)(e), including the fees and disbursements of counsel for the Underwriters in
connection with such registration and qualification and the preparation,
printing, distribution and shipment of preliminary and supplementary Blue Sky
memoranda; (iv) the furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of each preliminary
prospectus, the Prospectus and all amendments or supplements to the Prospectus,
and of the several documents required by this Section to be so furnished, as may
be reasonably 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
filing fees of the National Association of Securities Dealers, Inc. in
connection with its review of the terms of the public offering; (vi) the
furnishing (including costs of shipping and mailing) to the Representatives and
to the Underwriters of copies of all reports and information required by Section
6(A)(f); and (vii) inclusion of the Shares for quotation on the Nasdaq National
Market.
7. Indemnification.
----------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of
- 20 -
the Securities Act or Section 20 of the Exchange Act against any and all losses,
claims, damages and liabilities, joint or several (including any reasonable
investigation, legal and other expenses 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
Securities Act, the Exchange Act or other federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon 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 thereof or supplement thereto, or
arise out of or are based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that such indemnity shall not inure to
the benefit of any Underwriter (or any person controlling such Underwriter) on
account of any losses, claims, damages or liabilities arising from the sale of
the Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such preliminary
prospectus, the Registration Statement or the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with information furnished in
writing to the Company by the Representatives on behalf of any Underwriter
specifically for use therein. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, each director of the Company, and each officer of the
Company who signs the Registration Statement, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only insofar as
such losses, claims, damages or liabilities arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which was
made in any preliminary prospectus, the Registration Statement or the
Prospectus, or any amendment thereof or supplement thereto, contained in the
last paragraph of the cover page, in the paragraph relating to stabilization on
the inside front cover page of the Prospectus and the statements with respect to
the public offering of the Shares under the caption "Underwriting" in the
Prospectus; provided, however, that the obligation of each Underwriter to
indemnify the Company (including any controlling person, director or officer
thereof) shall be limited to the net proceeds received by the Company from such
Underwriter.
(c) Any party that proposes to assert the right to be indemnified under
this Section will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section, notify each
such indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. No indemnification provided for in
Section 7(a) or 7(b) shall be available to any party who shall fail to give
notice as provided in this Section 7(c) if the party to
- 21 -
whom notice was not given was unaware of the proceeding to which such notice
would have related and was prejudiced by the failure to give such notice but
the omission so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to any
indemnified party for contribution or otherwise than under this Section. In
case any such action, suit or proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and the approval by the indemnified party of such counsel, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses, except as provided below and except for the reasonable
costs of investigation subsequently incurred by such indemnified party in
connection with the defense thereof. The indemnified party shall have the
right to employ its counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized in writing
by the indemnifying parties, (ii) the indemnified party shall have reasonably
concluded that there may be a conflict of interest between the indemnifying
parties and the indemnified party in the conduct of the defense of such action
(in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the defense of
such action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying parties. An indemnifying party shall not be liable
for any settlement of any action, suit, proceeding or claim effected without
its written consent; provided, however, that such consent shall not be
unreasonably withheld.
8. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable from the Company, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted, but after deducting any contribution received by the
Company from persons other than the Underwriters, such as persons who control
the Company within the meaning of the Securities Act, officers of the Company
who signed the Registration Statement and directors of the Company, who may also
be liable for contribution) to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company on the one
hand and the Underwriters on the
- 22 -
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts but before deducting
expenses) received by the Company, as set forth in the table on the cover page
of the Prospectus, bear to (y) the underwriting discounts received by the
Underwriters, as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
or omission or alleged omission of a material fact related to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 8, (i) in no case shall any Underwriter (except as
may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, and (ii) the Company shall be liable
and responsible for any amount in excess of such underwriting discount;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of the Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) in the
immediately preceding sentence of this Section 8. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section,
notify such party or parties from whom contribution may be sought, but the
failure so to notify such party or parties from whom contribution may be sought
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
Section. No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its written consent. The Underwriter's
obligations to contribute pursuant to this Section 8 are several in proportion
to their respective underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with respect to
-----------
the Shares to be purchased on a Closing Date by the Representatives by notifying
the Company at any time
(a) in the absolute discretion of the Representatives at or before any
Closing Date: (i) if on or prior to such date, any domestic or international
event or act or
- 23 -
occurrence has materially disrupted, or in the opinion of the Representatives
will in the future materially disrupt, the securities markets; (ii) if there
has occurred any new outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representatives,
inadvisable to proceed with the offering; (iii) if there shall be such a
material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial markets
in the United States is such as to make it, in the judgment of the
Representatives, inadvisable or impracticable to market the Shares; (iv) if
trading in the Shares has been suspended by the Commission or trading
generally on the New York Stock Exchange, Inc. or on the American Stock
Exchange, Inc. has been suspended or limited, or minimum or maximum ranges
for prices for securities shall have been fixed, or maximum ranges for prices
for securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any
other governmental or regulatory authority; or (v) if a banking moratorium
has been declared by any state or federal authority, or
(b) at or before any Closing Date, that any of the conditions specified
in Section 5 shall not have been fulfilled when and as required by this
Agreement.
If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (y) if this Agreement
is terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused to
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company
or to the other Underwriters for damages occasioned by its failure or refusal.
10. Substitution of Underwriters. If one or more of the
----------------------------
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 9) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters, the Representatives may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Representatives may deem advisable or one or more of the remaining Underwriters
may agree to purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that all
the Underwriters are
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obligated to purchase on such Closing Date, then each of the nondefaulting
Underwriters shall be obligated to purchase such Shares on the terms herein
set forth in proportion to their respective obligations hereunder; provided,
that in no event shall the maximum number of Shares that any Underwriter has
agreed to purchase pursuant to Section 1 be increased pursuant to this
Section 10 by more than one-ninth of such number of Shares without the
written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, then the Company
shall be entitled to an additional business day within which it may, but is
not obligated to, find one or more substitute underwriters reasonably
satisfactory to the Representatives to purchase such Shares upon the terms
set forth in this Agreement.
In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and without liability
on the part of the Company, except in both cases as provided in Sections 6(B),
7, 8 and 9. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations,
-------------
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 7 and 8 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 6(B), 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters, or the Company, and directors and officers of the Company, 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" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
- 25 -
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Representatives, c/o Oppenheimer & Co., Inc., Xxxxxxxxxxx
Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxx X.
Xxxxx, (b) if to the Company, to its agent for service as such agent's address
appears on the cover page of the Registration Statement.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
WILSONS THE LEATHER EXPERTS INC.
By
Title:
Confirmed:
XXXXXXXXXXX & CO., INC.
LADENBURG XXXXXXXX & CO. INC.
XXXXX XXXXXXX INC.
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto.
By Xxxxxxxxxxx & Co., Inc.
By
Title: Managing Director
- 26 -
SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
-----------------
Xxxxxxxxxxx & Co., Inc.
Ladenburg Xxxxxxxx & Co. Inc.
Xxxxx Xxxxxxx Inc.
----------
TOTAL 3,000,000
- i -
SCHEDULE II
Number of
Warrant Shares
Underlying Warrants
Name To Be Purchased
--------------------
Xxxxxxxxxxx & Co., Inc.
Ladenburg Xxxxxxxx & Co. Inc.
Xxxxx Xxxxxxx Inc.
----------
TOTAL 300,000
- ii -
