EXHIBIT 1.1
▇▇▇▇▇▇ INVESTMENT CORPORATION
$5,000,000 SENIOR SUBORDINATED ADJUSTABLE RATE NOTES
UNDERWRITING AGREEMENT
Minneapolis, Minnesota
__________, 2002
▇▇▇▇▇▇▇▇▇ & Company LLC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
1. Introduction. ▇▇▇▇▇▇ Investment Corporation, a Minnesota corporation
(the "Company"), proposes to issue and sell to ▇▇▇▇▇▇▇▇▇ & Company LLC (the
"Underwriter") $5,000,000 aggregate principal amount of its Senior Subordinated
Adjustable Rate Notes as described in the Registration Statement referred to
below (the "Notes") upon the terms and conditions herein. The Company also
proposes to grant the Underwriter an option, exercisable from time to time not
more than 45 days subsequent to the date of this Agreement, to purchase an
aggregate of up to an additional $750,000 principal amount of the Notes (the
"Optional Notes"). The Notes will be issued pursuant to an Indenture (the
"Indenture"), of even date herewith, between the Company and U.S. Bank National
Association, as Trustee (the "Trustee").
The Company hereby agrees with the Underwriter as follows:
2. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with,
the Underwriter that:
(i) A registration statement on Form S-2
(Registration No. 333-__________), including a form of prospectus, relating to
the Notes has been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended, and the rules and regulations of the
Securities and Exchange Commission ("Commission") promulgated thereunder
(collectively, the "Act;" all references herein to specific rules and
regulations are to rules and regulations promulgated by the Commission under the
Act) has been filed with the Commission and has been declared effective under
the Act and is not proposed to be amended.
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For purposes of this Agreement, "Effective Time" means (A) if the Company has
advised the Underwriter that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or the
most recent post-effective amendment thereto (if any) filed prior to the
execution and delivery of this Agreement, was declared effective by the
Commission, or (B) if the Company has advised the Underwriter that it proposes
to file an amendment or post-effective amendment to such registration statement,
the date and time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared effective
by the Commission. "Effective Date" means the date of the Effective Time. Such
registration statement, as amended at the Effective Time, including all
information (if any) deemed to be a part of such registration statement as of
the Effective Time pursuant to Rule 430A(b), is hereinafter referred to as the
"Registration Statement," and the form of prospectus relating to the Notes, as
first filed with the Commission pursuant to and in accordance with Rule 424(b)
or (if no such filing is required) as included in the Registration Statement, is
hereinafter referred to as the "Prospectus."
(ii) The Commission has not issued any order
preventing or suspending the use of the Prospectus. If the Effective Time is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date, the Registration Statement conformed in all respects to the requirements
of the Act and did not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and (B) on the date of this Agreement,
the Registration Statement conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b), the Registration Statement and the Prospectus will
conform, in all respects to the requirements of the Act, and neither of such
documents includes, or will include, any untrue statement of a material fact or
omits, or will omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. If the Effective Time
is subsequent to the execution and delivery of this Agreement: on the Effective
Date, the Registration Statement and the Prospectus will conform in all respects
to the requirements of the Act, and neither of such documents will include any
untrue statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading. The two preceding sentences do not apply to statements in or
omissions from the Registration Statement or Prospectus in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
specifically for use therein, which are the sole responsibility of the
Underwriter.
(iii) The Company and its subsidiaries, Four Seasons
Realty of Minnesota, Inc.; Four Seasons Realty of Wisconsin, Inc.; Four Seasons
Realty of Michigan, Inc.; Four Seasons Properties of Tennessee, LLC; Four
Seasons Properties of Georgia, LLC; FSP Development of Texas, LLC; and
Laurentian Development Corporation, which constitute all of its subsidiaries
(each a "Subsidiary" and, collectively, the "Subsidiaries"), and the joint
ventures of which the Company is a member, Lantana Development, LLC; The
Preserve, LLC; and Lakeridge Community Center, LLC (each a "Joint Venture" and,
collectively, the "Joint Ventures"), have been duly incorporated or organized
and are validly existing as corporations or limited liability companies in good
standing under the laws of their respective states of incorporation or
organization, with full power and authority, corporate and otherwise, to own
their properties and conduct their business as described in the Prospectus. The
Company, the Subsidiaries and the Joint Ventures are duly qualified as foreign
corporations or limited liability companies to transact business and are in good
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standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property, the conduct of business or
otherwise, other than jurisdictions in which the failure to so qualify,
considering all such cases in the aggregate, would not have a material adverse
effect on the Company, the Subsidiaries and Joint Ventures, taken as a whole. No
proceeding has been instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification.
(iv) All of the shares of capital stock or membership
interests of the Subsidiaries have been duly and validly authorized and issued,
are fully paid and nonassessable and are owned by the Company, free and clear of
any security interest, lien or restriction except for the security interest of
Diversified Business Credit, Inc. The Company has no subsidiaries (other than
the Subsidiaries) and owns no securities of any other entity (other than the
Joint Ventures) and none of the Subsidiaries has any subsidiary or owns any
securities of any other entity.
(v) The authorized and issued indebtedness of the
Company and of the Subsidiaries is correctly set forth in the Prospectus, as of
the dates indicated. The capitalization of the Company as of the date indicated
is as set forth under the caption "Capitalization" in the Prospectus. The issued
and outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and nonassessable. The
indebtedness of the Company and of the Subsidiaries has been duly authorized.
None of the outstanding shares of capital stock of the Company was issued in
violation of preemptive rights of any shareholder of the Company.
(vi) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable in accordance with its terms,
except as enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws or equitable principles
affecting the enforcement of creditors' rights generally and except as rights to
indemnity hereunder may be limited by applicable securities laws, including the
Act and the rules and regulations thereunder.
(vii) The Indenture has been duly and validly
authorized, executed and delivered by the Company and constitutes the valid and
binding obligation of the Company enforceable in accordance with its terms
except as enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws or equitable principles
affecting enforcement of creditors' rights generally. The Notes have been duly
and validly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in accordance with the provisions of the Indenture
and delivered and paid for pursuant to this Agreement, the Notes will have been
duly and validly executed and issued by the Company and will constitute valid
and binding obligations of the Company entitled to the benefits of the
Indenture.
(viii) The Notes and the Indenture conform in all
material respects to the descriptions thereof contained in the Prospectus. The
global certificate for the Notes to be issued in book-entry form hereunder and
the certificates for any Notes to be certificated are in due and proper form.
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(ix) There are no material contracts or other
material documents required to be described in the Prospectus or to be filed as
exhibits to the Registration Statement which have not been described or filed as
required. Contracts and documents so described in the Prospectus are in full
force and effect on the date hereof. All descriptions of such contracts and
documents in the Prospectus are correct in all material respects. Neither the
Company nor the Subsidiaries nor the Joint Ventures nor, to the best knowledge
of the Company, any other party, is in breach of or default under any of such
contracts.
(x) Neither the issue and sale of the Notes, the
performance of this Agreement or the Indenture, nor the consummation of the
transactions contemplated herein and therein will conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to any contract, indenture, mortgage, loan agreement, note,
lease or other instrument or agreement to which the Company or any Subsidiary is
a party or by which any of them may be bound, or to which any of the property or
assets of any of them is subject, nor will such action result in any violation
of the provisions of the charter or bylaws of the Company or any Subsidiary or
any applicable law or regulation or administrative or court decree except those
as to which the Company has obtained a waiver. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency, other governmental body or any self-regulatory agency is required for
the execution and delivery of this Agreement or the Indenture or the
consummation of the transactions contemplated herein or therein or in the
Prospectus, except such as will be or have been obtained under the Act and
except as may be required under applicable blue sky laws or the rules and
regulations of the National Association of Securities Dealers, Inc. ("NASD"); in
connection with the purchase and distribution of the Notes by the Underwriter.
(xi) The accountants who have expressed their
opinions with respect to certain of the financial statements and schedules
included or incorporated by reference in the Registration Statement are
independent accountants as required by the Act.
(xii) The consolidated financial statements of the
Company, together with the notes thereto, included in the Registration Statement
present fairly the consolidated financial position of the Company as of the
respective dates of such financial statements, and the consolidated results of
operations, stockholders' equity and cash flows of the Company for the
respective periods covered thereby. Such financial statements have been prepared
in conformity with generally accepted accounting principles consistently applied
throughout the periods involved. The selected financial data set forth in the
Prospectus present fairly the information set forth therein and have been
compiled on a basis consistent with that of the audited consolidated financial
statements included in the Registration Statement.
(xiii) Neither the Company nor any Subsidiary is in
violation of its articles of incorporation or bylaws or other governing
documents or in default under any administrative or court decree, or in default
with respect to any material provision of any lease, loan agreement, franchise,
license, permit or other contractual obligation to which it is a party or by
which it may be bound, or to which any of the property or assets of the Company
or any Subsidiary is subject. There does not exist any state of facts which
constitutes an event of default as defined in such documents or which, with
notice or lapse of time or both, would constitute such an event of default.
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(xiv) Other than as set forth in attached Schedule
2(a)(xiv), there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or, to the best
knowledge of the Company, threatened, against or affecting the Company, any
Subsidiary or any Joint Venture.
(xv) There are no holders of securities of the
Company having rights to registration thereof or preemptive rights with respect
to the Notes or the shares of capital stock of the Company, except as disclosed
in the Prospectus. The Notes will be issued free and clear of all liens,
encumbrances, claims, security interests, restrictions on transfer and other
defects of title.
(xvi) The Company and the Subsidiaries have good and
marketable title to all the properties and assets reflected as owned by the
Company and the Subsidiaries in the financial statements hereinabove described
(or elsewhere in the Prospectus), subject to no lien, mortgage, pledge, charge
or encumbrance of any kind except those, if any, reflected in such financial
statements (or elsewhere in the Prospectus). The Company and the Subsidiaries
hold their leased properties under valid and binding leases which are in full
force and effect. Neither the Company nor any Subsidiary has any notice of any
claim adverse to the rights of the Company or any Subsidiary under any such
leases or affecting or questioning the rights of the Company or any Subsidiary
to the continued possession of the leased premises.
(xvii) Other than in connection with the
Underwriter's "put" right, the Company has not taken and will not take, directly
or indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any of the Notes.
(xviii) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus, and
except as otherwise stated in the Prospectus, (A) neither the Company nor any
Subsidiary has incurred any material liabilities or obligations, direct or
contingent, nor entered into any material transactions not in the ordinary
course of business, (B) there has not been any material adverse change in the
condition, financial or otherwise, results of operations, earnings, business
affairs or business prospects nor any material change in the capital stock,
short-term debt or long-term debt of the Company or any Subsidiary, (C) there
has not been any material transaction entered into by the Company or any
Subsidiary and (D) except as described in the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(xix) The Company and the Subsidiaries maintain
insurance, which is in full force and effect, of the types and in the amounts,
which, in the opinion of their respective managements, is adequate for their
businesses.
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(xx) The Company and the Subsidiaries own and possess
all right, title and interest in and to, or have duly licensed from third
parties, all trademarks, copyrights, inventions, know-how (including trade
secrets and other unpatented or unpatentable proprietary or confidential
information, systems or procedures) and other proprietary rights ("Trade
Rights") presently employed by any of them in connection with the business now
operated by them. Neither the Company nor any Subsidiary has received any notice
of infringement, misappropriation or conflict from any third party as to such
Trade Rights which has not been resolved or disposed of, and neither the Company
nor any Subsidiary has infringed, misappropriated or otherwise conflicted with
material Trade Rights of any third parties.
(xxi) The Company and the Subsidiaries own, possess
or have obtained all material governmental licenses, permits, certificates,
consents, orders, approvals and other material authorizations necessary to own
or lease, as the case may be, and to operate their properties and to carry on
their respective business as presently conducted and as contemplated by the
Prospectus, and neither the Company nor any Subsidiary has received any notice
of proceedings relating to the revocation or modification of any such licenses,
permits, certificates, consents, orders, approvals or authorizations. The
business of the Company and the Subsidiaries is not being conducted in violation
of any applicable federal, state, local or foreign law, ordinance, regulation,
judgment, decree, injunction or order or requirement of any court or other
governmental entity. No such company and, to the Company's knowledge, no
officer, director, shareholder or agent of such company has been authorized to
receive or make, and is not receiving or making, any bribe, kickback, or other
illegal payment with respect to the business conducted by such company.
(xxii) No labor dispute with the employees of the
Company or any Subsidiary exists or, to the best knowledge of the Company, is
imminent which might reasonably be expected to materially adversely affect the
condition, financial or otherwise, results of operations, earnings, business
affairs or business prospects of the Company or any Subsidiary. To the best
knowledge of the Company, no members of senior management presently intend to
leave the Company or any Subsidiary.
(xxiii) All United States Federal income tax returns
required by law to be filed by or on behalf of the Company and the Subsidiaries
have been filed and all taxes shown by such returns or otherwise assessed which
are due and payable as of or prior to the date hereof have been paid, except
assessments against which appeals have been or will be promptly taken and as to
which adequate reserves have been provided. All other tax returns that are
required to have been filed by or on behalf of the Company and the Subsidiaries
pursuant to applicable foreign, state, local or other law have been filed, and
the Company and the Subsidiaries have paid all taxes due as of or prior to the
date hereof pursuant to such returns or pursuant to any assessment received by
them, except for such taxes, if any, as are being contested in good faith and as
to which adequate reserves have been provided. The charges, accruals and
reserves on the books of the Company and the Subsidiaries in respect of any
income and corporation tax liability (or for any payments to be made in respect
of any tax sharing agreements or arrangements) for any years not finally
determined are adequate to meet any assessments or reassessments for additional
income tax for any years not finally determined.
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(xxiv) Neither the Company nor any Subsidiary is an
"investment company" within the meaning of such term as defined in the
Investment Company Act of 1940, as amended.
(xxv) No broker, finder, consultant or other person
or entity is entitled to any brokerage, finder's or other fee or commission in
connection with the issuance and sale of the Notes, except as may be provided to
the Underwriter by the express terms of this Agreement.
(xxvi) The Company has not sold any securities in
violation of Section 5(a) of the Act or any state securities laws.
(b) Any certificate signed by any officer of the Company and
delivered to the Underwriter or to counsel for the Underwriter pursuant to this
Agreement shall be deemed a representation and warranty by the Company to the
Underwriter as to the matters covered thereby.
3. Representations and Warranties of the Underwriter.
(a) The Underwriter represents and warrants to, and agrees
with, the Company that:
(i) The Underwriter is a member of the National
Association of Securities Dealers, Inc. ("NASD"). To the best of the
Underwriter's knowledge, no proceedings are pending or, to the Underwriter's
knowledge, threatened that, in any way, may revoke or limit the Underwriter's
authority to commence the offering contemplated hereby, including, but not
limited to, any proceedings or actions by the NASD, the Commission, the
Minnesota Department of Commerce or any other applicable state blue sky
authorities.
(ii) The Underwriter is a licensed broker-dealer
under the Exchange Act and the rules and regulations promulgated thereunder, and
the laws and regulations of Minnesota and such other states where the Notes may
be offered or sold by the Underwriter.
(iii) The Underwriter has full power, right and
authority to enter into this Agreement, this Agreement has been duly authorized,
executed and delivered by the Underwriter and it is the valid and binding
obligation of the Underwriter, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
rights of creditors generally, to the exercise of judicial discretion as to the
availability of equitable remedies such as specific performance and injunction,
and subject, as to enforcement of the indemnification provisions, to limitations
under applicable securities laws.
4. Purchase, Sale and Delivery of the Notes.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, the Notes at a purchase price of 94% of the
principal amount thereof.
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(b) The Company will deliver the Notes to the Underwriter,
against payment by the Underwriter of the purchase price therefore in
immediately available funds by wire transfer to an account designated by the
Company at such time and date as may be agreed upon by the Company and the
Underwriter (the "First Closing Date"). Delivery of the documents required by
Paragraph 7 hereof with respect to the Notes shall be made at such time, date
and location as may be agreed upon by the Company and the Underwriter.
(c) Upon written notice from the Underwriter given to the
Company from time to time not more than 45 days subsequent to the date of this
Agreement, the Underwriter may purchase all or less than all of the Optional
Notes at a purchase price of 94% of the principal amount thereof, plus accrued
interest from the First Closing Date. The Company agrees to sell to the
Underwriter the principal amount of Optional Notes specified in such notice and
the Underwriter agrees to purchase such Optional Notes. The right to purchase
the Optional Notes or any portion thereof may be exercised from time to time and
to the extent not previously exercised may be surrendered and terminated at any
time upon notice by the Underwriter to the Company.
The delivery time of and payment for, the Optional Notes (each
an "Optional Closing Date"), shall be determined by the Underwriter, but shall
not be later than three full business days after written notice of election to
purchase Optional Notes is given. Delivery of the documents required by
Paragraph 7 hereof with respect to the Optional Notes shall be made at such
time, date and location as may be agreed upon by the Company and the
Underwriter.
(d) Delivery of the Notes on a Closing Date will be in book-entry form through
the facilities of The Depository Trust Company, New York, New York ("DTC"). One
or more notes in definitive global form, registered in the name of DTC, or its
nominee, having an amount corresponding to the principal amount of the Notes
(the "Global Note") shall be made available to the Underwriter for inspection
not later than 9:30 a.m. on the business day immediately preceding such Closing
Date. The Company will cause the Trustee to deposit as original issue the Global
Note pursuant to the Full Fast Delivery Program of DTC.
5. Underwriter's Remarketing Fee and Put Option.
(a) The Underwriter shall also receive an annual fee equal to
0.5% of the outstanding principal balance of the Notes ("Remarketing Fee"). The
Remarketing Fee will be payable by the Company to the Underwriter quarterly on
January 1, April 1, July 1, October 1 commencing on October 1, 2002 based on the
outstanding principal balance of the Notes on each such payment date. Provided
that if the Company's net income, calculated in accordance with generally
accepted accounting principles and before shareholder tax-related distributions,
for any fiscal year is less than $500,000, then the Remarketing Fee will
increase to 1.0% per annum and will remain 1.0% per annum until the Company's
net income, calculated in accordance with the foregoing, exceeds $500,000 on a
fiscal year-end basis. Further provided, that in the event the Company has been
required to repurchase in excess of $1.0 million of principal amount of the
Notes from the Underwriter pursuant to Paragraph 5(b), the Company will not be
required to pay any future Remarketing Fee to the Underwriter. The principal
balance of any Notes purchased by the Company on the open market or upon the
death of a Noteholder as provided in the Indenture shall not be included in
determining whether the $1.0 million limit has been reached.
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(b) After September 30, 2003, the Underwriter, on behalf of
the Noteholders shall have the right to require the Company to repurchase
annually on a calendar year basis up to $500,000 aggregate principal amount of
the Notes. Pursuant to the terms of the Indenture, the Underwriter must notify
the Company or the Trustee in writing of its desire to exercise this repurchase
option and the principal amount of the Notes to be repurchased. Within 30 days
of the receipt by the Company or the Trustee of this notice, the Company shall
pay the Underwriter an amount equal to the outstanding principal amount of the
Notes to be repurchased plus interest accrued but unpaid as of the date of
repurchase by the Company. The Underwriter's rights pursuant to this paragraph
shall be noncumulative. The aggregate principal amount of any Notes purchased by
the Company on the open market will be credited toward the Company's annual
repurchase obligations under this paragraph.
6. Certain Agreements of the Company. The Company covenants and agrees
that:
(a) The Company will use its best efforts to cause the
Registration Statement, if the Effective Time is subsequent to the execution and
delivery of this Agreement, and any amendment thereof, to become effective. If
the Effective Time is prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to by the
Underwriter, subparagraph (4)) of Rule 424(b) not later than the earlier of (A)
the second business day following the execution and delivery of this Agreement
or (B) the fifth business day after the Effective Date. The Company will advise
the Underwriter promptly of any such filing pursuant to Rule 424(b).
(b) The Company will advise the Underwriter promptly of: (i)
any proposal to amend or supplement the Registration Statement or the Prospectus
and will not effect such amendment or supplementation without the Underwriter's
consent; (ii) the effectiveness of the Registration Statement (if the Effective
Time is subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of the Registration Statement or the Prospectus;
(iii) the institution by the Commission of any stop order in respect of the
Registration Statement or of any notification or other communication relating to
the institution of any stop order proceedings in respect of the Registration
Statement (and the Company will use its best efforts to prevent the issuance of
any such stop order and to obtain as soon as possible its lifting, if issued);
and (iv) any notification of the suspension of qualification of the Notes for
sale in any jurisdiction or the initiation or threat of any proceedings for that
purpose.
(c) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Act, the Company will advise the Underwriter promptly thereof
and will prepare promptly and file with the Commission an amendment or
supplement which will correct such statement or omission or an amendment which
will effect such compliance.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally available
to the Noteholders an earnings statement covering a period of at least 12 months
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beginning after the Effective Date which will satisfy the provisions of Section
11(a) of the Act and Rule 158 thereunder. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes the Effective Date,
except that, if such fourth fiscal quarter is the last quarter of the Company's
fiscal year, "Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Company will furnish to the Underwriter copies of the
Registration Statement (two of which will be originally executed and will
include all exhibits), each related preliminary prospectus, the Prospectus and
all amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Underwriter shall reasonably request.
(f) The Company will use its best efforts to arrange for the
qualification of the Notes for sale under the blue sky laws of such
jurisdictions as the Underwriter reasonably designates, and to continue such
qualifications in effect so long as this offering continues. The preparation and
filing of the applications and other documents relating to such qualifications
have been conducted by counsel to the Company. After the termination of the
offering and until all of the Notes have been paid in full by the Company, the
Company will file and make, and pay all fees applicable thereto, such statements
and reports and renewals of registration necessary in order to continue to
qualify the Notes for secondary market transactions in the various states in
which the Notes were originally registered for sale.
(g) As long as any Notes remain outstanding, the Company will
furnish to the Underwriter, as soon as practicable after the end of each fiscal
year, a copy of any annual report to its security holders for such year, and the
Company will furnish to the Underwriter (i) as soon as available, a copy of each
report or proxy statement of the Company filed with the Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or mailed to
security holders pursuant to the Indenture, and (ii) from time to time, such
other information concerning the Company or the Notes as the Underwriter may
request , provided that, as a condition to the Company's disclosure of any
confidential information to the Underwriter, the Underwriter shall sign a
customary confidentiality agreement pursuant to which it agrees to maintain any
such information in strict confidence.
(h) The Company will use the net proceeds received by it from
the sale of the Notes substantially in the manner specified in the Prospectus
under the caption "Use of Proceeds."
(i) The Company will not claim the benefit of any usury laws
against any holders of the Notes.
(j) Whether or not the transactions contemplated hereunder are
consummated, the Company will pay (i) all costs, fees and expenses incurred in
connection with the performance of the Company's obligations hereunder,
including, without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants and auditors, all costs and expenses incurred in connection with the
preparation, any printing, filing and distribution of the Registration
Statement, each preliminary prospectus and the Prospectus (including all
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exhibits and financial statements) and all amendments and supplements thereto,
this Agreement and the blue sky memoranda, (ii) all out-of-pocket expenses of
the Underwriter in connection with the sale of the Notes, including the legal
fees and disbursements of counsel to the Underwriter up to $65,000, subject to
any unusual or unexpected circumstances under which the Company may agree to pay
any additional reasonable fees and disbursements of counsel to the Underwriter,
(iii) all costs, fees and expenses (including legal fees and disbursements of
counsel for the Company) incurred in connection with qualifying or registering
all or any part of the Notes for offer and sale under blue sky laws, including
the preparation of blue sky memoranda relating to the Notes supplied to the
Underwriter by counsel for the Company, (iv) the fees of the NASD in connection
with the request for clearance of such offering with the NASD, (v) all fees and
expenses of the Trustee under the Indenture and any paying agent and registrar,
(vi) all fees and expenses associated with the production of materials prepared
in connection with the informational meetings to be held in selected cities, and
the travel expenses incurred by the management of the Company related to such
meetings, and (vii) costs of printing the certificates for the Notes and all
transfer taxes, if any, with respect to the sale and delivery of any
certificated Notes to the Underwriter.
7. Conditions of the Obligations of the Underwriter. The obligations of
the Underwriter to act as Underwriter in connection with the offer and sale of
the Notes, to make payment for the Notes and to take delivery thereof at the
Closing Date shall be subject to the following: the accuracy of the
representations and warranties on the part of the Company herein set forth, the
accuracy in all material respects of the statements of the Company officers made
pursuant to the provisions hereof, the performance by the Company of its
obligations hereunder and the satisfaction of the following additional
conditions precedent:
(a) The Underwriter shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time is prior to the execution
and delivery of this Agreement, shall be on or prior to the date of this
Agreement or, if the Effective Time is subsequent to the execution and delivery
of this Agreement, shall be prior to the filing of the amendment or
post-effective amendment to the Registration Statement to be filed shortly prior
to the Effective Time) of Deloitte & Touche LLP confirming that they are
independent public accountants within the meaning of the Act and the applicable
rules and regulations thereunder and stating in effect, with respect to the
consolidated financial statements of the Company, that:
(i) in their opinion, the consolidated financial
statements and related schedules of the Company examined by them and included in
the Registration Statement and Prospectus on their authority as experts comply
as to form in all material respects with the applicable accounting requirements
of the Act, the applicable published rules and regulations of the Commission
thereunder, Staff Accounting Bulletins with respect to registration statements
on Form S-2, and the requirements of Form S-2;
(ii) on the basis of a limited review, not
constituting an audit, including a reading of the latest available interim
financial statements, a reading of the minutes of the shareholders and of the
Board of Directors of the Company, and inquiries of officials of the Company
responsible for financial and accounting matters and such other inquiries and
procedures as they may specify, nothing has come to their attention which, in
their judgment, would indicate,
11
(A) that any unaudited consolidated
financial statements and related notes thereto of the Company included in the
Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act and of
the published instructions, rules and regulations of the Commission thereunder
with respect to registration statements on Form S-2, or that such unaudited
financial information contained in the Prospectus was not prepared in conformity
with generally accepted accounting principles applied on a basis consistent with
those followed in the preparation of the audited financial statements of the
Company included therein, or would require any material adjustment for a fair
presentation of the information purported to be shown thereby;
(B) at a specified date not more than five
days prior to the date of this Agreement, the First Closing Date or any
Additional Closing Date, as applicable, there was any change in the capital
stock, long-term debt or short-term debt of the Company, or any decrease in
total assets, net current assets, net assets or shareholder's investment as
compared with amounts shown on the latest balance sheet included in the
Registration Statement and Prospectus, except as set forth or contemplated in
the Prospectus;
(C) for the period from the closing date of
the latest income statement included in the Registration Statement and
Prospectus to the specified dates referenced in clause (B) above, there were any
decreases, as compared with the corresponding period of the previous year, in
operating revenues, income before income taxes or in the total or per share
amounts of net income, except as set forth or contemplated in the Prospectus;
(iii) they have compared specific dollar amounts,
number of shares, percentages and other financial information pertaining to the
Company set forth in the Prospectus, which have been specified by the
Underwriter, with the general accounting records of the Company, with the
results obtained from the application of specified readings, inquiries and other
appropriate procedures (which procedures do not constitute an examination in
accordance with generally accepted auditing standards) set forth in the letter,
and found them to be in agreement; and
(iv) such other matters as the Underwriter may
reasonably request.
For purposes of this subsection, if the Effective Time is subsequent to the
execution and delivery of this Agreement, "Registration Statement" shall mean
the registration statement as proposed to be amended by the amendment or
post-effective amendment to be filed shortly prior to the Effective Time, and
"Prospectus" shall mean the prospectus included in the Registration Statement.
(b) If the Effective Time is not prior to the execution and
delivery of this Agreement, the Effective Time shall have occurred not later
than 10:00 P.M., Minneapolis time, on the date of this Agreement or such later
date as shall have been consented to by the Underwriter. If the Effective Time
is prior to the execution and delivery of this Agreement, the Prospectus shall
have been filed with the Commission in accordance with the Act and Paragraph
6(a) of this Agreement. No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the best knowledge of the Company or
the Underwriter, shall be contemplated by the Commission.
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(c) The Notes shall have been qualified for sale under the
blue sky laws of such states and in such amounts as shall have been specified by
the Underwriter and agreed to by the Company.
(d) The NASD, upon review of the terms of the public offering
of the Notes, shall not have objected to such offering, the terms of the
offering or the Underwriter's participation in the offering.
(e) The legality and sufficiency of the authorization,
issuance and sale or transfer and sale of the Notes hereunder, the validity and
form of the certificates representing the Notes, the execution and delivery of
this Agreement and the Indenture and all corporate proceedings and other legal
matters incident thereto, and the form of the Registration Statement and the
Prospectus (except financial statements) shall have been approved by counsel for
the Underwriter exercising reasonable judgment.
(f) The Underwriter shall not have advised the Company that
the Registration Statement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of fact which, in the opinion of counsel
for the Underwriter, is material or omits to state a fact which, in the opinion
of such counsel, is required to be stated therein or necessary to make the
statements therein not misleading.
(g) The Underwriter shall have received an opinion, dated each
Closing Date, of Winthrop & Weinstine, P.A., counsel for the Company, to the
effect that:
(i) The Company and the Subsidiaries have been duly
incorporated and organized and are validly existing as corporations or limited
liability companies in good standing under the laws of their respective states
of incorporation or organization, with full corporate power and authority to own
their properties and conduct their business as described in the Prospectus. The
Company and the Subsidiaries are duly qualified as foreign corporations or
limited liability companies to transact business and are in good standing in
each jurisdiction in which such qualification is required, other than
jurisdictions in which the failure to so qualify would not have a material
adverse effect on the Company and the Subsidiaries, taken as a whole.
(ii) All of the securities of the Subsidiaries have
been duly and validly authorized and issued, are fully paid and nonassessable
and are owned by the Company, free and clear of any security interest, lien or
restriction except for the security interest of Diversified Business Credit,
Inc. The Company has no subsidiaries (other than the Subsidiaries) or affiliates
or affiliated corporations except as explicitly stated in the Prospectus.
(iii) The authorized capital stock of the Company is
as set forth under the caption "Description of Outstanding Securities - Common
Stock" in the Prospectus as of the date(s) indicated, and the issued and
outstanding shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. The long-term debt and
short-term debt of the Company and the Subsidiaries have been duly authorized.
No holder of the Company's common stock has the right to cause the Company to
redeem such common stock.
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(iv) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company enforceable in accordance with its terms
except as enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws or equitable principles
affecting the enforcement of creditors' rights generally and except as rights to
indemnity hereunder may be limited by applicable securities laws, including the
Act and the rules and regulations thereunder.
(v) The Indenture and the Notes have been duly and
validly authorized, executed and delivered by the Company and constitute the
legal, valid and binding obligations of the Company enforceable in accordance
with their respective terms except as enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws or
equitable principles affecting enforcement of creditors' rights generally. The
Notes are entitled to the benefits of the Indenture.
(vi) The Notes and the Indenture conform in all
material respects to the descriptions thereof contained in the Prospectus. The
global certificate for the Notes to be inserted in book-entry form hereunder and
the certificates for any Notes to be certificated are in due and proper form.
(vii) Neither the issue and sale of the Notes, the
performance of this Agreement, the Indenture, nor the consummation of the
transactions contemplated herein and therein will conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to any contract, indenture, mortgage, loan agreement, note,
lease or other instrument or agreement to which the Company or any Subsidiary is
a party or by which any of them may be bound, or to which any of the property or
assets of any of them is subject, nor will such actions result in any violation
of any administrative or court decree known to such counsel after due inquiry or
the provisions of the charter or bylaws of the Company or any Subsidiary or, to
the best of such counsel's knowledge after due inquiry, any applicable law or
administrative regulation.
(viii) No consent, approval, authorization or other
order of any court, regulatory body, administrative agency, other governmental
body or any self-regulatory agency is required for the execution and delivery of
this Agreement, the Indenture or the Notes or the consummation of the
transactions contemplated herein or therein, except such as have been obtained
under the Act and as may be required under applicable blue sky laws and under
the rules and regulations of the NASD.
(ix) Neither the Company nor any Subsidiary is in
violation of its articles of incorporation or organization or bylaws or other
governing document or, to the best of such counsel's knowledge after due
inquiry, in default under any administrative or court decree or in default with
respect to any material provision of any lease, loan agreement, franchise,
license or permit to which it is a party or by which it may be bound, or to
which any of the property or assets of the Company or any Subsidiary is subject.
To the best knowledge of such counsel, there does not exist any state of facts
which constitutes an event of default as defined in such documents or which,
with notice or lapse of time or both, would constitute such an event of default.
14
(x) To the best of such counsel's knowledge after due
inquiry, there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or threatened,
against or affecting the Company or the Subsidiaries, which is required to be
disclosed in the Registration Statement.
(xi) There are no holders of securities of the
Company having preemptive rights with respect to the issuance and sale of the
Notes and no rights to register outstanding shares of the Company's capital
stock or, except as described in the Prospectus, shares issuable upon the
exercise of outstanding warrants, options, convertible securities or other
rights to acquire shares of such capital stock exist with respect to the
Registration Statement.
(xii) To the best knowledge of such counsel after due
inquiry, there are no contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments, documents or agreement (collectively, "Agreements")
of a character required to be described or referred to in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement which are not described or referred to or filed as required. All
descriptions or references to such Agreements in the Registration Statement are
correct in all material respects.
(xiii) The Indenture is not required to be qualified
under the Trust Indenture Act of 1939, as amended.
(xiv) The information in the Registration Statement,
to the extent that it constitutes summaries of matters of law, descriptions of
statutes, legal and government proceedings, contracts and other legal
conclusions, is accurate and fairly presents the information required to be
shown, and such counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus that are not described as
required.
(xv) The conditions for use of a registration
statement on Form S-2 set forth in the General Instructions to Form S-2 have
been satisfied with respect to the Company and the Registration Statement.
(xvi) The Registration Statement was declared
effective under the Act as of the date and time specified in such opinion, the
Prospectus either was filed with the Commission pursuant to the subparagraph of
Rule 424(b) specified in such opinion on the date specified therein or was
included in the Registration Statement (as the case may be), and, to the best
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated under the
Act, and the Registration Statement and the Prospectus, and each amendment or
supplement thereto, as of their respective effective or issue dates, complied as
to form in all material respects with the requirements of the Act and the rules
and regulations thereunder; and nothing has come to such counsel's attention
that would lead such counsel to believe that either the Registration Statement
or the Prospectus or any such amendment or supplement, as of such respective
dates, contained any untrue statement of a material fact or omitted to state any
15
material fact required to be stated therein or necessary to make the statements
therein not misleading, it being understood that such counsel need express no
opinion as to the financial statements or other financial or statistical data or
compilations contained in any of the documents mentioned in this clause,
including the Registration Statement or the Prospectus or as to any statements
in or omissions from the documents mentioned in this clause, including the
Registration Statement and the Prospectus, in reliance upon and in conformity
with written information furnished to the Company by the Underwriter
specifically for use therein.
(xvii) The Company has not sold any securities in
violation of Section 5(a) of the Act or any state securities laws.
(xviii) To the best of such counsel's knowledge, the
Company and the Subsidiaries own, possess or have obtained all material
governmental licenses, permits, certificates, consents, orders, approvals and
other authorizations necessary to own or lease, as the case may be, and to
operate their properties and to carry on their respective business as presently
conducted and as contemplated by the Prospectus, and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such licenses, permits, certificates, consents, orders,
approvals or authorizations. The business of the Company and the Subsidiaries is
not being conducted in violation of any applicable federal, state, local or
foreign law, ordinance, regulation, judgment, decree, injunction or order or
requirement of any court or other governmental entity known to such counsel. To
the best knowledge of such counsel, no such company and no officer, director,
shareholder or agent of such company has been authorized to receive or make, and
is not receiving or making, any bribe, kickback, or other illegal payment with
respect to the business conducted by such company.
(xix) The Company is not and after giving effect to
the Offering and sale of the Notes will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(xx) Such other matters as the Underwriter may
reasonably request.
(h) The Underwriter shall have received from ▇▇▇▇▇▇▇, Street
and Deinard, Professional Association, counsel for the Underwriter, such opinion
or opinions, dated each Closing Date, as the Underwriter may require, and the
Company shall have furnished to such counsel such documents as they request for
the purpose of preparing such opinion.
(i) The Underwriter shall have received a certificate, dated
each Closing Date, of the President and the principal financial officer of the
Company on behalf of the Company to the effect that the representations and
warranties of the Company in this Agreement are true and correct on and as of
the applicable Closing Date to the same effect as if made on such Closing Date,
that the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to such Closing
Date, that no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the best of their knowledge, no proceedings
for such purpose have been instituted or are contemplated by the Commission, and
that there has not been, since the date hereof or since the respective dates as
of which information is given in the Registration Statement and the Prospectus,
any material adverse change in the condition, financial or other, or in the
results of operations, business affairs or business prospects of the Company or
any Subsidiary.
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(j) The Underwriter shall have received a letter, dated each
Closing Date, of Deloitte & Touche LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to in
such subsection will be a date not more than five days prior to the applicable
Closing Date for the purposes of this subsection.
(k) The Company shall have received, with copies to the
Underwriter, duly executed waivers from each holder of the Company's common
stock having redemption rights, permanently waiving such rights.
The Company will furnish the Underwriter with such manually signed or conformed
copies of such opinions, certificates, letters and documents as the Underwriter
reasonably requests and of such other certificates and documents as the
Underwriter may reasonably request.
8. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless the
Underwriter and any selected dealers against any losses, claims, damages or
liabilities to which the Underwriter and selected dealers may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon a
breach by the Company of the representations, warranties or covenants contained
herein, or any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon 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, and will reimburse the Underwriter and selected dealers for any
legal or other expenses reasonably incurred by the Underwriter and selected
dealers in connection with investigating or defending any such loss, claims,
damage, liability or action as such expenses are incurred, provided that the
Company will not be liable in any such case to the extent that any such loss,
claims, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by the Underwriter, as described in the last sentence of
paragraph (b) below; and provided further that the foregoing indemnity agreement
with respect to any Preliminary Prospectus or Prospectus shall not inure to the
benefit of the Underwriter and selected dealers on account of any loss,
liability, claim, damage and expense whatsoever arising from the sale of any
Notes by the Underwriter and selected dealers to any person if (A) the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Preliminary Prospectus or Prospectus from which
such loss, liability, claim, damage or expense arose was corrected in a later
Prospectus by amendment or supplement, and (B) a copy of such later Prospectus
(if such amendments or supplements shall have been furnished to the Underwriter
and selected dealers prior to the confirmation of the sale involved) shall not
have been sent or given by or on behalf of the Underwriter or selected dealers
to such person, if required by law, with or prior to the written confirmation of
the sale involved.
17
(b) The Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of material fact contained
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by the Underwriter, as described in the last sentence of this paragraph
(b), and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred. For all
purposes of this Agreement, the information set forth (i) on the last paragraph
of the cover page of the Prospectus, and (ii) in the section entitled
"Underwriting" in the Prospectus is the only information furnished to the
Company by the Underwriter for use in the Registration Statement or the
Prospectus, or any related preliminary prospectus.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof, but the failure so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party, without the prior written consent of the indemnified party, shall effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriter on the other from the offering
of the Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above, but also the
18
relative fault of the Company on the one hand and the Underwriter on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriter on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bears to the total underwriting discounts and commissions received
by the Underwriter. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriter and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), the
Underwriter shall not be required to contribute any amount in excess of the
commissions and discounts applicable to the Notes. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company under this Section shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, jointly and severally, to each
person, if any, who controls the Underwriter within the meaning of the Act. The
obligations of the Underwriter under this Section shall be in addition to any
liability which the Underwriter may otherwise have and shall extend, upon the
same terms and conditions, jointly and severally, to each director of the
Company, to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers, and the Underwriter set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Notes, in each case for a period of four (4) years following
the date hereof. If for any reason the purchase of the Notes by the Underwriter
is not consummated, the Company shall remain responsible for the expenses to be
paid or reimbursed by them pursuant to Paragraph 6(j) and the respective
obligations of the Company and the Underwriter under Paragraph 8 shall remain in
effect, and if any Notes have been purchased hereunder the representations and
warranties in Section 2 and all obligations under Section 6 shall also remain in
effect.
10. Termination. This Agreement may be terminated by the Underwriter or
the Company at any time prior to the Closing. In such case, the Underwriter will
be paid for its fees and expenses accrued as of such date within thirty (30)
days of such termination. Notwithstanding the foregoing, this Agreement shall be
subject to termination in the Underwriter's absolute discretion, by notice given
to the Company prior to delivery of and payment for the Notes, if prior to such
19
time (i) prevailing market or general economic or political conditions, in the
judgment of the Underwriter, have become unfavorable such that the Underwriter's
ability to sell the Notes will be impaired or it would be impracticable to
proceed (ii) any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business or properties
of the Company or any Subsidiary shall have occurred which, in the judgment of
the Underwriter, materially impairs the investment quality or the value of the
Notes, (iii) trading in securities generally on the New York Stock Exchange or
the Nasdaq shall have been suspended or limited or minimum prices shall have
been established on such exchange or market system, (iv) a banking moratorium
shall have been declared either by Federal, New York or Minnesota banking
authorities, (vi) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis or terrorist act, the effect of which on financial
markets is such as to make it, in the Underwriter's judgment, impracticable or
inadvisable to proceed with the offering or delivery of the Notes as
contemplated by the Prospectus or (v) there shall have occurred any material
adverse change in the financial or securities markets beyond normal
fluctuations.
11. Notices. All communications hereunder will be in writing and, if
sent to the Underwriter, will be mailed, delivered or telegraphed and confirmed
to the Underwriter at ▇▇▇▇▇▇▇▇▇ & Company LLC, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇; or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at ▇▇▇▇▇▇
Investment Corporation, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or to such other address of which a party
hereto shall notify the other party hereto pursuant to this paragraph.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other
person will have any right or obligation hereunder. No purchaser of Notes from
the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Minnesota.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
Underwriter in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇ Investment Corporation
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
▇▇▇▇▇▇▇▇▇ & COMPANY LLC
By:
--------------------------------
Name:
Title:
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