Exhibit 1.1
BIOFUEL ENERGY CORP.
[_____] Shares of Common Stock
Form of Underwriting Agreement
[__________], 2007
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Citigroup Global Markets Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
BioFuel Energy Corp., a Delaware corporation (the "Company"), proposes to
issue and sell to the several Underwriters listed in Schedule 1 hereto (each an
"Underwriter" and, collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), an aggregate of [ ] shares of common
stock, par value $0.01 share (the "Common Stock"), of the Company (the
"Underwritten Shares") and, at the option of the Underwriters, up to an
additional [ ] shares of Common Stock of the Company (the "Option Shares"). The
Underwritten Shares and the Option Shares are herein referred to as the
"Shares". The shares of Common Stock of the Company to be outstanding after
giving effect to the sale of the Shares are herein referred to as the "Stock".
As used herein, the term "recapitalization" shall have the meaning assigned
thereto in the Prospectus (as defined below) and the term "contribution" shall
refer to the contribution by the Company of the net proceeds of the offering
contemplated by this Agreement to BioFuel Energy, LLC, as described in the
Prospectus.
The Company hereby confirms its agreement with the several Underwriters
concerning the purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement (File No.
333-139203) including a prospectus, relating to the Shares. Such registration
statement, as amended at the time it becomes effective, including the
information, if any, deemed pursuant to Rule 430A, 430B or 430C under the
Securities Act to be part of the registration statement at the time of its
effectiveness ("Rule 430 Information"), is referred to herein as the
"Registration Statement"; and as used herein, the term "Preliminary Prospectus"
means each prospectus included in such registration statement (and any
amendments thereto) before it becomes effective, any prospectus filed with the
Commission pursuant to Rule 424(a) under the Securities Act and the prospectus
included in the Registration Statement at the time of its effectiveness that
omits Rule 430 Information, and the term "Prospectus" means the prospectus in
the form first used (or made available upon request of purchasers pursuant to
Rule 173 under the Securities Act) in connection with confirmation of sales of
the Shares. If the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed
to include such Rule 462 Registration Statement. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Registration
Statement and the Prospectus.
At the Time of Sale (as defined below), the Company had prepared the
following information (the "Time of Sale Information"): a Preliminary Prospectus
dated [ ], 2007, [each "free-writing prospectus" (as defined pursuant to Rule
405 under the Securities Act) listed on Annex B hereto] and the pricing
information set forth on Annex B hereto.
"Time of Sale" means [__] P.M. (Eastern time) on the date of this
Agreement.
2. Purchase of the Shares by the Underwriters.
(a) The Company agrees to issue and sell the Shares to the several
Underwriters as provided in this Agreement, and each Underwriter, on the basis
of the representations, warranties and agreements set forth herein and subject
to the conditions set forth herein, agrees, severally and not jointly, to
purchase from the Company the respective number of Underwritten Shares set forth
opposite such Underwriter's name in Schedule 1 hereto at a price per share (the
"Purchase Price") of $__________.
In addition, the Company agrees to issue and sell the Option Shares to the
several Underwriters as provided in this Agreement, and the Underwriters, on the
basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, shall have the option to purchase,
severally and not jointly, from the Company the Option Shares at the Purchase
Price.
If any Option Shares are to be purchased, the number of Option Shares to be
purchased by each Underwriter shall be the number of Option Shares which bears
the same ratio to the aggregate number of Option Shares being purchased as the
number of Underwritten Shares set forth opposite the name of such Underwriter in
Schedule 1 hereto (or such number increased as set forth in Section 10 hereof)
bears to the aggregate number of Underwritten Shares being purchased from the
Company by the several Underwriters, subject, however, to such adjustments to
eliminate any fractional Shares as the Representatives in their sole discretion
shall make.
The Underwriters may exercise the option to purchase the Option Shares at
any time in whole, or from time to time in part, on or before the thirtieth day
following the date of this Agreement, by written notice from the Representatives
to the Company. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for which may be the same date and
time as the Closing Date (as hereinafter defined) but shall not be earlier than
the Closing Date nor later than the tenth full business day (as hereinafter
defined) after the date of such notice (unless such time and date are postponed
in accordance with the provisions of Section 10 hereof). Any such notice shall
be given at least two Business Days prior to the date and time of delivery
specified therein.
(b) The Company understands that the Underwriters intend to make a public
offering of the Shares as soon after the effectiveness of this Agreement as in
the judgment of the Representatives is advisable, and initially to offer the
Shares on the terms set forth in the Prospectus. The Company acknowledges and
agrees that the Underwriters may offer and sell Shares to or through any
affiliate of an Underwriter and that any such affiliate may offer and sell
Shares purchased by it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Representatives
in the case of the Underwritten Shares, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 A.M. New York
City time on [__________], 2007, or at such other time or place on the same or
such other date,
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not later than the fifth business day thereafter, as the Representatives and the
Company may agree upon in writing or, in the case of the Option Shares, on the
date and at the time and place specified by the Representatives in the written
notice of the Underwriters' election to purchase such Option Shares. The time
and date of such payment for the Underwritten Shares is referred to herein as
the "Closing Date" and the time and date for such payment for the Option Shares,
if other than the Closing Date, is herein referred to as the "Additional Closing
Date".
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date in definitive form registered in such
names and in such denominations as the Representative shall request in writing
not later than two full business days prior to the Closing Date or the
Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the sale of the Shares duly paid by the Company. The
certificates for the Shares will be made available for inspection and packaging
by the Representatives, if requested, at the office of ▇.▇. ▇▇▇▇▇▇ Securities
Inc. set forth above not later than 1:00 P.M., New York City time, on the
business day prior to the Closing Date or the Additional Closing Date, as the
case may be.
(d) The Company acknowledges and agrees that the Underwriters are acting
solely in the capacity of an arm's length contractual counterparty to the
Company with respect to the offering of Shares contemplated hereby (including in
connection with determining the terms of the offering) and not as a financial
advisor or a fiduciary to, or an agent of, the Company or any other person.
Additionally, neither the Representatives nor any other Underwriter is advising
the Company or any other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction. The Company shall consult with its own
advisors concerning such matters and shall be responsible for making its own
independent investigation and appraisal of the transactions contemplated hereby,
and the Underwriters shall have no responsibility or liability to the Company
with respect thereto. Any review by the Underwriters of the Company, the
transactions contemplated hereby or other matters relating to such transactions
will be performed solely for the benefit of the Underwriters and shall not be on
behalf of the Company.
3. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of
any Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, complied in all material
respects with the Securities Act and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use in any Preliminary Prospectus.
(b) Time of Sale Information. The (i) Time of Sale Information and (ii)
each electronic road show when taken together as a whole with the Time of Sale
Information, at the Time of Sale did not, and at the Closing Date and as of the
Additional Closing Date, as the case may be, will not, contain any untrue
statement of a material fact or omit 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; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in
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writing by such Underwriter through the Representatives expressly for use in
such Time of Sale Information.
(c) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus
and the Prospectus, the Company (including its agents and representatives, other
than the Underwriters in their capacity as such) has not made, used, prepared,
authorized, approved or referred to and will not prepare, make, use, authorize,
approve or refer to any "written communication" (as defined in Rule 405 under
the Securities Act) that constitutes an offer to sell or solicitation of an
offer to buy the Shares (each such communication by the Company or its agents
and representatives (other than a communication referred to in clause (i) below)
an "Issuer Free Writing Prospectus") other than (i) any document not
constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act
or Rule 134 under the Securities Act or (ii) the documents listed on Annex B
hereto and other written communications approved in writing in advance by the
Representatives. Each such Issuer Free Writing Prospectus complied in all
material respects with the Securities Act, has been filed in accordance with the
Securities Act (to the extent required thereby) and, when taken together with
the Preliminary Prospectus accompanying, or delivered prior to delivery of, such
Issuer Free Writing Prospectus, did not, and at the Closing Date and as of the
Additional Closing Date, as the case may be, will not, contain any untrue
statement of a material fact or omit 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; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in
each such Issuer Free Writing Prospectus in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in any Issuer
Free Writing Prospectus.
(d) Registration Statement and Prospectus. The Registration Statement has
been declared effective by the Commission. No order suspending the effectiveness
of the Registration Statement has been issued by the Commission and no
proceeding for that purpose or pursuant to Section 8A of the Securities Act
against the Company or related to the offering has been initiated or, to the
knowledge of the Company after due inquiry, threatened by the Commission; as of
the applicable effective date of the Registration Statement and any amendment
thereto, the Registration Statement complied and will comply in all material
respects with the Securities Act, and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and as of the date of the Prospectus and any amendment or supplement
thereto and as of the Closing Date and as of the Additional Closing Date, as the
case may be, the Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement and the
Prospectus and any amendment or supplement thereto.
(e) Financial Statements. The financial statements and the related notes
thereto, of the Company, its consolidated subsidiaries and any predecessor
entities thereto included in the Registration Statement, the Time of Sale
Information and the Prospectus comply in all material respects with the
applicable requirements of the Securities Act and the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act"), as applicable, and present fairly in all
material respects the financial position of the Company, its subsidiaries and
any predecessor entities thereto as of the dates indicated and the results of
their operations and the changes in their cash flows for the periods specified;
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered
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thereby, and the supporting schedules included in the Registration Statement
present fairly in all material respects the information required to be stated
therein; and the other financial information included in the Registration
Statement, the Time of Sale Information and the Prospectus has been derived from
the accounting records of the Company, its subsidiaries or any predecessor
entities thereto, as applicable, and presents fairly in all material respects
the information shown thereby.
(f) No Material Adverse Change. Since the date of the most recent financial
statements of the Company included in the Registration Statement, the Time of
Sale Information and the Prospectus, (i) except as otherwise disclosed in the
Time of Sale Information, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries, or any dividend or
distribution of any kind declared, set aside for payment, paid or made by the
Company on any class of capital stock, or any material adverse change, or any
development that would reasonably be expected to result in a material adverse
change, in or affecting the business, properties, management, financial
position, stockholders' equity, results of operations or prospects of the
Company and its subsidiaries taken as a whole; (ii) neither the Company nor any
of its subsidiaries has entered into any transaction or agreement that is
material to the Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to the Company
and its subsidiaries taken as a whole; and (iii) neither the Company nor any of
its subsidiaries has sustained any material loss or material interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor disturbance or dispute or any action,
order or decree of any court or arbitrator or governmental or regulatory
authority, except in each case as otherwise disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus.
(g) Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
management, financial position, stockholders' equity, results of operations or
prospects of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"). The Company does not own or control, directly or indirectly,
any corporation, association or other entity other than the subsidiaries listed
in Exhibit 21.1 to the Registration Statement.
(h) Capitalization. The Company has an authorized capitalization as set
forth in the Registration Statement, the Time of Sale Information and the
Prospectus under the heading "Capitalization"; all the outstanding shares of
capital stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable and are not subject to any pre-emptive or
similar rights; except as described in or expressly contemplated by the Time of
Sale Information and the Prospectus, there are no outstanding rights (including,
without limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital stock or
other equity interest in the Company or any of its subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any capital stock of the Company or any such
subsidiary, any such convertible or exchangeable securities or any such rights,
warrants or options; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Registration Statement, the
Time of Sale Information and the Prospectus; and all the outstanding shares of
capital stock or other equity interests of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
(except as otherwise described in the Registration Statement, the Time of Sale
Information and the Prospectus) and are owned directly or indirectly by the
Company,
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free and clear of any lien, charge, encumbrance, security interest, restriction
on voting or transfer or any other claim of any third party.
(i) Due Authorization. The Company has full right, power and authority to
execute and deliver this Agreement and to perform its obligations hereunder; and
all action required to be taken for the due and proper authorization, execution
and delivery by it of this Agreement and the consummation by it of the
transactions contemplated hereby has been duly and validly taken.
(j) Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(k) The Shares. The Shares have been duly authorized by the Company and,
when issued and delivered and paid for as provided herein, will be duly and
validly issued and will be fully paid and nonassessable and will conform to the
descriptions thereof in the Time of Sale Information and the Prospectus; and the
issuance of the Shares is not subject to any preemptive or similar rights.
(l) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject; or
(iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Material
Adverse Effect.
(m) No Conflicts. The execution, delivery and performance by the Company of
this Agreement, the issuance and sale of the Shares, the recapitalization, the
contribution and the consummation of the transactions contemplated by this
Agreement will not (i) conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a 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 of its subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, (ii) result in any violation
of the provisions of the charter or by-laws or similar organizational documents
of the Company or any of its subsidiaries or (iii) result in the violation of
any law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of
clauses (i) and (iii) above, for any such conflict, breach, violation or default
that would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(n) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company of this Agreement, the issuance and sale of the Shares and the
consummation of the recapitalization, the contribution and the transactions
contemplated by this Agreement, except (i) for the registration of the Shares
under the Securities Act, (ii) where the failure to obtain such consents,
approvals, authorizations, orders and registrations or qualifications would not
reasonably be expected to have a Material Adverse Effect and (iii) for such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required under applicable state securities laws or the bylaws and
rules of the National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution of the Shares by the Underwriters.
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(o) Legal Proceedings. Except as described in the Registration Statement,
the Time of Sale Information and the Prospectus, there are no legal,
governmental or regulatory investigations, actions, suits or proceedings pending
to which the Company or any of its subsidiaries is or may be a party or to which
any property of the Company or any of its subsidiaries is or may be the subject
that, individually or in the aggregate, if determined adversely to the Company
or any of its subsidiaries, would reasonably be expected to have a Material
Adverse Effect or materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; to the knowledge of the Company,
no such investigations, actions, suits or proceedings are threatened or
contemplated by any governmental or regulatory authority or threatened by
others; and (i) there are no current or pending legal, governmental or
regulatory actions, suits or proceedings that are required under the Securities
Act to be described in the Registration Statement that are not so described in
the Registration Statement, the Time of Sale Information and the Prospectus and
(ii) there are no statutes, regulations or contracts or other documents that are
required under the Securities Act to be filed as exhibits to the Registration
Statement or described in the Registration Statement or the Prospectus that are
not so filed as exhibits to the Registration Statement or described in the
Registration Statement, the Time of Sale Information and the Prospectus.
(p) Independent Accountants. Deloitte & Touche LLP, who have certified
certain financial statements of the Company, its subsidiaries and any
predecessor entities thereto, are an independent registered public accounting
firm with respect to the Company, its subsidiaries and any predecessor entities
thereto within the applicable rules and regulations adopted by the Commission
and the Public Company Accounting Oversight Board (United States) and as
required by the Securities Act.
(q) Title to Real and Personal Property. The Company and its subsidiaries
have good and marketable title in fee simple to, or have valid rights to lease
or otherwise use, all items of real and personal property that are material to
the respective businesses of the Company and its subsidiaries, in each case free
and clear of all liens, encumbrances, claims and defects and imperfections of
title except those that (i) do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries or (ii)
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(r) Title to Intellectual Property. The Company and its subsidiaries own or
possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective businesses,
except where the failure to own or possess such rights would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect;
and the conduct of their respective businesses will not conflict in any material
respect with any such rights of others, and the Company and its subsidiaries
have not received any notice of any claim of infringement or conflict with any
such rights of others.
(s) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on the one hand,
and the directors, officers, stockholders, customers or suppliers of the Company
or any of its subsidiaries, on the other, that is required by the Securities Act
to be described in the Registration Statement and the Prospectus and that is not
so described in such documents and in the Time of Sale Information.
(t) Investment Company Act. The Company is not and, after giving effect to
the offering and sale of the Shares and the application of the proceeds thereof
as described in the Registration Statement, the Time of Sale Information and the
Prospectus, will not be required to register as an "investment company" or an
entity "controlled" by an "investment company" within the meaning of the
Investment Company
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Act of 1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, "Investment Company Act").
(u) Taxes. The Company and its subsidiaries have paid all federal, state,
local and foreign taxes and filed all tax returns required to be paid or filed
through the date hereof other than taxes or filings with respect to which the
failure to pay or file, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect; and except as otherwise disclosed
in the Registration Statement, the Time of Sale Information and the Prospectus,
there is no tax deficiency that has been, or would reasonably be expected to be,
asserted against the Company or any of its subsidiaries or any of their
respective properties or assets other than tax deficiencies which, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
(v) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in the Registration Statement, the Time of
Sale Information and the Prospectus, except where the failure to possess or make
the same would not, individually or in the aggregate, have a Material Adverse
Effect; and except as described in the Registration Statement, the Time of Sale
Information and the Prospectus, neither the Company nor any of its subsidiaries
has received notice of any revocation or modification of any such license,
certificate, permit or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the
ordinary course, other than revocations, modifications or non-renewals which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
(w) No Labor Disputes. No labor disturbance by or dispute with employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is contemplated or threatened, and the Company is not aware of any
existing or imminent labor disturbance by, or dispute with, the employees of any
of its or its subsidiaries' principal suppliers, contractors or customers,
except as would not have a Material Adverse Effect.
(x) Compliance with Environmental Laws. (i) The Company and its
subsidiaries (x) are in compliance with any and all applicable federal, state,
local and foreign laws, rules, regulations, requirements, decisions and orders
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"); (y) have received and are in compliance
with all permits, licenses, certificates or other authorizations or approvals
required of them under applicable Environmental Laws to conduct their respective
businesses; and (z) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, and (ii)
there are no costs or liabilities associated with Environmental Laws of or
relating to the Company or its subsidiaries, except in the case of each of
(i)(x) and (i)(y) above, for any such failure to comply, or failure to receive
required permits, licenses or approvals, or cost or liability, as would not,
individually or in the aggregate, have a Material Adverse Effect.
(y) Compliance with ERISA. Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and its affiliates has been operated in substantial accordance with its
terms and in material compliance with the requirements of any applicable
statutes, orders, rules and regulations having the binding effect of law,
including but not limited to ERISA and the Internal Revenue Code of
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1986, as amended (the "Code"); to the Company's knowledge, no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the
Code, has occurred with respect to any such plan excluding transactions effected
pursuant to a statutory or administrative exemption; and for each such plan that
is subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, no "accumulated funding deficiency" as defined in Section 412 of the Code
has been incurred, whether or not waived, and the fair market value of the
assets of each such plan (excluding for these purposes accrued but unpaid
contributions) exceeds the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions.
(z) Disclosure Controls. Except as disclosed in the Registration Statement,
the Time of Sale Information and the Prospectus, the Company and its
subsidiaries maintain an effective system of "disclosure controls and
procedures" (as defined in Rule 13a-15(e) of the Exchange Act) that is designed
to ensure that information required to be disclosed by the Company in reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commission's
rules and forms, including controls and procedures designed to ensure that such
information is accumulated and communicated to the Company's management as
appropriate to allow timely decisions regarding required disclosure.
(aa) Accounting Controls. Except as disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus, the Company and its
subsidiaries maintain systems of "internal control over financial reporting" (as
defined in Rule 13a-15(f) of the Exchange Act) that have been designed by, or
under the supervision of, their respective principal executive and principal
financial officers, or persons performing similar functions, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. Except as disclosed in the
Registration Statement, the Time of Sale Information and the Prospectus, there
are no material weaknesses in the Company's internal controls.
(bb) Insurance. The Company and its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are
adequate to protect the Company and its subsidiaries and their respective
businesses, except where the failure to carry such insurance would not
reasonably be expected to have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has (i) received notice from any insurer or
agent of such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such insurance or (ii) any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage at
reasonable cost from similar insurers as may be necessary to continue its
business.
(cc) No Unlawful Payments. Neither the Company nor any of its subsidiaries
nor, to the best knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the Company or
any of its subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(dd) Compliance with Money Laundering Laws. The operations of the Company
and its subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency
-9-
(collectively, the "Money Laundering Laws") and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(ee) Compliance with OFAC. None of the Company, any of its subsidiaries or,
to the knowledge of the Company, any director, officer, agent, employee or
Affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury ("OFAC"); and the Company will not directly or
indirectly use the proceeds of the offering of the Shares hereunder, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint
venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by
OFAC.
(ff) No Restrictions on Subsidiaries. Except as set forth in the Credit
Agreement and Collateral Account Agreement dated September 25, 2006, among BFE
Operating Company, LLC, Buffalo Lake Energy, LLC and Pioneer Trail Energy, LLC,
as borrowers, and the other parties thereto, the Loan Agreement dated September
25, 2006, between BioFuel Energy, LLC and the other parties thereto, and the
documents relating to the tax increment financing of Pioneer Trail Energy, LLC,
no subsidiary of the Company is currently prohibited, directly or indirectly,
under any agreement or other instrument to which it is a party or is subject,
from paying any dividends to the Company, from making any other distribution on
such subsidiary's capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such
subsidiary's properties or assets to the Company or any other subsidiary of the
Company.
(gg) No Broker's Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Company or any
of its subsidiaries or any Underwriter for a brokerage commission, finder's fee
or like payment in connection with the offering and sale of the Shares.
(hh) No Registration Rights. Except as disclosed in the Registration
Statement, Time of Sale Information and Prospectus, no person has the right to
require the Company or any of its subsidiaries to register any securities for
sale under the Securities Act by reason of the filing of the Registration
Statement with the Commission or the issuance and sale of the Shares.
(ii) No Stabilization. The Company has not taken, directly or indirectly,
any action designed to or that would reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares.
(jj) Margin Rules. Neither the issuance, sale and delivery of the Shares
nor the application of the proceeds thereof by the Company as described in the
Registration Statement, the Time of Sale Information and the Prospectus will
violate Regulation T, U or X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board of Governors.
(kk) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Registration Statement, the Time of Sale Information and
the Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(ll) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included in the Registration
-10-
Statement, the Time of Sale Information and the Prospectus is not based on or
derived from sources that are reliable and accurate in all material respects.
(mm) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. There is and has been no failure on the part of
the Company or any of the Company's directors or officers, in their capacities
as such, to comply with those provisions of Section 402 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002 and the rules and regulations promulgated in connection therewith
(the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act") related to loans.
(nn) Status Under the Securities Act. The Company is not an ineligible
issuer as defined under the Securities Act at the times specified in the
Securities Act in connection with the offering of the Shares.
(oo) No Ratings. The are no securities or preferred stock of or guaranteed
by the Company or any of its subsidiaries that are rated by a "nationally
recognized statistical rating organization", as such term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Shares shall be deemed a representation and warranty by the Company, as
to matters covered thereby, to each Underwriter.
4. Further Agreements of the Company. The Company covenants and agrees with
each Underwriter that:
(a) Required Filings. The Company will file the final Prospectus with the
Commission within the time periods specified by Rule 424(b) and Rule 430A, 430B
or 430C under the Securities Act, will file any Issuer Free Writing Prospectus
to the extent required by Rule 433 under the Securities Act ("Rule 433"); and
the Company will furnish copies of the Prospectus and each Issuer Free Writing
Prospectus (to the extent not previously delivered) to the Underwriters in New
York City prior to 10:00 A.M., New York City time, on the business day next
succeeding the date of this Agreement in such quantities as the Representatives
may reasonably request.
(b) Compliance with Rule 433. The Company shall comply with Rule 433 under
the Securities Act, including causing there to be made available at least one
version of a "bona fide electronic road show" (as defined in Rule 433) in a
manner that causes the Company not to be required, pursuant to Rule 433(d), to
file with the Commission any Road Show (as defined in Rule 433).
(c) Delivery of Copies. The Company will deliver, without charge, (i) to
the Representatives, three signed copies of the Registration Statement as
originally filed and each amendment thereto, in each case including all exhibits
and consents filed therewith; and (ii) to each Underwriter (A) a conformed copy
of the Registration Statement as originally filed and each amendment thereto
(without exhibits) and (B) during the Prospectus Delivery Period (as defined
below), as many copies of the Prospectus (including all amendments and
supplements thereto) and each Issuer Free Writing Prospectus as the
Representatives may reasonably request. As used herein, the term "Prospectus
Delivery Period" means such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered (or
required to be delivered but for Rule 172 under the Securities Act) in
connection with sales of the Shares by any Underwriter or dealer.
(d) Amendments or Supplements, Issuer Free Writing Prospectuses. Before
preparing, using, authorizing, approving, referring to or filing any Issuer Free
Writing Prospectus, and before filing any amendment or supplement to the
Registration Statement or the Prospectus, the Company will furnish to
-11-
the Representatives and counsel for the Underwriters a copy of the proposed
Issuer Free Writing Prospectus, amendment or supplement for review and will not
prepare, use, authorize, approve, refer to or file any such Issuer Free Writing
Prospectus or file any such proposed amendment or supplement to which the
Representatives reasonably object.
(e) Notice to the Representatives. The Company will advise the
Representatives promptly, and confirm such advice in writing, (i) when the
Registration Statement has become effective; (ii) when any amendment to the
Registration Statement has been filed or becomes effective; (iii) when any
supplement to the Prospectus or any Issuer Free Writing Prospectus or any
amendment to the Prospectus has been filed; (iv) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or the receipt of any comments from the Commission
relating to the Registration Statement or any other request by the Commission
for any additional information; (v) of the issuance by the Commission of any
order suspending the effectiveness of the Registration Statement or preventing
or suspending the use of any Preliminary Prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose or pursuant to
Section 8A of the Securities Act; (vi) of the occurrence of any event within the
Prospectus Delivery Period as a result of which the Prospectus, the Time of Sale
Information or any Issuer Free Writing Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances existing when the
Prospectus, the Time of Sale Information or any such Issuer Free Writing
Prospectus is delivered to a purchaser, not misleading; and (vii) of the receipt
by the Company of any notice with respect to any suspension of the qualification
of the Shares for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use
commercially reasonable efforts to prevent the issuance of any such order
suspending the effectiveness of the Registration Statement, preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification of the Shares and, if any such order is issued, will use
commercially reasonably efforts to obtain the withdrawal thereof at the earliest
possible time.
(f) Ongoing Compliance. (1) If during the Prospectus Delivery Period (i)
any event shall occur or condition shall exist 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 required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not
misleading or (ii) it is necessary to amend or supplement the Prospectus to
comply with law, the Company will immediately notify the Underwriters thereof
and forthwith prepare and, subject to paragraph (d) above, file with the
Commission and furnish to the Underwriters and to such dealers as the
Representatives may designate, such amendments or supplements to the Prospectus
as may be necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus
will comply with law and (2) if at any time prior to the Closing Date (i) any
event shall occur or condition shall exist as a result of which the Time of Sale
Information as then amended or supplemented would include any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances, not misleading or
(ii) it is necessary to amend or supplement the Time of Sale Information to
comply with law, the Company will immediately notify the Underwriters thereof
and forthwith prepare and, subject to paragraph (d) above, file with the
Commission (to the extent required) and furnish to the Underwriters and to such
dealers as the Representatives may designate, such amendments or supplements to
the Time of Sale Information as may be necessary so that the statements in the
Time of Sale Information as so amended or supplemented will not, in the light of
the circumstances, be misleading or so that the Time of Sale Information will
comply with law.
-12-
(g) Blue Sky Compliance. The Company will qualify the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and will continue such qualifications
in effect so long as required for distribution of the Shares; provided that in
no event shall the Company be obligated to do business in any jurisdiction where
it is not now so qualified or to take any action that would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Shares, in any jurisdiction where it is not now so subject and the
Company will not be required to subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.
(h) Earning Statement. The Company will make generally available to its
security holders and the Representatives as soon as practicable an earning
statement that satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder covering a period of at
least twelve months beginning with the first fiscal quarter of the Company
occurring after the "effective date" (as defined in Rule 158) of the
Registration Statement.
(i) Clear Market. For a period of 180 days after the date of the initial
public offering of the Shares, the Company will not (i) offer, pledge, announce
the intention to sell, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of Stock or any securities convertible into or exercisable or
exchangeable for Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Stock, whether any such transaction described in clause (i) or (ii) above is
to be settled by delivery of Stock or such other securities, in cash or
otherwise, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc.,
other than the Shares to be sold hereunder, any options granted pursuant to the
Company's 2007 Equity Incentive Compensation Plan and any shares of Stock of the
Company issued upon the exercise of options granted under the Company's 2007
Equity Incentive Compensation Plan. Notwithstanding the foregoing, if (1) during
the last 17 days of the 180-day restricted period, the Company issues an
earnings release or material news or a material event relating to the Company
occurs; or (2) prior to the expiration of the 180-day restricted period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions imposed by
this Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.
(j) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Shares as described in the Registration Statement, the Time of Sale
Information and the Prospectus under the heading "Use of Proceeds".
(k) No Stabilization. The Company will not take, directly or indirectly,
any action designed to or that would reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares.
(l) Exchange Listing. The Company will use its commercially reasonable
efforts to list, subject to notice of issuance, the Shares on the Nasdaq Global
Market (the "Exchange").
(m) Reports. So long as the Shares are outstanding, the Company will
furnish to the Representatives, as soon as they are available, copies of all
reports or other communications (financial or other) furnished to holders of the
Shares, and copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange or automatic quotation
system; provided that any reports, communications or financial statements
furnished or filed with the Commission that are publicly available on the
Commission's ▇▇▇▇▇ System shall be deemed to have been furnished to the
Representatives at the time furnished or filed with the Commission.
-13-
(n) Record Retention. The Company will, pursuant to reasonable procedures
developed in good faith, retain copies of each Issuer Free Writing Prospectus
that is not filed with the Commission in accordance with Rule 433 under the
Securities Act.
(o) Filings. The Company will file with the Commission such reports as may
be required by Rule 463 under the Securities Act.
(p) Recapitalization and Contribution. The recapitalization and the
contribution shall be effected substantially in accordance with the descriptions
thereof in the Registration Statement, Time of Sale Information and Prospectus.
5. Certain Agreements of the Underwriters. Each Underwriter hereby
represents and agrees that:
(a) It has not and will not use, authorize use of, refer to, or participate
in the planning for use of, any "free writing prospectus", as defined in Rule
405 under the Securities Act (which term includes use of any written information
furnished to the Commission by the Company and not incorporated by reference
into the Registration Statement and any press release issued by the Company)
other than (i) a free writing prospectus that contains no "issuer information"
(as defined in Rule 433(h)(2) under the Securities Act) that was not included
(including through incorporation by reference) in the Preliminary Prospectus or
a previously filed Issuer Free Writing Prospectus, (ii) any Issuer Free Writing
Prospectus listed on Annex B or prepared pursuant to Section 3(c) or Section
4(d) above, or (iii) any free writing prospectus prepared by such underwriter
and approved by the Company in advance in writing (each such free writing
prospectus referred to in clauses (i) or (iii), an "Underwriter Free Writing
Prospectus").
(b) It has not and will not distribute any Underwriter Free Writing
Prospectus referred to in clause (a)(i) in a manner reasonably designed to lead
to its broad unrestricted dissemination.
(c) It has not and will not, without the prior written consent of the
Company, use any free writing prospectus that contains the final terms of the
Shares unless such terms have previously been included in a free writing
prospectus filed with the Commission; provided that Underwriters may use a term
sheet substantially in the form of Annex C hereto without the consent of the
Company; provided further that any Underwriter using such term sheet shall
notify the Company, and provide a copy of such term sheet to the Company, prior
to, or substantially concurrently with, the first use of such term sheet.
(d) It will, pursuant to reasonable procedures developed in good faith,
retain copies of each free writing prospectus used or referred to by it, in
accordance with Rule 433 under the Securities Act.
(e) It is not subject to any pending proceeding under Section 8A of the
Securities Act with respect to the offering (and will promptly notify the
Company if any such proceeding against it is initiated during the Prospectus
Delivery Period).
6. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Underwritten Shares on the Closing Date or the
Option Shares on the Additional Closing Date, as the case may be, as provided
herein is subject to the performance by the Company of its covenants and other
obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceeding for such purpose or pursuant to Section 8A under the Securities
-14-
Act shall be pending before or threatened by the Commission; the Prospectus and
each Issuer Free Writing Prospectus shall have been timely filed with the
Commission under the Securities Act (in the case of an Issuer Free Writing
Prospectus, to the extent required by Rule 433 under the Securities Act) and in
accordance with Section 4(a) hereof; and all requests by the Commission for
additional information shall have been complied with to the reasonable
satisfaction of the Representatives.
(b) Representations and Warranties. The representations and warranties of
the Company contained herein shall be true and correct on the date hereof and on
and as of the Closing Date or the Additional Closing Date, as the case may be
(except to the extent any such representations and warranties expressly relate
to an earlier date, in which case, as of such earlier date); and the statements
of the Company and its officers made in any certificates delivered pursuant to
this Agreement shall be true and correct on and as of the Closing Date or the
Additional Closing Date, as the case may be.
(c) No Material Adverse Change. No event or condition of a type described
in Section 3(f) hereof shall have occurred or shall exist, which event or
condition is not described in the Time of Sale Information (excluding any
amendment or supplement thereto) and the Prospectus (excluding any amendment or
supplement thereto) and the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Shares on the Closing Date or the Additional
Closing Date, as the case may be, on the terms and in the manner contemplated by
this Agreement, the Time of Sale Information and the Prospectus.
(d) Officer's Certificate. The Representatives shall have received on and
as of the Closing Date or the Additional Closing Date, as the case may be, a
certificate of the chief financial officer or chief accounting officer of the
Company and one additional senior executive officer of the Company who is
satisfactory to the Representatives (i) confirming that such officers have
carefully reviewed the Registration Statement, the Time of Sale Information and
the Prospectus and, to the best knowledge of such officers, the representations
set forth in Sections 3(b) and 3(d) hereof are true and correct, (ii) confirming
that the other representations and warranties of the Company in this Agreement
are true and correct and 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 and (iii) to the effect set forth in paragraphs
(a) and (c) above.
(e) Comfort Letters. On the date of this Agreement and on the Closing Date
or the Additional Closing Date, as the case may be, Deloitte & Touche LLP shall
have furnished to the Representatives, at the request of the Company, letters,
dated the respective dates of delivery thereof and addressed to the
Underwriters, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type customarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement, the Time of Sale Information and the Prospectus;
provided, that the letter delivered on the Closing Date or the Additional
Closing Date, as the case may be, shall use a "cut-off" date no more than three
business days prior to such Closing Date or such Additional Closing Date, as the
case may be.
(f) Opinion of Counsel for the Company. (i) Cravath, Swaine & ▇▇▇▇▇ LLP,
counsel for the Company, shall have furnished to the Representatives, at the
request of the Company, their written opinion, dated the Closing Date or the
Additional Closing Date, as the case may be, and addressed to the Underwriters,
in form and substance reasonably satisfactory to the Representatives,
substantially to the effect set forth in Annex A-1 hereto, and (ii) ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇▇, General Counsel of the Company, shall have furnished to the
Representatives, at the request of the Company, his written opinion, dated the
Closing Date or the Additional Closing Date, as the case may be, and addressed
to the Underwriters, in form and substance reasonably satisfactory to the
Representatives, substantially to the effect set forth in Annex A-2 hereto.
-15-
(g) Opinion of Counsel for the Underwriters. The Representatives shall have
received on and as of the Closing Date or the Additional Closing Date, as the
case may be, an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, with respect to such matters as the Representatives may reasonably
request, and such counsel shall have received such documents and information as
they may reasonably request to enable them to pass upon such matters.
(h) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date or the Additional Closing Date, as the case may be,
prevent the issuance or sale of the Shares; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date or the Additional Closing Date, as the case may be, prevent the
issuance or sale of the Shares.
(i) Good Standing. The Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, satisfactory
evidence of the good standing of the Company and its subsidiaries in their
respective jurisdictions of organization and their good standing as foreign
entities in such other jurisdictions as the Representatives may reasonably
request, in each case in writing or any standard form of telecommunication from
the appropriate Governmental Authorities of such jurisdictions.
(j) Exchange Listing. The Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved for
listing on the Exchange, subject to official notice of issuance.
(k) Lock-up Agreements. The "lock-up" agreements, each substantially in the
form of Exhibit A hereto, between you and the shareholders, officers and
directors of the Company set forth on Annex C hereto relating to sales and
certain other dispositions of shares of Stock or certain other securities,
delivered to you on or before the date hereof, shall be full force and effect on
the Closing Date or Additional Closing Date, as the case may be.
(l) Additional Documents. On or prior to the Closing Date or the Additional
Closing Date, as the case may be, the Company shall have furnished to the
Representatives such further certificates and documents as the Representatives
may reasonably request.
(m) Recapitalization. The recapitalization shall have been effected
substantially in accordance with the description thereof in the Registration
Statement, Time of Sale Information and Prospectus.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, its affiliates, directors and officers and
each person, if any, who controls such Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without limitation,
legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint
or several, that arise out of, or are based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or caused
-16-
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary in order to make the statements therein, not
misleading, (ii) or any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or supplement
thereto), any Issuer Free Writing Prospectus or any Time of Sale Information or
caused by any omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, in each case except 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 made in
reliance upon and in conformity with any information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein, it being understood and agreed that
the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below.
(b) Indemnification of the Company. Each Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, its directors, its
officers who signed the Registration Statement and 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 to the same extent as the indemnity set forth in
paragraph (a) above, but only with respect to any losses, claims, damages or
liabilities that arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information furnished to the Company in writing by such
Underwriter through the Representatives expressly for use in the Registration
Statement, the Prospectus (or any amendment or supplement thereto), any Issuer
Free Writing Prospectus or any Time of Sale Information, it being understood and
agreed upon that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: (i) the last paragraph of the cover page regarding the delivery of
the Shares and (ii) under the heading "Underwriting", (A) the list of
Underwriters and their respective participations in the sale of Shares appearing
in the second paragraph, (B) the concession and reallowance figures appearing in
the fourth paragraph and (C) the information contained in the seventh and eighth
paragraphs.
(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 7 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying
Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 7. If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel (including local counsel) reasonably satisfactory to the Indemnified
Person (who shall not, without the consent of the Indemnified Person, be counsel
to the Indemnifying Person) to represent the Indemnified Person in such
proceeding and shall pay the fees and expenses of such counsel related to such
proceeding, as incurred. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary or (ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person. It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be paid or reimbursed as they are incurred. Any such separate firm for any
Underwriter, its affiliates, directors and officers and
-17-
any control persons of such Underwriter shall be designated in writing by ▇.▇.
▇▇▇▇▇▇ Securities Inc. and any such separate firm for the Company, its
directors, its officers who signed the Registration Statement and any control
persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by this paragraph, the Indemnifying Person
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by the Indemnifying Person of such request, (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement and (iii) the Indemnifying Person shall not
have notified the Indemnified Person in writing (and in reasonable detail) of
its good faith belief based upon the advice of outside counsel that such
reimbursement is not required. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriters, on the
other, from the offering of the Shares or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company, on the one hand, and the
Underwriters, on the other, in connection with the statements or omissions that
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 Underwriters, on the other, shall be deemed to
be in the same respective proportions as the net proceeds (before deducting
expenses) received by the Company from the sale of the Shares and the total
underwriting discounts and commissions received by the Underwriters in
connection therewith, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate offering price of the Shares. The relative
fault of the Company, on the one hand, and the Underwriters, on the other, 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 by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(e) Limitation on Liability. The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 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 that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection with any such
action or claim.
-18-
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total underwriting discounts and commissions received by such
Underwriter with respect to the offering of the Shares exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in proportion
to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in equity.
8. Effectiveness of Agreement. This Agreement shall become effective upon
the execution and delivery hereof by the parties hereto.
9. Termination. This Agreement may be terminated in the absolute discretion
of the Representatives, by notice to the Company, if after the execution and
delivery of this Agreement and prior to the Closing Date or, in the case of the
Option Shares, prior to the Additional Closing Date (i) trading generally shall
have been suspended or materially limited on or by any of the New York Stock
Exchange, the American Stock Exchange, the NASD, the Chicago Board Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade; (ii)
trading of any securities issued or guaranteed by the Company shall have been
suspended on any exchange or in any over-the-counter market; (iii) a general
moratorium on commercial banking activities shall have been declared by federal
or New York State authorities; or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis, either within or outside the United States, that, in the judgment of the
Representatives, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date or the Additional Closing Date, as the case may be, on the terms
and in the manner contemplated by this Agreement, the Time of Sale Information
and the Prospectus.
10. Defaulting Underwriter.
(a) If, on the Closing Date or the Additional Closing Date, as the case may
be, any Underwriter defaults on its obligation to purchase the Shares that it
has agreed to purchase hereunder on such date, the non-defaulting Underwriters
may in their discretion arrange for the purchase of such Shares by other persons
satisfactory to the Company on the terms contained in this Agreement. If, within
36 hours after any such default by any Underwriter, the non-defaulting
Underwriters do not arrange for the purchase of such Shares, then the Company
shall be entitled to a further period of 36 hours within which to procure other
persons satisfactory to the non-defaulting Underwriters to purchase such Shares
on such terms. If other persons become obligated or agree to purchase the Shares
of a defaulting Underwriter, either the non-defaulting Underwriters or the
Company may postpone the Closing Date or the Additional Closing Date, as the
case may be, for up to five full business days in order to effect any changes
that in the opinion of counsel for the Company or counsel for the Underwriters
may be necessary in the Registration Statement and the Prospectus or in any
other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Registration Statement and the Prospectus that
effects any such changes. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the context otherwise
requires, any person not listed in Schedule 1 hereto that, pursuant to this
Section 10, purchases Shares that a defaulting Underwriter agreed but failed to
purchase.
-19-
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate
number of Shares that remain unpurchased on the Closing Date or the Additional
Closing Date, as the case may be, does not exceed one-eleventh of the aggregate
number of Shares to be purchased on such date, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number of
Shares that such Underwriter agreed to purchase hereunder on such date plus such
Underwriter's pro rata share (based on the number of Shares that such
Underwriter agreed to purchase on such date) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate
number of Shares that remain unpurchased on the Closing Date or the Additional
Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount
of Shares to be purchased on such date, or if the Company shall not exercise the
right described in paragraph (b) above, then this Agreement or, with respect to
any Additional Closing Date, the obligation of the Underwriters to purchase
Shares on the Additional Closing Date, as the case may be, shall terminate
without liability on the part of the non-defaulting Underwriters. Any
termination of this Agreement pursuant to this Section 10 shall be without
liability on the part of the Company, except that the Company will continue to
be liable for the payment of expenses as set forth in Section 11 hereof and
except that the provisions of Section 7 hereof shall not terminate and shall
remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company or any non-defaulting Underwriter for
damages caused by its default.
11. Payment of Expenses.
(a) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay or cause to be
paid all costs and expenses incident to the performance of its obligations
hereunder, including without limitation, (i) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Shares and any
taxes payable in that connection; (ii) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement, the
Preliminary Prospectus, any Issuer Free Writing Prospectus, any Time of Sale
Information and the Prospectus (including all exhibits, amendments and
supplements thereto) and the distribution thereof; (iii) the costs of
reproducing and distributing this Agreement; (iv) the fees and expenses of the
Company's counsel and independent accountants; (v) the fees and expenses
incurred in connection with the registration or qualification and determination
of eligibility for investment of the Shares under the laws of such jurisdictions
as the Representatives may designate and the preparation, printing and
distribution of a Blue Sky Memorandum (including the related fees and expenses
of counsel for the Underwriters); (vi) the cost of preparing stock certificates;
(vii) the costs and charges of any transfer agent and any registrar; (viii) all
expenses and application fees incurred in connection with any filing with, and
clearance of the offering by, the NASD; (ix) all expenses incurred by the
Company in connection with any "road show" presentation to potential investors;
and (x) all expenses and application fees related to the listing of the Shares
on the Exchange.
(b) If (i) this Agreement is terminated pursuant to Section 9, (ii) the
Company for any reason fails to tender the Shares for delivery to the
Underwriters or (iii) the Underwriters decline to purchase the Shares for any
reason permitted under this Agreement, the Company agrees to reimburse the
Underwriters for all out-of-pocket costs and expenses (including the fees and
expenses of their counsel) reasonably incurred by the Underwriters in connection
with this Agreement and the offering contemplated hereby.
-20-
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and any controlling persons referred
to in Section 7 hereof. Nothing in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor
merely by reason of such purchase.
13. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Underwriters
contained in this Agreement or made by or on behalf of the Company or the
Underwriters pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Shares and shall remain
in full force and effect, regardless of any termination of this Agreement or any
investigation made by or on behalf of the Company or the Underwriters.
14. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term "affiliate" has the meaning set forth in
Rule 405 under the Securities Act; (b) the term "business day" means any day
other than a day on which banks are permitted or required to be closed in New
York City; (c) the term "subsidiary" has the meaning set forth in Rule 405 under
the Securities Act; and (d) the term "significant subsidiary" has the meaning
set forth in Rule 1-02 of Regulation S-X under the Exchange Act.
15. Miscellaneous.
(a) Authority of the Representatives. Any action by the Underwriters
hereunder may be taken by the Representatives on behalf of the Underwriters, and
any such action taken by the Representatives shall be binding upon the
Underwriters.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Underwriters
shall be given to the Representatives c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: Equity
Syndicate Desk. Notices to the Company shall be given to it at BioFuel Energy
Corp., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇);
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇, Vice President, General Counsel and
Assistant Secretary.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) Waiver of Jury Trial. The Company hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
(e) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(f) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
-21-
(g) Headings. The headings herein are included for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
-22-
If the foregoing is in accordance with your understanding, please indicate
your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
BIOFUEL ENERGY CORP.
By
-------------------------------------
Name:
Title:
-23-
Accepted: [__________], 2007
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
CITIGROUP GLOBAL MARKETS INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
For themselves and on behalf of the
several Underwriters listed in
Schedule 1 hereto.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By
----------------------------------
Name:
Title:
CITIGROUP GLOBAL MARKETS INC.
By
----------------------------------
Name:
Title:
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
By
----------------------------------
Name:
Title:
-24-
Schedule 1
Underwriter Number of Shares
----------- ----------------
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Citigroup Global Markets Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇ and Company, LLC
-------------------------
Total
-▇▇-
▇▇▇▇▇ ▇-▇
[Form of Opinion of Counsel for the Company]
[Provided Under Separate Cover]
▇-▇-▇
▇▇▇▇▇ ▇-▇
[Form of Opinion of General Counsel for the Company]
[Provided Under Separate Cover]
A-2-1
Annex B
a. time of sale information
[list each Issuer Free Writing Prospectus to be included in the Time of
Sale Information](1)
[b. pricing information provided orally by underwriters]
[set out key information included in script that will be used by
underwriters to confirm sales]
----------
(1) Would generally include the filed IFWPs and any IFWP with preliminary terms
of the Securities.
B-1
Annex C
[List Individuals required to sign Lock-up Agreements]
C-1
Exhibit A
FORM OF LOCK-UP AGREEMENT
[__________], 2007
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
CITIGROUP GLOBAL MARKETS INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
As Representatives of
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: BioFuel Energy Corp. --- Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several
Underwriters, propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with BioFuel Energy Corp., a Delaware corporation (the "Company"),
providing for the public offering (the "Public Offering") by the several
Underwriters named in Schedule 1 to the Underwriting Agreement (the
"Underwriters"), of common stock of the Company (the "Securities"). Capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Underwriting Agreement.
In consideration of the Underwriters' agreement to purchase and make the
Public Offering of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of
the Underwriters, the undersigned will not, during the period ending 180 days
after the date of the prospectus relating to the Public Offering (the
"Prospectus"), (1) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of common stock,
$0.01 per share par value, of the Company (the "Common Stock") or any securities
convertible into or exercisable or exchangeable for Common Stock (including,
without limitation, Common Stock which may be deemed to be beneficially owned by
the undersigned in accordance with the rules and regulations of the Securities
and Exchange Commission and securities which may be issued upon exercise of a
stock option or warrant) or (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. In addition, the undersigned agrees that, without the prior
written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of the Underwriters, it
will not, during the period ending 180 days after the date of the Prospectus,
make any demand for or exercise any right with respect to, the registration of
any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock. Notwithstanding the foregoing, if (1) during the
last 17 days of the 180-day restricted period, the Company issues an earnings
release or material news or a material event relating to the Company occurs; or
(2) prior to the expiration of the 180-day restricted period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions imposed by
this Letter Agreement shall continue to apply until the expiration of the
Exh. A-1
18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, is hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released form all obligations under this Letter Agreement.
The undersigned understands that to the extent the Underwriters enter into
the Underwriting Agreement and proceed with the Public Offering, they will be
doing so in reliance upon this Letter Agreement.
This Letter Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
---------------------------------
Name:
By:(2)
---------------------------------
Name:
Title:
----------
(2) To be completed if applicable.
▇▇▇. ▇-▇