EXHIBIT 1.1
SELECTED NON-EXCLUSIVE BROKER-DEALER AGREEMENT
___, 2003
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_______________________________
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Ladies and Gentlemen:
Iroquois Bio-Energy Company, LLC, an Indiana limited liability company
(the "COMPANY") hereby confirms its agreement with you with respect to the
Company's offer and sale of the Company's Class A units (collectively, the
"UNITS"). The Company has commenced a public offering of Units in the minimum
amount of $19,000,000 and a maximum amount of $25,000,000 (the "OFFERING"). The
subscribers therefor, each of whom will be named in a subscription agreement
substantially similar to the form of subscription agreement attached as an
exhibit to the Prospectus (hereinafter referred to the "SUBSCRIPTION
AGREEMENT"), and by which all such subscribers will be bound, will, at the
election of and sole discretion of the Company, become unitholders
("UNITHOLDERS") of the Company. Pursuant to the terms and conditions hereof, the
Company desires to appoint you as a non-exclusive third-party limited
broker-dealer (the "BROKER-DEALER") to offer and sell up to and no more than
2,500,000 units ($2,500,000) if the maximum offering is sold, and 1,900,000
units ($1,900,000) if the minimum offering is sold, to the investors listed on
Schedule I. You understand and agree that certain of the officers and directors
of the Company will also offer and sell the Units, and the Company may engage
other third-party broker-dealers to offer and sell the units but subject to the
terms and conditions hereof.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to you as of the date hereof
as follows:
(i) A registration statement on Form SB-2 (File No.
333-100672) with respect to the Units have been prepared and filed with
the Securities and Exchange Commission ("COMMISSION") by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (the "ACT"), and the rules and regulations of the Commission
thereunder (the "REGULATIONS"), and the Company has so prepared and has
filed such amendments thereto, if any, and such amended preliminary
prospectuses as may have been required to the date hereof and will file
such additional amendments thereto and such amended prospectuses as may
hereafter be required. There have been or will
promptly be delivered to you a conformed copy of such registration
statement and amendments and a copy of each exhibit filed therewith.
Such registration statement (as amended, if applicable) at the
time it becomes effective and the prospectus constituting a part thereof
(including the information, if any, deemed to be part thereof pursuant
to Rule 430A(b)), as from time to time amended or supplemented, are
hereinafter referred to as the "REGISTRATION STATEMENT," and the
"PROSPECTUS," respectively, except that if any revised prospectus shall
be provided to the Broker-Dealer by the Company for use in connection
with the offering of the Units which differs from the Prospectus on file
at the Commission at the time the Registration Statement became or
becomes effective shall be deemed to be part of the "Registration
Statement" as defined herein, and any prospectus (including any
amendment or supplement thereto or information which is deemed part
thereof) included in such registration statement shall be deemed to be
part of the "Prospectus," as defined herein, as appropriate. The
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder are hereinafter collectively
referred to as the "EXCHANGE ACT."
(ii) The Commission has not issued any order preventing or
suspending the use of the prospectus, and the prospectus has conformed
in all material respects with the requirements of the Act and, as of its
date, has not included any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein not misleading; and when the Registration Statement became or
becomes effective, and at all times subsequent thereto, the Registration
Statement, including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule
430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are
required to be stated therein in accordance with the Act and in all
material respects conformed or will in all material respects conform to
the requirements of the Act, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, included or
will include any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(iii) The Company has not sustained since the date of the
latest audited financial statements included in the Prospectus any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
material change in the capitalization or long-term debt of the Company
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, unitholders' equity or results
of operations of the Company, otherwise than as set forth or
contemplated in the Prospectus.
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(iv) The Company is duly formed and validly existing as a
limited liability company in good standing under the laws of Indiana,
with power and authority to own or lease its properties and conduct its
business as described in the Prospectus, and has been duly qualified as
a foreign limited liability company for the transaction of business and
is and will be in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification (except where the failure
to be so licensed or qualified would not, individually or in the
aggregate, have a material adverse effect on the financial condition,
results of operations or business of the Company or subject the Company,
its unitholders or its members to any material liability or disability
(a "MATERIAL ADVERSE EFFECT").
(v) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued equity securities of the
Company have been duly and validly authorized and issued and are fully
paid and (except as required to the contrary by the Indiana Limited
Liability Company Act) non-assessable and conform in all material
respects to the descriptions thereof in the Prospectus.
(vi) The Units have been duly and validly authorized and,
when issued and delivered against payment therefore as provided in this
Agreement and the Prospectus, will be duly and validly issued and fully
paid and (except as non-assessability may be affected by the Indiana
laws governing limited liability companies) non-assessable and will
conform to the descriptions thereof contained in the Prospectus.
(vii) The issue and sale of the Units by the Company, and the
consummation of the transactions contemplated herein, therein and in the
Prospectus will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject; nor will such action result in any violation of the provisions
of any of the formation or governing documents, including the Operating
Agreement (the "Operating Agreement"), of the Company or any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of the properties of
the Company; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Units or the
consummation of the transactions contemplated by this Agreement or the
Prospectus, except the registration under the Act as described in
Section 1(a) herein and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or "blue sky" laws in connection with the offer and sale of
the Units as contemplated by this Agreement and the Prospectus.
(viii) The Company is not (A) in violation of its formation or
governing documents, including the Operating Agreement, or (B) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound.
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(ix) The statements set forth in the Prospectus under the
captions "Description of Units and Operating Agreement," insofar as they
purport to constitute a summary of the terms of the Units, and under the
captions "Description of Units and Operating Agreement," "Federal Income
Tax Consequences of Owning Our Units" and "Plan of Distribution,"
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in all
material respects.
(x) Boulay, Heutmaker, Xxxxxx & Co. P.L.L.P., who have
certified certain financial statements and schedules of the Company
included in the Prospectus, are independent public accountants as
required by the Act and the Regulations.
(xi) The financial statements of the Company included in the
Registration Statement present fairly the financial position of the
Company as of the respective dates of such financial statements, and the
results of operations and cash flows of the Company for the respective
periods covered thereby, all in conformity with accounting principles
generally accepted in the United States of America consistently applied
throughout the periods involved; and the supporting schedules included
in the Registration Statement present fairly the information required to
be stated therein. The financial information set forth in the Prospectus
under "Selected Financial Data" presents fairly on the basis stated in
the Prospectus, the information set forth therein.
(xii) The PRO FORMA financial information disclosed under
"Selected Financial Data" in the Prospectus have been properly complied
on the PRO FORMA basis described therein and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate under the
circumstances.
(xiii) The Company (A) makes and keeps accurate books and
records and (B) maintains internal accounting controls which provide
reasonable assurance that (1) transactions are executed in accordance
with management's authorization, (2) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (3) access to its assets is
permitted only in accordance with management's authorization, and (4)
the reported accountability for its assets is compared with existing
assets at reasonable intervals.
(xiv) The Company is a "small business issuer" as such term is
defined in Rule 405 under the Act.
(xv) The Company has all of the necessary limited liability
company power and authority to enter into this Agreement and consummate
the transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Company. This Agreement
constitutes a valid and binding agreement of the Company.
(xvi) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
and prior to the Minimum Subscription Date, and except as otherwise may
be specifically described, indicated or contemplated therein,
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the Company will not have (A) issued any securities or incurred any
material liability or obligation, direct or contingent, or borrowed
money, except borrowings in the ordinary course of business from the
same or similar sources and in similar amounts as indicated in the
Prospectus, or (B) entered into any transaction or series of
transactions which is material in light of the business of the Company.
(xvii) The Company is not involved in any labor dispute and, to
the knowledge of the Company, no such dispute has been threatened,
except for such disputes as would not have a Material Adverse Effect.
(xviii) To the Company's knowledge, the Company is not in
violation or default of any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties, as applicable.
(xix) The Company has or will seek to obtain all licenses,
permits, franchises, or other governmental authorization (collectively
the "Permits") necessary for the ownership and operation of an ethanol
plant and to the conduct of its business generally except for any
permits in which the Company's failure to obtain would not constitute a
Material Adverse Effect.
(xx) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened, against or affecting
the Company which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might result in
any material adverse change in the financial condition, results of
operations or business affairs of the Company; all pending legal or
governmental proceedings to which the Company is a party or of which any
of its respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to its business, are considered in the aggregate
not material; and there are no contracts or documents of the Company
which are required to be described in or filed as exhibits to the
Registration Statement which have not been so described or filed.
(xxi) The Company has not received a determination from the
Internal Revenue Service, but to its knowledge is qualified and at all
times through the Offering Termination Date, as defined in Section 2
hereof, will qualify for treatment as a partnership for Federal income
tax purposes under current interpretations of the Internal Revenue Code
of 1986, as amended, and regulations thereunder.
(xxii) On the date hereof, and at all times through the
Offering Termination Date, defined in Section 2 hereof, the Company is
not, and does not intend to conduct its business in a manner in which it
would become, an "investment company" as defined in Section 3(a) of the
Investment Company Act of 1940, as amended.
(xxiii) The Company has or will file all federal income and
state and local franchise tax returns required to be filed and have made
timely payments of all taxes
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shown as due and payable in respect of such returns, and no deficiency
has been asserted with respect thereto by any taxing authority, except
for such deficiencies that would not constitute a Material Adverse
Effect.
(b) Any certificate signed by any officer of the Company and
delivered to you or your counsel shall be deemed a representation and warranty
by the Company to you as to the matters covered thereby.
SECTION 2. OFFERING AND SALE OF UNITS.
(a) On the basis of the representations, warranties and covenants
herein contained, but subject to the terms and conditions herein set forth, you
have agreed to act as a non-exclusive limited broker-dealer for the purpose of
offering and selling the Units for the account and risk of the offerees listed
on Schedule I and to no one else, and subject to the performance by the Company
of all of its obligations to be performed hereunder and to the completeness and
accuracy of all the representations and warranties contained herein, and subject
to the performance by each of the subscribers of each of their obligations under
the section entitled "Subscription Procedures" in the Prospectus, you hereby
accept such appointment and agree on the terms and conditions herein set forth
to use commercially reasonable efforts to offer and sell the Units at a public
offering price of $1.00 per Unit, to each investor listed on Schedule I in the
amounts described herein.
The Offering Period will terminate on March 31, 2003, unless extended to
August 31, 2003 by the board of managers of the Company (either March 31, 2003
or such later date, as applicable, the "OFFERING TERMINATION DATE"). As of the
date hereof and at all times during the Offering Period you agree with the
representations and covenants made to us in this Section 2, and you agree to
follow the procedures set forth in this Section 2.
(b) Signature pages to the Subscription Agreement and the Operating
Agreement (the Subscription Agreement together with the Operating Agreement are
hereinafter referred to as the "SUBSCRIPTION DOCUMENTS") must be completed by or
on behalf of each person desiring to purchase Units in form and substance
satisfactory to the Company. You shall ascertain that the signature pages to the
Subscription Documents sent in by or on behalf of a prospective purchaser of
Units have been properly completed and executed. You shall return the
Subscription Documents together with a check (in the amount or amounts required
by paragraph (a) above) payable to "People's State Bank as escrow agent -
Iroquois Bio-Energy Company, LL Escrow" (the "BANK") to the Company at Iroquois
Bio-Energy, 0000 Xxxx 000xx Xxxxxx, Xxxxxx, Xxxxxxx 00000-0000.
(c) You are a properly licensed broker-dealer under applicable
federal and state law and under applicable rules and regulations of the National
Association Securities Dealers, and you shall be so qualified throughout the
Offering.
(d) You will comply with the requirements of Rule l5c2-4 of the
Securities Exchange Act of 1934, as amended and any applicable state law or
regulation applicable to your efforts in the Offering.
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(e) You agree to retain in your records and make available to us,
for a period of at least four years after the Offering Termination Date,
information establishing that each purchaser of the Units pursuant to a
Subscription Agreement solicited by you is within the permitted class of
investors under the requirements, if any, of the jurisdiction in which such
purchaser is a resident, and that investment in the Company is appropriate for
each such purchaser's investment objectives and financial situation. In
addition, you agree that you shall be responsible for determining that each
purchaser of Units pursuant to a Subscription Agreement solicited by you meets
the suitability requirement for investors contained in the Prospectus and you
agree to retain records evidencing such compliance with the suitability
requirement for each investor.
(f) The Company, upon receipt of the aforementioned signature pages
to the Subscription Documents, will determine as soon as practicable (but in no
event more than 30 days after receipt) whether it expects to accept the proposed
purchaser as a Unitholder in the Company, it being understood that the Company
reserves the right to reject the tender of any signature pages to the
Subscription Documents and to reject all tenders after all of the Units have
been sold. The Company, at its sole discretion, will determine if such
Subscription Documents have been properly completed and executed. Should the
Company determine to accept the tender of the signature pages to the
Subscription Documents, the Company will promptly advise you of such action.
Should the Company determine to reject the tender of the signature pages to the
Subscription Documents, it will promptly notify you in writing (and, if the
Company elects, the prospective purchaser), of such determination, and will
promptly cause the return of the tendered signature pages to the Subscription
Documents and payment of the purchase price of the Units directly to you or to
the prospective purchaser.
(g) "MINIMUM SUBSCRIPTION DATE" as used herein shall mean the date,
no later than March 31, 2003 (unless extended to August 31, 2003 by the board of
managers of the Company, then no later than August 31, 2003), on which the
Company and the Bank shall notify you in writing that subscriptions and payments
for an aggregate of at least 19,000,000 Units shall have been received and
accepted by the Company.
(h) In the event the offering is commenced and subscriptions for at
least 19,000,000 Units (the "Minimum Offering") shall not have been received by
the Offering Termination Date, all funds received from subscribers (if any)
shall be returned by the Bank to the subscribers in full, without deduction of
any escrow or other fees and expenses but with any interest earned thereon being
delivered to the Company. If the Minimum Offering is achieved and prior to the
Offering Termination Date, the Company closes on $27,919,000 - $34,094,000 in
debt financing (the "FINANCING COMMITMENT"), then the Company shall issue the
Units subscribed and paid for and accepted by the Company to each purchaser (an
"ISSUANCE DATE"). If the Company has not received the Financing Commitment prior
to the Offering Termination Date, then each subscriber's purchase price shall be
returned by the Bank to the subscribers, with any interest earned thereon being
delivered to the Company.
(i) As consideration for your services, your compensation will be
paid to you as follows:
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(i) Upon the Issuance Date, you will be paid at a commission
of 5% of the purchase price for each Unit sold to the
investors listed on Schedule I, which commission is due
and payable on such Issuance Date.
Such commissions shall be paid to you by a Company check.
(j) You shall not directly or indirectly, pay or award any finder's
fees, commissions or other compensation to any person engaged by a potential
investor for investment advice as an inducement to such advisor to the purchase
of Units.
(k) You will not disseminate or publish any advertisement relating
to your solicitation of subscribers for the Units (including, without
limitation, any advertisement relating to seminars).
(l) The aggregate number of Units that you may sell shall not exceed
2,500,000 ($2,500,000) if the maximum offering is sold, or 1,900,000
($1,900,000) if the minimum offering is sold. You further acknowledge that the
maximum number of Units that the Company may sell through arrangements with
limited dealers shall not exceed 7,500,000 units ($7,500,000) if the maximum
offering is sold, and 5,700,000 Units ($5,700,000) if the minimum offering is
sold. You further agree that the Company may limit the number of Units that you
may sell to satisfy these requirements.
SECTION 3. COVENANTS OF THE COMPANY.
The Company covenants with you as follows:
(a) It will notify you immediately and confirm the notice in writing
(i) when the Registration Statement and any amendment thereto shall have become
effective, (ii) of the receipt of any comments from the Commission with respect
to the Registration Statement, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information relating thereto, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any proceedings for that purpose. The Company will
make every reasonable effort to prevent the issuance by the Commission of any
stop order and, if any such stop order shall at any time be issued, to obtain
the lifting thereof at the earliest possible moment.
(b) It will give you notice of its intention to file or prepare any
amendment to the Registration Statement (including any post-effective amendment)
or any amendment or supplement to the Prospectus (including any revised
prospectus which the Company proposes for use by the Agent in connection with
the offering of the Units which differs from the prospectus on file at the
Commission at the time the Registration Statement became or becomes effective,
whether or not such revised prospectus is required to be filed pursuant to Rule
424(b)) and will furnish you with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the case
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may be, and will not file any such amendment or supplement or use any such
prospectus to which you shall reasonably object in writing.
(c) It will deliver to you, as soon as available, one signed copy of
the Registration Statement as originally filed and of each amendment thereto and
one set of exhibits thereto.
(d) It will deliver to you from time to time, before the
Registration Statement becomes effective, such number of copies of the
Registration Statement as originally filed and any amendments thereto and as
soon as the Registration Statement initially becomes effective and thereafter
from time to time during the period when the Prospectus is required to be
delivered under the Act, such number of copies of the Prospectus (as amended or
supplemented) as you may reasonably request for the purposes contemplated by the
Act or the Regulations, and such number of copies of the Subscription Agreement
and the Operating Agreement as you may reasonably request.
(e) During the period when the Prospectus is required to be
delivered pursuant to the Act, the Company will comply, so far as it is able and
at its own expense, with all requirements imposed upon it by the Act, as now and
hereafter amended, and by the Regulations, as from time to time in force, so far
as necessary to permit the continuance of sales of or dealings in, the Units
during such period in accordance with the provisions herein and as set forth in
the Prospectus.
(f) It will comply with all applicable registration, filing and
reporting requirements of the Exchange Act.
(g) It will endeavor in good faith, in cooperation with you, to
qualify the Units for offering and sale under the applicable securities or "blue
sky" laws of such jurisdictions as the Company has designated; PROVIDED,
HOWEVER, that the Company shall not be obligated to file any general consent to
service of process or to qualify to do business or to qualify as a dealer in
securities in any jurisdiction in which it is not so qualified. It will give you
notice of any correspondence received from any state securities commission
regarding the Offering and will give you notice of its intention to file, or
prepare for filing, any materials related to the Offering with any state
securities commission; it will furnish you copies of any of the foregoing
promptly upon receipt or prior to filing, as applicable, and will not file any
such materials to which you shall reasonably object in writing. In each
jurisdiction where the Units shall have been qualified as above provided, the
Company will make and file such statements and reports in each year as are or
may be required by the laws of such jurisdiction.
(h) It will make generally available to the Company's security
holders (I.E., the holders of Units) as soon as practicable, but not later than
120 days after the close of the period covered thereby, an earnings statement of
the Company (in form complying with the provisions of Section 11(a) of the Act
and Rule 158 promulgated thereunder, which need not be certified by independent
public accountants unless required by the Act or the Regulations) covering the
twelve-month period, or such earlier period since the
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Company's inception, beginning not later than the first day of the Company's
fiscal quarter following the effective date of the Registration Statement. As
used in this subsection, the terms "earnings statement" and "made generally
available to the Company's security holders" shall have the meanings contained
in Rule 158 promulgated under the Act.
(i) It will, so long as any Units remain outstanding, make available
to you the following:
(i) as soon as practicable after the end of each fiscal
year, one copy of the Company's annual report, including therein the
accountants' report, the balance sheet, the related statements of profit
and loss and cash flows for the Company, together with such accountants'
comments and notations with respect thereto in such detail as the
Company may customarily receive from such accountants;
(ii) as soon as practicable after the end of each fiscal
quarterly period, one copy of a balance sheet of the Company as at the
end of such period, setting forth in reasonable detail its financial
position, together with related statements of profit and loss and cash
flows, none of which statements need be audited, but shall be certified
as correct by the Company;
(iii) copies of any report, application or document which the
Company shall file with the Commission; and
(iv) as soon as the same shall be sent to holders of Units,
each communication which shall be sent to the holders of Units,
including any other annual or interim report of the Company.
(j) It will deliver to you, from time to time, all supplemental
sales material (whether designated solely for broker-dealer use or otherwise)
proposed to be used or delivered by the Company in connection with the offering
of Units.
(k) It intends to source funds and to use funds in the manner
specified in the Prospectus.
(l) It will use the net proceeds received by it from the sale of the
Units being sold by it in the manner specified in the Prospectus.
(m) It will maintain adequate books and records setting forth a true
and accurate account of all business transactions arising out of and in
connection with the conduct of the Company. You or your designated
representative shall have the right, at any reasonable time, to have access to
and inspect and copy the contents of such books and records.
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SECTION 4. COVENANTS OF AGENT.
You covenant with the Company as follows:
(a) You agree to offer and sell the Units according to all
of the terms and conditions of the Registration Statement, the Rules of
Fair Practice of the NASD, all applicable state and federal laws,
including the Act, as amended, and any and all regulations related
thereto. You shall not have any authority to give any information or
make any representations in connection with any offer or sale of the
Units other than as contained in the Prospectus or as is otherwise
expressly authorized in writing by the Company.
(b) The Units shall be offered and sold only where the Units
may be legally offered and sold, and only to such persons in such states
listed on Schedule I who shall be legally qualified to purchase the
Units. The Company shall give you written notice at the time of
effectiveness of the Registration Statement of those states in which the
offering and sale of the Units may be made, and shall amend such notice
thereafter as additional states are added. No Units shall be offered or
sold in any other states.
(c) Neither you nor any person associated with you shall
give any information, written or oral, or make any representation,
written or oral, in connection with the offering other than those
contained in the Prospectus or such other material as may be provided or
approved by the Company.
SECTION 5. CONDITIONS OF YOUR OBLIGATIONS.
Your obligations hereunder are subject to the accuracy of and compliance
with the representations and warranties of the Company, to the performance by
the Company of its obligations hereunder and to the following further
conditions:
(a) The Registration Statement shall become effective not later than
5:30 P.M., Eastern time, on the date hereof, or, with your consent, at a later
time and date not later, however, than 5:30 P.M., Eastern time, on the business
day following the date hereof; and at the Minimum Subscription Closing Date and
Issuance Date no stop order suspending the effectiveness thereof shall have been
issued under the Act or proceeding therefor initiated or threatened by the
Commission and not rescinded.
(b) On the Issuance Date you shall receive a certificate signed by
the principal executive officer and principal financial officer of the Company
to the effect that (i) the signer has carefully examined the Operating
Agreement, the Registration Statement and the Prospectus and, in the signer's
opinion, at the time the Registration Statement became effective and at the
Minimum Subscription Closing Date and Issuance Date, as the case may be, the
Registration Statement did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Prospectus, as of its issue date
and as of such date, did not contain an untrue statement of a material fact or
omit to state a material fact
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necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (ii) since the
effective date of the Registration Statement, no event has occurred which should
have been set forth in an amendment of, or supplement to, the Prospectus but
which has not been so set forth; (iii) no stop order suspending the
effectiveness of the Registration Statement, has been issued and no proceedings
therefor have been instituted or threatened by the Commission and not rescinded;
(iv) the representations, warranties and agreements contained in Section 1(a)
are true and correct in all material respects with the same effect as though
expressly made at the Minimum Subscription Closing Date and Issuance Date as the
case may be; (v) since the effective date of the Registration Statement, no
material adverse change in circumstance has occurred with regard to the
transactions described in the Prospectus which should have been set forth in an
amendment of, or supplement to, the Prospectus, but which has not been so set
forth; (vi) subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, no material and unfavorable
change, financial or otherwise, in the business, condition or prospects of the
Company has occurred or become known; no transaction which is material and
unfavorable to the Company has been entered into by the Company; and there has
not been any obligation, contingent or otherwise, directly or indirectly
incurred by the Company, which is material to the Company, other than such
obligations that are incurred in the ordinary course of the Company's business;
and (vii) subsequent to the execution and delivery of this Agreement, there has
been no change, or any development involving a prospective change, in or
affecting particularly the business or properties of the Company, whether or not
arising in the ordinary course of business, which is material and adverse to the
current or prospective financial condition or results of operations of the
Company.
(c) At the Issuance Date, the qualification of the Units under the
specified "blue sky" jurisdictions remain valid.
(d) At the Issuance Date, the Company shall be in compliance with
all reporting requirements under the Exchange Act.
(e) If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement and all your obligations hereunder may be cancelled by you by
notifying the Company of such cancellation in writing at any time at or prior to
the Issuance Date and any such cancellation or termination shall be without
liability of any party to any other party.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you which
approval shall not be unreasonably withheld. The Company shall furnish you with
such manually signed or conformed copies of such opinions, certificates, letters
and documents as you request.
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SECTION 6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless you and each
person, if any, who controls you within the meaning of the Act or the Exchange
Act against any losses, claims, damages or liabilities to which you or such
controlling person may become subject under the Act, the Exchange Act or other
federal or state statutory law or regulation, at common law or otherwise
(including in settlement of any litigation if such settlement is effected with
the written consent of the Company, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A, if
applicable, any preliminary prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and will reimburse you
and each such controlling person for any legal or other expenses reasonably
incurred by you or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that (i) any
such loss, claim, damage or liability arises out of your gross negligence of
recklessness or to the extent any such loss, claim, damage or liability suffered
or incurred by you (or any person who controls you) resulted from an action,
claim or suit by any person who purchased Units from you in the offering and you
failed to deliver or provide a copy of the Prospectus to such person at or prior
to the confirmation of the sale of such Units in any case where such delivery is
required by the Act. In addition to its other obligations under this Section
6(a), the Company agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 6(a), it will reimburse you on a monthly basis for all
reasonable legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse you for such expenses
and the possibility that such payments might later be held to have been improper
by a court of competent jurisdiction. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) You will indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Act or the
Exchange Act, against any losses, claims, damages or liabilities to which the
Company, or any such director, officer or controlling person may become subject
under the Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with your written consent), insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any of violation of any rule or regulation of the
NASD in connection with the offer and sale of the Units, and will reimburse any
legal or other expenses reasonably incurred by the Company, or any such
director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. In addition to
their other obligations under this Section 6(b), you agree that, as
13
an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section 6(b),
you will reimburse the Company on a monthly basis for all reasonable legal and
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
your obligation to reimburse the Company for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. This indemnity agreement will be in addition to any
liability which you may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 6, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party except to the extent
that the indemnifying party was prejudiced by such failure to notify. In case
any such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; PROVIDED, HOWEVER,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by you in the case of paragraph (a) representing all
indemnified parties not having different or additional defenses or potential
conflicting interest among themselves who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability arising out of such proceeding.
14
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under paragraphs (a) or (b) hereof in
respect of any losses, claims, damages or liabilities referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
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 and you from the offering of the Units or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and you in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and you
shall be deemed to be in the same proportion in the case of the Company as the
total price paid to the Company for the Units sold by you (net of commission but
before deducting expenses), and in your case, as the commission received by you
bears to the total of such amounts paid to the Company and received by you as
commission in each case as contemplated by the Prospectus. The relative fault of
the Company and you shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Company
or by you and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim.
Notwithstanding the provisions of this Section 6, you shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Units sold by it and distributed to the public were offered
to the public exceeds the amount of any damages which you have 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 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The provisions of this Section 6 shall survive any termination
of this Agreement.
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this
Agreement (including your covenants provided in Section 4 hereof) or contained
in a certificate of the Company submitted pursuant hereto shall remain operative
and in full force and effect, regardless of any investigation made by, or on
behalf of, you or any person who controls you, or by or on behalf of the Company
and shall survive the Offering Termination Date.
SECTION 8. EFFECTIVE DATE OF THIS AGREEMENT.
This Agreement shall become effective upon execution by both parties.
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SECTION 9. TERMINATION.
Without limiting the right to terminate this Agreement pursuant to any
other provision hereof:
(a) Either the Company or you may terminate this Agreement at any
time.
SECTION 10. NOTICES AND AUTHORITY TO ACT.
All communications hereunder shall be in writing and, if sent to you,
shall be mailed, delivered or faxed and confirmed to you at
_____________________________________, Attention: ________________, or, if sent
to the Company, shall be delivered or faxed and confirmed at Iroquois
Bio-Energy, LLC, 0000 Xxxx 000xx Xxxxxx, Xxxxxx, Xxxxxxx 00000-0000, Attention:
President, with a copy to Xxxxxxxxx & Xxxxxx, 4200 IDS Center, 00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention Xxxxxxx Xxxxxx.
SECTION 11. PARTIES.
This Agreement shall inure to the benefit of and be binding upon each of
you and the Company and your and the Company's respective successors, this
Agreement and the conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective successors and controlling persons, and for the benefit of no other
person, firm or corporation, except as otherwise specifically provided herein.
Section 12. APPLICABLE LAW.
This Agreement shall be construed in accordance with the laws of the
State of Indiana.
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If the foregoing is accordance with your understanding of our agreement,
kindly sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement among you and the
Company in accordance with its terms.
Very truly yours,
IROQUOIS BIO-ENERGY COMPANY, LLC
By ______________________________________
Title: _______________________________
CONFIRMED AND ACCEPTED as of the date first above written:
___________________________________
By ______________________________________
Title: _______________________________
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SCHEDULE I
INVESTORS
NAME STATE UNITS PURCHASE PRICE
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18
