EXHIBIT 1.1
_______________ SHARES
VERASUN ENERGY CORPORATION
COMMON STOCK, $0.01 PAR VALUE PER SHARE
FORM OF UNDERWRITING AGREEMENT
______________, 2006
_______________, 2006
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
VeraSun Energy Corporation, a South Dakota corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "UNDERWRITERS"), and certain stockholders of the Company named in
Schedule II hereto (collectively, the "SELLING SHAREHOLDERS") severally propose
to sell to the several Underwriters, an aggregate of _________ shares of the
Company's common stock, $0.01 par value per share (the "FIRM SHARES"), of which
_________ shares are to be issued and sold by the Company and ________ shares
are to be sold by the Selling Shareholders. The Selling Shareholders also
proposes to issue and sell to the several Underwriters not more than an
additional ______________ shares of the Company's common stock, $0.01 par value
per share (the "ADDITIONAL SHARES") if and to the extent that you, as Managers
of the offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES." The shares of common
stock, $0.01 par value per share of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"COMMON STOCK." The Company and the Selling Shareholders are hereinafter
sometimes collectively referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares (or in the form first made available to the
Underwriters by the Company to meet requests of purchasers pursuant to Rule 173
under the Securities Act) is hereinafter referred to as the "PROSPECTUS." If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock
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.
For purposes of this Agreement, "FREE WRITING PROSPECTUS" has the meaning
set forth in Rule 405 under the Securities Act, "TIME OF SALE PROSPECTUS" means
the preliminary prospectus together with the free writing prospectuses, if any,
each identified in Schedule III hereto, and "BROADLY AVAILABLE ROAD SHOW" means
a "bona fide electronic road show" as defined in Rule 433(h)(5) under the
Securities Act that has been made available without restriction to any person.
As used herein, the terms "Registration Statement," "preliminary prospectus,"
"Time of Sale Prospectus" and Prospectus shall include the documents, if any,
incorporated by reference therein. The terms "SUPPLEMENT," "AMENDMENT," and
"AMEND" as used herein with respect to the Time of Sale Prospectus or any free
writing prospectus shall include all documents subsequently filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), that are incorporated by reference therein.
Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX") has agreed to reserve
a portion of the Shares to be purchased by it under this Agreement for sale to
the Company's directors, officers, employees and business associates and other
parties related to the Company (collectively, "PARTICIPANTS"), as set forth in
the Prospectus under the heading "Underwriters" (the "DIRECTED SHARE PROGRAM").
The Shares to be sold by Xxxxxx Xxxxxxx and its affiliates pursuant to the
Directed Share Program are referred to hereinafter as the "DIRECTED SHARES". Any
Directed Shares not orally confirmed for purchase by any Participant by the end
of the business day on which this Agreement is executed will be offered to the
public by the Underwriters as set forth in the Prospectus.
1. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
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Securities Act and the applicable rules and regulations of the Commission
thereunder, (iii) the Time of Sale Prospectus does not, and at the time of each
sale of the Shares in connection with the offering when the Prospectus is not
yet available to prospective purchasers and at the Closing Date (as defined in
Section 5), the Time of Sale Prospectus, as then amended or supplemented by the
Company, if applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
(iv) each broadly available road show, if any, when considered together with the
Time of Sale Prospectus, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading and
(v) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement, the Time of Sale
Prospectus or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(c) The market-related, customer-related and industry-related data and
forward-looking statements included under the captions "Prospectus Summary,"
"Risk Factors," Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business" in the Time of Sale Prospectus and the
Prospectus are based on or derived from sources that the Company believes to be
reliable and accurate in all material respects and represents its good faith
estimates that are made on the basis of data derived from such sources.
(d) The Company is not an "ineligible issuer" in connection with the
offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free
writing prospectus that the Company is required to file pursuant to Rule 433(d)
under the Securities Act has been, or will be, filed with the Commission in
accordance with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act or that was prepared by or behalf of or used or referred to by
the Company complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. Except for the free writing prospectuses, if any,
identified in Schedule III hereto, and electronic road shows, if any, furnished
to you before first use, the Company has not prepared, used or referred to, and
will not, without your prior consent, prepare, use or refer to, any free writing
prospectus.
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(e) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Time of Sale Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failures to be so
qualified or be in good standing, singly and in the aggregate, could not
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole ("MATERIAL ADVERSE EFFECT").
(f) Each subsidiary of the Company has been duly incorporated or formed, is
validly existing as a corporation or limited liability company in good standing
under the laws of the jurisdiction of its incorporation or formation, has the
corporate power and authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failures to be so qualified or be
in good standing, singly and in the aggregate, could not reasonably be expected
to have a Material Adverse Effect; all of the issued shares of capital stock or
membership interests of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and are owned
directly by the Company and are free and clear of all liens, encumbrances,
equities or claims, except for security interests granted pursuant to the terms
of the Senior Secured Notes due 2012 issued pursuant to the Indenture dated as
of December 21, 2005 and the Credit Agreement dated as of December 21, 2005
between the Company and First National Bank of Omaha.
(g) This Agreement has been duly authorized, executed and delivered by the
Company.
(h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in each of the Time of Sale
Prospectus and the Prospectus.
(i) The shares of Common Stock (including the Shares to be sold by the
Selling Shareholders) outstanding prior to the issuance of the Shares have been
duly authorized and are validly issued, fully paid and non-assessable.
(j) The Shares have been duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.
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(k) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the articles of incorporation or bylaws of the
Company or any agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its subsidiaries, taken as
a whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its obligations
under this Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
Shares.
(l) There has not occurred any material adverse change, or any development
that is reasonably expected to result in a material adverse change in the
condition, financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set forth in the
Time of Sale Prospectus.
(m) None of the Company nor any of its subsidiaries nor any of their
respective subsidiaries has sustained, since the date of the latest audited
financial statements included in the Time of Sale Prospectus and 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, other than as set
forth or contemplated in the Time of Sale Prospectus and the Prospectus; and,
since such date, there has not been any change in the shareholders' equity or
other ownership interests or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development that could
reasonably be expected to have a Material Adverse Effect, other than as set
forth or contemplated in the Time of Sale Prospectus and the Prospectus.
(n) The financial statements, together with related schedules and notes
forming part of the Time of Sale Prospectus and the Prospectus, present fairly
in all material respects the financial position, results of operations and cash
flows of the Company and its subsidiaries on the basis stated in the Time of
Sale Prospectus and the Prospectus at the respective dates or for the respective
periods to which they apply; such financial statements and related schedules and
notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and data
set forth in the Time of Sale Prospectus and the Prospectus are, in all material
respects, accurately presented and, except as otherwise disclosed in the Time of
Sale Prospectus and the Prospectus, prepared on a basis consistent with such
financial statements and the books and records of the Company. Without limiting
the generality of the
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foregoing, the pro forma financial information included in such financial
statements present fairly in all material respects the information purported to
be shown therein and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein.
(o) McGladrey & Xxxxxx, LLP, who have audited the financial statements of
the Company, whose report appears in the Time of Sale Prospectus and the
Prospectus and who have delivered the initial letters referred to in Section
6(g) hereof, are independent registered public accountants as required by the
Securities Act and the applicable rules and regulations thereunder adopted by
the Commission and the Public Company Accounting Oversight Board during the
periods covered by the financial statements on which they reported contained in
the Time of Sale Prospectus and the Prospectus.
(p) There are no legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject (i) other than
proceedings accurately described in all material respects in the Time of Sale
Prospectus and proceedings that, singly and in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, or on the power or
ability of the Company to perform its obligations under this Agreement or to
consummate the transactions contemplated by the Time of Sale Prospectus or (ii)
that are required to be described in the Registration Statement or the
Prospectus and are not so described; and there are no statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(q) Except where the failure to make such required filings or payments
could not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect, the Company and each of its subsidiaries have filed all United
States federal, state and local income and franchise tax returns required to be
filed through the date hereof and have paid all taxes, penalties and interest,
assessments, fees and other charges due thereon, other than (i) those that are
being contested in good faith and for which reserves have been provided in
accordance with generally accepted accounting principles in the United States or
(ii) those currently payable without penalty or interest, and no tax deficiency
has been determined adversely to the Company or any of its subsidiaries that has
had (nor does the Company or any of its subsidiaries have knowledge of any tax
deficiency that, if determined adversely to the Company or any of its
subsidiaries, might have) a Material Adverse Effect.
(r) Each preliminary prospectus filed as part of the registration statement
as originally filed or as part of any amendment thereto, or filed pursuant
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to Rule 424 under the Securities Act, complied when so filed in all material
respects with the Securities Act and the applicable rules and regulations of the
Commission thereunder.
(s) 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
Prospectus will not be, required to register as an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(t) The Company and its subsidiaries (i) are in compliance with any and all
applicable federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals could not,
singly and in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(u) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which could, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(v) Except as disclosed in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such person the right
to require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the Registration
Statement.
(w) Subsequent to the respective dates as of which information is given in
each of the Registration Statement, the Time of Sale Prospectus and the
Prospectus, (i) the Company and its subsidiaries have not incurred any material
liability or obligation, direct or contingent, nor entered into any material
transaction; (ii) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock other than ordinary and customary dividends; and (iii)
there has not been any material change in the capital stock, short-term debt or
long-term debt of the Company and its subsidiaries, except in each case as
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described in each of the Registration Statement, the Time of Sale Prospectus and
the Prospectus, respectively.
(x) The Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Time of Sale Prospectus or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the Time of
Sale Prospectus.
(y) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names currently employed by them in
connection with the business now operated by them, and neither the Company nor
any of its subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, could reasonably be expected to have a Material Adverse Effect.
(z) No material labor dispute with the employees of the Company or any of
its subsidiaries exists, except as described in the Time of Sale Prospectus, or,
to the knowledge of the Company, is imminent; and the Company is not aware of
any existing, threatened or imminent labor disturbances by the employees of any
of its principal suppliers, manufacturers or contractors that could, singly or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(aa) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; and neither the Company nor any of its subsidiaries (i) has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other material expenditures will have to be made in order to
continue such insurance or (ii) has 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 from similar insurers at a cost that could not
reasonably be expected to have a Material Adverse Effect.
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(bb) The Company and its subsidiaries (i) possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, except
where failure to possess such certificates, authorizations or permits, singly or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect, and (ii) neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could reasonably be
expected to have a Material Adverse Effect, except as described in the Time of
Sale Prospectus.
(cc) Neither the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of an provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(dd) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ee) The minute books and records of the Company and its subsidiaries
relating to proceedings of their respective shareholders, boards of directors,
and committees of their respective boards of directors made available to Sidley
Austin LLP are their original minute books and records or are true, correct and
complete copies thereof, with respect to all proceedings of said shareholders,
boards of directors and committees since January 1, 2003 through the date
hereof. In the event that definitive minutes have not been prepared with respect
to any proceedings of such shareholders, boards of directors or committees, the
Company has provided Sidley Austin LLP with originals or true, correct and
complete copies of draft minutes or written agendas relating thereto, which
drafts and agendas, if any, reflect all material events that occurred in
connection with such proceedings.
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(ff) Except as described in the Time of Sale Prospectus, the Company has
not sold, issued or distributed any shares of Common Stock during the six-month
period preceding the date hereof, including any sales pursuant to Rule 144A
under, or Regulation D or S of, the Securities Act, other than shares issued
pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans or pursuant to outstanding options, rights or
warrants.
(gg) The Registration Statement, the Prospectus, the Time of Sale
Prospectus and any preliminary prospectus comply, and any amendments or
supplements thereto will comply, with any applicable laws or regulations of
foreign jurisdictions in which the Prospectus, the Time of Sale Prospectus or
any preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program.
(hh) No consent, approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any jurisdiction where
the Directed Shares are being offered.
(ii) The Company has not offered, or caused Xxxxxx Xxxxxxx to offer, Shares
to any person pursuant to the Directed Share Program with the specific intent to
unlawfully influence (i) a customer or supplier of the Company to alter the
customer's or supplier's level or type of business with the Company, or (ii) a
trade journalist or publication to write or publish favorable information about
the Company or its products.
2. Representations and Warranties of the Selling Shareholders. Each of the
Selling Shareholders represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by or
on behalf of each of the Selling Shareholders.
(b) The execution and delivery by such Selling Shareholder of, and the
performance by such Selling Shareholder of its obligations under, this
Agreement, the Custody Agreement signed by such Selling Shareholder and the
Company, as Custodian, relating to the deposit of the Shares to be sold by such
Selling Shareholder (the "CUSTODY AGREEMENT") and the Power of Attorney
appointing certain individuals as such Selling Shareholder's attorneys-in-fact
to the extent set forth therein, relating to the transactions contemplated
hereby and by the Registration Statement (the "POWER OF ATTORNEY") will not
contravene any provision of applicable law, or the organizational documents of
such Selling Shareholder (if such Selling Shareholder is a corporation, limited
liability company or limited partnership), or any agreement or other instrument
binding
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upon such Selling Shareholder or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over such Selling
Shareholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by such Selling Shareholder of its obligations under this Agreement
or the Custody Agreement or Power of Attorney of such Selling Shareholder,
except such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares.
(c) Each of the Selling Shareholders has, and on the Closing Date will
have, valid title to, or a valid "security entitlement" within the meaning of
Section 8-501 of the New York Uniform Commercial Code in respect of, the Shares
to be sold by such Selling Shareholder free and clear of all security interests,
claims, liens, equities or other encumbrances and the legal right and power, and
all authorization and approval required by law, to enter into this Agreement,
the Custody Agreement and the Power of Attorney, and to sell, transfer and
deliver the Shares to be sold by such Selling Shareholder or a security
entitlement in respect of such Shares.
(d) Upon payment for the Shares to be sold by each of the Selling
Shareholders pursuant to this Agreement, delivery of such Shares, as directed by
the Underwriters, to Cede & Co. ("CEDE") or such other nominee as may be
designated by the Depository Trust Company ("DTC"), registration of such Shares
in the name of Cede or such other nominee and the crediting of such Shares on
the books of DTC to securities accounts of the Underwriters (assuming that
neither DTC nor any such Underwriter has notice of any adverse claim (within the
meaning of Section 8-105 of the New York Uniform Commercial Code (the "UCC")) to
such Shares), (A) DTC shall be a "protected purchaser" of such Shares within the
meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of such Shares
and (C) no action based on any "adverse claim", within the meaning of Section
8-102 of the UCC, to such Shares may be asserted against the Underwriters with
respect to such security entitlement; for purposes of this representation, each
of the Selling Shareholders may assume that when such payment, delivery and
crediting occur, (x) such Shares will have been registered in the name of Cede
or another nominee designated by DTC, in each case on the Company's share
registry in accordance with its articles of incorporation, bylaws and applicable
law, (y) DTC will be registered as a "clearing corporation" within the meaning
of Section 8-102 of the UCC and (z) appropriate entries to the accounts of the
several Underwriters on the records of DTC will have been made pursuant to the
UCC.
(e) The Custody Agreement and the Power of Attorney have been duly
authorized, executed and delivered by such Selling Shareholder and are valid and
binding agreements of such Selling Shareholder.
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(f) Each of the Selling Shareholders has been duly organized and is validly
existing as a limited liability company or limited partnership in good standing
under the laws of the jurisdiction of its organization.
(g) The execution and delivery by each of the Selling Shareholders of, and
the performance by the each of the Selling Shareholders of their obligations
under, this Agreement will not contravene any (i) provision of applicable law,
(ii) the organizational documents of any of the Selling Shareholders, (iii) any
agreement or other instrument binding upon any of the Selling Shareholders or
any of their subsidiaries that is material to any of the Selling Shareholders
and their subsidiaries, taken as a whole, or (iv) any judgment, order or decree
of any governmental body, agency or court having jurisdiction over any of the
Selling Shareholders or any of their subsidiaries, except, in the case of
clauses (iii) and (iv) for such contraventions as would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the condition, financial or otherwise, earnings or business or operations of any
of the Selling Shareholders and their subsidiaries, taken as a whole, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by any of the
Selling Shareholders of their obligations under this Agreement, except such as
have already been obtained or may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale of the Shares.
(h) Except as described in the Time of Sale Prospectus, there are no
contracts, agreements or understandings between any of the Selling Shareholders
and any person granting such Selling Shareholder the right to require the
Company to file or cause the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to require the
Company to include such securities with the Shares registered pursuant to the
Registration Statement.
(i) Each Selling Shareholder is not prompted by any information concerning
the Company or its subsidiaries which is not set forth in the Time of Sale
Prospectus and the Prospectus to sell its Shares pursuant to this Agreement.
(j) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(ii) the Time of Sale Prospectus does not, and at the time of each sale of the
Shares in connection with the offering and at the Closing Date (as defined in
Section 5), the Time of Sale Prospectus, as then amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading and (iii) the
Prospectus does not contain
12
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties and
agreements set forth in this paragraph 3(j) are limited to the name and address
of such Selling Shareholder, the number of shares of Common Stock beneficially
owned by such Selling Shareholder after giving effect to the sale of the Shares
being sold by such Selling Shareholder and the number of Shares made available
for sale by such Selling Shareholder, which information has been furnished to
the Company in writing by such Selling Shareholder (the "SELLING SHAREHOLDER
INFORMATION") expressly for use in the Registration Statement, the Time of Sale
Prospectus or the Prospectus or any amendments or supplements thereto.
3. Agreements to Sell and Purchase. The Company (as to ________ shares) and
the Selling Shareholders (as to _________ shares), severally and not jointly,
hereby agree to sell to the several Underwriters, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from each Seller the respective numbers of Firm Shares set forth in Schedule I
hereto opposite its name at $______ a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Selling Shareholders
agree to sell to the Underwriters the Additional Shares, and the Underwriters
shall have the right to purchase, severally and not jointly, up to
_______________ Additional Shares at the Purchase Price. You may exercise this
right on behalf of the Underwriters in whole or from time to time in part by
giving written notice not later than 30 days after the date of this Agreement.
Any exercise notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Each purchase date must be at least one business day after the
written notice is given and may not be earlier than the closing date for the
Firm Shares nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. On each day, if any, that Additional Shares are to be purchased
(an "OPTION CLOSING DATE"), each Underwriter agrees, severally and not jointly,
to purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the total number of Additional Shares to be purchased on such Option Closing
Date as the number of Firm Shares set forth in Schedule I hereto opposite the
name of such Underwriter bears to the total number of Firm Shares.
4. Terms of Public Offering. Each of the Company and the Selling
Shareholders are advised by you that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon after the
Registration
13
Statement and this Agreement have become effective as in your judgment is
advisable. Each of the Company and the Selling Shareholders are further advised
by you that the Shares are to be offered to the public initially at
$_____________ a share (the "PUBLIC OFFERING PRICE") and to certain dealers
selected by you at a price that represents a concession not in excess of $______
a share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers. The Underwriters further advise the
Company and the Selling Shareholders that the offer and sale of the Shares
outside of the United States will be undertaken in accordance with the
restrictions attached hereto as Exhibit B.
5. Payment and Delivery. Payment for the Firm Shares to be sold by each
Seller shall be made to such Seller in Federal or other funds immediately
available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on ____________, 2006, or at such other time on the same or such other
date, not later than _________, 2006, as shall be designated in writing by you.
The time and date of such payment are hereinafter referred to as the "CLOSING
DATE."
Payment for any Additional Shares shall be made to the Selling Shareholders
in Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
corresponding notice described in Section 2 or at such other time on the same or
on such other date, in any event not later than _______, 2006, as shall be
designated in writing by you.
The Firm Shares and Additional Shares shall be registered in such names and
in such denominations as you shall request in writing not later than one full
business day prior to the Closing Date or the applicable Option Closing Date, as
the case may be. The Firm Shares and Additional Shares shall be delivered to you
on the Closing Date or an Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than [_____] (New York City time) on the date hereof.
14
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to
the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the securities of the
Company or any of its subsidiaries by any "nationally recognized
statistical rating organization," as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of Sale
Prospectus that, in your judgment, is material and adverse and that makes
it, in your judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Time of Sale Prospectus.
(b) The Underwriters shall have received on the Closing Date:
(i) a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in Section 6(a)(i) above
and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date and
that the Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date. The officer signing and delivering such
certificate may rely upon the best of his or her knowledge as to
proceedings threatened; and
(ii) a certificate, dated the Closing Date and signed by or on behalf
of each of the Selling Shareholders, who is authorized by company and
partnership action to provide such certificate, to the effect that the
representations and warranties of such Selling Shareholder contained in
this Agreement are true and correct as of the Closing Date and that such
Selling Shareholder has complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied hereunder on
or before the Closing Date.
(c) The Underwriters shall have received on the Closing Date an opinion of
Xxxxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, dated the Closing Date, to the effect that:
15
(i) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of South Dakota
and has the corporate power and authority to carry on its business as
described in the Time of Sale Prospectus and the Prospectus and to own,
lease and operate its properties as described therein.
(ii) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights.
(iii) The shares of Common Stock outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid and
non-assessable.
(iv) This Agreement has been duly authorized by all necessary
corporate action of, and executed and delivered by the Company.
(v) To such counsel's knowledge, the Company is not in violation of
its articles of incorporation or bylaws.
(vi) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all provisions hereof and the
consummation of the transactions contemplated hereby does not (i) require
any consent, approval, authorization or other order of, or filing,
registration or qualification with any court or governmental body or agency
having jurisdiction over the Company or any of its properties or assets,
(ii) conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the articles of incorporation or bylaws of the
Company, (iii) violate or conflict with any statute or any rule,
regulation, judgment, order or decree known to us of any court or any
governmental body or agency having jurisdiction over the Company or its
properties and assets, except, in the case of clause (iii) above, where
such conflict or violation could not reasonably be expected to have a
Material Adverse Effect.
(vii) The statements relating to legal matters, documents or
proceedings included in the Registration Statement in Item 14
("Indemnification of Officers and Directors") fairly summarize in all
material respects such matters, documents or proceedings.
(d) The Underwriters shall have received on the Closing Date an opinion of
Stoel Rives LLP, outside counsel for the Company, dated the Closing Date, to the
effect that:
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the
16
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Time of
Sale Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a Material Adverse Effect;
(ii) each subsidiary of the Company has been duly incorporated or
formed, is validly existing as a corporation or limited liability company
in good standing under the laws of the jurisdiction of its incorporation or
formation, has the corporate power and authority to own its property and to
conduct its business as described in the Time of Sale Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing could not reasonably
be expected to have a Material Adverse Effect;
(iii) the authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in each of the Time of Sale
Prospectus and the Prospectus;
(iv) the shares of Common Stock outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid and
non-assessable;
(v) all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(vi) the Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will
not be subject to any preemptive or similar rights;
(vii) this Agreement has been duly authorized, executed and delivered
by the Company;
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the articles of
incorporation or bylaws of the Company or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon the Company or
any of its subsidiaries that is listed on Schedule IV hereto, or, to the
17
best of such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares;
(ix) the statements relating to legal matters, documents or
proceedings included in (A) the Time of Sale Prospectus and the Prospectus
under the captions "Prospectus Summary," "Risk Factors," "Business," "U.S.
Federal Income Tax Considerations for Non-U.S. Holders" and "Description of
Capital Stock," (B) the Prospectus under the caption "Underwriters" and (C)
the Registration Statement in Item 15 ("Recent Sales of Unregistered
Securities"), in each case fairly summarize in all material respects such
matters, documents or proceedings;
(x) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required;
(xi) 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 Prospectus will not be, required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended; and
(xii) the Registration Statement and the Prospectus (except for the
financial statements and financial schedules and other financial and
statistical data included therein, as to which such counsel need not
express any opinion) appear on their face to be appropriately responsive in
all material respects to the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder.
In addition, such counsel shall state that nothing has come to
the attention of such counsel that causes such counsel to believe that (1)
the Registration Statement or the prospectus included therein (except for
the financial statements and financial schedules and other financial and
statistical data included therein, as to which such counsel need not
express
18
any belief) at the time the Registration Statement became effective
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (2) the Time of Sale Prospectus (except
for the financial statements and financial schedules and other financial
and statistical data included therein, as to which such counsel need not
express any belief) as of the date of this Agreement or as amended or
supplemented, if applicable, as of the Closing Date contained or contains
any untrue statement of a material fact or omitted or omits 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 or
(3) the Prospectus (except for the financial statements and financial
schedules and other financial and statistical data included therein, as to
which such counsel need not express any belief) as of its date or as
amended or supplemented, if applicable, as of the Closing Date contained or
contains any untrue statement of a material fact or omitted or omits 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.
With respect to the opinions given in paragraphs (i), (iv), (vii) and
(viii), insofar as such opinions relate to matters of South Dakota law, such
opinions are given solely in reliance on the opinion of Xxxxxxx Xxxxxxx Xxxxxxx
& Xxxxx LLP with respect to such matters. The opinion of Stoel Rives LLP
described in Section 6(d)(vi) above shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
(e) The Underwriters shall have received on the Closing Date an opinion of
Xxxxx, Xxxxx & Xxxxxx, P.C., counsel for the Selling Shareholders, dated the
Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and delivered by
or on behalf of each of the Selling Shareholders;
(ii) the execution and delivery by each Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations under, this
Agreement and the Custody Agreement and Power of Attorney of such Selling
Shareholder will not contravene any provision of applicable law, or the
organizational documents of such Selling Shareholder, or, to the best of
such counsel's knowledge, any agreement or other instrument binding upon
such Selling Shareholder or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by such
19
Selling Shareholder of its obligations under this Agreement, the Custody
Agreement or Power of Attorney of such Selling Shareholder, except such as
may be required by the securities or Blue Sky laws of the various states in
connection with offer and sale of the Shares;
(iii) to such counsel's knowledge, except as described in the Time of
Sale Prospectus, there are no contracts, agreements or understandings
between any of the Selling Shareholders and any person granting such
Selling Shareholder the right to require the Company to file or cause the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement;
(iv) each of the Selling Shareholders has valid title to, or a valid
security entitlement in respect of, the Shares to be sold by such Selling
Shareholder free and clear of all security interests, claims, liens,
equities and other encumbrances, and each of the Selling Shareholders has
the legal right and power, and all authorization and approval required by
law, to enter into this Agreement, the Custody Agreement and Power of
Attorney of such Selling Shareholder, and to sell, transfer and deliver the
Shares to be sold by such Selling Shareholder or a security entitlement in
respect of such Shares;
(v) the Custody Agreement and the Power of Attorney of each Selling
Shareholder have been duly authorized, executed and delivered by such
Selling Shareholder and are valid and binding agreements of such Selling
Shareholder; and
(vi) upon payment for the Shares to be sold by each of the Selling
Shareholders pursuant to this Agreement, delivery of such Shares, as
directed by the Underwriters, to Cede or such other nominee as may be
designated by DTC, registration of such Shares in the name of Cede or such
other nominee and the crediting of such Shares on the books of DTC to
securities accounts of the Underwriters (assuming that neither DTC nor any
such Underwriter has notice of any adverse claim (within the meaning of
Section 8-105 of the UCC to such Shares), (A) DTC shall be a "protected
purchaser" of such Shares within the meaning of Section 8-303 of the UCC,
(B) under Section 8-501 of the UCC, the Underwriters will acquire a valid
security entitlement in respect of such Shares and (C) no action based on
any "adverse claim", within the meaning of Section 8-102 of the UCC, to
such Shares may be asserted against the Underwriters with respect to such
security entitlement; for purposes of this representation, such counsel may
assume that when such payment, delivery and crediting occur, (x) such
Shares will have been registered in the name of Cede or
20
another nominee designated by DTC, in each case on the Company's share
registry in accordance with its articles of incorporation, bylaws and
applicable law, (y) DTC will be registered as a "clearing corporation"
within the meaning of Section 8-102 of the UCC and (z) appropriate entries
to the accounts of the several Underwriters on the records of DTC will have
been made pursuant to the UCC.
(f) The Underwriters shall have received on the Closing Date an opinion of
Sidley Austin LLP, counsel for the Underwriters, dated the Closing Date,
covering the matters referred to in Sections 6(d)(vi), 6(d)(vii), 6(d)(ix) (but
only as to the statements in each of the Time of Sale Prospectus and the
Prospectus under "Description of Capital Stock" and "Underwriters") and
6(d)(xii)above.
With respect to Section 6(d)(xii) above, Stoel Rives LLP and Sidley Austin
LLP may state that their opinions and beliefs are based upon their participation
in the preparation of the Registration Statement, the Time of Sale Prospectus
and Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified.
(g) The Underwriters shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from
McGladrey & Xxxxxx, LLP, independent public accountants, containing statements
and information of the type ordinarily 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
Prospectus and the Prospectus; provided that the letter delivered on the Closing
Date shall use a "cut-off date" not earlier than the date hereof.
(h) The "lock-up" agreements, each substantially in the form of Exhibit A
hereto, between you and certain shareholders (including each of the Selling
Shareholders), officers and directors of the Company relating to sales and
certain other dispositions of shares of Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in full
force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares to be sold on such Option Closing Date and other matters related to the
issuance of such Additional Shares.
21
7. Covenants of the Company. The Company covenants with each Underwriter as
follows:
(a) To furnish to you, without charge, four signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge, prior
to 10:00 a.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 7(e) or 7(f) below, as
many copies of the Time of Sale Prospectus, the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may reasonably
request.
(b) Before amending or supplementing the Registration Statement, the Time
of Sale Prospectus or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the Commission
within the applicable period specified in Rule 424(b) under the Securities Act
any prospectus required to be filed pursuant to such Rule.
(c) To furnish to you a copy of each proposed free writing prospectus to be
prepared by or on behalf of, used by, or referred to by the Company and not to
use or refer to any proposed free writing prospectus to which you reasonably
object.
(d) Not to take any action that would result in an Underwriter or the
Company being required to file with the Commission pursuant to Rule 433(d) under
the Securities Act a free writing prospectus prepared by or on behalf of the
Underwriter that the Underwriter otherwise would not have been required to file
thereunder.
(e) If the Time of Sale Prospectus is being used to solicit offers to buy
the Shares at a time when the Prospectus is not yet available to prospective
purchasers and any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Time of Sale Prospectus in order to make
the statements therein, in the light of the circumstances, not misleading, or if
any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration
Statement then on file, or if, in the opinion of counsel for the Underwriters,
it is necessary to amend or supplement the Time of Sale Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that the statements
in the Time of Sale Prospectus as so amended or supplemented will not, in the
light of the circumstances when delivered to a prospective purchaser, be
misleading or so that
22
the Time of Sale Prospectus, as amended or supplemented, will no longer conflict
with the Registration Statement, or so that the Time of Sale Prospectus, as
amended or supplemented, will comply with applicable law.
(f) If, during such period after the first date of the public offering of
the Shares as in the opinion of counsel for the Underwriters the Prospectus (or
in lieu thereof the notice referred to in Rule 173(a) under the Securities Act)
is required by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) under the Securities Act) is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose names
and addresses you will furnish to the Company) to which Shares may have been
sold by you on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus (or in lieu thereof the notice referred to in
Rule 173(a) under the Securities Act) is delivered to a purchaser, be misleading
or so that the Prospectus, as amended or supplemented, will comply with law.
(g) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided, however, that the Company shall not be required to qualify as
a foreign corporation or to take any action that would subject it to general
service of process in any such jurisdiction where it is not presently qualified
or where it would be subject to taxation as a foreign corporation.
(h) To make generally available to the Company's security holders and to
you as soon as practicable an earnings statement covering a period of at least
twelve months beginning with the first fiscal quarter of the Company occurring
after the date of this Agreement which shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder.
(i) To comply with all applicable securities and other laws, rules and
regulations in each jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
8. Expenses. Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, the Company agrees to pay or
cause to be paid all expenses incident to the performance of its
23
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus,
the Prospectus, any free writing prospectus prepared by or on behalf of, used
by, or referred to by the Company and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section 7(g) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating to the
Common Stock and all costs and expenses incident to listing the Shares on the
New York Stock Exchange, (vi) the cost of printing certificates representing the
Shares, (vii) the costs and charges of any transfer agent, registrar or
depositary, (viii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the offering of the Shares, including, without limitation, expenses associated
with the preparation or dissemination of any electronic roadshow, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, (ix) all fees and disbursements of counsel reasonably incurred by the
Underwriters in connection with the Directed Share Program and stamp duties,
similar taxes or duties or other taxes, if any, incurred by the Underwriters in
connection with the Directed Share Program and (x) all other costs and expenses
incident to the performance of the obligations of the Company hereunder for
which provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 10 entitled "Indemnity
and Contribution", Section 11 entitled "Directed Share Program Indemnification"
and the last paragraph of Section 13 below, the Underwriters will pay all of
their costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the
24
Shares by them and any advertising expenses connected with any offers they may
make.
The Company also covenants with each Underwriter that, without the prior
written consent of Xxxxxx Xxxxxxx and Xxxxxx Brothers Inc. ("XXXXXX BROTHERS")
on behalf of the Underwriters, it will not, during the period ending 180 days
after the date of the Prospectus, (1) offer, pledge, 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, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (2) enter into any swap or other arrangement that transfers to another, 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 or (3) file any registration statement with the Commission relating to
the offering of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock.
The restrictions contained in the preceding paragraph shall not apply to
(a) the Shares to be sold hereunder, (b) the issuance by the Company of options
or warrants to purchase shares of Common Stock under the Company's 2003 Stock
Incentive Plan, provided, however, that any shares issued pursuant to such plan
shall be subject to the restrictions contained in the preceding paragraph, (c)
the issuance by the Company of shares of Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date hereof
of which the Underwriters have been advised in writing or (d) the issuance of
not more than ________ shares of Common Stock in connection with acquisitions of
ethanol production sites, businesses, companies or assets by the Company,
provided, however, that any such shares shall be subject to the restrictions
contained in the preceding paragraph. 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. The Company shall promptly notify Xxxxxx
Xxxxxxx and Xxxxxx Brothers of any earnings release, news or event that may give
rise to an extension of the initial 180-day restricted period.
9. Covenants of the Underwriters. Each Underwriter severally covenants with
the Company not to take any action that would result in the Company being
required to file with the Commission under Rule 433(d) a free
25
writing prospectus prepared by or on behalf of such Underwriter that otherwise
would not be required to be filed by the Company thereunder, but for the action
of the Underwriter
10. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter, each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under
the Securities Act, any Company information that the Company has filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act, or the
Prospectus or any amendment or supplement thereto, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(b) The Selling Shareholders agree to indemnify and hold harmless each
Underwriter, each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, and each affiliate of any Underwriter within the meaning of Rule 405 under
the Securities Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus as defined in Rule 433(h) under the Securities Act, any Company
information that the Company has filed, or is required to file, pursuant to Rule
433(d) of the Securities Act, or the Prospectus or any amendment or supplement
thereto, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein, but only with
26
reference to information relating to the Selling Shareholder Information of such
Selling Shareholder.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholders, the directors of the
Company, its officers who sign the Registration Statement and each person, if
any, who controls the Company or the Selling Shareholders within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Company to such Underwriter, but
only with reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus,
any issuer free writing prospectus or the Prospectus or any amendment or
supplement thereto.
(d) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 10(a), 10(b) or 10(c), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party 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 party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings 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 such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx and Xxxxxx Brothers, in the case of
parties indemnified pursuant to Section 10(a), and by the Selling Shareholders
and the Company, in the case of parties indemnified pursuant to Section 10(b) or
10(c). The indemnifying party 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 judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall
27
have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second and third sentences of
this paragraph, the indemnifying party agrees that it 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 such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. 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 on claims that are the subject matter of
such proceeding.
(e) To the extent the indemnification provided for in Section 10(a), 10(b)
or 10(c) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, 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 on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 10(d)(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
10(d)(i) above but also the relative fault of the Company on the one hand and of
the Underwriters on the other hand 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 each Seller on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by such Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of each Seller on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Shareholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 10
are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
28
(f) Each of the Company, the Selling Shareholders and the Underwriters
agree that it would not be just or equitable if contribution pursuant to this
Section 10 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
Section 10(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in Section 10(d) shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
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 remedies provided for in this Section 10 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this Section 10
and the representations, warranties and other statements of the Company and the
Selling Shareholders contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter, any person
controlling any Underwriter or any affiliate of any Underwriter or by or on
behalf of the Selling Shareholders or the Company, its officers or directors or
any person controlling the Selling Shareholders or the Company and (iii)
acceptance of and payment for any of the Shares.
11. Directed Share Program Indemnification. (a) The Company agrees to
indemnify and hold harmless Xxxxxx Xxxxxxx, each person, if any, who controls
Xxxxxx Xxxxxxx within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and each affiliate of Xxxxxx Xxxxxxx within the
meaning of Rule 405 of the Securities Act ("XXXXXX XXXXXXX ENTITIES") from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (i) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
material prepared by or with the consent of the Company for distribution to
Participants in connection with the Directed Share Program or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; (ii)
caused by
29
the failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii) related to, arising out of, or
in connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
Xxxxxx Xxxxxxx Entities.
(b) In case any proceeding (including any governmental investigation) shall
be instituted involving any Xxxxxx Xxxxxxx Entity in respect of which indemnity
may be sought pursuant to Section 11(a), the Xxxxxx Xxxxxxx Entity seeking
indemnity, shall promptly notify the Company in writing and the Company, upon
request of the Xxxxxx Xxxxxxx Entity, shall retain counsel reasonably
satisfactory to the Xxxxxx Xxxxxxx Entity to represent the Xxxxxx Xxxxxxx Entity
and any others the Company may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any Xxxxxx Xxxxxxx Entity shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Xxxxxx Xxxxxxx Entity unless (i) the Company shall have agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Company and the Xxxxxx
Xxxxxxx Entity and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The
Company shall not, in respect of the legal expenses of the Xxxxxx Xxxxxxx
Entities in connection with any proceeding or related proceedings 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 Xxxxxx Xxxxxxx Entities. Any such
separate firm for the Xxxxxx Xxxxxxx Entities shall be designated in writing by
Xxxxxx Xxxxxxx. The Company 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 judgment for the plaintiff, the Company agrees to
indemnify the Xxxxxx Xxxxxxx Entities from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time a Xxxxxx Xxxxxxx Entity shall have requested the Company to
reimburse it for fees and expenses of counsel as contemplated by the second and
third sentences of this paragraph, the Company agrees that it 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 Company
of the aforesaid request and (ii) the Company shall not have reimbursed the
Xxxxxx Xxxxxxx Entity in accordance with such request prior to the date of such
settlement. The Company shall not, without the prior written consent of Xxxxxx
Xxxxxxx, effect any settlement of any pending or threatened proceeding in
respect of which any Xxxxxx Xxxxxxx Entity is or could have been a party and
indemnity could have been sought hereunder by such Xxxxxx Xxxxxxx Entity, unless
such settlement includes an unconditional release of the Xxxxxx Xxxxxxx Entities
from all liability on claims that are the subject matter of such proceeding.
30
(c) To the extent the indemnification provided for in Section 11(a) is
unavailable to a Xxxxxx Xxxxxxx Entity or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then the Company in lieu of
indemnifying the Xxxxxx Xxxxxxx Entity thereunder, shall contribute to the
amount paid or payable by the Xxxxxx Xxxxxxx Entity 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
Xxxxxx Xxxxxxx Entities on the other hand from the offering of the Directed
Shares or (ii) if the allocation provided by clause 11(c)(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 11(c)(i) above but also the
relative fault of the Company on the one hand and of the Xxxxxx Xxxxxxx Entities
on the other hand in connection with any 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 Xxxxxx Xxxxxxx Entities on the other hand in connection with
the offering of the Directed Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Directed Shares (before
deducting expenses) and the total underwriting discounts and commissions
received by the Xxxxxx Xxxxxxx Entities for the Directed Shares, bear to the
aggregate Public Offering Price of the Directed Shares. If the loss, claim,
damage or liability is caused by an untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact, the
relative fault of the Company on the one hand and the Xxxxxx Xxxxxxx Entities on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement or the omission or alleged omission
relates to information supplied by the Company or by the Xxxxxx Xxxxxxx Entities
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(d) The Company and the Xxxxxx Xxxxxxx Entities agree that it would not be
just or equitable if contribution pursuant to this Section 11 were determined by
pro rata allocation (even if the Xxxxxx Xxxxxxx Entities 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 Section 11(c). The amount
paid or payable by the Xxxxxx Xxxxxxx Entities as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by the Xxxxxx Xxxxxxx
Entities in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 11, no Xxxxxx Xxxxxxx Entity
shall be required to contribute any amount in excess of the amount by which the
total price at which the Directed Shares distributed to the public were offered
to the public exceeds the amount of any damages that such Xxxxxx Xxxxxxx Entity
has otherwise been required to pay. The remedies provided for in this Section 11
are
31
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(e) The indemnity and contribution provisions contained in this Section 11
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Xxxxxx Xxxxxxx Entity or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Directed Shares.
12. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market,
(ii) trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a material disruption in
securities settlement, payment or clearance services in the United States shall
have occurred, (iv) any moratorium on commercial banking activities shall have
been declared by Federal or New York State authorities or (v) there shall have
occurred any outbreak or escalation of hostilities, or any change in financial
markets or any calamity or crisis that, in your judgment, is material and
adverse and which, singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Shares on the terms and in the manner
contemplated in the Time of Sale Prospectus or the Prospectus.
13. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 13 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date,
32
any Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and
the aggregate number of Firm Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Firm Shares to be purchased on
such date, and arrangements satisfactory to you, the Company and the Selling
Shareholders for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter, the Company or the Selling Shareholders. In
any such case either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement, in the Time of Sale
Prospectus, in the Prospectus or in any other documents or arrangements may be
effected. If, on an Option Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased on such
Option Closing Date, the non-defaulting Underwriters shall have the option to
(i) terminate their obligation hereunder to purchase the Additional Shares to be
sold on such Option Closing Date or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company or the Selling
Shareholders to comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason the Company or the Selling Shareholders
shall be unable to perform its obligations under this Agreement, the Company
will reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering contemplated
hereunder.
14. Entire Agreement. (a) This Agreement, together with any contemporaneous
written agreements and any prior written agreements (to the extent not
superseded by this Agreement) that relate to the offering of the Shares,
represents the entire agreement between the Company and the Selling
Shareholders, on the one hand, and the Underwriters, on the other, with respect
to the preparation of any preliminary prospectus, the Time of Sale Prospectus,
the Prospectus, the conduct of the offering, and the purchase and sale of the
Shares.
(b) The Company acknowledges that in connection with the offering of the
Shares: (i) the Underwriters have acted at arms length, are not agents of, and
owe no fiduciary duties to, the Company or any other person, (ii) the
33
Underwriters owe the Company only those duties and obligations set forth in this
Agreement and prior written agreements (to the extent not superseded by this
Agreement), if any, and (iii) the Underwriters may have interests that differ
from those of the Company. The Company waives to the full extent permitted by
applicable law any claims it may have against the Underwriters arising from an
alleged breach of fiduciary duty in connection with the offering of the Shares.
15. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
16. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
17. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
18. Notices. All communications hereunder shall be in writing and effective
only upon receipt and if to the Underwriters shall be delivered, mailed or sent
to you in care of Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Equity Syndicate Desk, with a copy to the Legal
Department, and Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Syndicate Registration (fax: 000-000-0000), with a copy, in
the case of any notice pursuant to Section 8(c), to the Director of Litigation,
Office of the General Counsel, Xxxxxx Brothers Inc., 000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: 000-000-0000); if to the Company shall be
delivered, mailed or sent to VeraSun Energy Corporation, 000 00xx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxx 00000, Attention: President (fax: 000-000-0000), with a
copy to Xxxx X. Xxxxxx, Stoel Rives LLP, 000 XX Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxx, Xxxxxx 00000 (fax: 000-000-0000); and if to the Selling Shareholders
shall be delivered, mailed or sent, in the case of Bluestem Funds to managing
member, Bluestem Capital Company, L.L.C., 000 X. Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000 (fax: 000-000-0000), with a copy to Xxxx X.
Xxxxxx, Xxxxx, Xxxxx & Xxxxxx, P.C., 000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxx
Xxxxx, Xxxxx Xxxxxx 00000 (fax: 000-000-0000), in the case of Capitaline
Renewable Energy, LP, to 000 Xxxx Xxx., Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxx
00000, in the case of Xxxxxx Xxxxx to him at 000 Xxxxxx Xxxxxx, Xxxxxxx Xxxxx,
Xxxxxxxxx 00000 and in the case of Teachers Insurance and Annuity Association of
America, to it at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, attention: ____________.
34
Accepted as of the date hereof Very truly yours,
Xxxxxx Xxxxxxx & Co. Incorporated VERASUN ENERGY CORPORATION
Xxxxxx Brothers Inc.
Acting severally on behalf of By:
themselves and the several ------------------------------------
Underwriters named in Schedule I Name:
hereto. ----------------------------------
Title:
---------------------------------
By: Xxxxxx Xxxxxxx & Co. Incorporated The Selling Shareholders named in
Schedule II hereto, acting severally
By: By:
--------------------------------- ------------------------------------
Name: Attorney-in Fact
-------------------------------
Title:
------------------------------
By: Xxxxxx Brothers Inc.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
35
SCHEDULE I
NUMBER OF FIRM SHARES TO BE
UNDERWRITER PURCHASED
----------- ---------------------------
Xxxxxx Xxxxxxx & Co. Incorporated....
Xxxxxx Brothers Inc..................
X.X. Xxxxxxx & Sons, Inc.............
Total:............................
I-1
SCHEDULE II
ADDITIONAL
SELLING SHAREHOLDER FIRM SHARES SHARES
------------------- ----------- ----------
Bluestem Ethanol L.L.C............................
Bluestem Ethanol II, L.L.C........................
Bluestem Capital Partners III, Limited
Partnership....................................
Bluestem Growth & Income Fund L.L.C...............
Capitaline Renewable Energy, LP...................
Xxxxxx Xxxxx......................................
Teachers Insurance and Annuity Association of
America........................................
Total:.........................................
II-1
SCHEDULE III
TIME OF SALE PROSPECTUS
1. Preliminary Prospectus issued __________, 2006
2. [identify all free writing prospectuses filed by the Company under Rule
433(d) of the Securities Act]
3. [free writing prospectus containing a description of terms that does not
reflect final terms, if the Time of Sale Prospectus does not include a
final term sheet]
4. [orally communicated pricing information to be included on Schedule II if a
final term sheet is not used]
III-1
SCHEDULE IV
1. Indenture, dated as of December 21, 2005, between the Company, as Issuer,
VeraSun Aurora Corporation, VeraSun Fort Dodge, LLC, VeraSun Xxxxxxx City,
LLC and VeraSun Marketing, LLC, as Subsidiary Guarantors, and Xxxxx Fargo,
N.A., as Trustee.
2. Registration Rights Agreement, dated as of December 21, 2005, by and among
the Company, VeraSun Aurora Corporation, VeraSun Fort Dodge, LLC, VeraSun
Xxxxxxx City, LLC, VeraSun Marketing LLC, Xxxxxx Brothers Inc. and Xxxxxx
Xxxxxxx & Co. Incorporated.
3. Revolving Credit Agreement, dated as of December 21, 2005, among the
Company, First National Bank of Omaha, VeraSun Aurora Corporation, VeraSun
Fort Dodge, LLC and VeraSun Xxxxxxx City, LLC.
4. Shareholder Agreement, dated November 30, 2005, by and among the Company,
the Shareholders of the Company and Teachers' Insurance and Annuity
Association.
5. Warrant Agreement, dated October 14, 2005, between the Company and Teachers
Insurance and Annuity Association of America (including Warrant to Purchase
Common Stock of the Company issued to Teachers Insurance Annuity
Association of America).
6. Amendment to Warrant Agreement, dated March 28, 2006, between the Company
and Teachers Insurance and Annuity Association of America.
7. Ethanol Marketing Agreement, dated October 14, 2002, between Aventine
Renewable Energy, Inc. (f/k/a Xxxxxxxx Ethanol Services, Inc.) and VeraSun
Aurora Corporation (f/k/a VeraSun Energy Corporation), as amended on
December 8, 2003 and February 22, 2005.
8. Ethanol Marketing Agreement, dated February 22, 2005, between Aventine
Renewable Energy, Inc. and VeraSun Fort Dodge, LLC.
9. VeraSun Energy Corporation 2003 Stock Incentive Plan.
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EXHIBIT A
[FORM OF LOCK-UP LETTER]
_____________, 2006
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentleman:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX
XXXXXXX") and Xxxxxx Brothers Inc. ("XXXXXX BROTHERS") propose to enter into an
Underwriting Agreement (the "UNDERWRITING AGREEMENT") with VeraSun Energy
Corporation, a South Dakota corporation (the "COMPANY") and specified selling
shareholders, providing for the public offering (the "PUBLIC OFFERING") by the
several Underwriters, including Xxxxxx Xxxxxxx and Xxxxxx Brothers (the
"UNDERWRITERS"), of shares (the "SHARES") of the common stock, $0.01 par value
per share, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx and
Xxxxxx Brothers on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, 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, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, 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. The foregoing sentence shall not apply
to transactions relating to (a) shares of Common Stock or other securities
acquired in open market transactions after the completion of the Public
Offering, provided that no filing
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under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE Act"), shall be required or shall be voluntarily made in connection
with subsequent sales of Common Stock or other securities acquired in such open
market transactions, (b) transfers of shares of Common Stock or any security
convertible into Common Stock as a bona fide gift, (c) transfers of shares of
Common Stock to any trust, partnership or limited liability company solely for
the direct or indirect benefit of the undersigned or the immediate family of the
undersigned provided that any such transfer shall not involve a disposition for
value, (d) transfers of shares of Common Stock to any beneficiary of the
undersigned pursuant to a will or other testamentary document or applicable laws
of descent, (e) transfers of shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock to the Company,
(f) distributions of shares of Common Stock or any security convertible into
Common Stock to limited partners or stockholders of the undersigned provided
that any such transfer shall not involve a disposition for value, (g) transfers
of shares of Common Stock to any wholly-owned subsidiary of the undersigned or
to the parent corporation of the undersigned or any wholly-owned subsidiary of
such parent corporation provided that any such transfer shall not involve a
disposition for value, or (h) transfers of shares of Common Stock with the prior
written consent of Xxxxxx Xxxxxxx and Xxxxxx Brothers, provided that in the case
of any transfer or distribution pursuant to clause (b), (c), (d), (e), (f) or
(g) of this lock-up letter, (i) each donee, distributee or transferee shall sign
and deliver a lock-up letter substantially in the form of this letter and (ii)
no filing under Section 16(a) of the Exchange Act, reporting a reduction in
beneficial ownership of shares of Common Stock, shall be required or shall be
voluntarily made during the restricted period referred to in the foregoing
sentence. For purposes of this lock-up letter, "immediate family" shall mean any
relationship by blood, marriage, domestic partnership or adoption, not more
remote than first cousin. In addition, the undersigned agrees that, without the
prior written consent of Xxxxxx Xxxxxxx and Xxxxxx Brothers on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
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. The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the undersigned's shares of Common Stock except in compliance with
the foregoing restrictions.
If:
(1) during the last 17 days of the restricted period the Company issues a
earnings release or material news or a material event relating to the Company
occurs; or
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(2) prior to the expiration of the restricted period, the Company announces
that it will release earnings results during the 16-day period beginning on the
last day of the restricted 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.
The undersigned shall not engage in any transaction that may be restricted
by this agreement during the 34-day period beginning on the last day of the
initial restricted period unless the undersigned requests and receives prior
written confirmation from the Company or Xxxxxx Xxxxxxx and Xxxxxx Brothers that
the restrictions imposed by this agreement have expired.
This lock-up letter shall be terminated (i) if for any reason the
Underwriting Agreement is terminated prior to the closing of the Public Offering
or (ii) if the Company (a) notifies the undersigned and Xxxxxx Xxxxxxx and
Xxxxxx Brothers that it will not be proceeding with the Public Offering prior to
the filing of the Registration Statement or (b) once the Registration Statement
has been filed, publicly announces that it will not be proceeding with the
Public Offering.
The undersigned understands that the Company and the Underwriters are
relying upon this agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this agreement is irrevocable
and shall be binding upon the undersigned's heirs, legal representatives,
successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
With respect to the Public Offering, the undersigned waives all
registration rights relating to the registration under the Securities Act of any
Common Stock owned either of record or beneficially by the undersigned,
including without limitation, all registration rights under the Shareholder
Agreement dated November 30, 2005 and the notice required thereunder.
Very truly yours,
----------------------------------------
(Name)
----------------------------------------
(Address)
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EXHIBIT B
In relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive, each underwriter represents and agrees
that with effect from and including the date on which the Prospectus Directive
is implemented in that Member State it has not made and will not make an offer
of shares to the public in that Member State, except that it may, with effect
from and including such date, make an offer of shares to the public in that
Member State:
(a) at any time to legal entities which are authorized or regulated to
operate in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
(b) at any time to any legal entity which has two or more of (1) an
average of at least 250 employees during the last financial year; (2) a
total balance sheet of more than E443,000,000; and (3) an annual net
turnover of more thaN E450,000,000, as shown in its last annual or
consolidated accounts; or
(c) at any time in any other circumstances which do not require the
publication by us of a prospectus pursuant to Article 3 of the Prospectus
Directive.
For the purposes of the above, the expression an "offer of shares to the
public" in relation to any shares in any Member State means the communication in
any form and by any means of sufficient information on the terms of the offer
and the shares to be offered so as to enable an investor to decide to purchase
or subscribe the shares, as the same may be varied in that Member State by any
measure implementing the Prospectus Directive in that Member State and the
expression Prospectus Directive means Directive 2003/71/EC and includes any
relevant implementing measure in that Member State.
Each underwriter represents and agrees that it has only communicated or
caused to be communicated and will only communicate or cause to be communicated
an invitation or inducement to engage in investment activity (within the meaning
of Section 21 of the Financial Services and Markets Act 2000) in connection with
the issue or sale of the shares in circumstances in which Section 21(1) of such
Act does not apply to us and it has complied and will comply with all applicable
provisions of such Act with respect to anything done by it in relation to any
shares in, from or otherwise involving the United Kingdom.
Each underwriter has represented and agreed that:
(1) it has not offered or sold and will not offer or sell in Hong
Kong, by means of any document, any shares other than (a) to
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"professional investors" as defined in the Securities and Futures
Ordinance (Cap. 571) of Hong Kong and any rules made under that
Ordinance; or (b) in other circumstances which do not result in the
document being a "prospectus" as defined in the Companies Ordinance
(Cap. 32) of Hong Kong or which do not constitute an offer to the
public within the meaning of that Ordinance; and
(2) it has not issued or had in its possession for the purposes of
issue, and will not issue or have in its possession for the purposes
of issue, whether in Hong Kong or elsewhere, any advertisement,
invitation or document relating to the shares, which is directed at,
or the contents of which are likely to be accessed or read by, the
public of Hong Kong (except if permitted to do so under the securities
laws of Hong Kong) other than with respect to shares which are or are
intended to be disposed of only to persons outside Hong Kong or only
to "professional investors" as defined in the Securities and Futures
Ordinance (Cap. 571) of Hong Kong and any rules made under that
Ordinance.
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