Exhibit No. 1
IBF VI - Guaranteed Income Fund
Form SB-2, Amend. No. 1
File No. 333-71091
IBF VI - PARTICIPATING INCOME FUND
(A Delaware corporation)
DEALER-MANAGER AGREEMENT
CLASS A 10% INCOME PARTICIPATING NOTES
$50,000,000
Xxxxxxx & Company Securities, Inc. _________________, 1999
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxxxxx:
IBF VI - Participating Income Fund (the "Company"), a
Delaware corporation, desires to offer for sale to the public
$50,000,000 in principal amount of its Class A 10% Income
Participating Notes ("Notes"). The Company desires to offer the
Notes for sale through Xxxxxxx & Company Securities, Inc. (the
"Dealer-Manager"). The offering will be undertaken by the Dealer-
Manager as agent for the Company on a "best efforts, $500,000
Notes minimum-$50,000,000 Notes maximum" basis so that in the
event $500,000 for the purchase of Notes is not received within
the agreed period, no Notes will be sold, and the Dealer-Manager
will not be entitled to any compensation. On these premises, we
set forth the terms of our proposed agreement as follows:
1. Appointment of Dealer-Manager. The Company hereby
appoints the Dealer-Manager, on all the terms and conditions
hereinafter set forth, as the Company's exclusive agent to use
its best efforts to sell on behalf of the Company the Notes.
2. Representations and Warranties of the Company. As an
inducement to, and to obtain the reliance of, the Dealer-Manager
in connection herewith, the Company represents, warrants, and
agrees with the Dealer-Manager as follows:
(a) The Company has prepared and filed or will prepare
and file with the United States Securities and Exchange
Commission (the "Commission"), a registration statement on
form SB-2, including a prospectus, relating to the Notes in
accordance with section 5 of the Securities Act of 1933, as
amended (the "Securities Act"), and the rules and
regulations of the Commission thereunder. As used in this
Agreement, the term "Registration Statement" means such
Registration Statement, including exhibits, financial
statements, and schedules, as amended, when it becomes
effective, and the term "Prospectus" means the Prospectus
filed with the Registration Statement. (The Registration
Statement and Prospectus, as defined herein, are hereinafter
E-1
collectively referred to as the "Filing.") The Company will
utilize its best efforts to cause the Filing to become
effective and to maintain its effectiveness during the term
hereof.
(b) The Commission has not issued and, to the
knowledge and belief of the Company, does not have cause to
issue an order preventing or suspending the use of the
Filing; the Filing conforms or shall conform in all material
respects with the requirements of the Securities Act and the
rules and regulations of the Commission promulgated
thereunder (the "Regulations") and does not include any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading; and on the Effective Date (as hereinafter
defined) and at all times subsequent thereto up to the
Termination Date (as hereinafter defined), the Filing and
any amendment or supplement thereto will fully comply with
the provisions of the Securities Act and the Regulations and
will not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the
statements made, in light of the circumstances under which
they are made, not misleading; provided, that the foregoing
representations and warranties shall not apply to statements
in or omissions from the Filing, or any amendments or
supplements thereto, made in reliance on and in conformity
with information furnished herein or in writing to the
Company by or on behalf of the Dealer-Manager expressly for
use therein.
(c) The Company has no subsidiaries.
(d) Except as reflected in or contemplated by the
Filing, since the respective dates as of which information
is given in the Filing, there has not been and on the
Effective Date there will not have been, any material
adverse change in the condition of the Company, financial or
otherwise, or in the results of its operations.
(e) The authorized capital stock of the Company
consists of 1,000 shares of common stock, par value $1.00,
of which 1,000 shares are issued and outstanding. On the
date of issuance, the Notes will be duly and validly
authorized and, when issued and paid for in accordance with
this Agreement and the Indenture dated _______________, 1999
("Indenture"), will be validly issued, fully paid, and non-
assessable, and will conform to the description thereof
contained in the Filing; and the execution and delivery of,
and compliance with, this Agreement and the Indenture and
the issuance of the Notes will not conflict or constitute a
breach of or default under the certificate of incorporation
or bylaws of the Company, any indenture, agreement, or other
instrument by which the Company is bound, any order, decree,
rule, or regulation of any court, or any law or
administrative regulation applicable to the Company.
(f) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the state of Delaware, with an authorized and
outstanding capitalization as set forth in the Filing and
with full corporate power and authority to carry on the
business in which it is now engaged. The Company is
qualified or licensed and in good standing as a foreign
corporation in each jurisdiction in which the ownership or
leasing of any properties or the character of its operations
requires such qualification or licensing. The Company has
all requisite corporate power and authority and all material
and necessary authorizations, approvals, orders, licenses,
certificates, and permits of and from all governmental
regulatory officials and bodies to own or lease its
properties and conduct its business as described in the
Prospectus, and the Company is doing business in strict
compliance with all such authorizations, approvals, orders,
licenses, certificates, and permits and all federal, state,
and local laws, rules, and regulations concerning the
business in which the Company is engaged. The disclosures
in the Filing concerning the effects of federal, state, and
local regulation on the Company's business as currently
E-2
conducted and as contemplated are correct in all material
respects and do not omit to state a material fact. The
Company has all corporate power and authority to enter into
this Agreement and the Indenture and to carry out the
provisions and conditions hereof and thereof, and all
consents, authorizations, approvals, and orders required in
connection therewith have been obtained or will have been
obtained prior to the time of closing as provided in
subparagraph 3(f) hereto. No consent, authorization, or
order of, and no filing with any court, governmental agency,
or other body is required for the issuance of the Notes
pursuant to the Filing, except with respect to applicable
federal and state securities laws.
(g) The Filing contains an audited balance sheet of
the Company as of April 30, 1999, and the related audited
statement of stockholders' equity of the Company, including
the notes thereto, together with the opinion of Radin, Glass
& Co., LLP, independent certified public accountants, with
respect to the audited balance sheet and related audited
statements. Such financial statements have been prepared in
accordance with generally accepted accounting principles
consistently followed throughout the periods indicated,
except as otherwise indicated in the notes thereto. The
balance sheet presents fairly as of its date the financial
condition of the Company. The Company did not have, as of
the date of such balance sheet, except as and to the extent
reflected or reserved against therein (including the notes
thereto), any liabilities or obligations (absolute or
contingent) of a nature customarily reflected in a balance
sheet or the notes thereto prepared in accordance with
generally accepted accounting principles. The statement of
stockholders' equity presents fairly the information that
should be presented therein in accordance with generally
accepted accounting principles.
(h) Except as set forth in the Filing, there is no
action, suit, or proceeding before any court or government
agency, authority, or body pending or, to the knowledge of
the Company, threatened which might result in judgments
against the Company which are not adequately covered by
insurance, or which is pending or, to the knowledge of the
Company, threatened by any public body, agency, or
authority, which might result in any material adverse change
in the condition (financial or otherwise), business, or
prospects of the Company or would materially affect its
properties or assets.
(i) The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated and
compliance with the terms and provisions hereof will not
conflict with, or constitute a breach of, any of the terms,
provisions, or conditions of any agreement or instrument to
which the Company is a party, nor will any one nor any
combination of the foregoing have such a result.
(j) The Company has the legal right, power, and
authority to enter into this Agreement, and the execution,
delivery, and, except as otherwise indicated in this
Agreement, performance thereof by the Company, do not
require the consent or approval of any governmental body,
agency, or authority which has not been obtained.
(k) The Company is not a party to any material
contract (meaning thereby a contract materially affecting
its business or properties) that is not referred to in the
Filing. No default of any material significance exists in
the due performance and observance by the Company of any
term, covenant, or condition of any such contract; all such
contracts are in full force and effect and are binding on
the parties thereto in accordance with their terms; and, to
the knowledge of the Company, no other party to any such
material contract has threatened or instituted any action or
proceeding wherein the Company is alleged to be in default
thereunder.
E-3
(l) No stock options or warrants are or will be
outstanding or issued during the period covered by this
Agreement, except as set forth in the Filing.
(m) The Company is not delinquent in the filing of any
tax return or in the payment of any taxes, knows of no
proposed redetermination or assessment of taxes, and has
paid or provided for adequate reserves for all known tax
liabilities.
3. Employment of the Dealer-Manager. On the foregoing
representations, agreements, and warranties and subject to the
terms and conditions of this Agreement:
(a) The Company hereby employs the Dealer-Manager as
exclusive agent to sell for the Company's account the Notes.
The Dealer-Manager agrees to use its best efforts as agent,
promptly following the receipt of written notice of the
Effective Date of the Registration Statement, to offer for
sale the Notes, subject to the terms, provisions, and
conditions hereinafter set forth.
(b) In the event the Dealer-Manager does not find
subscribers for Notes having a total aggregate purchase
price of $500,000 within three months following the
Effective Date (unless extended by agreement of the Company
and Dealer-Manager for an additional period not to exceed
three months), this Agreement shall terminate, and neither
party to this Agreement shall have any obligation to the
other party hereunder. Appropriate arrangements for placing
the funds received for the Notes in escrow until a total of
$500,000 in cash has been received shall be made prior to
the commencement of the offering hereunder, with provision
for refund to the purchasers as set forth above or for
delivery to the Company of the net proceeds therefrom if
$500,000 or more in cash has been received from the sale of
Notes hereunder within the specified time period.
(c) The Notes shall be offered to the general public
at face value without discount; provided, that the Dealer-
Manager may, at its discretion, waive its commission under
subsection 3(e), below, and offer Notes at face value less
the amount of the commission so waived.
(d) The Dealer-Manager is granted irrevocable
authority as agent for the Company to declare any contract
to purchase Notes offered to the public hereunder in default
if the Notes are not paid for in cash within seven business
days after the contract date. The Dealer-Manager shall
instruct investors to make all checks tendered as payment
for the Notes payable to "CSTTC, Escrow Account" and shall
deposit promptly, but in no event later than noon of the
next business day following receipt, the gross proceeds from
sales of Notes in the account with the escrow agent until
$500,000 (or such other amount as may be required by the
securities commission of any state in which the Notes are
offered and sold) in good funds is received from said sales,
and, thereafter, the escrow account shall continue to be
used as a clearing account into which all checks for the
payment for securities shall likewise be promptly deposited.
Subject to and after the sale of Notes with a minimum public
offering price of $500,000 and the release by the escrow
agent of such funds under the terms of the escrow agreement,
as funds are collected and subscriptions accepted by the
Company, the net proceeds (gross proceeds minus the Dealer-
Manager's sales commissions and non-accountable expense
allowance as provided herein) shall be promptly paid to the
Company and the Dealer-Manager's sales commission and non-
accountable expense allowance shall be paid to it.
(e) As its compensation, and subject to the sale of
$500,000 of Notes, the Dealer-Manager shall be entitled to
receive a commission of 8% of the principal amount of the
Notes sold and for which payment is made to the Company. In
addition, the Dealer-Manager will receive a nonaccountable
expense allowance of 0.775% of the gross proceeds of the
E-4
offering less $5,000 for expenses incurred in connection
with the offering. Finally, the Dealer-Manager shall be
entitled to receive 2.5% of the Company's annual Net Income
for each calendar year through 2005. For purposes of this
provision, Net Income shall be calculated in the same manner
as set forth in the Indenture. In the event the Dealer-
Manager does not find subscribers for Notes having a total
aggregate purchase price of $500,000 within three months
following the Effective Date (unless extended by agreement
of the Company and Dealer-Manager for an additional period
not to exceed three months), the Dealer-Manager will be
reimbursed only for its actual accountable out of pocket
expenses.
(f) The Company agrees to issue or have issued Notes
in such names and denominations as may be specified by the
Dealer-Manager and to deliver certificates representing the
Notes to the purchasers in accordance with the Indenture
against payment of the purchase price of the Notes net of
the Dealer-Manager's sales commissions (including the Dealer-
Manager's expense allowance), as provided herein. Such
payment and delivery shall be at such place and at such date
and time within 21 days following the sale of the minimum
amount of Notes as provided in subsection 3(b) hereof as
shall be agreed on by the Dealer-Manager and the Company
(the "time of closing"). Thereafter, further payments and
deliveries shall be made at such address and at such
subsequent times and dates similarly agreed on so as to
effect the prompt transmittal of funds and of certificates
for Notes to the purchasers (a "subsequent time of
closing"). All requisitions for Notes by the Dealer-Manager
shall be in writing and shall be given to the Company before
the delivery date.
(g) The Dealer-Manager is hereby authorized to
organize a selling group of participating dealers consisting
exclusively of members of the National Association of
Securities Dealers, Inc., or foreign dealers who are not
eligible for membership in said association. Such
participating dealers are to act as agents and shall be
allowed to purchase on an equal basis from the Dealer-
Manager at a price which provides a concession out of the
Dealer-Manager's commissions in such amount as the Dealer-
Manager may determine.
(h) The Company has appointed Continental Stock
Transfer & Trust Company, 0 Xxxxxxxx, Xxx Xxxx, XX 00000, as
Trustee under the Indenture and registrar of the Notes.
4. Representations and Warranties of the Dealer-Manager. As an
inducement to, and to obtain the reliance of, the Company in
connection herewith, the Dealer-Manager represents, warrants, and
agrees with the Company as follows:
(a) The Dealer-Manager is duly registered as a
securities broker-dealer in accordance with the Securities
Exchange Act of 1934, as amended.
(b) The Dealer-Manager will not publish, issue, or
circulate or authorize the publication, issuance, or
circulation of any circular, notice, or advertisement which
offers the Notes for sale which shall not have previously
been approved by the Company and its counsel, except for so-
called "tombstone" advertisements and which has not been
approved by the Commission prior to its use, if such prior
approval is required.
(c) The Dealer-Manager is in good standing and in full
and current compliance in all material respects with the
rules of the National Association of Securities Dealers,
Inc.
(d) The Dealer-Manager shall confirm sales to
customers only in those states in which it is licensed to do
so as a securities broker or dealer and shall ensure that
all participating dealers similarly confirm sales to
E-5
customers only in states in which they are duly licensed to
do so. The Dealer-Manager and participating dealers in the
distribution of the offering will comply with sections 8,
24, 25 and 36 of Article III of the NASD Rules of Fair
Practice and rule 15c2-8 promulgated under the Securities
Exchange Act of 1934, as amended.
5. Covenants by the Company. In further consideration of
the agreements by the Dealer-Manager herein contained, the
Company covenants as follows:
(a) At least 48 hours prior to submission of the
Filing or any amendment thereto to the Commission, the
Dealer-Manager shall be provided with a copy of such Filing
or amendment, and no such Filing will be made to which the
Dealer-Manager shall object within the 48 hour period.
(b) The Company will use its best efforts to cause the
Registration Statement to become effective and will not at
any time, whether before, on, or after the Effective Date,
file any amendments to the Filing or supplement thereto
without first obtaining the Dealer-Manager's approval. Such
approval shall be obtained by compliance with subsection (a)
above. Said Filings or any amendments or supplements
thereto shall be in compliance with the Securities Act and
the Regulations of the Commission to the best of the
Company's knowledge, information, and belief.
(c) As soon as the Company is advised thereof, the
Company will advise the Dealer-Manager and confirm the
advice in writing (i) as to when the Registration Statement
has become effective; (ii) of any request made by the
Commission for amendment of or supplement to the Filing, or
for additional information with respect thereto; and (iii)
of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement
or of any amendment thereto or the initiation, or threat of
initiation, of any proceedings for such purpose, and the
Company will use its best efforts to prevent the issuance of
any such order and to obtain as soon as possible the lifting
thereof, if issued.
(d) The Company will deliver to the Dealer-Manager
prior to the Effective Date, copies of the preliminary
prospectus and, on the Effective Date of the Registration
Statement, without charge and from time to time thereafter,
copies of the Prospectus and amendments thereto as required
by law to be delivered in connection with sales, in such
quantities as the Dealer-Manager may reasonably request.
(e) The Company will deliver to the Dealer-Manager,
without charge, one manually executed copy of the
Registration Statement, together with all required exhibits
as filed and all amendments thereto with exhibits which have
not previously been furnished to the Dealer-Manager, and
will deliver to the Dealer-Manager, without charge, such
reasonable number of copies of the Registration Statement
and Prospectus (excluding exhibits) and all amendments
thereto as the Dealer-Manager may reasonably request.
(f) Prior to the Termination Date if, in the opinion
of the Dealer-Manager, any statements are contained in the
Filing which are misleading or inaccurate in light of the
circumstances under which they are made, the Dealer-Manager
may require the Company to amend or supplement the Filing to
correct said statements and may request such reasonable
number of copies of any amended or supplemented Filing as
may be necessary to comply with the Securities Act and
Regulations.
(g) The Company will have used and will use its best
efforts to secure on or before the Effective Date of the
Registration Statement, and to maintain for such period as
may be required for distribution, such exemptions,
E-6
registrations and qualifications of the Notes as will permit
the public offering thereof under the "Blue Sky Laws" of
such states as the Dealer-Manager and the Company shall
agree upon; provided, that no such qualification shall be
required if, as a result thereof, the Company would be made
subject to qualify for authority to do business as a foreign
corporation in a jurisdiction where it is not now so subject
or so qualified. The Company's counsel shall furnish copies
of any such filings or other materials submitted in
connection with this subparagraph to the Dealer-Manager and
shall notify the Dealer-Manager, in writing, of those states
in which the Notes may be offered and sold pursuant to the
terms hereof. The Dealer-Manager agrees to cooperate in
securing such exemptions, registrations and qualifications
in accordance with the terms hereof.
(h) The Company will pay all costs and expenses
incident to the performance of its obligations under this
Agreement, including (i) all expenses incident to its
issuance and delivery of the Notes; (ii) the fees and
expenses incident to the preparation, printing, and filing
of the Filing (including all exhibits thereto) with the
Commission, the various "blue sky" agencies and the National
Association of Securities Dealers, Inc.; and (iii) the costs
of furnishing to the Dealer-Manager copies of the Filing and
preliminary and definitive prospectus. The Company shall
not, however, be required to pay for transfer tax stamps on
any sales of the Notes which the Dealer-Manager may make or
to pay for any of the Dealer-Manager's expenses or those of
any other dealers other than as hereinabove set forth.
(i) For a period of six years from the Effective Date,
the Company will furnish the Dealer-Manager (i) all reports
and financial statements, if any, the Company files with or
furnishes to the Commission or any stock exchange on which
the securities of the Company are listed; (ii) such other
periodic and special reports as the Company from time to
time furnishes generally to holders of any class of its
stock; (iii) every press release and every news item and
article with respect to the affairs of the Company which is
released by the Company; and (iv) such additional documents
and information with respect to the affairs of the Company
and any future subsidiaries of the Company as the Dealer-
Manager may from time to time reasonably request.
(j) The Company will mail or otherwise make generally
available to its security holders as soon as practicable,
but in no event more than 15 months after the close of the
fiscal quarter ending after the Effective Date of the
Registration Statement, an earnings statement, which need
not be audited, covering a period of at least 12 months
beginning after the Effective Date of the Registration
Statement.
(k) The Company will, as promptly as practicable after
the end of each fiscal year, release an appropriate report
covering its operations for such year and send to the Dealer-
Manager, to all holders of record of the Company's Notes,
and to recognized statistical services, a report covering
operations for such year, including a balance sheet of the
Company and statements of earnings and of retained earnings,
as examined by the Company's independent accountants.
(l) The Company will apply the net proceeds from the
offering received by it in substantially the manner set
forth in the Prospectus.
(m) The Company will comply with the reporting
requirements to which it is subject pursuant to section
15(d) of the Securities Exchange Act of 1934, as amended.
(n) The Company will, as soon as practicable following
the filing of the Filing with the Commission, make
application for and receive a CUSIP number for its
securities from Standard and Poor's Corporation.
6. Reciprocal Indemnification.
E-7
6. Reciprocal Indemnification.
(a) The Company agrees to indemnify and hold harmless
the Dealer-Manager and any person who may be deemed to
control the Dealer-Manager within the meaning of section 15
of the Securities Act; and
(b) The Dealer-Manager agrees to indemnify and hold
harmless the Company, its directors, such of its officers as
sign the Registration Statement, and any person who may be
deemed to control the Company within the meaning of the
Securities Act;
against any and all losses, claims, damages, or liabilities
whatsoever (including, but not limited to, any and all legal or
other expenses whatsoever reasonably incurred in investigating,
preparing, or defending against any actions or threatened actions
or claims) based on or arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Filing (as from time to time amended or supplemented) or any
application or other document filed in any state in order to
register, qualify, or obtain an exemption for the Notes under the
laws thereof ("blue sky application"), as the case may be, or 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, or any violation by any of the
indemnifying parties of any provision of the Securities Act or
any Regulation, or of common or statutory law, and against any
and all losses, claims, damages, or liabilities whatsoever to the
extent of the aggregate amount paid in settlement of any action,
commenced or threatened, or of any claim whatsoever based on any
such untrue statement or omission or any such violation
(including, but not limited to, any and all legal or other
expenses whatsoever reasonably incurred in investigating,
preparing, or defending against any such actions or claims) if
such settlement is effected with the written consent of any
indemnifying party. The indemnification by the Dealer-Manager
shall extend only to any such statements or omissions made in
reliance on and in conformity with written information furnished
to the Company by the Dealer-Manager or on behalf of the Dealer-
Manager for use in the remaining statements in or omissions from
the Filing or blue sky applications.
Each of the foregoing indemnifications is expressly
conditioned on the indemnifying party being notified by the
person seeking indemnification, by letter or by telegram
confirmed by letter, of any action commenced against such person,
within a reasonable time after such person shall have been served
with the summons or other first legal process giving information
as to the nature and basis of the claim, and in any event at
least ten days prior to the entry of any judgment in such action,
but the failure to give such notice shall not relieve any
indemnifying party of any liability which such party may have to
such person otherwise than on account of this indemnity
agreement. Any party whose indemnification is being relied on
shall assume the defense of any action or claim, including the
employment of counsel and the payment of all expenses. Any
indemnified party shall have the right to separate counsel in any
such action and to participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment thereof shall have
been specifically authorized by the indemnifying party, or (ii)
the indemnifying party shall have failed to assume the defense
and employ counsel.
The indemnifications contained above in this section 6, and
the representations and warranties of the Company set forth in
this Agreement, will remain operative and in full force and
effect, regardless of any investigations made by or on behalf of
the Dealer-Manager or any controlling person thereof, or by or on
behalf of the Company or its directors or officers and will
survive delivery of and payment for the Notes.
7. Conditions to Obligations of the Company. The
obligation of the Company to deliver the Notes being sold by the
Dealer-Manager hereunder is subject to the conditions that (i)
the Registration Statement shall have become effective not later
than 5:00 p.m., Eastern Time, the twenty-fifth business day
E-8
following the date hereof or such later time and date as is
acceptable to the Company, and (ii) no stop order suspending the
effectiveness of the Registration Statement shall have been
issued and shall be in effect at the time of closing or at each
subsequent time of closing, if any, and no proceeding for that
purpose shall have been initiated or, to the knowledge of the
Company, threatened by the Commission, it being understood that
the Company shall use its best efforts to prevent the issuance of
any such stop order and, if one has been issued, to obtain the
lifting thereof. In the event that the Notes (or any part
thereof) are not delivered by virtue of the provisions of clause
(i) of this paragraph, the Company shall not be liable to the
Dealer-Manager.
8. Conditions to the Obligations of the Dealer-Manager.
The several obligations of the Dealer-Manager hereunder are
subject to the accuracy, as of the date hereof, at the time of
closing and at each subsequent time of closing, if any, of the
representations and warranties made herein by the Company; to the
accuracy in all material respects of the statements of the
officers of the Company made pursuant to the provisions hereof;
to the performance by the Company of its obligations hereunder
required on its part to be performed or complied with prior to or
at such time of closing; and to the following additional
conditions:
(a) The Filing shall have fully complied with the
provisions of the Securities Act and the Regulations and
shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided, however, that statements or omissions
in the Filing in reliance on, and in conformity with,
information furnished in writing by or on behalf of the
Dealer-Manager expressly for use therein shall not be
considered within the scope of this provision.
(b) The Dealer-Manager shall not have advised the
Company that the Filing, or any amendment or supplement
thereto, contains an untrue statement of fact which, in the
opinion of the Dealer-Manager, is material or omits to state
a fact which, in the opinion of the Dealer-Manager, is
material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) The Registration Statement shall have become
effective not later than the date specified in section 7, or
such later time and date as is acceptable to the Dealer-
Manager and, prior to the time of closing, no stop order
shall have been issued by the Commission with respect to the
Filing, no proceedings therefor shall have been initiated by
the Commission, and to the knowledge of the Company or the
Dealer-Manager, no such proceedings shall be contemplated by
the Commission.
(d) Each contract to which the Company is a party and
which is filed as an exhibit to the Registration Statement
shall be in full force and effect at such time of closing,
or shall have been terminated, in accordance with its terms;
no party to any such contract shall have given any notice of
cancellation or, to the knowledge of the Company, shall have
threatened to cancel any such contract; and there shall be
no material misstatement in any description of a contract
contained in the Filing.
(e) From the date hereof until the time of closing and
until each subsequent time of closing, if any, no material
litigation or legal proceedings of any nature shall have
been commenced or threatened against the Company, nor any
litigation or legal proceedings which are directed against
the consummation of the transactions herein contemplated and
no substantial change, financial or otherwise, shall have
occurred in or relating to the condition, business, or
E-9
assets of the Company which shall render such condition,
business, or assets substantially less favorable, in the
Dealer-Manager's judgment, than as set forth in the Filing.
(f) The Dealer-Manager shall have been furnished at
the time of closing and at each subsequent time of closing,
if any, with such certificates as the Dealer-Manager may
reasonably request evidencing the continued accuracy in all
material respects of the respective representations and
warranties made herein by the Company and the fulfillment of
the conditions stated above in subsections (a), (c), (d),
and (e) of this section.
(g) The Dealer-Manager shall have received at the time
of closing an opinion of the firm of Xxxxxx, Xxxxxx &
Xxxxxxx, X.X., counsel for the Company, dated as of the time
of closing and in a form and substance satisfactory to
counsel for the Dealer-Manager, to the following effect:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of Delaware, with power and
authority to own its properties, hold its franchises,
and conduct its business, as described in the
Prospectus, and, to the best of the knowledge and
information of said counsel, is duly qualified to do
business and is in good standing in every other
jurisdiction where the location of its properties or
the conduct of its business makes such qualification
necessary;
(ii) The Notes have been duly and validly
authorized and are fully paid and non-assessable; and
the description of the Notes made in the Filing
accurately sets forth matters respecting such
securities required to be set forth therein;
(iii) This Agreement has been duly
authorized, executed, and delivered by the Company and
constitutes a valid and binding agreement of the
Company (except that counsel need render no opinion as
to the enforceability of the indemnification
provisions);
(iv) The certificates to be issued for the
Notes are in proper form;
(v) The final Registration Statement has
become effective under Securities Act and, to the best
knowledge of such counsel, no stop orders suspending
the effectiveness of the offering have been issued and
no proceeding for that purpose has been instituted or
pending or contemplated under the Securities Act; and
(vi) The Registration Statement and each
amendment or supplement thereto (except for the
financial data included therein and any information
furnished to the Company by or on behalf of the Dealer-
Manager), complies as to form in all material respects
with the requirements of the Securities Act and the
rules and regulations of the Commission promulgated
thereunder.
The Dealer-Manager shall have received, at each
subsequent time of closing, if any, an opinion of such
counsel dated as of the time of such closing and addressed
to the Dealer-Manager, confirming their opinion delivered at
the time of closing as to the matters set forth in
subparagraphs (i), (ii), (iii), (iv), (v), and (vi) of
subsection 8(g).
Such counsel may rely, as to matters of local law, on
opinions of local counsel satisfactory to it, and, as to
matters of fact, on affidavits or certificates of officers
of the Company.
E-10
(h) All proceedings taken and to be taken in
connection with the sale of the Notes pursuant to this
Agreement shall be satisfactory as to legal aspects to the
Dealer-Manager.
(i) If any of the foregoing conditions set forth in
subsections (a), (b), (c), (d), and (e), of this section 8
shall not have been fulfilled as above provided at or prior
to the time of the initial public offering as defined below,
the condition of the securities market or any material
factor, whether of an economic, military, or political
nature or otherwise, bearing on the marketability of the
Notes proposed to be sold shall be such as, in the Dealer-
Manager's reasonable judgment, would seriously affect the
offering, sale, or delivery to the public of the Notes, or
would render such delivery at the initial public offering
price impracticable or inadvisable, the Dealer-Manager shall
have the right to terminate its obligations under this
Agreement forthwith, by written or telegraphic notice to the
Company, without any liability on the part of the Dealer-
Manager. The term "initial public offering" means the first
publication authorized by the Dealer-Manager, following
effectiveness of the Filing, of a newspaper advertisement
relating to the Notes to be offered pursuant to this
Agreement, or the first allotments or confirmations by the
Dealer-Manager of any of the Notes to customers or dealers
or others by letter or telegram, whichever shall occur
first. The Dealer-Manager agrees to notify the Company in
writing immediately after the initial public offering shall
have been made.
(j) If at any time prior to the time of closing (i)
trading in securities on the New York Stock Exchange shall
be suspended, (ii) minimum prices shall be established on
said exchange by action of said exchange or the Commission,
(iii) a bank moratorium shall be declared by federal
authorities, (iv) a significant decline in the United States
or international economies results in a domestic securities
market or other commercial conditions in the opinion of the
Dealer-Manager that are materially adverse or detrimental to
the offering, or (v) there shall be an outbreak of
hostilities between the United States and any foreign power
which has resulted in the declaration of a national
emergency or declaration of war or there shall be an
outbreak of civil disorder within the United States which
has resulted in the declaration of a national emergency, the
Dealer-Manager shall have the right to terminate its
obligations under this Agreement forthwith, by written or
telegraphic notice to the Company, without any liability on
the part of the Dealer-Manager.
If the sale of the Notes as herein contemplated shall not be
carried out because of any of the conditions set forth in
sections 7 or 8 hereof shall not have been fulfilled, then the
Company shall not be liable to the Dealer-Manager for lost
profits or expenses incurred by it in connection herewith.
9. Definitions.
(a) "Effective Date" shall mean the date, following
any required waiting period, when the Commission shall have
declared the Registration Statement effective.
(b) "Termination Date" shall mean the date specified
below which first occurs:
(i) December 31, 2000;
(ii) The date on which the escrow period set
forth in subsection 3(b) expires without the minimum
number of Notes having been subscribed to;
(iii) The date on which all offered Notes
are sold.
E-11
10. Miscellaneous Provisions.
(a) This Agreement contains the entire agreement of
the parties hereto and cannot be altered, except in a
writing making specific reference hereto.
(b) The representations and warranties contained
herein shall be effective regardless of any investigations
made or participation in the preparation of the Filing, or
any amendment or supplement thereto and shall survive the
Termination Date and the delivery of and payment for the
Notes contemplated herein for a period of three years.
(c) This Agreement has been and is made solely for the
benefit of the Dealer-Manager, the Company, and each's
respective successors, and, to the extent expressly provided
herein, for the benefit of the directors of the Company, the
officers of the Company who signed the Filing or authorized
the same, the persons controlling the Dealer-Manager or the
Company, and each's respective successors and assigns, and
no other person or persons shall acquire or have any right
under or by virtue of this Agreement. The term "successor"
shall not include any purchaser, as such, of any Notes from
the Dealer-Manager.
(d) Each of the parties hereto respectively warrant
and represent that the persons executing this Agreement on
its behalf have full power and authority to execute,
acknowledge, and deliver this Agreement for and on behalf of
such corporation.
(e) Except as otherwise provided herein, all
communications hereunder shall be in writing and, if sent to
the Dealer-Manager, shall be mailed, delivered, or
telegraphed to it at the following address:
Xxxxxxx & Company Securities, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
or, if sent to the Company, shall be mailed, delivered, or
telegraphed and confirmed to it at the following address:
IBF VI - Participating Income Fund
0000 Xxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
with copies to:
Xxxx X. Xxxxxx, Esq.
Xxxxxx, Xxxxxx & Xxxxxxx, X.X.
0 Xxxx Xxxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
(f) In the event that any party prevails in any action
or suit brought by them to obtain relief for any default
under the terms hereof, the non-prevailing party shall be
liable to the prevailing party for all costs, including
reasonable attorneys' fees, incurred in connection with such
action or suit.
E-12
(g) The representations, warranties, and undertakings
herein on the part of the Company and the Dealer-Manager
shall not create any rights in or duties to any person to a
party to this Agreement. It is expressly understood and
agreed that such persons as shall purchase Notes in the
public offering described herein, shall be entitled to rely
solely and only on the statements and representations made
in the Filing.
(h) This Agreement may be executed in one or more
counterparts, which taken together shall constitute one and
the same instrument.
If the foregoing correctly sets forth our understanding,
please so indicate in the space provided below for that purpose,
whereupon this document shall constitute a binding agreement
among us.
Very truly yours,
IBF VI - Participating Income Fund
By____________________________________
Xxxxx X. Xxxxxxx, President
The foregoing Dealer-Manager Agreement is accepted as of the
date first above written.
Xxxxxxx & Company Securities, Inc.
By____________________________________
Duly Authorized Officer
E-13
