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Exhibit No. 1
IBF VI - Participating Income Corporation
Form SB-2, Amend. No. 2
File No. 333-71091
IBF VI - PARTICIPATING INCOME CORPORATION
(A Delaware corporation)
UNDERWRITING AGREEMENT
CLASS A 10% INCOME PARTICIPATING BONDS
$50,000,000
NATIONAL SECURITIES CORPORATION
_________________, 2000
000 X. Xxxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Gentlemen:
IBF VI - Participating Income Corporation (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 Bonds ("Bonds"). The Company desires to offer the
Bonds for sale through Xxxxxxx & Company Securities, Inc. (the
"Underwriter"). The offering will be undertaken by the
Underwriter as agent for the Company on a "best efforts, $500,000
Bonds minimum-$50,000,000 Bonds maximum" basis so that in the
event $500,000 for the purchase of Bonds is not received within
the agreed period, no Bonds will be sold, and the Underwriter
will not be entitled to any compensation, except reimbursement of
out-of-pocket expenses. On these premises, we set forth the
terms of our proposed agreement as follows:
1. Appointment of Underwriter. The Company hereby
appoints the Underwriter, 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 Bonds.
2. Representations and Warranties of the Company. As an
inducement to, and to obtain the reliance of, the Underwriter in
connection herewith, the Company represents, warrants, and agrees
with the Underwriter 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 Bonds 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
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.
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(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 Underwriter 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 Bonds will be duly and validly
authorized and, when issued and paid for in accordance with
this Agreement and the Indenture dated _______________, 2000
("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 Bonds 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
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
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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 Bonds
pursuant to the Filing, except with respect to applicable
federal and state securities laws.
(g) The Filing contains an audited balance sheets of
the Company as of September 30, 1999, and December 31, 1998,
and the related audited statements of operations, change in
shareholder's equity and cash flows for the period June 8,
1998 (inception) through September 30, 1999, 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.
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(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 Underwriter. On the foregoing
representations, agreements, and warranties and subject to the
terms and conditions of this Agreement:
(a) The Company hereby employs the Underwriter as
exclusive agent to sell for the Company's account the Bonds.
The Underwriter 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 Bonds, subject to the terms, provisions, and
conditions hereinafter set forth.
(b) In the event the Underwriter does not find
subscribers for Bonds having a total aggregate purchase
price of $500,000 within three months following the
Effective Date (unless extended by agreement of the Company
and Underwriter 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 Bonds 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
Bonds hereunder within the specified time period.
(c) The Bonds shall be offered to the general public
at face value without discount; provided, that the
Underwriter may, at its discretion, waive its commission
under subsection 3(e), below, and offer Bonds at face value
less the amount of the commission so waived.
(d) The Underwriter is granted irrevocable authority
as agent for the Company to declare any contract to purchase
Bonds offered to the public hereunder in default if the
Bonds are not paid for in cash within seven business days
after the contract date. The Underwriter shall instruct
investors to make all checks tendered as payment for the
Bonds 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 Bonds 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 Bonds 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 Bonds 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
Underwriter's sales commissions and accountable expenses as
provided herein) shall be promptly paid to the Company and
the Underwriter's sales commission and accountable expenses
shall be paid to it.
(e) As its compensation, and subject to the sale of
$500,000 of Bonds, the Underwriter shall be entitled to
receive a commission of 8% of the principal amount of the
Bonds sold and for which payment is made to the Company. In
addition, the Underwriter will receive reimbursement for all
accountable out of pocket expenses. Finally, the
Underwriter shall be entitled to receive 2.0% of the
Company's annual Net Income for each calendar year through
2006. For purposes of
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this provision, Net Income shall be
calculated in the same manner as set forth in the Indenture.
In the event the Underwriter does not find subscribers for
Bonds having a total aggregate purchase price of $500,000
within three months following the Effective Date (unless
extended by agreement of the Company and Underwriter for an
additional period not to exceed three months), the
Underwriter will be reimbursed only for its actual
accountable out of pocket expenses.
(f) The Company agrees to issue or have issued Bonds
in such names and denominations as may be specified by the
Underwriter and to deliver certificates representing the
Bonds to the purchasers in accordance with the Indenture
against payment of the purchase price of the Bonds net of
the Underwriter's sales commissions (including the
Underwriter's accountable expenses), 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 Bonds as provided in subsection 3(b)
hereof as shall be agreed on by the Underwriter 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 Bonds to the purchasers (a "subsequent time of
closing"). All requisitions for Bonds by the Underwriter
shall be in writing and shall be given to the Company before
the delivery date.
(g) The Underwriter is 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. The
Underwriter will use the services of Xxxxxxx & Company
Securities, Inc., an affiliate of the Company ("Xxxxxxx") to
assist the Underwriter in making wholesale distribution of
the offering to the selling group of participating dealers.
Participating dealers are to act as agents and shall be
allowed to purchase on an equal basis from the Underwriter
at a price which provides a concession out of the
Underwriter's commissions in such amount as the Underwriter
may determine, but in no event in excess of 7.5% of the
principal amount of the Bonds sold by the participating
dealers and for which payment is made to the Company. For
the services rendered by Xxxxxxx, it will receive from the
Underwriter 0.5% of the principal amount of the Bonds sold
and for which payment is made to the Company.
(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 Bonds.
4. Representations and Warranties of the Underwriter. As an
inducement to, and to obtain the reliance of, the Company in
connection herewith, the Underwriter represents, warrants, and
agrees with the Company as follows:
(a) The Underwriter is duly registered as a securities
broker-dealer in accordance with the Securities Exchange Act
of 1934, as amended.
(b) The Underwriter will not publish, issue, or
circulate or authorize the publication, issuance, or
circulation of any circular, notice, or advertisement which
offers the Bonds 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 Underwriter 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.
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(d) The Underwriter 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 customers
only in states in which they are duly licensed to do so.
The Underwriter 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 Underwriter 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
Underwriter shall be provided with a copy of such Filing or
amendment, and no such Filing will be made to which the
Underwriter 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 Underwriter'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 Underwriter 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 Underwriter 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 Underwriter may reasonably request.
(e) The Company will deliver to the Underwriter,
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 Underwriter, and will
deliver to the Underwriter, without charge, such reasonable
number of copies of the Registration Statement and
Prospectus (excluding exhibits) and all amendments thereto
as the Underwriter may reasonably request.
(f) Prior to the Termination Date if, in the opinion
of the Underwriter, any statements are contained in the
Filing which are misleading or inaccurate in light of the
circumstances under which they are made, the Underwriter 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.
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(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,
registrations and qualifications of the Bonds as will permit
the public offering thereof under the "Blue Sky Laws" of
such states as the Underwriter 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 Underwriter and
shall notify the Underwriter, in writing, of those states in
which the Bonds may be offered and sold pursuant to the
terms hereof. The Underwriter 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 Bonds; (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 Underwriter 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 Bonds which the Underwriter may make or to
pay for any of the Underwriter'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 Underwriter (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
Underwriter 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
Underwriter, to all holders of record of the Company's
Bonds, 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.
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(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.
(a) The Company agrees to indemnify and hold harmless
the Underwriter and any person who may be deemed to control
the Underwriter within the meaning of section 15 of the
Securities Act; and
(b) The Underwriter 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 Bonds 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 Underwriter 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 Underwriter or on behalf of the Underwriter 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 Underwriter 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 Bonds.
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7. Conditions to Obligations of the Company. The
obligation of the Company to deliver the Bonds being sold by the
Underwriter 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 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 Bonds (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 Underwriter.
8. Conditions to the Obligations of the Underwriter. The
several obligations of the Underwriter 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
Underwriter expressly for use therein shall not be
considered within the scope of this provision.
(b) The Underwriter 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 Underwriter, is material or omits to state a fact
which, in the opinion of the Underwriter, 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 Underwriter
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
Underwriter, 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,
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financial or otherwise, shall have
occurred in or relating to the condition, business, or
assets of the Company which shall render such condition,
business, or assets substantially less favorable, in the
Underwriter's judgment, than as set forth in the Filing.
(f) The Underwriter shall have been furnished at the
time of closing and at each subsequent time of closing, if
any, with such certificates as the Underwriter 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 Underwriter 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 Underwriter, 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 Bonds have been duly and validly
authorized and are fully paid and non-assessable; and
the description of the Bonds 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
Bonds 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
Underwriter), 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 Underwriter 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
Underwriter, 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.
(h) All proceedings taken and to be taken in
connection with the sale of the Bonds pursuant to this
Agreement shall be satisfactory as to legal aspects to the
Underwriter.
(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
Bonds proposed to be sold shall be such as, in the
Underwriter's reasonable judgment, would seriously affect
the offering, sale, or delivery to the public of the Bonds,
or would render such delivery at the initial public offering
price impracticable or inadvisable, the Underwriter 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
Underwriter. The term "initial public offering" means the
first publication authorized by the Underwriter, following
effectiveness of the Filing, of a newspaper advertisement
relating to the Bonds to be offered pursuant to this
Agreement, or the first allotments or confirmations by the
Underwriter of any of the Bonds to customers or dealers or
others by letter or telegram, whichever shall occur first.
The Underwriter 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
Underwriter 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
Underwriter 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 Underwriter.
If the sale of the Bonds 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 Underwriter 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) __________________;
(ii) The date on which the escrow period set
forth in subsection 3(b) expires without the minimum
number of Bonds having been subscribed to;
(iii) The date on which all offered Bonds
are sold.
10. Miscellaneous Provisions.
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(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
Bonds contemplated herein for a period of three years.
(c) This Agreement has been and is made solely for the
benefit of the Underwriter, 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 Underwriter 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 Bonds from
the Underwriter.
(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 Underwriter, shall be mailed, delivered, or telegraphed
to it at the following address:
National Securities Corporation
000 X. Xxxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Chairman
with copies to:
Arthur Don, Esq.
or Xxxxx Xxxxxx, Esq.
X'Xxxxxx & Xxxxxx LLC
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, 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 Corporation
0000 Xxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxx X. Xxxxxxx, President
with copies to:
Xxxx X. Xxxxxx, Esq.
Xxxxxx, Xxxxxx & Xxxxxxx, X.X.
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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.
(g) The representations, warranties, and undertakings
herein on the part of the Company and the Underwriter 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 Bonds 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 Corporation
By____________________________________
Xxxxx X. Xxxxxxx, President
The foregoing Underwriter Agreement is accepted as of the
date first above written.
National Securities Corporation
By____________________________________
Xxxxxx X. Xxxxxxxxx, Chairman
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