EXHIBIT 1.1
CENEX HARVEST STATES COOPERATIVES
50,000,000 SHARES
8% PREFERRED STOCK
$1.00 PER SHARE
UNDERWRITING AGREEMENT
November 1, 0000
Xxxxxx Xxxxxxxxxx Ltd.
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
Cenex Harvest States Cooperatives, a Minnesota cooperative (the "Company"),
hereby confirms its agreement to appoint Xxxxxx Xxxxxxxxxx Ltd. (the
"Underwriter") to act as the Company's exclusive agent in connection with the
offer and sale of up to 50,000,000 shares of 8% Preferred Stock (the "Shares")
at $1.00 per share, on a best efforts basis commencing on the effective date of
the registration statement referred to below.
1. Representations, Warranties and Agreements.
(a) The Company represents and warrants to and agrees with the
Underwriter as follows:
(i) A registration statement on Form S-2 (File No.
333-65364) with respect to the Shares, including a prospectus, has
been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder and has been
filed with the Commission under the Securities Act. Copies of the
registration statement and amendments, as filed with the Commission,
have been delivered by the Company to the Underwriter. Such
registration statement, as amended from time to time, is hereinafter
called the "Registration Statement." The prospectus included in the
Registration Statement at the time it was declared effective by the
Commission is hereinafter called the "Prospectus," except that if any
prospectus provided to the Underwriter by the Company for use in
connection with the offering of the Shares differs from the prospectus
as filed with the Commission, the term "Prospectus" shall refer to
such differing prospectus from and after the time such prospectus is
first provided to the Underwriter by the Company for such use. For
purposes of this Agreement, all references to the Registration
Statement, the Prospectus, or any amendment or
supplement to any of the foregoing shall be deemed to include the
respective copies thereof filed with the Commission.
(ii) At the time the Registration Statement was declared
effective by the Commission and at all times subsequent thereto until
the termination of the offering, the Registration Statement and
Prospectus, and all amendments thereof and supplements thereto,
complied with the provisions and requirements of the Securities Act
and the Rules and Regulations. Neither the Commission nor any state
securities authority has issued a stop order with respect to the
offering of the Shares, or instituted or, to the Company's knowledge,
threatened the institution of, proceedings for any of such purposes.
The Registration Statement does 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, in light of the
circumstances in which they were made, not misleading. When the
Registration Statement was declared effective by the Commission and at
all times subsequent thereto until the termination of the offering,
the Prospectus (as amended or supplemented, if the Company shall have
filed with the Commission any amendment thereof or supplement thereto)
did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in
which they were made, not misleading. None of the representations and
warranties in this Subsection 1(a) shall apply to statements in, or
omissions from, the Registration Statement or the Prospectus, or any
amendment thereof or supplement thereto, which are based upon and
conform to written information relating to the Underwriter furnished
in writing to the Company by the Underwriter specifically for use in
the preparation of the Registration Statement or the Prospectus, or
any such amendment or supplement.
(iii) The Company has been duly incorporated and is validly
existing as a cooperative in good standing under the laws of the State
of Minnesota, with full power and authority to own, lease and operate
its properties and conduct its business as described in the
Registration Statement and Prospectus. The Company is duly qualified
to do business and is in good standing in each jurisdiction in which
the ownership or lease of its properties or the conduct of its
business requires such qualification and in which the failure to be
qualified or in good standing would have a material adverse effect on
the condition (financial or otherwise), earnings, operations or
business of the Company, and no proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or qualification.
(iv) The Company has operated and is operating in material
compliance with all authorizations, licenses, certificates, consents,
permits, approvals and orders of and from all state, federal and other
governmental regulatory officials and bodies necessary to own its
properties and to conduct its business to the extent described or
incorporated by reference in the Registration Statement and
Prospectus, all of which are, to the Company's knowledge, valid and in
full force and effect. The Company is conducting its business in
compliance in all material respects with all applicable laws, rules
and regulations of the jurisdictions in which it is conducting
business, and the Company is not in violation in any material respect
of any applicable law, order, rule,
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regulation, writ, injunction, judgment or decree of any court,
government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or over its properties.
(v) The Company is not in violation of its articles of
incorporation or bylaws or in default in any material respect in the
performance or observance of any obligation, agreement, covenant or
condition contained in any agreement required to be filed with the
Commission pursuant to the requirements of the Securities Act (the
"Material Contracts").
(vi) The Company has full requisite power and authority to
enter into this Agreement and perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the
part of the Company, enforceable against the Company in accordance
with its terms. The performance of this Agreement and the consummation
of the transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under:
(A) any indenture, mortgage, deed of trust, loan
agreement, bond, debenture, note, agreement or other
evidence of indebtedness, any lease, contract, joint venture
or other agreement or instrument to which the Company is a
party or by which the Company or its properties may be
bound;
(B) the articles of incorporation or bylaws of the
Company: or
(C) any applicable law, order, rule, regulation,
writ, injunction, judgment or decree of any court,
government or governmental agency or body, domestic or
foreign, having jurisdiction over the Company or over its
properties.
No consent, approval, authorization or order of or qualification with any court,
governmental agency or body, domestic or foreign, having jurisdiction over the
Company or over its properties is required for the execution and delivery of
this Agreement and the consummation by the Company of the transactions herein
contemplated, except such as may be required under the Securities Act, or under
state or other securities or Blue Sky laws.
(vii) Except as is otherwise expressly described in the
Registration Statement or Prospectus, there is neither pending nor, to
the best of the Company's knowledge, threatened, any action, suit,
claim or proceeding against the Company or any of its officers or any
of its properties, assets or rights before any court, government or
governmental agency or body, domestic or foreign, having jurisdiction
over the Company or over its officers or properties or otherwise which
(A) would reasonably be expected to result in any material adverse
change in the condition (financial or otherwise), earnings, operations
or business of the Company or might materially and adversely affect
its properties, assets or rights, or (B) would, if successful, prevent
consummation of the transactions contemplated hereby.
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(viii) The Shares to be sold hereunder by the Company have
been duly authorized for issuance and sale pursuant to this Agreement
and, when issued and delivered against payment therefor in accordance
with the terms of this Agreement and the Prospectus, will be duly and
validly issued and fully paid and non-assessable and will be sold free
and clear of any pledge, lien, security interest, encumbrance, claim
or equitable interest; and no preemptive right, co-sale right,
registration right, right of first refusal or other similar right of
shareholders exists with respect to any of the Shares to be sold
hereunder by the Company or the issuance and sale thereof. Except as
disclosed in the Prospectus, the Company has no outstanding options to
purchase, or any preemptive rights or other rights to subscribe for or
to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock
or any such options, rights, convertible securities or obligations.
(ix) PricewaterhouseCoopers LLP and Deloitte & Touche LLP,
each of which has expressed its opinion with respect to certain of the
financial statements filed as part of the Registration Statement, are
independent accountants within the meaning of the Securities Act and
the Rules and Regulations. The financial statements of the Company set
forth in the Registration Statement and Prospectus comply in all
material respects with the requirements of the Securities Act and
fairly present the financial position and the results of operations of
the Company at the respective dates and for the respective periods to
which they apply in accordance with generally accepted accounting
principles consistently applied throughout the periods involved. The
selected and summary financial and statistical data included in the
Registration Statement present fairly the information shown therein
and have been compiled on a basis consistent with the audited
financial statements presented therein. No other financial statements
or schedules are required by the Securities Act or the Rules and
Regulations to be included in the Registration Statement.
(x) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus,
except as is otherwise disclosed in the Registration Statement or
Prospectus, there has not been:
(A) any change in the capital stock, except for
the Company's redemption of its equity participation units,
or long-term debt (including any capitalized lease
obligation), except in the ordinary course of business, or
material increase in the short-term debt of the Company;
(B) any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock of
the Company;
(C) any material adverse change, or any
development involving a material adverse change, in or
affecting the condition (financial or otherwise), earnings,
operations, business or business prospects, management,
financial position, stockholders' equity, results of
operations or general condition of the Company;
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(D) any transaction entered into by the Company
that is required to be disclosed by the Company;
(E) any obligation, direct or contingent, incurred
by the Company, except obligations incurred in the ordinary
course of business that, in the aggregate, are not material;
or
(F) any loss or damage (whether or not insured) to
the property of the Company has been sustained has a
material adverse effect on the condition (financial or
otherwise), earnings, operations or business of the Company.
(xi) Except as is otherwise expressly disclosed in the
Registration Statement or Prospectus:
(A) the Company has good and marketable title to
all of the property, real and personal, and assets described
in the Registration Statement or Prospectus as being owned
by it, free and clear of any and all pledges, liens,
security interests, encumbrances, equities, charges or
claims, other than such as would not have a material adverse
effect on the condition (financial or otherwise), earnings,
operations or business of the Company; and
(B) the Material Contracts are valid agreements,
enforceable by the Company except as the enforcement thereof
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by judicial
limitations on the right of specific performance.
(xii) The Company has timely filed (or has timely requested
an extension of time to file) all necessary federal and state income
and franchise tax returns and has paid all taxes shown thereon as due;
there is no tax deficiency that has been or, to the best of the
Company's knowledge, could be asserted against the Company that would
have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or properties of the
Company, and all tax liabilities are adequately provided for in the
books of the Company.
(xiii) To the best of the Company's knowledge, the Company
owns, or possesses adequate rights to use, all patents, patent rights,
inventions, trade secrets, know-how, technology, service marks, trade
names, copyrights, trademarks and proprietary rights or information
which are necessary for the conduct of its present or intended
business as described in the Registration Statement or Prospectus. To
the best of the Company's knowledge, the expiration of any patents,
patent rights, trade secrets, trademarks, service marks, trade names
or copyrights would not have a material adverse effect on the
condition (financial or otherwise), earnings, operations or business
of the Company and the Company has not received any notice of, and has
no knowledge of, any infringement of or conflict with the asserted
rights of others with respect to any patent, patent rights,
inventions, trade secrets, know-how, technology, trademarks, service
marks, trade names or copyrights that, singly or in the aggregate, if
the subject of an
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unfavorable decision, ruling or finding, might have a material adverse
effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company.
(xiv) The Company has not taken and will not take, directly
or indirectly, any action (and does not know of any action by its
directors, officers, members or others) which has constituted or is
designed to, or which might reasonably be expected to, cause or result
in stabilization or manipulation, as defined in the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or otherwise, of
the price of any security of the Company to facilitate the sale or
resale of the Shares.
(xv) The Company maintains insurance, which is in full force
and effect, with insurers of recognized financial responsibility of
the types and in the amounts generally deemed adequate for its
business and, to the best of the Company's knowledge, in line with the
insurance maintained by similar companies and businesses; and the
Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and
adversely affect the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company.
(xvi) The Company has not at any time during the last five
years made any unlawful contribution to any candidate for an office or
failed to disclose fully any contribution in violation of law, or made
any payment to any federal or state governmental officer or official,
domestic or foreign, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof. The Company
maintains a system of internal accounting controls sufficient to
provide reasonable assurances that transactions are executed in
accordance with management's general or specific authorizations and
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles. To maintain accountability for assets, access to assets is
permitted only in accordance with management's general or specific
authorization, and the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xvii) Except as set forth in the Registration Statement and
Prospectus:
(A) the Company is in material compliance with all
material rules, laws and regulations relating to the use,
treatment, storage and disposal of toxic substances and
protection of health or the environment (the "Environmental
Laws") which are applicable to its business; and
(B) the Company has received no notice from any
governmental authority or third party of an asserted claim
under Environmental Laws, which claim is required to be
disclosed in the Registration Statement and the Prospectus.
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(xviii) The Company represents and warrants that no person
or entity other than the Underwriter is entitled to any compensation
or other payments from either the Company or the Underwriter, as a
finder, underwriter or agent in connection with the offering
contemplated hereby or any other proposed transaction between the
Company and the Underwriter. The Company agrees to promptly notify the
Underwriter of any such relationships, including consulting or prior
agency agreements entitling other parties to compensation for the
transaction described herein and agrees to provide the Underwriter
with a copy of such agreements.
(b) Any certificate signed by any officer of the Company and delivered
to you or to Underwriter's Counsel shall be deemed a representation and warranty
by the Company to the Underwriter as to the matters covered thereby.
(c) The Underwriter represents and warrants to and agrees with the
Company that the Underwriter has not taken and will not take, directly or
indirectly, any action (and does not know of any action by its directors,
officers or others) which has constituted or is designed to, or which might
reasonably be expected to, cause or result in stabilization or manipulation, as
defined in the Exchange Act or otherwise, of the price of any security of the
Company to facilitate the sale or resale of the Shares.
2. Best Efforts Offering.
(a) On the basis of the representations, warranties and agreements
herein contained, and subject to the terms and conditions herein set forth, the
Company appoints the Underwriter as its exclusive agent to effect sales of the
Shares on a "best efforts" basis, for the account and risk of the Company, at a
price of $1.00 per Share and upon the other terms and conditions set forth in
the Prospectus. The Underwriter agrees to use its best efforts as such agent to
procure purchasers for the Shares during a period commencing with the date of
this Agreement and ending on _____________________. The Underwriter may, in its
sole discretion, use the services of other brokers or dealers in connection with
the offer and sale of the Shares and pay any portion of the Underwriter's
compensation hereunder to such brokers or dealers who are members of the NASD.
3. Covenants.
(a) The Company hereby covenants and agrees with the Underwriter as
follows:
(i) If the Registration Statement has not already been
declared effective by the Commission, the Company will use its best
efforts to cause the Registration Statement and any post-effective
amendments thereto to become effective as promptly as possible. The
Company will notify the Underwriter promptly of the time when the
Registration Statement or any post-effective amendment to the
Registration Statement has become effective or any supplement to the
Prospectus has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or
additional information.
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(ii) The Company will advise the Underwriter, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement, of the suspension of the qualification of
the Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose. The
Company will promptly use its best efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such a stop order should
be issued.
(iii) Within the time during which a prospectus relating to
the Shares is required to be delivered under the Securities Act, the
Company will comply as far as it is able with all requirements imposed
upon it by the Securities Act, as now and hereafter amended, and by
the Rules and Regulations, as from time to time in force, so far as
necessary to permit the continuance of sales of or dealings in the
Shares as contemplated by the provisions hereof and the Prospectus.
If, during such period, any event occurs as a result of which the
Prospectus would include an 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 then existing, not
misleading, or if, during such period, it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the
Securities Act, the Company will promptly notify the Underwriter and
will amend the Registration Statement or supplement the Prospectus (at
the expense of the Company) so as to correct such statement or
omission or effect such compliance.
(iv) The Company will use its best efforts to arrange for
the qualification of the Shares for offering and sale under the
securities laws of such jurisdictions as the Company and the
Underwriter may agree upon and to continue such qualifications in
effect for so long as may be required for purposes of the distribution
of the Shares. In each jurisdiction in which the Shares shall have
been qualified as herein provided, the Company will make and file such
statements and reports in each year as are or may be reasonably
required by the laws of such jurisdiction.
(v) The Company will furnish to the Underwriter copies of
the Registration Statement, the Prospectus, and all amendments and
supplements to such documents, in each case as soon as available and
in such quantities as the Underwriter may from time to time reasonably
request.
(vi) The Company will apply the net proceeds from the sale
of the Shares substantially in the manner set forth under the caption
"Use of Proceeds" in the Prospectus.
(vii) The Company will not take, and will use its best
efforts to cause each of its officers and directors not to take,
directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares.
(b) The Underwriter hereby covenants and agrees with the Company that
the Underwriter will not take, and will use its best efforts to cause each of
its officers and directors
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not to take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares.
4. Expenses.
(a) The Company agrees with the Underwriter that:
(i) Whether or not this Agreement is terminated or cancelled
or any sale of the Shares hereunder is consummated, and regardless of
the reason for or cause of any such termination, cancellation, or
failure to consummate, the Company will pay or cause to be paid:
(A) all out-of-pocket expenses of the Underwriter
incurred in connection with the offer and sale of the
Shares, including, but not limited to, designing, printing
and mailing all offering and advertising materials;
advertisements in newspapers, on the radio and through
direct mail; operating a toll-free telephone number; and
assisting the Company with creating a web site;
(B) all fees and expenses (including, without
limitation, fees and expenses of the Company's auditors and
legal counsel) in connection with the preparation, printing,
filing, delivery of the Registration Statement (including
the financial statements therein and all amendments,
schedules, and exhibits thereto), each Preliminary
Prospectus, the Prospectus, and any amendment thereof or
supplement thereto;
(C) all fees and expenses incurred in connection
with the qualification of the Shares for offering and sale
under the securities or Blue Sky laws of the states and
other jurisdictions which the Underwriter may designate in
accordance with Section 3(d) hereof;
(D) all fees and expenses of the Underwriter's
legal counsel in connection with the offering up to a
maximum of $30,000;
(E) all fees and expenses of any transfer or
paying agent in connection with the Shares; and
(F) all costs and expenses incident to the
performance of the Underwriter's obligations hereunder that
are not otherwise specifically described herein.
5. Conditions of the Underwriter's Obligations. The obligation of the
Underwriter to sell the Shares on a best efforts basis as provided herein shall
be subject to the accuracy of the representations and warranties of the Company,
as of the date hereof, to the performance by the Company of its obligations
hereunder, and to the satisfaction of the following additional conditions:
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(a) Subsequent to the Effective Date and prior to termination of the
offering, there shall not have occurred any change, or any development involving
a prospective change, which materially and adversely affects the Company's
condition (financial or otherwise), earnings, operations, properties, business
or business prospects from that set forth in the Registration Statement or
Prospectus, and which, in the Underwriter's sole judgment, is material and
adverse and that makes it, in the Underwriter's sole judgment, impracticable or
inadvisable to proceed with the offering of the Shares as contemplated by the
Prospectus and this Agreement.
(b) All corporate proceedings and other legal matters in connection
with this Agreement, the form of Registration Statement and the Prospectus, and
the registration, authorization, issue, sale and delivery of the Shares shall
have been reasonably satisfactory to Underwriter's counsel, and Underwriter's
counsel shall have been furnished with such papers and information as it may
reasonably have requested to enable it to pass upon the matters referred to in
this Section.
(c) Upon execution of this Agreement, the Underwriter shall have
received the opinion of Xxxxxx & Xxxxxxx LLP, counsel for the Company, dated as
of the date of this Agreement, satisfactory in form and substance to the
Underwriter and Underwriter's counsel, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a cooperative in good standing under the laws of the
jurisdiction of its incorporation.
(ii) The Shares to be issued by the Company pursuant to the
terms of this Agreement have been duly authorized and, upon issuance
and delivery against payment therefor will be duly and validly issued
and fully paid and non-assessable.
(iii) The Company has the requisite power and authority to
issue, sell and deliver the Shares to be issued and sold by it.
(iv) The Registration Statement has become effective under
the Securities Act and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose has been instituted
or is pending or threatened under the Securities Act.
(v) The Registration Statement and the Prospectus, and each
amendment thereof or supplement thereto (other than the financial
statements, including the notes thereto and the supporting schedules,
and other financial, numerical, statistical and accounting data
derived therefrom, as to which such counsel need express no opinion),
comply as to form in all material respects with the requirements of
the Securities Act and the Rules and Regulations.
(vi) A statement of fact (but not an opinion) that, on the
basis of information obtained as a result of discussions and meetings
with directors, officers and other employees and Underwriters of the
Company, discussions with the independent public accountants for the
Company in connection with the preparation of the Registration
Statement and the Prospectus, and the examination of other information
and documents requested by such counsel, nothing has come to such
counsel's attention that
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has caused them to believe that the Registration Statement and any
amendment thereof, at the time it became effective and at all times
subsequent thereto up to the date of this Agreement, contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus, and any
amendment or supplement thereto, at the first date of its issuance,
contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. Such counsel may further state that in
making the foregoing comments, such counsel does not intend them to
include or cover the financial statements and notes thereto and
related schedules and other financial, numerical, statistical and
accounting data contained or omitted from the Registration Statement
and any amendment or supplement thereto and the Prospectus.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States or the state of Minnesota upon
opinions of local counsel, and, as to questions of fact, upon representations or
certificates of officers of the Company and of government officials, in which
case its opinion is to state the extent of such reliance. Copies of any opinion,
representation or certificate so relied upon shall be delivered to the
Underwriter and to Underwriter's counsel.
(d) The Underwriter shall have received from Xxxxxx and Xxxxxx,
Professional Association, Underwriter's counsel, such opinion or opinions as the
Underwriter may reasonably require, dated as of the date of this Agreement,
which are satisfactory in form and substance to the Underwriter, with respect to
the sufficiency of corporate proceedings and other legal matters relating to
this Agreement and the transactions contemplated hereby, and the Company shall
have furnished to Underwriter's counsel such documents as it may have requested
for the purpose of enabling it to pass upon such matters. In connection with
such opinion, as to matters of fact relevant to conclusions of law,
Underwriter's counsel may rely, to the extent that it deems proper, upon
representations or certificates of public officials and of responsible officers
of the Company.
(e) At the time of execution of this Agreement, the Underwriter shall
have received from the Company a certificate, dated the date of such execution,
of the principal executive officer and the principal financial or accounting
officer of the Company, to the effect that:
(i) The representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the date
of the certificate, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied under this Agreement; and
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment thereof
or the qualification of the Shares for offering or sale have been
issued, and no proceedings for that purpose have been instituted or,
to the best of their knowledge, are contemplated by the Commission or
any state or regulatory body.
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(f) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company has not
incurred any material liabilities or material obligations, direct or contingent,
or entered into any material transactions, not in the ordinary course of
business consistent with past practice, and except as disclosed in the
Prospectus, there has not been any change in the capital stock, or any material
increase in the short-term debt or long-term debt, or in the issuance of
options, warrants, convertible securities or other rights to purchase the
capital stock, of the Company, or any material adverse change or any development
involving a prospective material adverse change (whether or not arising in the
ordinary course of business) in the general affairs, condition (financial or
otherwise), business, key personnel, property, prospects, net worth or results
of operations of the Company.
(g) Xxxxxx & Whitney LLP shall deliver to the Underwriter a Blue Sky
Memorandum reasonably satisfactory to the Underwriter confirming that all
requisite actions for the offer and sale of the Shares in all jurisdictions
requested by the Underwriter have been taken.
The Underwriter may waive in writing the performance of any one or more of
the conditions specified in this Section or extend the time for their
performance.
If any of the conditions specified in this Section shall not have been
fulfilled when and as required by this Agreement to be fulfilled and if the
fulfillment of said condition has not been waived by the Underwriter, this
Agreement and all obligations of the Underwriter hereunder may be canceled at,
or at any time prior to, the Closing Date by the Underwriter. Any such
cancellation shall be without liability of the Underwriter to the Company and
shall not relieve the Company of its obligations under Section 4(a) hereof.
Notice of such cancellation shall be given to the Company as specified in
Section II.
6. Underwriter's Commission. In consideration of the agreement of the
Underwriter to assist the Company in the sale of the Shares as set forth in this
Agreement, the Company will pay the Underwriter an amount equal to three percent
(3%) of the gross proceeds received on the sale of Shares not rescinded. Such
commissions are to be due and payable by the tenth day of every month for Shares
issued through the last three business days of the previous month that are not
rescinded. Shares issued in the last three business days are counted in the
total for the next month.
7. Indemnification.
(a) The Company hereby agrees to indemnify and hold harmless the
Underwriter, and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Securities Act, against any losses, claims, damages
or liabilities, joint or several, to which the Underwriter or each such
controlling person may become subject under the Securities Act, the Exchange
Act, common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of, or are based upon, (i)
any breach of any representation, warranty, agreement or covenant of the Company
contained in this Agreement; (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof or supplement thereto, or the omission or alleged omission to
state in the Registration Statement or any amendment thereof or supplement
thereto a material fact necessary to make the statements therein, in light of
the circumstances
12
under which they were made, not misleading; (iii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus (as
amended or as supplemented), or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; or (iv)
any untrue statement or alleged untrue statement of a material fact contained in
any application or other statement executed by the Company or based upon written
information furnished by the Company filed in any jurisdiction in order to
qualify the Shares under, or exempt the Shares or the sale thereof from
qualification under, the securities laws of such jurisdiction, or the omission
or alleged omission to state in such application or statement a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Company will reimburse the Underwriter and each such controlling person for any
legal or other expenses incurred by the Underwriter or controlling person in
connection with investigating or defending against any such loss, claim, damage,
liability or action. However, the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Underwriter specifically for use in
the preparation of the Registration Statement or any such post-effective
amendment thereof, or the Prospectus, or any such amendment thereof or
supplement thereto, or in any application or other statement executed by the
Company or the Underwriter filed in any jurisdiction in order to qualify the
Shares under, or exempt the Shares or the sale thereof from qualification under,
the securities laws of such jurisdiction. This indemnity agreement is in
addition to any liability which the Company may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the Registration
Statement, and each person who controls the Company within the meaning of
Section 15 of the Securities Act against any losses, claims, damages or
liabilities to which the Company or any such director, officer or controlling
person may become subject under the Securities Act, the Exchange Act, common law
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of, or are based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof or supplement thereto, or the omission or
alleged omission to state in the Registration Statement or any amendment thereof
or supplement thereto, a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented), or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading; or (iii) any untrue statement or alleged untrue
statement of a material fact contained in any application or other statement
executed by the Company or by the Underwriter and filed in any jurisdiction in
order to qualify the Shares under, or exempt the Shares or the sale thereof from
qualification under, the securities laws of such jurisdiction, or the omission
or alleged omission to state in such application or statement a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by, or
on behalf of, the
13
Underwriter specifically for use in the preparation of the Registration
Statement or any such post-effective amendment thereof, or the Prospectus or any
such amendment thereof or supplement thereto, or in any application or other
statement executed by the Company or by the Underwriter and filed in any
jurisdiction. The Underwriter will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, or controlling
person in connection with investigating or defending against any such loss,
claim, damage, liability or action. This indemnity agreement is in addition to
any liability which the Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 7, notify in writing the indemnifying party of the commencement
thereof. Failure to so notify the indemnifying party will relieve it from any
liability under this Section 7 as to the particular item for which
indemnification is then being sought, but not from any other liability which it
may have to any indemnified party. In case any such action is brought against
any indemnified party, and the indemnified party notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, to assume the defense
thereof, with counsel who shall be reasonably satisfactory to such indemnified
party. After notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this Section 7 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party, and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it or other indemnified parties which are different from
or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select as separate counsel to assume
such legal defenses and to otherwise participate in the defense of such action
on behalf of such indemnified party or parties, in which event the fees and
expenses of such separate counsel shall be borne by the indemnifying party. Any
such indemnifying party shall not be liable to any such indemnified party on
account of any settlement of any claim or action effected without the consent of
such indemnifying party.
8. Contribution.
(a) In order to provide for just and equitable contribution in any
action in which the Underwriter or the Company (or any person who controls the
Underwriter or the Company within the meaning of Section 15 of the Securities
Act) makes claim for indemnification pursuant to Section 7 hereof, but such
indemnification is unavailable or insufficient to hold harmless and indemnify a
party under Section 7, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in Section 7 (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriter on the other from the offering of the Shares
hereunder or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in such clause (i) but also the
14
relative fault of the Company on the one hand and the Underwriter on the other
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriter on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Shares (before deducting
expenses) received by the Company bear to the total commissions received by the
Underwriter. The relative fault 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 Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriter agree that it
would not be just and equitable if contributions pursuant to this Section 8 were
to be determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to in the
first sentence of this Section 8. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this Section 8 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this Section 8. Notwithstanding the provisions of this Section 8, the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares distributed to the public
were offered to the public exceeds the amount of any damages that the
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 is not
guilty of such fraudulent misrepresentation.
(b) Promptly after receipt by a party to this Agreement of notice of
the commencement of any action, suit or proceeding, such person will, if a claim
for contribution in respect thereof is to be made against another party (the
"Contributing Party"), notify the Contributing Party of the commencement
thereof, but the failure to so notify the Contributing Party will not relieve
the Contributing Party from any liability which it may have to any party other
than under this Section 8. Any notice given pursuant to Section 7 hereof shall
be deemed to be like notice under this Section 8. In case any such action, suit
or proceeding is brought against any party, and such person notifies a
Contributing Party of the commencement thereof, the Contributing Party will be
entitled to participate therein with the notifying party and any other
Contributing Party similarly notified.
9. Termination. This Agreement may be terminated by the Underwriter or the
Company, at the option of either party by giving notice to the other party.
10. Survival of Indemnities, Contribution Agreements, Warranties and
Representations. The respective indemnity and contribution agreements of the
Company and the Underwriter contained in Sections 7 and 8, the representations
and warranties of the Company set forth in Section 1 hereof, and the covenants
and agreements of the Company set forth in Section 3 hereof, shall remain
operative and in full force and effect, regardless of any investigation made by,
or on behalf of, the Underwriter, the Company, any of its officers and
directors, or any controlling person referred to in Sections 7 and 8, and shall
survive the sale of
15
the Shares. The aforesaid indemnity and contribution agreements shall also
survive any termination or cancellation of this Agreement. Any successor of any
party or of any such controlling person, or any legal representative of such
controlling person, as the case may be, shall be entitled to the benefit of the
respective indemnity and contribution agreements.
11. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and shall be mailed,
delivered or transmitted by any standard form of telecommunication, as follows:
If to the Underwriter, to: Xxxxxx Xxxxxxxxxx Ltd.
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx Xxxxxxx
with a copy to: Xxxxxx and Xxxxxx,
Professional Association
2400 IDS Center
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxxxx
If to the Company, to: Cenex Harvest States Cooperatives
0000 Xxxxx Xxxxx
Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
with a copy to: Xxxxxx & Whitney LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
12. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Underwriter and the Company and their respective
successors and assigns, and the officers, directors and controlling persons
referred to in Sections 7 and 8. Nothing expressed in this Agreement is intended
or shall be construed to give any person or corporation, other than the parties
hereto, their respective successors and assigns, and the controlling persons,
officers and directors referred to in Sections 7 and 8, any legal or equitable
right, remedy or claim under, or in respect of, this Agreement or any provision
herein contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective executors, administrators, successors, assigns and
such controlling persons, officers and directors, and for the benefit of no
other person or corporation. No purchaser of any Shares shall be construed a
successor or assign merely by reason of such purchase.
13. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the state of Minnesota.
16
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed counterpart of this Agreement,
whereupon it will become a binding agreement between the Company and the
Underwriter in accordance with its terms.
Very truly yours,
CENEX HARVEST STATES
COOPERATIVES
By:
------------------------------------
Xxxx Xxxxxxx
Executive Vice President and
Chief Financial Officer
ACCEPTANCE
The foregoing Underwriting Agreement is
hereby confirmed and accepted by us
as of the date first above written.
XXXXXX XXXXXXXXXX LTD.
By:
---------------------
K. Xxxxxx Xxxxxxx
President
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