UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported) – February 19,
2008
ALLETE,
Inc.
(Exact
name of registrant as specified in its charter)
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Minnesota
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1-3548
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41-0418150
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(State
or other jurisdiction of
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(Commission
File Number)
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(IRS
Employer
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incorporation
or organization)
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Identification
No.)
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30
West Superior Street
Duluth,
Minnesota 55802-2093
(Address
of principal executive offices, including zip code)
(218)
279-5000
(Registrant’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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SECTION
8 – OTHER EVENTS
Item
8.01 Other Events
On
February 19, 2008, ALLETE, Inc. (the “Company”) entered into a Distribution
Agreement with KCCI, Inc. with respect to the issuance and sale of up to
2,500,000 shares of the Company’s common stock, without par value, together with
the preferred share purchase rights attached thereto (the
“Shares”). The Shares may be offered for sale, from time to time, in
accordance with the terms of the Agreement, which terminates on June 30,
2009. The offering of the Shares will be made pursuant to the
Company’s Registration Statement on Form S-3 (Registration No. 333-147965),
which became effective on December 10, 2007, and pursuant to a Prospectus
Supplement, dated February 19, 2008, and base Prospectus, dated December 10,
2007, to be filed with the Securities and Exchange Commission pursuant to Rule
424(b)(2) under the Securities Act of 1933, as amended.
The
Distribution Agreement is attached as Exhibit 1 hereto.
SECTION
9 – FINANCIAL STATEMENTS AND EXHIBITS
Item
9.01 Financial Statements and Exhibits
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(a)
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Financial
Statements of Business Acquired – Not applicable
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(b)
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Pro
Forma Financial Information – Not applicable
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(c)
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Shell
Company Transactions – Not applicable
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(d)
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Exhibits
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Exhibit
Number
1 –
Distribution Agreement between ALLETE, Inc. and KCCI, Inc. dated February 19,
2008.
Readers
are cautioned that forward-looking statements should be read in conjunction with
ALLETE’s disclosures under the heading: “SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995” located on page 2 of this Form
8-K.
ALLETE,
Inc. Form 8-K KCCI Distribution Agreement February 19,
2008
1
Safe
Harbor Statement
Under
the Private Securities Litigation Reform Act of 1995
In
connection with the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, we are hereby filing cautionary statements identifying
important factors that could cause our actual results to differ materially from
those projected in forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) made by or on behalf of ALLETE
in this Current Report on Form 8-K, in presentations, in response to questions
or otherwise. Any statements that express, or involve discussions as to
expectations, beliefs, plans, objectives, assumptions, or future events or
performance (often, but not always, through the use of words or phrases such as
“anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,”
“projects,” “will likely result,” “will continue,” “could,” “may,” “potential,”
“target,” “outlook” or similar expressions) are not statements of historical
facts and may be forward-looking.
Forward-looking
statements involve estimates, assumptions, risks and uncertainties, which are
beyond our control and may cause actual results or outcomes to differ materially
from those that may be projected. These statements are qualified in their
entirety by reference to, and are accompanied by, the following important
factors, in addition to any assumptions and other factors referred to
specifically:
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·
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our
ability to successfully implement our strategic
objectives;
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our
ability to manage expansion and integrate acquisitions;
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prevailing
governmental policies, regulatory actions, and legislation including those
of the United States Congress, state legislatures, the Federal Energy
Regulatory Commission, the Minnesota Public Utilities Commission, the
Public Services Commission of Wisconsin, and various local and county
regulators, and city administrators, allowed rates of return, financings,
industry and rate structure, acquisition and disposal of assets and
facilities, real estate development, operation and construction of plant
facilities, recovery of purchased power, capital investments and other
expenses, present or prospective wholesale and retail competition
(including but not limited to transmission costs), zoning and permitting
of land held for resale and environmental rules and
regulation;
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·
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the
potential impacts of climate change on our Regulated Utility
operations;
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·
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effects
of restructuring initiatives in the electric industry;
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·
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economic
and geographic factors, including political and economic
risks;
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·
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changes
in and compliance with laws and policies;
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weather
conditions;
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·
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natural
disasters and pandemic diseases;
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·
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war
and acts of terrorism;
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wholesale
power market conditions;
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population
growth rates and demographic patterns;
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effects
of competition, including competition for retail and wholesale
customers;
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changes
in the real estate market;
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pricing
and transportation of commodities;
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changes
in tax rates or policies or in rates of inflation;
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·
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unanticipated
project delays or changes in project costs;
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·
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availability
and management of construction
materials and skilled construction labor for capital
projects;
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·
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unanticipated
changes in operating expenses, capital and land
development expenditures;
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·
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global
and domestic economic conditions;
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our
ability to access capital markets and bank financing;
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changes
in interest rates and the performance of the financial
markets;
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our
ability to replace a mature workforce and retain qualified, skilled and
experienced personnel; and
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the
outcome of legal and administrative proceedings (whether civil or
criminal) and settlements that affect the business and profitability of
ALLETE.
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Additional
disclosures regarding factors that could cause our results and performance to
differ from results or performance anticipated by this report are discussed in
Item 1A under the heading “Risk Factors” beginning on page 22 of our 2007
Form 10-K. Any forward-looking statement speaks only as of the date on
which such statement is made, and we undertake no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which that statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for
management to predict all of these factors, nor can it assess the impact of each
of these factors on the businesses of ALLETE or the extent to which any factor,
or combination of factors, may cause actual results to differ materially from
those contained in any forward-looking statement. Readers are urged to carefully
review and consider the various disclosures made by us in this Form 8-K and in
our other reports filed with the SEC that attempt to advise interested parties
of the factors that may affect our business.
ALLETE,
Inc. Form 8-K KCCI Distribution Agreement February 19,
2008
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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ALLETE,
Inc.
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February
19, 2008
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/s/
Steven Q. DeVinck
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Steven
Q. DeVinck
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Controller
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ALLETE,
Inc. Form 8-K KCCI Distribution Agreement February 19, 2008
3
Exhibit
1
DISTRIBUTION
AGREEMENT
February
19, 2008
KCCI
Inc.
80 Maiden
Lane
Suite
2201
New York,
New York 10038
Attention: Mark
Nauman
Ladies
and Gentlemen:
ALLETE,
Inc., a Minnesota corporation (the “Company”), confirms its
agreement with KCCI Inc., as agent (“you” or “KCCI”), with respect to the
issuance and sale from time to time by the Company, in the manner and subject to
the terms and conditions described below, of up to an aggregate of 2,500,000
shares (the “Maximum Number of
Shares”) of common stock, without par value (the “Common Stock”), including the
preferred share purchase rights attached thereto (“Rights”), of the
Company. Such 2,500,000 shares, including the attached Rights, are
hereinafter collectively referred to as the “Shares.” The Shares are
described in the Prospectus referred to below.
The
Company has filed with the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 (No. 333-147965) (the “registration statement”) for
the registration of an unspecified amount of securities, including Common Stock
and Rights, under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “Act”). Except where
the context otherwise requires, “Registration Statement,” as
used herein, means the registration statement, as amended at the time of such
registration statement’s effectiveness for purposes of Section 11 of the Act, as
such section applies to KCCI, including (1) all documents incorporated or deemed
to be incorporated by reference therein and (2) any information contained or
incorporated by reference in a prospectus filed with the Commission pursuant to
Rule 424(b) under the Act, to the extent such information is deemed, pursuant to
Rule 430B under the Act, to be part of the registration statement at the
effective time. Except where the context otherwise requires, “Basic Prospectus,” as used
herein, means the prospectus filed as part of the Registration Statement,
together with any amendments or supplements thereto as of the date of this
Agreement. Except where the context otherwise requires, “Prospectus Supplement,” as
used herein, means the prospectus supplement, dated February 19, 2008, relating
to the Shares, filed by the Company with the Commission pursuant to Rule 424(b)
under the Act on or before the second business day after the date hereof (or
such earlier time as may be required under the Act), in the form furnished by
the Company to KCCI in connection with the offering of the
Shares. Except where the context otherwise requires, “Prospectus,” as used herein,
means the Prospectus Supplement together with the Basic Prospectus attached to
or used with the Prospectus Supplement. “Permitted Free Writing
Prospectuses,” as used herein, means any other documents that the parties
hereto shall hereafter expressly agree in writing to distribute in connection
with the offering of the Shares. Any reference herein to the
registration statement, the Registration Statement, any Basic Prospectus, the
Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus
shall be deemed to refer to and include the documents, if any, incorporated by
reference, or deemed to be incorporated by reference, therein (the “Incorporated
Documents”). Any reference herein to the terms “amend,” “amendment” or “supplement” with respect to
the Registration Statement, any Basic Prospectus, the Prospectus Supplement, the
Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to
and include any document filed with the Commission under the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively,
the “Exchange Act”) on
or after the initial effective date of the Registration Statement, or the date
of such Basic Prospectus, the Prospectus Supplement, the Prospectus or such
Permitted Free Writing Prospectus, as the case may be, and deemed to be
incorporated therein by reference.
The
Company and KCCI agree as follows:
1. Issuance and
Sale.
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(a)
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Upon
the basis of the representations and warranties and subject to the terms
and conditions set forth herein, on any Exchange Business Day (as defined
below) selected by the Company, the Company and KCCI shall enter into an
agreement in accordance with Section 2 hereof regarding the number of
Shares to be placed by KCCI and the manner in which and other terms upon
which such placement is to occur (each such transaction being referred to
as a “Transaction”). As
used in this Agreement, (i) the “Term” shall be the
period commencing on the date hereof and ending on the earliest of (x)
June 30, 2009, (y) the date on which the Maximum Number of Shares have
been issued and sold pursuant to this Agreement, or (z) the termination of
this Agreement pursuant to Section 8 or 9 (the “Termination Date”), (ii)
an “Exchange Business
Day” means any day during the Term that is a trading day for the
Exchange other than a day on which trading on the Exchange is scheduled to
close prior to its regular weekday closing time, and (iii) “Exchange” means The New
York Stock Exchange, Inc.
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(b)
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Subject
to the terms and conditions set forth below, the Company appoints KCCI as
agent in connection with the offer and sale of Shares in any Transaction
entered into hereunder. KCCI will use its commercially
reasonable efforts to sell such Shares in accordance with the terms and
conditions hereof and of the applicable Transaction Notice (as defined
below). Neither the Company nor KCCI shall have any obligation
to enter into a Transaction. The Company shall be obligated to
issue and sell through KCCI, and KCCI shall be obligated to use its
commercially reasonable efforts, as provided herein and in the applicable
Transaction Notice, to place Shares issued by the Company only if and when
a Transaction Notice related to such Transaction has been delivered by the
Company and accepted by KCCI as provided in Section 2
below.
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(c)
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The
Company and KCCI agree that the Shares to be sold in a Transaction shall
be sold in a manner constituting an “at-the-market offering” as defined in
Rule 415 promulgated under the Act. In such case, KCCI will
confirm in writing to the Company the number of Shares sold on any
Exchange Business Day and the related Gross Sales Price and Net Sales
Price (as each of such terms is defined in Section 2(b) below) no later
than the opening of trading on the immediately following Exchange Business
Day.
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(d)
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KCCI
hereby covenants and agrees not to make any sales of the Shares on behalf
of the Company, pursuant to this Agreement, other than (A) by means of
ordinary brokers’ transactions between members of the Exchange that
qualify for delivery of a Prospectus to the Exchange in accordance with
Rule 153 under the Act (such transactions are hereinafter referred to as
“At-the-Market
Offerings”) and (B) such other sales of the Shares on behalf
of the Company in its capacity as agent of the Company as shall be agreed
by the Company and KCCI.
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(e)
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KCCI
hereby covenants and agrees, unless it has or shall have obtained, as the
case may be, the prior written consent of the Company, not to make any
offer relating to the Shares that would constitute any “issuer free writing
prospectus” (as defined in Rule 433) relating to the Shares or that
would otherwise constitute a “free writing prospectus”
(as defined in Rule 405) required to be filed by the Company with the
Commission or retained by the Company under Rule
433.
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2. Transaction
Notices.
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(a)
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The
Company may, from time to time during the Term, propose to KCCI that they
enter into a Transaction to be executed on a specified Exchange Business
Day. If KCCI agrees to the terms of such proposed Transaction
or if the Company and KCCI mutually agree to modified terms for such
proposed Transaction, then the Company shall promptly send to KCCI a
notice, substantially in the form of Exhibit A
hereto (each a “Transaction Notice”),
confirming the agreed terms of such proposed Transaction. The time at
which the Company issues a Transaction Notice shall be the “Notice Time” for that
Transaction. If KCCI wishes such proposed
Transaction to become a binding agreement between it and the Company, KCCI
shall promptly indicate its acceptance thereof by countersigning and
returning such Transaction Notice to the Company or sending a written
notice to the Company (by any means permissible under Section 11 hereof)
indicating its acceptance. The terms reflected in a Transaction
Notice shall become binding on KCCI and the Company only if accepted by
KCCI no later than the times specified in Section 2(b)
below. Each Transaction Notice shall specify, among other
things:
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(i) the
Exchange Business Day on which the Shares subject to such Transaction are to be
sold (the “Purchase
Date”);
(ii) the
number of Shares that the Company agrees to sell (the “Specified Number of Shares”)
on such Purchase Date, which shall be no more than twenty percent (20%) of the
average daily trading volume in the Common Stock on the Exchange for the ninety
(90) Exchange Business Days preceding the date of delivery of the Transaction
Notice; and
(iii) the
lowest price (if any) at which the Company shall be obligated to sell Shares in
such Transaction (a “Floor
Price”).
A
Transaction Notice shall not set forth a Specified Number of Shares that, when
added to the aggregate number of Shares previously purchased and to be purchased
pursuant to pending Transaction Notices (if any) hereunder, results in a total
that exceeds the Maximum Number of Shares. The Company shall have
responsibility for maintaining records with respect to the aggregate dollar
amount of Shares sold, or for otherwise monitoring the availability of Shares
for sale under the Registration Statement. A Transaction Notice
conforming to the foregoing requirements, once accepted by KCCI, shall be
irrevocable, and the Company shall be obligated to sell the Specified Number of
Shares and KCCI shall be obligated, subject to the terms of, and satisfaction
of, the conditions set forth in this Agreement and such Transaction Notice,
including, but not limited to, Section 1(e) above and Section 2(e) below, to use
its commercially reasonable efforts to obtain performance from each Purchaser
providing offers for the Shares. Notwithstanding the foregoing, if
the terms of any Transaction contemplate that Shares shall be sold on more than
one Purchase Date, then the Company and KCCI shall mutually agree to such
additional terms and conditions as they deem necessary in respect of such
multiple Purchase Dates, and such additional terms and conditions shall be set
forth in the relevant Transaction Notice and be binding to the same extent as
any other terms contained therein.
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(b)
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The
Purchase Date in respect of the Shares deliverable pursuant to any
Transaction Notice shall occur on the Exchange Business Day next following
the date on which such Transaction Notice is accepted if such acceptance
occurs by 4:30 P.M. (New York time) on such acceptance date; provided that
if a Transaction Notice is accepted prior to 8:30 A.M. (New York time) on
an Exchange Business Day (or by such later time as the Company may agree
in its sole discretion), the Purchase Date in respect of such Shares shall
be on such date of acceptance. For Transactions, KCCI’s
commission shall be $0.03 per Share sold (the “Gross Sales Price”) (the
Gross Sale Price less KCCI’s commission is referred to herein as the
“Net Sales
Price”).
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(c)
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Payment
of the Net Sales Price for Shares sold by the Company on any Purchase Date
pursuant to a Transaction Notice shall be made to the Company by federal
funds wire transfer to an account designated by the Company in writing,
against delivery of such Shares to the accounts specified in writing by
KCCI. Such payment and delivery shall be made at or about 10:00
A.M., local time in New York, New York, on the third Exchange Business Day
(or such other day as may, from time to time, become standard industry
practice for settlement of such a securities issuance) following each
Purchase Date (the “Closing
Date”). If the Company fails for any reason to make
timely delivery of such Shares, the Company shall indemnify KCCI and its
successors and assigns and hold them harmless from and against any loss,
damage, expense, liability or claim that KCCI may incur as a result of
such failure.
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(d)
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If,
as provided in the related Transaction Notice, a Floor Price has been
agreed to by the parties with respect to a Transaction, and the Gross
Sales Price for such Transaction would not be at least equal to such Floor
Price, then the Company shall not be obligated to issue and sell through
KCCI, and KCCI shall not be obligated to place, the Specified Number of
Shares for such Transaction.
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(e)
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If
either party is aware that the Company is selling shares of Common Stock
(other than the Shares offered pursuant to this Agreement) during the Term
and the exemptive provisions set forth in Rule 101(c)(1) of Regulation M
under the Exchange Act are not satisfied with respect to the sale of such
other shares of Common Stock, it shall promptly notify the other party and
sales of the Shares under this Agreement and any Transaction Notice shall
be suspended until that or other exemptive provisions have been satisfied
in the judgment of each party.
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3. Representations and
Warranties of the Company.
The
Company represents and warrants to KCCI, on and as of (i) the date hereof, (ii)
each Notice Time, and (iii) each Closing Date that:
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(a)
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The
Company meets the requirements for use of Form S-3 under the Act for the
registration of the Transactions; the Registration Statement has become
effective under the Act and no stop order suspending the effectiveness of
the Registration Statement has been issued under the Act and no
proceedings for that purpose have been instituted or are pending or, to
the Company’s knowledge, are threatened by the Commission; at the
respective times that the Registration Statement and any post-effective
amendment thereto became effective, the Registration Statement and any
post-effective amendment thereto complied, in all material respects, with
the requirements of the Act; and the Basic Prospectus and the Prospectus
Supplement, and any supplement or amendment thereto, each when filed with
the Commission and on each Closing Date, complied or will comply in all
material respects with the provisions of the Act; each Incorporated
Document, when filed with the Commission, fully complied or will fully
comply, in all material respects, with the requirements of the Exchange
Act; the Registration Statement meets, and the offering and sale of the
Shares as contemplated hereby complies with, the requirements of Rule 415
under the Act; the Registration Statement did not, as of the time of its
effectiveness, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; as of each Notice Time and each
Closing Date, the Prospectus, as then amended or supplemented, together
with all of the then issued Permitted Free Writing Prospectuses, if any,
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representation or warranty
with respect to any statement in or omission from the Registration
Statement, any Basic Prospectus, the Prospectus or any Permitted Free
Writing Prospectus made in reliance upon and in conformity with
information relating to KCCI furnished in writing by or on behalf of KCCI
expressly for use in the Registration Statement, such Basic Prospectus,
the Prospectus or such Permitted Free Writing
Prospectus.
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(b)
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Prior
to the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any “prospectus”
(within the meaning of the Act) or used any “prospectus” (within the
meaning of the Act) in connection with the offer and sale of the Shares,
in each case other than the Prospectus; the Company has not, directly or
indirectly, prepared, used or referred to any Permitted Free Writing
Prospectus except in compliance with Rules 164 and 433 under the Act in
connection with the offer and sale of the Shares; the Company is not an
“ineligible
issuer” (as defined in Rule 405 under the Act) as of the
eligibility determination date for purposes of Rules 164 and 433 under the
Act with respect to the offering of the Shares contemplated by the
Registration Statement.
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(c)
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The
Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. “Material Adverse
Effect,” as used herein, means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties
of the Company and its Subsidiaries, taken as a whole, or (b) the ability
of the Company to perform its obligations under this Agreement, or (c) the
validity or enforceability of this Agreement. “Subsidiary,” as used herein,
means, as to any Person, any other Person in which such first Person or
one or more of its Subsidiaries or such first Person and one or more of
its Subsidiaries owns sufficient equity or voting interests to enable it
or them (as a group) ordinarily, in the absence of contingencies, to elect
a majority of the directors (or Persons performing similar functions) of
such second Person, and any partnership or joint venture if more than a
50% interest in the profits or capital thereof is owned by such first
Person or one or more of its Subsidiaries or such first Person and one or
more of its Subsidiaries (unless such partnership or joint venture can and
does ordinarily take major business actions without the prior approval of
such Person or one or more of its Subsidiaries). “Person,” as used herein,
means an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, or business
entity. The Company has the corporate power and authority to
own or hold under lease the properties it purports to own or hold under
lease, to transact the business it transacts and proposes to transact, to
execute and deliver this Agreement and to perform the provisions hereof
and thereof.
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(d)
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No
consent, approval or authorization of, or registration, filing or
declaration with, any federal, state or local governmental or regulatory
commission, board, body, authority or agency is required in connection
with the execution, delivery or performance by the Company of this
Agreement and the issuance of the Shares, except (1) such as have been, or
will have been prior to the Closing Date, obtained under the Act, (2) for
an existing order of the Minnesota Public Utilities Commission (the
“MPUC”) dated February 4, 2008 and amended February 5, 2008 approving the
capital structure of the Company including the issuance and sale of the
Shares (which order is, to the best knowledge of the Company, still in
full force and effect), and future orders of the MPUC, which will be
obtained as required, to permit the issuance and sale of the Shares
hereunder, (3) for such consents, approvals, authorizations, orders,
registrations or qualifications as may be required under state securities
or blue sky laws, as the case may be, and except in any case where the
failure to obtain such consent, approval, authorization, order,
registration or qualification would not have a Material Adverse Effect and
(4) such as may be required in connection with the exercise of the
Rights.
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(e)
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Except
as disclosed in the Registration Statement, any Basic Prospectus, the
Prospectus or any Permitted Free Writing Prospectus, all of the
outstanding equity interests of each of the Significant Subsidiaries have
been duly authorized and validly issued, are fully paid and non-assessable
and are owned by the Company, directly or indirectly, subject to no
security interest, mortgage, pledge, lien, encumbrance, claim or other
equity or adverse claim except such as do not materially affect the value
thereof (collectively, “Encumbrance”). “Significant Subsidiary,”
as used herein, has the meaning set forth in Item 1.02(w) of Regulation
S-X under the Act.
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(f)
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This
Agreement has been duly authorized by all necessary corporate action on
the part of the Company, and this Agreement constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors’ rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
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(g)
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The
Shares have been duly authorized and, when issued, delivered and paid for
as provided in this Agreement, will be validly issued, fully paid and
non-assessable. The Shares will conform in all material
respects to the description thereof contained in any Permitted Free
Writing Prospectus and the Prospectus as amended or
supplemented.
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(h)
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The
form of certificates evidencing the Shares (to the extent such Shares are
certificated) complies with all applicable legal requirements and, in all
material respects, with all applicable requirements of the Amended and
Restated Articles of Incorporation , as amended, and Bylaws, as amended,
of the Company and the requirements of the Exchange (if
any).
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(i)
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PricewaterhouseCoopers
LLP, who has audited the audited financial statements of the Company, is
an independent registered public accounting firm with respect to the
Company within the applicable rules and regulations adopted by the
Commission and the Public Accounting Oversight Board (United States) and
as required by the Act.
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(j)
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Each
of the Company and its Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state, local or foreign law, regulation or
rule, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its respective business
as described in the Registration Statement, any Basic Prospectus, the
Prospectus or any Permitted Free Writing Prospectus, unless the failure to
possess such licenses, authorizations, consents and other governmental or
regulatory authorizations and approvals or make such necessary filing,
individually or in the aggregate, would not have, or reasonably be
expected to have, a Material Adverse Effect; and except as described in
the Registration Statement, any Basic Prospectus, the Prospectus or any
Permitted Free Writing Prospectus, neither the Company nor any of its
Subsidiaries is in violation of, in default under or has received any
notice regarding a possible violation, default or revocation of any such
license, authorization, consent or approval or any federal, state, local
or foreign law, regulation or rule or any decree, order or judgment
applicable to the Company or any of its Subsidiaries the effect of which
would have, or would reasonably be expected to have, a Material Adverse
Effect.
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(k)
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Except
as disclosed in the Registration Statement, any Basic Prospectus, the
Prospectus or any Permitted Free Writing Prospectus, there are no actions,
suits, investigations or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its
Subsidiaries or any property of the Company or any of its Subsidiaries in
any court or before any arbitrator of any kind or before or by any
Governmental Authority which is reasonably likely to be determined
adversely and, if determined adversely, might reasonably be expected to
have a Material Adverse Effect.
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(l)
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The
financial statements included or incorporated in the Registration
Statement, any Basic Prospectus, the Prospectus or any Permitted Free
Writing Prospectus fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of
the respective dates specified in such financial statements and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with generally
accepted accounting principles as applied in the United States
consistently applied throughout the periods involved except as set forth
in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end
adjustments).
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(m)
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Subsequent
to the respective dates as of which information is given in the
Registration Statement, any Basic Prospectus, the Prospectus or any
Permitted Free Writing Prospectus, there has not been (i) any change in
the business, properties or assets described or referred to in the
Registration Statement, or the results of operations, condition (financial
or otherwise), business or operations of the Company and its Subsidiaries,
taken as a whole, that would have, or reasonably be expected to have, a
Material Adverse Effect, or (ii) except as otherwise expressly disclosed
in the Registration Statement, the Basic Prospectus and the Prospectus,
(A) any transaction which is material to the Company or its Subsidiaries,
taken as a whole, planned or entered into by the Company or any of its
Subsidiaries, (B) any obligation, direct or contingent, which is material
to the Company and its Subsidiaries, taken as a whole, incurred by the
Company or its Subsidiaries, except obligations incurred in the ordinary
course of business, (C) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company (other than the
Company’s regular quarterly cash dividends) or (D) any other material
information required to be publicly disclosed prior to the issuance of any
Shares in accordance with the Act or the rules and regulations promulgated
thereunder.
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(n)
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The
Company has filed in a timely manner all reports required to be filed
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act during
the preceding twelve calendar months and if during such period the Company
has relied on Rule 12b-25(b) under the Exchange Act (“Rule 12b-25(b)”)
with respect to a report or a portion of a report, that report or portion
of a report has actually been filed within the time period prescribed by
Rule 12b-25(b).
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(o)
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The
Company is not subject to regulation under the Investment Company Act of
1940, as amended.
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(p)
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None
of the Company, its Subsidiaries, or any of their respective officers,
directors and controlling persons has taken, directly or indirectly, any
action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale of the
Shares.
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(q)
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With
such exceptions as would not have, or would not reasonably be expected to
have, a Material Adverse Effect, the Company and its Subsidiaries have
good and marketable title in fee simple to all real property, if any, and
good title to all personal property owned by them, in each case free and
clear of all Encumbrances, except such as are disclosed in the Basic
Prospectus, the Prospectus and any Permitted Free Writing Prospectus or
such as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such
property by the Company and its Subsidiaries; and any real property and
buildings held under lease by the Company or any of its Subsidiaries are
held under valid, existing and binding leases, with such exceptions as are
disclosed in the Registration Statement, any Basic Prospectus, the
Prospectus or any Permitted Free Writing Prospectus or are not material
and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or such
Subsidiary.
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4. Certain Covenants of the
Company.
The
Company hereby agrees with KCCI:
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(a)
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Before
using or filing any Permitted Free Writing Prospectus relating to the
Shares and before amending or supplementing the Registration Statement,
the Basic Prospectus (other than as a result of any documents incorporated
by reference due to the filing with the Commission by the Company), or the
Prospectus (except in connection with an offering of securities other than
the Shares), or during any period of time in which a Prospectus relating
to the Shares is required to be delivered under the Act (except in
connection with an offering of securities other than the Shares), to
furnish to KCCI a copy of each such proposed Permitted Free Writing
Prospectus, amendment or supplement within a reasonable period of time
before filing any such Permitted Free Writing Prospectus, amendment or
supplement with the Commission and the Company will not use or file any
such Permitted Free Writing Prospectus or file any such proposed amendment
or supplement to which KCCI reasonably objects unless the Company’s legal
counsel has advised the Company that filing such documents is required by
law.
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(b)
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The
Company shall make commercially reasonably efforts to provide KCCI with
advance notice of the intent of the Company to file a Current Report on
Form 8-K (not the substance thereof) if such Form 8-K is to be filed at
any time during which either a Transaction Notice is in effect or a
Prospectus relating to the Shares is required to be delivered under the
Act, provided that the Company shall not be obligated to provided such
advance notice if, in its reasonable judgment, it is not legally permitted
to do so or doing so would adversely affect the Company’s ability to file
such Form 8-K in a timely manner.
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(c)
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To
prepare a Prospectus Supplement, with respect to any Shares sold by the
Company pursuant to this Agreement and to file such Prospectus Supplement
pursuant to, and within the time periods required by, Rule 424(b) under
the Act as may be required by the Act or the rules and regulations
promulgated thereunder and to file any Permitted Free Writing Prospectus
to the extent required by Rule 433 under the Act and to provide copies of
the Prospectus and such Prospectus Supplement and each Permitted Free
Writing Prospectus (to the extent not previously delivered) to KCCI via
e-mail in “.pdf” format on such filing date to an e-mail account
designated by KCCI and, at KCCI’s request, to also furnish copies of the
Prospectus and such Prospectus Supplement to each exchange or market on
which sales were effected as may be required by the rules or regulations
of such exchange or market.
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(d)
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To
file timely all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in connection
with the offering or sale of the Shares, and during such same period to
advise KCCI, promptly after the Company receives notice thereof, (i) of
the time when any amendment to the Registration Statement has been filed
or has become effective or any supplement to the Prospectus or any
Permitted Free Writing Prospectus or any amended Prospectus has been filed
with the Commission, (ii) the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any prospectus
relating to the Shares or the initiation or threatening of any proceeding
for that purpose or pursuant to Section 8A of the Act, (iii) the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, and (iv) of any request by the Commission for the amendment
of the Registration Statement or the amendment or supplementation of the
Prospectus.
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(e)
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In
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or suspending any
such qualification, to use promptly its commercially reasonable efforts to
obtain its withdrawal.
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(f)
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To
furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue
sky laws of such states as KCCI may reasonably designate and to maintain
such qualifications in effect so long as required for the distribution of
the Shares; provided that the Company shall not be required to qualify as
a foreign corporation, become a dealer of securities, or become subject to
taxation in, or to consent to the service of process under the laws of,
any such state (except service of process with respect to the offering and
sale of the Shares); and to promptly advise KCCI of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation
of any proceeding for such purpose.
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(g)
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To
make available to KCCI, without charge, from time to time as many copies
of the Prospectus and the Prospectus Supplement (or of the Prospectus or
Prospectus Supplement as amended or supplemented if the Company shall have
made any amendments or supplements thereto and documents incorporated by
reference therein) and each Permitted Free Writing Prospectus as KCCI may
reasonably request for so long as the delivery of a prospectus is required
(whether physically or through compliance with Rule 172 under the Act or
any similar rule); and for so long as this Agreement is in effect, the
Company will prepare and file promptly, subject to Section 4(a), such
amendment or amendments to the Registration Statement, any Basic
Prospectus, the Prospectus, the Prospectus Supplement or any Permitted
Free Writing Prospectus as may be necessary to comply with the
requirements of Section 10(a)(3) of the
Act.
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(h)
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Except
where such reports, communications, financial statements or other
information is available on the Commission’s EDGAR system, to furnish or
make available to KCCI during the term of this Agreement (i) copies
of any reports or other communications which the Company shall send to its
shareholders or shall from time to time publish or publicly disseminate
and (ii) copies of all annual, quarterly and current reports filed with
the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form as
may be designated by the Commission, and to furnish to KCCI from time to
time during the term of this Agreement such other information as KCCI may
reasonably request regarding the Company, in each case as soon as such
reports, communications, documents or information becomes available or
promptly upon the request of KCCI, as
applicable.
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(i)
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If,
at any time during the Term, any event shall occur or condition exist as a
result of which it is necessary, in the reasonable opinion of counsel for
the Company, to further amend or supplement the Prospectus or any
Permitted Free Writing Prospectus as then amended or supplemented in order
that the Prospectus or any such Permitted Free Writing Prospectus will not
include an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading, in light of the circumstances
existing at the time the Prospectus or any such Permitted Free Writing
Prospectus is delivered to a purchaser, or if it shall be necessary, in
the reasonable opinion of such counsel, to amend or supplement the
Registration Statement or the Prospectus or any Permitted Free Writing
Prospectus in order to comply with the requirements of the Act, immediate
notice shall be given, and confirmed in writing, to KCCI to cease the sale
of the Shares, and the Company will promptly prepare and file with the
Commission such amendment or supplement, whether by filing documents
pursuant to the Act, the Exchange Act or otherwise, as may be necessary to
correct such untrue statement or omission or to make the Registration
Statement, Prospectus or any such Permitted Free Writing Prospectus comply
with such requirements.
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(j)
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To
generally make available to its security holders as soon as practicable,
but not later than 90 days after the close of the period covered thereby,
an earnings statement (in form complying with the provisions of Section
11(a) under the Act and Rule 158 of the Commission promulgated thereunder)
covering each twelve-month period beginning, in each case, not later than
the first day of the Company’s fiscal quarter next following the “effective date” (as
defined in such Rule 158) of the Registration Statement with respect to
each sale of Shares.
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(k)
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To
furnish to KCCI two signed copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto,
including all exhibits thereto.
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(l)
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To
apply the net proceeds from the sale of the Shares in the manner described
in the Registration Statement, any Basic Prospectus, the Prospectus or any
Permitted Free Writing Prospectus.
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(m)
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The
Company will not, and will cause its Subsidiaries not to, take directly or
indirectly any action designed to cause or result in, or that constitutes
or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale of the Shares.
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(n)
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Except
as otherwise agreed between the Company and KCCI, to pay all costs,
expenses, fees and taxes in connection with (i) the preparation and filing
of the Registration Statement, any Basic Prospectus, the Prospectus, any
Permitted Free Writing Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to KCCI
and to dealers (including costs of mailing and shipment), (ii) the
registration, issue and delivery of the Shares, (iii) the qualification of
the Shares for offering and sale under state laws and the determination of
their eligibility for investment under state law as aforesaid (including
the reasonable legal fees and filing fees and other disbursements of
counsel for KCCI in connection therewith) and the printing and furnishing
of copies of any blue sky surveys or legal investment surveys to KCCI,
(iv) the listing of the Shares on the Exchange and any registration
thereof under the Exchange Act, (v) any filing for review of the public
offering of the Shares by the Financial Industry Regulatory Authority,
Inc., (vi) the reasonable fees and disbursements of counsel to the Company
and (vii) the performance of the Company’s other obligations hereunder;
provided that KCCI shall be responsible for any costs and expenses
associated with the sale and marketing of the Shares, and legal costs of
KCCI.
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(o)
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With
respect to the offering contemplated hereby, that the Company will not
offer shares of its Common Stock or any other securities convertible into
or exchangeable or exercisable for shares of Common Stock in a manner in
violation of the Act; the Company will not distribute any offering
material in connection with the offer and sale of the Shares, other than
the Registration Statement, any Basic Prospectus, the Prospectus or any
Permitted Free Writing Prospectus and other materials permitted by the Act
or the rules and regulations promulgated
thereunder.
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(p)
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On
the Purchase Date for each Transaction, the Company will not (i) offer,
pledge, announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of its Common Stock or any
securities convertible into or exercisable or exchangeable for such shares
or (ii) enter into any swap or other agreement that transfers, in whole or
in part, any of the economic consequences of ownership of such shares,
whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of shares or such other securities, in cash or
otherwise, without the prior written consent of KCCI, other than the
Shares to be sold hereunder, any shares of Common Stock of the Company
issued upon the exercise of options granted under employee stock option
plans or pursuant to the Company’s Direct Stock Purchase and Dividend
Reinvestment Plan and any shares of Common Stock or options issued in
connection with any employment or compensatory contract, compensation or
benefit plan or other similar arrangement with or for the benefit of
employees, officers, directors or
consultants.
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(q)
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The
Company will, pursuant to reasonable procedures developed in good faith,
retain copies of each Permitted Free Writing Prospectus that is not filed
with the Commission in accordance with Rule 433 under the
Act.
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(r)
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To
use commercially reasonable efforts to satisfy, or cause to be satisfied,
the conditions set forth below in Section 5 on or in respect of each
Closing Date hereunder.
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5. Execution of
Agreement.
KCCI’s
obligation to execute this Agreement shall be subject to the delivery by the
Company of the following documents in connection with and on the intended date
of the execution of this Agreement:
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(a)
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an
officer’s certificate signed by an officer of the Company certifying as to
the matters set forth in Exhibit B
hereto;
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(b)
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an
opinion of Deborah A. Amberg, Esq., Senior Vice President, General Counsel
and Secretary of the Company, as to the matters set forth in Exhibit C
hereto, and Thelen Reid Brown Raysman & Steiner LLP, as to the matters
set forth in Exhibit D
hereto, counsels for the Company, addressed to KCCI and dated the date of
this Agreement;
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(c)
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resolutions
duly adopted by the Company’s board of directors, and certified by an
officer of the Company, authorizing the Company’s execution of this
Agreement and the consummation by the Company of the transactions
contemplated hereby, including the issuance of the Shares;
and
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(d)
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in
the event the Company is required by the rules of the Exchange to make one
or more filings for approval of listing of the Shares by the Exchange,
evidence that the Shares have been approved for listing on the Exchange,
subject only to notice of issuance on or before the Purchase
Date.
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6. Additional Covenants of the
Company.
The
Company further covenants and agrees with KCCI as follows:
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(a)
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Each
issuance of a Transaction Notice by the Company shall be deemed to be an
affirmation that the representations and warranties of the Company herein
contained and contained in any certificate delivered to KCCI pursuant
hereto are true and correct at the Notice Time, and an undertaking that
such representations and warranties will be true and correct on any
Closing Date (subject only to Section 4(i) above), and at the time of
delivery to KCCI of Shares pursuant to the Transaction Notice, as though
made at and as of each such time (it being understood that such
representations and warranties shall relate to the Registration Statement,
any Basic Prospectus, the Prospectus or any Permitted Free Writing
Prospectus as amended and supplemented to the time of such Transaction
Notice).
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(b)
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Each
time that the Registration Statement, any Basic Prospectus, the Prospectus
or any Permitted Free Writing Prospectus shall be amended or supplemented
(including by the filing of any Incorporated Document (subject to the
proviso at the end of this subsection (b) in the case of a Current Report
on Form 8-K), but excluding any amendment or supplement in connection with
an offering of securities other than the Shares or any prospectus
supplement relating solely to the offering of Shares pursuant to a
Transaction Notice), the Company shall furnish or cause to be furnished to
KCCI forthwith a certificate, dated the date of filing with the Commission
or the date of effectiveness of such amendment or supplement, as
applicable, in form satisfactory to KCCI, certifying as to the matters set
forth in Exhibit
B hereto at the time of the filing or effectiveness of such
amendment or supplement, as applicable, as though made at and as of such
time (except that such statements shall be deemed to relate to the
Registration Statement, any Basic Prospectus, the Prospectus or any
Permitted Free Writing Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same tenor as
the certificate referred to in Section 5(a) hereof, modified as necessary
to relate to the Registration Statement, any Basic Prospectus, the
Prospectus or any Permitted Free Writing Prospectus as amended and
supplemented to the time of delivery of such certificate; provided that,
the Company will not be required to furnish such a certificate to KCCI in
connection with the filing of a Current Report on Form 8-K unless (i) such
Current Report on Form 8-K is filed at any time during which either a
Transaction Notice is in effect or a Prospectus relating to the Shares is
required to be delivered under the Act and (ii) KCCI has reasonably
requested such a certificate based upon the event or events reported in
such Current Report on Form 8-K.
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(c)
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Upon
the filing with the Commission of the Company’s Annual Report on Form 10-K
and each Quarterly Report on Form 10-Q, as promptly as reasonably
practicable, the Company shall furnish or cause to be furnished forthwith
to KCCI the written opinion of Deborah A. Amberg, Esq., Senior Vice
President, General Counsel & Secretary and Thelen Reid Brown Raysman
& Steiner LLP, or other counsel satisfactory to KCCI, dated the date
of filing with the Commission or the date of effectiveness of such
amendment or supplement, as applicable, in form and substance satisfactory
to KCCI, of the same tenor as the opinions referred to in Section 5(b)
hereof, but modified as necessary to relate to the Registration Statement,
any Basic Prospectus, the Prospectus or any Permitted Free Writing
Prospectus as amended and supplemented to the time of delivery of such
opinion or, in lieu of such opinion, counsel last furnishing such opinion
to KCCI shall furnish KCCI with a letter substantially to the effect that
KCCI may rely on such last opinion to the same extent as though it was
dated the date of such letter authorizing reliance (except that statements
in such last opinion shall be deemed to relate to the Registration
Statement, any Basic Prospectus, the Prospectus or any Permitted Free
Writing Prospectus as amended and supplemented to the time of delivery of
such letter authorizing reliance).
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(d)
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If
requested by KCCI, as soon as practicable after the filing with the
Commission of the Company’s Annual Report on Form 10-K and each Quarterly
Report on Form 10-Q, and, if requested by KCCI, a Current Report on Form
8-K that includes financial statements (excluding (i) any financial
statements which are furnished and not filed and (ii) any financial
statements of any business acquire), the Company shall cause
PricewaterhouseCoopers LLP promptly to furnish to KCCI in a form
reasonably satisfactory to KCCI that relates to the Registration
Statement, any Basic Prospectus, the Prospectus or any Permitted Free
Writing Prospectus as amended and supplemented to the date of such
letter.
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(e)
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The
Company shall give a written notice to KCCI of the issuance of any
authorization by the MPUC relating to the authority of the Company to
issue and sell shares of Common Stock. Following the issuance
of such authorization, the legal opinions of counsel attached hereto as
Exhibits B and C shall be respectively modified to reflect such
authorization.
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(f)
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To
disclose in its Quarterly Reports on Form 10-Q and in its Annual Report on
Form 10-K the number of the Shares sold through KCCI under this Agreement,
the net proceeds to the Company from the sale of the Shares and the
compensation paid by the Company with respect to sales of the Shares
pursuant to this Agreement during the relevant
quarter.
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(g)
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The
Company shall not be required to deliver the documents listed in Sections
6(b), 6(c), 6(d) and 6(e) if the Company notifies the Agent pursuant to
Section 11 that the Company does not intend to sell Shares pursuant to
this Agreement during the current fiscal quarter, provided that if the
Company subsequently elects to sell Shares pursuant to this Agreement
during such fiscal quarter the documents required by Sections 6(b), 6(c),
6(d) and 6(e) shall be delivered to the
Agent
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7. Conditions of KCCI’s
Obligation to Execute Sales.
KCCI’s
obligation to execute any sale of Shares pursuant to a Transaction Notice that
has been accepted by KCCI shall be subject to the satisfaction of the following
conditions at the time of acceptance of the Transaction Notice, the time of the
commencement of trading on the Exchange on the Purchase Date and at the time of
closing on the Closing Date:
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(a)
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The
representations and warranties on the part of the Company herein contained
or contained in any certificate of an officer or officers of the Company
delivered pursuant to the provisions hereof shall be true and correct in
all respects.
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(b)
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The
Company shall have performed and observed its covenants and other
obligations hereunder in all material
respects.
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(c)
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From
the date of delivery of the Transaction Notice until the Closing Date,
trading in the Common Stock on the Exchange shall not have been
suspended.
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(d)
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(i)
No order suspending the effectiveness of the Registration Statement shall
be in effect, and no proceeding for such purpose or pursuant to Section 8A
under the Act shall be pending before or threatened by the Commission; the
Prospectus and each Permitted Free Writing Prospectus shall have been
timely filed with the Commission under the Act (in the case of an
Permitted Free Writing Prospectus, to the extent required by Rule 433
under the Act); and all requests by the Commission for additional
information shall have been complied with to the satisfaction of the
Commission and no suspension of the qualification of the Shares for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes, will have occurred and be in
effect at the time the Company issues a Transaction Notice; and (ii) the
Registration Statement, any Basic Prospectus, the Prospectus or any
Permitted Free Writing Prospectus shall not contain an untrue statement of
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading at the time the
Company issues a Transaction
Notice.
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(e)
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Subsequent
to the time of acceptance of the Transaction Notice, (i) no downgrading
shall have occurred in the rating accorded any securities of the Company
by any “nationally recognized statistical rating organization”, as defined
in Section 3(a)(62) of the Exchange Act and (ii) no such organization
shall have publicly announced that it has under surveillance or review, or
has changed its outlook with respect to, its rating of any securities of
the Company with possible negative
implications.
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(f)
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The
Shares to be issued pursuant to the Transaction Notice shall have been
approved for listing on the Exchange, subject only to notice of
issuance.
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(g)
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No
amendment or supplement to the Registration Statement, any Basic
Prospectus, the Prospectus or any Permitted Free Writing Prospectus shall
have been filed to which KCCI shall have reasonably objected in
writing.
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(h)
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On
or prior to the Closing Date, the Company shall have furnished to KCCI
such further certificates and documents as KCCI may reasonably
request.
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8. Termination by
KCCI.
This
Agreement and the obligations of KCCI hereunder may be terminated, in the sole
and absolute discretion of KCCI, if at any time (i) any of the covenants or
conditions specified in Section 6 shall not have been performed or satisfied
when and as required by this Agreement to be fulfilled, (ii) there has been
since the respective dates as of which information is given in the Registration
Statement, any change in the business, properties or assets or the results of
operations, condition (financial or otherwise), business or operations of the
Company and its Subsidiaries, taken as a whole, that would have, or reasonably
be expected to have, a Material Adverse Effect, (iii) there has since the date
hereof occurred an outbreak or escalation of hostilities, any material adverse
change in the financial markets or any other national or international calamity
or crisis the effect of which on the financial markets of the United States is
such as to make it, in the reasonable judgment of KCCI, impracticable or
inadvisable to market or deliver the Shares on the terms and in the manner
contemplated in the Prospectus or enforce contracts for the sale of the Shares,
or (iv) trading in any securities of the Company has been suspended by the
Commission or by the Exchange or if trading generally on the Exchange has been
suspended, or limitations on prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by such Exchange or the
Financial Industry Regulatory Authority, Inc. or by order of the Commission or
any other governmental authority, or (v) a banking moratorium has been declared
by federal or New York authorities.
If KCCI
elects to terminate this Agreement as provided in this Section 8, KCCI shall
promptly notify the Company of such termination by telephone, promptly confirmed
by facsimile stating in reasonable detail the basis therefore. If a
Transaction Notice is pending at the time of termination, KCCI may declare such
Transaction Notice void or may require the Company to complete the sale of
Shares as specified in the Transaction Notice, at KCCI’s sole discretion (to the
extent doing so is permitted under applicable law and regulation).
If the
sale of Shares, as contemplated by this Agreement, is not carried out by KCCI
for any reason permitted under this Agreement or if such sale is not carried out
because the Company shall be unable to comply in all material respects with any
of the terms of this Agreement, the Company shall not be under any obligation or
liability under this Agreement (except to the extent provided in Sections 4(n)
and 10 hereof) and KCCI shall be under no obligation or liability to the Company
under this Agreement (except to the extent provided in Section 10 hereof) or to
one another hereunder.
KCCI may
terminate this Agreement for any reason upon giving ten (10) Exchange Business
Days prior notice to the Company. Any such termination shall be
without liability of any party to any other party except that the provisions of
Sections 4(n) and 10 hereof shall remain in full force and effect
notwithstanding such termination.
9. Termination by
Company.
The
Company may terminate this Agreement in its sole discretion upon ten (10)
Exchange Business Days prior written notice to KCCI.
10. Indemnity and
Contribution.
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(a)
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The
Company agrees to indemnify and hold harmless KCCI, its directors and
officers and each person, if any, who controls KCCI within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against
any and all losses, claims, damages and liabilities (including, without
limitation, reasonable out-of-pocket legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are incurred), that 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 caused by any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary in order to make the statements therein,
not misleading, or (ii) or any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any amendment
or supplement thereto), any Permitted Free Writing Prospectus (or any
amendment or supplement thereto), or caused by any 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, in each case except insofar as such losses, claims,
damages or liabilities arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to KCCI
furnished to the Company in writing by KCCI expressly for use
therein.
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(b)
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KCCI
agrees to indemnify and hold harmless the Company, its directors, its
officers who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act to the same extent as the indemnity set
forth in paragraph (a) above, but only with respect to any losses, claims,
damages or liabilities that arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to KCCI
furnished to the Company in writing by KCCI expressly for use in the
Registration Statement, the Basic Prospectus, the Prospectus (or any
amendment or supplement thereto), any Permitted Free Writing Prospectus
(or any amendment or supplement
thereto).
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(c)
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If
any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any
person in respect of which indemnification or contribution may be sought
pursuant to this Section 10, such person (the “Indemnified Person”)
shall promptly notify the person against whom such indemnification or
contribution may be sought (the “Indemnifying Person”) in
writing; provided that the failure to notify the Indemnifying Person shall
not relieve it from any liability that it may have to an Indemnified
Person otherwise than under this Section 10. If any such
proceeding shall be brought or asserted against an Indemnified Person and
it shall have notified the Indemnifying Person thereof, the Indemnifying
Person shall retain counsel reasonably satisfactory to the Indemnified
Person (who shall not, without the consent of the Indemnified Person, be
counsel to the Indemnifying Person) to represent the Indemnified Person in
such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding, as incurred. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary or (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person. It is
understood and agreed that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be paid or reimbursed
as they are incurred. Any such separate firm for KCCI, its
directors and officers and any control persons of KCCI shall be designated
in writing by KCCI and any such separate firm for the Company, its
directors, its officers who signed the Registration Statement and any
control persons of the Company shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld, but if settled with such
consent or if there be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify each Indemnified Person from and
against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the written
consent of the Indemnified Person, which consent shall not be unreasonably
withheld, effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (x) includes an unconditional release of
such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or
any admission of fault, culpability or a failure to act by or on behalf of
any Indemnified Person.
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(d)
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If
the indemnification provided for in paragraphs (a) and (b) above is
unavailable to an Indemnified Person or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative fault of the Company, on the one hand, and KCCI, on the
other, in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, (ii) the relative benefits
received by the Company, on the one hand, and KCCI, on the other, from the
offering of the Shares or (iii) any other relevant equitable
considerations; provided, however, that no indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution with respect thereto from any
indemnifying party not guilty of such fraudulent
misrepresentation. 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 KCCI and
each such party’s relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or
omission. The Company and KCCI agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were to
be determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this
subsection (d), KCCI shall not be required to contribute in excess of
the amount equal to the excess of (i) the total price at which the
Shares offered by it were offered to the public, over (ii) the amount
of any damages which KCCI has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged
omission.
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(e)
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The
remedies provided for in this Section 10 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
Indemnified Person at law or in
equity.
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11. Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any
standard form of communication, and if to KCCI, shall be sufficient in all
respects if delivered to KCCI Inc., 80 Maiden Lane, Suite 2201, New York, New
York 10038, and if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at ALLETE, Inc.,
30 West Superior Street, Duluth, Minnesota 55802, Attn:
Treasurer. Notwithstanding the foregoing, Transaction Notices shall
be delivered to KCCI, and acceptance of Transaction Notices by the Company,
shall be by facsimile and receipt confirmed by telephone at such numbers as
shall be agreed upon by KCCI and the Company in writing from time to
time.
12. No Fiduciary
Relationship.
The
Company acknowledges and agrees that KCCI is acting solely in the capacity of an
arm’s length contractual counterparty to the Company with respect to the
offering of Shares contemplated hereby (including in connection with determining
the terms of the offering) and not as a financial advisor or a fiduciary to the
Company or any other person. Additionally, KCCI is not advising the
Company or any other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction. The Company shall consult
with its own advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of the transactions
contemplated hereby, and KCCI shall have no responsibility or liability to the
Company with respect thereto except as set forth herein. Any review
by KCCI of the Company, the transactions contemplated hereby or other matters
relating to such transactions will be performed solely for the benefit of KCCI
and shall not be on behalf of the Company.
13. Adjustments for Stock
Splits.
The
parties acknowledge and agree that all share related numbers related to the
Shares contained in this Agreement and any Transaction Notice shall be adjusted
to take into account any stock split effected with respect to the Common
Stock.
14. Governing Law;
Construction.
THIS
AGREEMENT SHALL BE GOVERNED BY, INTERPRETED UNDER AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS THEREOF. The Section headings in
this Agreement have been inserted as a matter of convenience of reference and
are not a part of this Agreement.
15. Parties in
Interest.
The
Agreement herein set forth has been and is made solely for the benefit of KCCI
and the Company and to the extent provided in Section 10 hereof the controlling
persons, directors and officers referred to in such section, and their
respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, association or
corporation (including a purchaser, as such purchaser, from KCCI) shall acquire
or have any right under or by virtue of this Agreement.
16. Counterparts.
This
Agreement may be signed in counterparts (which may include counterparts
delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same
instrument.
17. Successors and
Assigns.
This
Agreement shall be binding upon KCCI and the Company and their successors and
assigns and any successor or assign of any substantial portion of the Company’s
and KCCI’s respective businesses and/or assets.
18. Survival.
The
respective indemnities, rights of contribution, representations, warranties and
agreements of the Company and KCCI contained in this Agreement or made by or on
behalf of the Company or KCCI pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Shares and shall remain in full force and effect, regardless of any termination
of this Agreement or any investigation made by or on behalf of the Company or
KCCI.
19. Amendments or
Waivers.
No
amendment or waiver of any provision of this Agreement, nor any consent or
approval to any departure therefrom, shall in any event be effective unless the
same shall be in writing and signed by the parties hereto.
If the
foregoing correctly sets forth the understanding among the Company and KCCI,
please so indicate in the space provided below for the purpose, whereupon this
letter and your acceptance shall constitute a binding agreement between the
Company and KCCI.
Very
truly yours,
ALLETE,
Inc.
By: /s/ Mark
A. Schober
Mark A. Schober
Senior Vice President and Chief
Financial Officer
Accepted
and agreed to as of the
date
first above written:
KCCI
Inc.
By: /s/ Mark Nauman
Mark
Nauman
President