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CONTIFINANCIAL CORPORATION
(a Delaware corporation)
560,000 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: __________, 1997
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TABLE OF CONTENTS
INTERNATIONAL PURCHASE AGREEMENT................................................................................ 1
SECTION 1. Representations and Warranties................................................................ 3
(a) Representations and Warranties by the Company...................................... 3
(i) Compliance with Registration Requirements............................ 3
(ii) Incorporated Documents............................................... 4
(iii) Independent Accountants.............................................. 5
(iv) Financial Statements................................................. 5
(v) No Material Adverse Change in Business............................... 5
(vi) Good Standing of the Company......................................... 5
(vii) Good Standing of Subsidiaries........................................ 5
(viii) Capitalization....................................................... 6
(ix) Description of Common Stock.......................................... 6
(x) Authorization of Agreement........................................... 6
(xi) Authorization and Description of Securities.......................... 6
(xii) Absence of Defaults and Conflicts.................................... 6
(xiii) Absence of Labor Dispute............................................. 7
(xiv) Absence of Proceedings............................................... 7
(xv) Accuracy of Exhibits................................................. 8
(xvi) Possession of Intellectual Property.................................. 8
(xvii) Absence of Further Requirements...................................... 8
(xviii) Possession of Licenses and Permits................................... 8
(xix) Title to Property.................................................... 9
(xx) Investment Company Act............................................... 9
(xxi) Environmental Laws................................................... 9
(xxii) Compliance with Laws................................................. 10
(xxiii) Registration Rights.................................................. 10
(xxiv) Options and Warrants................................................. 10
(xxv) Taxes................................................................ 10
(xxvi) Insurance............................................................ 10
(xxvii) Accounting Control................................................... 11
(xxviii) Restriction on Sale of Securities.................................... 11
(xxix) Accuracy of Information.............................................. 11
(b) Officer's Certificates............................................................. 11
SECTION 2. Sale and Delivery to International Managers; Closing.......................................... 11
(a) Initial Securities................................................................. 11
(b) Option Securities.................................................................. 11
(c) Payment............................................................................ 12
(d) Denominations; Registration........................................................ 13
SECTION 3. Covenants of the Company...................................................................... 13
(a) Compliance with Securities Regulations and Commission Requests..................... 13
(b) Filing of Amendments............................................................... 13
(c) Delivery of Registration Statements................................................ 13
(d) Delivery of Prospectuses........................................................... 14
(e) Continued Compliance with Securities Laws.......................................... 14
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(f) Blue Sky Qualifications............................................................ 14
(g) Rule 158........................................................................... 15
(h) Use of Proceeds.................................................................... 15
(i) Listing............................................................................ 15
(j) Restriction on Sale of Securities.................................................. 15
(k) Reporting Requirements............................................................. 15
SECTION 4. Payment of Expenses........................................................................... 15
(a) Expenses........................................................................... 16
(b) Termination of Agreement........................................................... 16
SECTION 5. Conditions.................................................................................... 16
(a) Conditions of International Managers' Obligations.................................. 16
(i) Effectiveness of Registration Statement.............................. 16
(ii) Opinions of Counsel for the Company.................................. 17
(iii) Opinion of Counsel for International Managers........................ 17
(iv) Officers' Certificate................................................ 17
(v) Accountant's Comfort Letter.......................................... 17
(vi) Accountant's Bring-down Comfort Letter............................... 18
(vii) Approval of Listing.................................................. 18
(viii) No Objection......................................................... 18
(ix) Lock-up Agreements................................................... 18
(x) Purchase of Initial U.S. Securities.................................. 18
(xi) Conditions to Purchase of International Option
Securities........................................................... 18
(xii) Additional Documents................................................. 19
(b) Termination of Agreement........................................................... 19
SECTION 6. Indemnification............................................................................... 19
(a) Indemnification of International Managers.......................................... 19
(b) Indemnification of Company, Directors and Officers................................. 20
(c) Actions against Parties; Notification.............................................. 21
(d) Settlement without Consent if Failure to Reimburse................................. 21
SECTION 7. Contribution.................................................................................. 22
SECTION 8. Representations, Warranties and Agreements to Survive Delivery................................ 23
SECTION 9. Termination of Agreement...................................................................... 23
(a) Termination; General............................................................... 23
(b) Liabilities........................................................................ 24
SECTION 10. Default by One or More of the International Managers.......................................... 24
SECTION 11. Notices....................................................................................... 25
SECTION 12. Parties....................................................................................... 25
SECTION 13. GOVERNING LAW AND TIME........................................................................ 25
SECTION 14. Effect of Headings............................................................................ 25
SCHEDULE A List of International Managers..........................................................Sch A - 1
SCHEDULE B Price per share of Common Stock.........................................................Sch B - 1
SCHEDULE C List of Subsidiaries....................................................................Sch C - 1
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SCHEDULE D List of Persons Subject to Lock-up......................................................Sch D - 1
EXHIBIT A Form of Lock-up Letter....................................................................Exh A-1
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CONTIFINANCIAL CORPORATION
(a Delaware corporation)
INTERNATIONAL PURCHASE AGREEMENT
__________ __, 1997
XXXXXXX XXXXX INTERNATIONAL
BEAR, XXXXXXX INTERNATIONAL LIMITED
as Lead Managers of the several International Managers
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Ladies and Gentlemen:
ContiFinancial Corporation, a Delaware corporation (the "Company")
confirms its agreement with Xxxxxxx Xxxxx International ("Xxxxxxx Xxxxx"), Bear,
Xxxxxxx International Limited and each of the other International Managers named
in Schedule A hereto (collectively, the "International Managers", which term
shall also include any underwriter substituted as provided in Section 10 hereof,
for whom Xxxxxxx Xxxxx and Bear, Xxxxxxx International Limited are acting as
representatives (in such capacity, the "Lead Managers"), with respect to (i) the
issue and sale by the Company and the purchase by the International Managers,
acting severally and not jointly, of the respective numbers of shares of Common
Stock, par value $.01 per share, of the Company (the "Common Stock") set forth
in Schedule A hereto and (ii) the grant by the Company to the International
Managers, acting severally and not jointly, of the option described in Section
2(b) hereof to purchase all or any part of 84,000 additional shares of Common
Stock to cover over-allotments, if any. The aforesaid 560,000 shares of Common
Stock (the "Initial International Securities") to be purchased by the
International Managers pursuant to this Agreement and all or any part of the
84,000 shares of Common Stock subject to the option described in Section 2(b)
hereof (the "International Option Securities") are hereinafter called,
collectively, the "International Securities".
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It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Company of an aggregate of 2,240,000 shares of Common Stock
(the "Initial U.S. Securities") through arrangements with certain underwriters
in the United States and Canada (the "U.S. Underwriters") for which Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Bear, Xxxxxxx & Co. Inc. are
acting as representatives and the grant by the Company to the U.S. Underwriters,
acting severally and not jointly, of an option to purchase all or any part of
the 336,000 additional shares of Common Stock, subject to the option described
in Section 2(b) of the U.S. Purchase Agreement, to cover over-allotments, if any
(the "U.S. Option Securities" and, together with the International Option
Securities, the "Option Securities"). The Initial U.S. Securities and the U.S.
Option Securities are hereinafter called the "U.S. Securities". It is understood
that the Company is not obligated to sell, and the International Managers are
not obligated to purchase, any Initial International Securities unless all of
the Initial U.S. Securities are contemporaneously purchased by the U.S.
Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities", and the International Securities, and the U.S.
Securities are hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.
The Company understands that the International Managers propose to make
a public offering of the International Securities as soon as the Lead Managers
deem advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-21839) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the Rules and Regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. Two forms of prospectus are to be used in connection
with the offering and sale of the Securities: one relating to the International
Securities (the "Form of International Prospectus") and one relating to the U.S.
Securities (the "Form of U.S. Prospectus"). The Form of International Prospectus
is identical to the Form of U.S. Prospectus, except for the front cover and back
cover pages and the information under the caption "Underwriting". The
information included in any such prospectus that was omitted from such
registration statement at the time it became effective but that is deemed to be
part of such registration statement at the time it became effective pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information." Each Form
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of International Prospectus and Form of U.S. Prospectus used before such
registration statement became effective, and any prospectus relating to the
offering of the Securities that omitted the Rule 430A Information that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, the schedules thereto, if any, and
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the 430A
Information, is herein called the "Registration Statement." Any registration
statement filed by the Company pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" shall include the Rule
462(b) Registration Statement. The final Form of International Prospectus and
the final Form of U.S. Prospectus, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the
forms first furnished to the Underwriters for use in connection with the
offering of the Securities are herein called the "International Prospectus" and
the "U.S. Prospectus," respectively, and collectively, the "Prospectuses." For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the International Prospectus, the U.S. Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus (including the Form of U.S.
Prospectus and Form of International Prospectus) or the Prospectuses (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus
(including the Form of U.S. Prospectus and Form of International Prospectus) or
the Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectuses, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each International Manager as of the date hereof and
as of the Closing Time referred to in Section 2(c) hereof, and agrees with each
International Manager, as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for the use of Form S-3 under the 1933 Act. Each
of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act and no
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proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not 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.
Neither of the Prospectuses nor any amendments or supplements thereto,
at the time the Prospectuses or amendments or supplements thereto were
issued and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will 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. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or International Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
International Manager through the Lead Managers expressly for use in
the Registration Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424(b) under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and, if applicable, each preliminary prospectus and the
Prospectuses delivered to the International Managers for use in
connection with the offering of the Securities was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectuses, when they became effective or at the time they
were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations or the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"),
as applicable, and, when read together with the other information in
the Prospectuses, at the time the Registration Statement became
effective, at the time the Prospectuses were issued and at the Closing
Time (and, if any International Option Securities are purchased, at the
Date of Delivery), did not and will not 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.
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(iii) Independent Accountants. The accountants who
certified the financial statements and supporting schedules of the
Company included in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements of the
Company included in the Registration Statement and the Prospectuses,
together with the related schedules and notes, present fairly the
financial position of the Company and its consolidated subsidiaries at
the dates indicated and the statement of operations, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
for the periods specified; said financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP") in
the United States applied on a consistent basis throughout the periods
involved except for changes in GAAP during such periods. The supporting
schedules, if any, included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectuses present fairly the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration
Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, operations or business of the Company
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each, a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
5
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock
of each such Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of
such Subsidiary. The only subsidiaries of the Company are the
subsidiaries listed on Schedule C hereto.
(viii) Capitalization. The shares of outstanding capital stock
of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive
or other similar rights of any securityholder of the Company.
(ix) Description of Common Stock. The Common Stock conforms
to the statements relating thereto contained in the Prospectuses.
(x) Authorization of Agreement. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(xi) Authorization and Description of Securities. The
Securities to be purchased by the International Managers and the U.S.
Underwriters from the Company have been duly authorized for issuance
and sale to the International Managers pursuant to this Agreement and
the U.S. Underwriters pursuant to the U.S. Purchase Agreement,
respectively, and, when issued and delivered by the Company pursuant to
this Agreement and the U.S. Purchase Agreement, respectively, against
payment of the consideration set forth herein and the U.S. Purchase
Agreement, respectively, will be validly issued, fully paid and
non-assessable; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar rights of
any securityholder of the Company.
(xii) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter or bylaws or
limited liability company agreement or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which it or any
of them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (collectively,
6
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the U.S. Purchase Agreement and the
consummation of the transactions contemplated in this Agreement, the
U.S. Purchase Agreement and in the Registration Statement (including
the issuance and sale of the Securities and the use of proceeds from
the sale of the Securities as described in the Prospectuses under "Use
of Proceeds") and compliance by the Company with its obligations under
this Agreement and the U.S. Purchase Agreement have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to, the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the
charter or bylaws or limited liability company agreement of the Company
or any subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any subsidiary or any of their assets, properties or
operations (except for such violations of law, statute, rule
regulation, judgment, order writ or decree that would not result in a
Material Adverse Effect). As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness of the Company or any subsidiary (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary. As used herein, a
"subsidiary" means a subsidiary more than a majority of whose
outstanding securities representing the right, other than as affected
by events of default, to vote for the election of directors of such
subsidiary or to direct or cause the direction of the management and
policies of such subsidiary, is owned, directly or indirectly, by the
Company.
(xiii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any Subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xiv) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending with
respect to which the Company has received service of process, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect, or which might,
7
individually or in the aggregate, reasonably be expected to materially
and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated by this Agreement and the
U.S. Purchase Agreement or the performance by the Company of its
obligations hereunder or thereunder; the aggregate of all pending legal
or governmental proceedings (with respect to which the Company has
received service of process) to which the Company or any subsidiary is
a party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect.
(xv) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to
be filed as exhibits thereto which have not been so described or filed
as required.
(xvi) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any reasonably likely unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate, would
result in a Material Adverse Effect.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations in connection with the offering, issuance or sale of
the Securities under this Agreement and the U.S. Purchase Agreement or
the consummation of the transactions contemplated by this Agreement and
the U.S. Purchase Agreement, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
the 1934 Act or the 1934 Act Regulations and foreign or state
securities laws.
(xviii) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued
by the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except where the failure to possess any such Governmental Licenses
would not, singly or in the aggregate, result in a Material Adverse
Effect; the Company and its subsidiaries are
8
in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except where the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of any reasonably likely
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectuses or (b) do not, singly or in
the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any of its subsidiaries; and all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectuses, are in
full force and effect, and neither the Company nor any subsidiary has
any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xx) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials
9
(collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with
their requirements, (C) to the Company's knowledge, there are no
pending (with respect to which the Company has received service of
process) or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and
(D) to the Company's knowledge, there are no events or circumstances
that might reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or
any Environmental Laws.
(xxii) Compliance with Laws. Except as set forth in the
Registration Statement or the Prospectuses, the Company and its
Subsidiaries are in compliance in all material respects with all
applicable laws, statutes, ordinances, rules or regulations, the
enforcement of which, individually or in the aggregate, would be
reasonably expected to result in a Material Adverse Effect.
(xxiii) Registration Rights. Except as set forth in the
Registration Statement or the Prospectuses, there are no persons with
registration or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the
Company under the 1933 Act.
(xxiv) Options and Warrants. Except as disclosed in the
Registration Statement or the Prospectuses, there are no outstanding
options, warrants, or other rights calling for the issuance of, and no
commitments, plans or arrangements to issue, any, shares of capital
stock of the Company or any of its Subsidiaries or any security
convertible into or exchangeable for capital stock of the Company or
any of its Subsidiaries.
(xxv) Taxes. The Company and its Subsidiaries have filed all
federal, state, local and foreign tax returns that are required to be
filed or have duly requested extensions thereof and have paid all taxes
required to be paid by any of them and any related assessments, fines
or penalties, except for any such tax, assessment, fine or penalty that
is being contested in good faith and by appropriate proceedings; and
adequate charges, accruals and reserves have been provided for in the
financial statements referred to in Section 1 (a)(iv) above in respect
of all federal, state, local and foreign taxes for all periods as to
which the tax liability of the Company or any of its Subsidiaries has
not been finally determined or remains open to examination by
applicable taxing authorities.
(xxvi) Insurance. The Company and its Subsidiaries carry or
are entitled to the benefits of insurance in such amounts and covering
such risks as is, in the Company's opinion, reasonably adequate for its
purposes.
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(xxvii) Accounting Control. The Company and its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general and specific authorizations; (ii)
transactions are recorded as necessary to permit preparations of
financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorizations; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxviii) Restriction on Sale of Securities. The Company has
obtained and delivered to the Lead Managers the agreements of the
persons and entities named in Schedule D annexed hereto to the effect
that each such person will not, for a period of 90 days from the date
hereof and except as otherwise provided therein, without the prior
written consent of Xxxxxxx Xxxxx directly or indirectly, offer to sell,
grant any option for the sale of, or otherwise dispose of, any shares
of Common Stock or any securities convertible into or exercisable for
Common Stock owned by such person or entity or with respect to which
such person has the power of disposition.
(xxix) Accuracy of Information. The information in the
International Prospectus regarding delinquencies and foreclosures, loan
losses, the value of the servicing portfolios and Excess Spread
Receivables (as such term is defined in the Registration Statement) is
accurate and complete in all material respects.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company and delivered to the Lead Managers or counsel for the International
Managers in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company to each International Manager as to
the matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each International Manager, severally and
not jointly, and each International Manager, severally and not jointly, agrees
to purchase from the Company, at the price per share set forth in Schedule B,
the number of Initial International Securities set forth in Schedule A opposite
the name of such International Manager, plus any additional number of Initial
International Securities which such International Manager may become obligated
to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
International Managers, severally and not jointly, to purchase up to an
additional 84,000 shares of Common Stock at the price per share set forth in
Schedule B. The
11
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial International Securities upon notice by the Lead
Managers to the Company setting forth the number of International Option
Securities as to which the several International Managers are then exercising
the option and the time and date of payment and delivery for such Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the Lead Managers, but shall not be later than seven full business
days after the exercise of said option, nor in any event prior to the Closing
Time, as hereinafter defined. If the option is exercised as to all or any
portion of the International Option Securities, each of the International
Managers, acting severally and not jointly, will purchase that proportion of the
total number of International Option Securities then being purchased which the
number of Initial International Securities set forth in Schedule A opposite the
name of such International Manager bears to the total number of Initial
International Securities, subject in each case to such adjustments as the Lead
Managers in their discretion shall make to eliminate any sales or purchases of
fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxx &
Xxxx LLP, Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
place as shall be agreed upon by the Lead Managers and the Company, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Lead Managers and the Company (such time and date of payment and delivery being
herein called "Closing Time"). In addition, in the event that any or all of the
International Option Securities are purchased by the International Managers,
payment of the purchase price for, and delivery of certificates for, such
International Option Securities shall be made at the above-mentioned offices, or
at such other place as shall be agreed upon by the Lead Managers and the
Company, on each Date of Delivery as specified in the notice from the Lead
Managers to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such International Manager from its obligations
hereunder.
12
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
International Manager as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
and will notify the Lead Managers immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectuses or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Lead Managers
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectuses, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will furnish the Lead Managers with copies
of any such documents a reasonable amount of time prior to such proposed filing
or use, as the case may be, and will not file or use any such document to which
the Lead Managers or counsel for the International Managers shall reasonably
object in a timely manner.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Lead Managers, counsel for the International Managers,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents and
certificates of experts,
13
and will also deliver to the Lead Mangers, without charge, a conformed copy of
the Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the International Managers. If applicable, the
copies of the Registration Statement and each amendment thereto furnished to the
International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to each International Manager, without charge,
during the period when the International Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of the International
Prospectus (as amended or supplemented) as such International Manager may
reasonably request. If applicable, the International Prospectus and any
amendments or supplements thereto furnished to the International Managers will
be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T
or Rule 430A.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement, the U.S. Purchase Agreement and in the
Prospectuses. If at any time prior to the expiration of nine months after the
time of issuance of the Prospectuses, a prospectus is required by the 1933 Act
to be delivered in connection with sales of the Securities, and if at such time
any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the International Managers or counsel
for the Company, to amend the Registration Statement or amend or supplement any
Prospectus in order that the Prospectuses will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of any such counsel, at any such time to
amend the Registration Statement or amend or supplement any Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the Prospectuses
comply with such requirements, and the Company will furnish to the
International Managers such number of copies of such amendment or supplement as
the International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the International Managers, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Lead Managers may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any
14
general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified or
to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b) Registration
Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Xxxxxxx Xxxxx, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof, (C) any shares of Common Stock issued
or options to purchase Common Stock granted pursuant to existing employee
benefit plans of the Company or (D) any shares of Common Stock issued pursuant
to any non-employee director stock plan or dividend reinvestment plan.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
15
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the International
Managers of this Agreement, any Agreement Among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters and the
transfer of the Securities between the U.S. Underwriters and the International
Managers, (iv) the fees and disbursements of the Company's counsel, accountants
and other advisors, (v) the qualification of the Securities under securities
laws in accordance with the provisions of Section 3(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the International
Managers in connection therewith and in connection with the preparation of the
Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to
the International Managers of copies of each preliminary prospectus and of the
Prospectuses and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the International Managers of copies of the Blue Sky
Survey and any supplement thereto, (viii) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the International Managers in
connection with, the review by the National Association of Securities Dealers,
Inc. of the terms of the offering and sale of the Securities and (ix) the fees
and expenses incurred in connection with the listing of the Securities on the
New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
Lead Manger(s) in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the International Mangers for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the International Mangers.
SECTION 5. Conditions.
(a) Conditions of International Managers' Obligations. The obligations
of the several International Managers hereunder are subject to the accuracy of
the representations and warranties of the Company contained in Section 1 hereof,
to the accuracy of the statements in certificates of any officer of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(i) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or and no proceedings therefor shall have been
initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied
with to the reasonable satisfaction of counsel to the International
Managers. A prospectus containing the Rule 430A
16
Information shall have been filed with the Commission in accordance
with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance
with the requirements of Rule 430A).
(ii) Opinions of Counsel for the Company. At Closing Time, the
Lead Managers shall have received (1) the favorable opinion, dated as
of Closing Time, of Xxxxx Xxxxxxxxxx, counsel for the Company, in form
and substance reasonably satisfactory to counsel for the International
Managers, together with signed or reproduced copies of such letter for
each of the other International Managers, and (2) the favorable
opinion, dated as of Closing Time, of Xxxx X. Xxxxxx, Esq., Chief
Counsel for the Company, in form and substance reasonably satisfactory
to counsel for the International Managers, together with signed or
reproduced copies of such letter for each of the other International
Managers.
(iii) Opinion of Counsel for International Managers. At
Closing Time, the Lead Managers shall have received the favorable
opinion, dated as of Closing Time, of Xxxxx & Xxxx LLP, counsel for the
International Managers, in form and substance reasonably satisfactory
to the Lead Managers, together with signed or reproduced copies of such
letter for each of the other International Managers.
(iv) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of
which information is given in the Prospectuses, any material adverse
change in the condition, financial or otherwise, or in the earnings,
operations or business of the Company and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of
business, and the Lead Managers shall have received a certificate of
the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties of the Company
contained in Section 1 hereof are true and correct with the same force
and effect as though expressly made at and as of Closing Time, (iii)
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the best of their knowledge, are
pending or are contemplated by the Commission.
(v) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Lead Managers shall have received from Xxxxxx
Xxxxxxxx LLP a letter dated such date, in form and substance
satisfactory to counsel for the Lead Managers, together with signed or
reproduced copies of such letter for each of the other International
Managers, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect
to the financial statements and certain financial information contained
in the Registration Statement and the Prospectuses.
17
(vi) Accountant's Bring-down Comfort Letter. At Closing Time,
the Lead Managers shall have received from Xxxxxx Xxxxxxxx LLP a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to Section
5(a)(v) hereof, except that the "specified date" referred to shall be a
date not more than three business days prior to Closing Time.
(vii) Approval of Listing. At Closing Time, the Securities
shall have been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.
(viii) No Objection. The NASD shall not have raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(ix) Lock-up Agreements. At the date of this Agreement, the
Lead Managers shall have received an agreement substantially in the
form of Exhibit A hereto signed by each of the persons and entities
listed on Schedule D hereto.
(x) Purchase of Initial U.S. Securities. Contemporaneously
with the purchase by the International Managers of the Initial
International Securities under this Agreement, the U.S. Underwriters
shall have purchased the Initial U.S. Securities under the U.S.
Purchase Agreement.
(xi) Conditions to Purchase of International Option
Securities. In the event that the International Managers exercise their
option provided in Section 2(b) hereof to purchase all or any portion
of the International Option Securities, the representations and
warranties of the Company and contained herein and the statements in
any certificates furnished by the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Lead Managers shall have received:
(A) Officers' Certificate. A certificate, dated
such Date of Delivery, of the President or a Vice President of
the Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate
delivered at Closing Time pursuant to Section 5(a)(iv) hereof
is true and correct as of such Date of Delivery.
(B) Opinions of Counsel for the Company. The
favorable opinions of (1) Xxxxx Xxxxxxxxxx, counsel for the
Company, and (2) Xxxx X. Xxxxxx, Esq., Chief Counsel for the
Company, in form and substance reasonably satisfactory to
counsel for the International Managers, dated such Date of
Delivery, relating to the International Option Securities to
be purchased on such Date of Delivery and otherwise to the
same effect as the opinions required by Section 5(a)(ii)
hereof.
(C) Opinion of Counsel for International
Managers. The favorable opinion of Xxxxx & Wood LLP, counsel
for the International Managers, in form
18
and substance reasonably satisfactory to the Lead Managers,
dated such Date of Delivery, relating to the International
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(a)(iii) hereof.
(D) Accountant's Bring-down Comfort Letter. A
letter from Xxxxxx Xxxxxxxx LLP, in form and substance
satisfactory to counsel for the International Managers and
dated such Date of Delivery, substantially the same in form
and substance as the letter furnished to the International
Managers pursuant to Section 5(a)(vi) hereof, except that the
"specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to
such Date of Delivery.
(xii) Additional Documents. At Closing Time and at each Date
of Delivery, counsel for the International Managers shall have been
furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, contained herein; and all
proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Lead Managers and counsel for
the International Managers.
(b) Termination of Agreement. If any condition specified in subsection
(a) of this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after the Closing
Time, the obligations of the several International Managers to purchase the
relevant Option Securities, may be terminated by the Lead Managers by notice to
the Company at any time at or prior to Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 6 and 7
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of International Managers. The Company agrees to
indemnify and hold harmless each International Manager and each person, if any,
who controls any International Manager within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto) including the Rule
430A Information, if applicable, or the omission or alleged omission
19
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, referred to
under (i) above; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, referred to under (i) above,
to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto) including the Rule 430A
Information, if applicable, or any preliminary prospectus or the International
Prospectus (or any amendment or supplement thereto); provided, further, however,
that the foregoing indemnity with respect to any untrue statement contained in
or omission from a preliminary prospectus shall not inure to the benefit of any
International Manager (or any person controlling such International Manager)
from whom the person asserting any such loss, liability, claim, damage or
expense purchased any of the Securities which are the subject thereof if such
person was not sent or given a copy of the International Prospectus (or the
International Prospectus as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person and the untrue
statement contained in or omission from such preliminary prospectus was
corrected in the International Prospectus (or the International Prospectus as
amended or supplemented).
(b) Indemnification of Company, Directors and Officers. Each
International Manager severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a)
20
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) including the Rule 430A Information, if
applicable, or any preliminary international prospectus or the International
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the International Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx; and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to
21
the date of such settlement for all such fees and expenses of counsel, other
than such fees and expenses of counsel which are being contested in good faith
by an indemnifying party.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the International Managers on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
International Managers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on one hand and the
International Managers on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be such that the
International Managers shall be responsible for that portion of the aggregate
amount of such losses, liabilities, claims, damages and expenses represented by
the percentage that the total underwriting discount received by the
International Managers, as set forth on the cover of the International
Prospectus, bears to the aggregate initial public offering price of the
International Securities as set forth on such cover and the Company shall be
responsible for the balance.
The relative fault of the Company on the one hand and the International
Managers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by the International Managers on the
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the International Managers agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the International Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
22
Notwithstanding the provisions of this Section 7, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such International Manager has otherwise been required to pay
by reason of any 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 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager; and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Securities set forth
opposite their respective names on Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any International Manager or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the International Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement, or since the
respective dates as of which information is given in the International
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, operations or business of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the Lead
Managers, impracticable to market the Securities or to enforce contracts for the
sale of the Securities, or (iii) if trading in the Common Stock has been
suspended or limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq
23
National Market has been suspended or limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been required, by any
of said exchanges or by such system or by order of the Commission, the NASD or
any other governmental authority, or (v) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the International Managers. If
one or more of the International Managers shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Lead Managers
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting International Managers, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Lead Managers shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of International Securities to be purchased on such date,
each of the non-defaulting International Managers shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after
the Closing Time, the obligation of the International Managers to
purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery, shall terminate without
liability on the part of any non-defaulting International Manager.
No action taken pursuant to this Section 10 shall relieve any
defaulting International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers or
the Company shall have the right to postpone Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectuses or
in any other documents or arrangements. As used herein, the term "International
Manager" includes any person substituted for an International Manager under this
Section 10.
24
SECTION 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 by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at: Xxxxxxx Xxxxx
International, Ropemaker Place, 00 Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX England,
attention of Equity Capital Markets; and notices to the Company shall be
directed to it at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxx
X. Xxxxxx, Esq., Chief Counsel.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the International Managers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
International Managers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, 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 are intended
to be for the sole and exclusive benefit of the International Managers and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any International Manager shall be deemed to be a successor by reason merely of
such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the International Managers and the Company in accordance with its terms.
Very truly yours,
CONTIFINANCIAL CORPORATION
By
------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXXX XXXXX INTERNATIONAL
BEAR, XXXXXXX INTERNATIONAL
LIMITED
By: XXXXXXX XXXXX INTERNATIONAL
By
-------------------------------------------------
Authorized Signatory
For themselves and as Lead Managers of the
other International Managers named in
Schedule A hereto.
26
SCHEDULE A
Number of
Initial
International
Name of International Manager Securities
----------------------------- -------------
Xxxxxxx Xxxxx International...................................................
Bear, Xxxxxxx International Limited...........................................
-------
Total......................................................................... 560,000
=======
Sch A -1
SCHEDULE B
560,000 shares
CONTIFINANCIAL CORPORATION
Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share of the
Securities, as referred to in Section 2, shall be $_____.
2. The purchase price per share for the International
Securities to be paid by the several International Managers shall be $_____,
being an amount equal to the initial public offering price set forth above less
$_____ per share; provided that the purchase price per share for any
International Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial International Securities but not payable on the
International Option Securities.
Sch B - 1
SCHEDULE C
List of Subsidiaries
ContiMortgage Corporation
ContiWest Corporation
ContiTrade Services L.L.C.
ContiFinancial Services Corporation
ContiSecurities Asset Funding Corp.
ContiSecurities Asset Funding Corp. II
ContiSecurities Asset Funding L.L.C.
ContiSecurities Asset Funding II, L.L.C.
ContiSecurities Asset Funding Corp. III
ContiSecurities Asset Funding Corp. IV
ContiFunding Corporation
Royal Mortgage Partners, L.P. d/b/a Royal MortgageBanc
California Lending Group, Inc. d/b/a United Lending Group
Triad Financial Corporation
Resource One Consumer Discount Company, Inc.
ContiAuto Asset Funding Corp.
Sch C - 1
SCHEDULE D
Xxxxx X. Xxxxx
Xxxxxx X. Major
Xxxxx Xxxxxx
Xxxxxx X. Xxxxxx
A. Xxxx Xxxx
Xxxxxx X. Xxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
Xxxx X. Xxxxxx
Xxxxx X. X'Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxx Xxxxxxxx
Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxxx
Sch D - 1
EXHIBIT A
[Form of Lock-up Letter]
______________________, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BEAR, XXXXXXX & CO. INC.
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
XXXXXXX XXXXX INTERNATIONAL
BEAR, XXXXXXX INTERNATIONAL LIMITED
as Lead Managers of the several Managers
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Re: Proposed Public Offering by ContiFinancial Corporation
Ladies and Gentlemen:
The undersigned, a stockholder and/or an officer and/or a
director and/or a director nominee of ContiFinancial Corporation, a Delaware
corporation (the "Company"), understands that Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and Bear, Xxxxxxx &
Co. Inc. propose to enter into a U.S. Purchase Agreement (the "U.S. Purchase
Agreement") and Xxxxxxx Xxxxx International and Bear, Xxxxxxx International
Limited propose to enter into an International Purchase Agreement (the
"International Purchase Agreement" and with the U.S. Purchase Agreement, the
"Purchase Agreements") with the Company providing for the public offering of
shares (the "Securities") of the Company's common stock, par value $.01 per
share (the "Common Stock") which will set forth, among other things,
Exh A-1
the initial public offering price of the Securities. In recognition of the
benefit that such an offering will confer upon the undersigned as a stockholder
and/or an officer and/or a director nominee of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter or manager to be
named in the Purchase Agreements that, during a period of 90 days from the date
of the Purchase Agreements, the undersigned will not, without the prior written
consent of Xxxxxxx Xxxxx, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of or transfer, any shares of the
Company's Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition.
Very truly yours,
Signature:
------------------------
Print Name:
-----------------------
Exh A-2
