EXHIBIT 1.1
SOUTHERN PACIFIC FUNDING CORPORATION
U.S. $75,000,000
.% Convertible Subordinated Notes due 2006
UNDERWRITING AGREEMENT
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November [5], 1996
NATWEST SECURITIES LIMITED
XXXXXXXXXXX & CO., INC.
As Representatives of the
several Underwriters
c/o NatWest Securities Limited
000 Xxxxxxxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Dear Sirs:
Southern Pacific Funding Corporation, a California corporation (the
"Company"), proposes to issue and sell to the several underwriters named on
Schedule I hereto (the "Underwriters") U.S. $75,000,000 aggregate principal
amount of .% Convertible Subordinated Notes due 2006 (the "Firm Notes"), which
are convertible into common stock of the Company, no par value per share (the
"Common Stock"), at a conversion price of U.S. $. per share, subject to
adjustment under certain circumstances. In addition, the Company shall, at the
option (the "Option") of NatWest Securities Limited ("NatWest") and Xxxxxxxxxxx
& Co., Inc. (the "Representatives"), issue and sell to the Underwriters up to an
additional U.S. $11,250,000 aggregate principal amount of .% Convertible
Subordinated Notes due 2006 on the terms and conditions and for the purposes set
forth in Section 1 below (the "Option Notes"). The Firm Notes and, if
purchased, the Option Notes are hereinafter collectively referred to as the
"Notes." The issuance and sale of the Notes is hereinafter referred to as the
"Offering." The Notes are to be issued pursuant to an Indenture (the
"Indenture") to be dated as of October 1, 1996, between the Company and The Bank
of New York, a New York banking corporation, as trustee (the "Trustee"). The
shares of Common Stock issuable upon conversion of the Notes are hereinafter
collectively referred to as the "Conversion Shares."
The Company confirms as follows its agreements with the Representatives and
the several other Underwriters.
1. Agreement to Sell and Purchase.
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(a) On the basis of the representations, warranties and agreements of
the Company herein contained and subject to all the terms and conditions of this
Agreement, (i) the Company agrees to sell to the several Underwriters and (ii)
each of the Underwriters, severally and not jointly, agrees to purchase from the
Company at a purchase price of .% of the principal amount of the Firm Notes, the
aggregate principal amount of Firm Notes set forth opposite the name of such
Underwriter in Schedule I, plus such additional number of Firm Notes which such
Underwriter may become obligated to purchase pursuant to Section 9 hereof.
(b) Subject to all the terms and conditions of this Agreement, the
Company grants the Option to the several Underwriters to purchase, severally and
not jointly, up to $11,250,000 aggregate principal amount of Option Notes, at
the same price per Option Note as the Underwriters shall pay for the Firm Notes.
The Option may be exercised only to cover over allotments in the sale of the
Firm Notes by the Underwriters and may be exercised in whole or in part at any
time (but not more than once) on or before the 30th day after the date of this
Agreement (or the next business day if the 30th day is not a business day), upon
notice (the "Option Notice") in writing or by telephone (confirmed in writing)
by the Representatives to the Company no later than 5:00 p.m., New York City
time, at least two and no more than five business days before the date specified
for closing in the Option Notice (the "Option Closing Date") setting forth the
aggregate principal amount of Option Notes to be purchased and the time and date
for such purchase. On the Option Closing Date, the Company will sell to the
Underwriters the aggregate principal amount of Option Notes set forth in the
Option Notice, and each Underwriter will purchase such percentage of the Option
Notes as is equal to the percentage of Firm Notes that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional Notes.
Upon original issuance thereof, and until such time as the same is no longer
required under the requirements of The Depository Trust Company (the
"Depository"), the Notes shall be in global form and shall include the
following paragraph:
"Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of
such successor Depository. Unless this certificate is presented by an
authorized representative of The Depository Trust Company, a New York
corporation (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) (the "Depository"), to
the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such
other name as may be requested by an authorized representative of the
Depository (and any payment is made to Cede & Co. or such other entity as
may be requested by an authorized representative of the Depository), ANY
TRANSFER, PLEDGE OR
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OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co."
2. Delivery and Payment. Delivery of the Firm Notes shall be made to the
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Representatives for the accounts of the Underwriters against payment of the
purchase price by wire transfer in immediately available funds to the order of
the Company at the office of Xxxxxxx Xxxxxxxx & Xxxx, counsel to the Company,
Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Such payment shall be made at
10:00 a.m., New York City time, on November 12, 1996, or at such other time or
place or on such other date, not later than the third full business day after
the date of this Agreement, as may be agreed upon by the Company and the
Representatives (such date is hereinafter referred to as the "Initial Closing
Date," and together with the Option Closing Date, the "Closing Dates").
To the extent the Option is exercised, delivery of the Option Notes against
payment by the Underwriters (in the manner specified above) will take place at
the offices specified above for the Initial Closing Date at the time and date
(which may be the Initial Closing Date) specified in the Option Notice.
Such payment shall be made against delivery to the Depository of one or
more Notes, each in definitive form, registered in the name of Cede & Co., as
nominee of the Depository, having an aggregate amount corresponding to the
aggregate principal amount of the Notes to be issued on the Initial Closing Date
or the Option Closing Date, as the case may be.
3. Representations and Warranties of the Company. The Company jointly
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represents, warrants and covenants to each Underwriter, as of the date hereof
and as of each Closing Date that:
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File No. 333-14627) relating to the registration of the Notes under the
provisions of the Securities Act of 1933, as amended (the "Act"), and the
Commission's rules and regulations thereunder (collectively referred to as the
"Rules and Regulations"), including a preliminary prospectus and such amendments
to such registration statement as may have been required to the date of this
Agreement. The Commission has not issued any order preventing or suspending the
use of the Prospectus (as defined below) or the preliminary prospectus (as
defined below). The term "preliminary prospectus" as used herein means a
preliminary prospectus as contemplated by Rule 430 or Rule 430A ("Rule 430A") of
the Rules and Regulations included at any time as part of the registration
statement. Copies of such registration statement and amendments and of each
related preliminary prospectus have been delivered to the Representatives. If
such registration statement has not become effective, a further amendment to
such registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective will be filed promptly by
the Company with the Commission. If such registration statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A will be filed by the Company with the
Commission in accordance with Rule 424(b) of the Rules and Regulations
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promptly after execution and delivery of this Agreement. The term "Registration
Statement" means the registration statement relating to the Notes, as amended at
the time it becomes or became effective (the "Effective Date"), including
financial statements and all exhibits and any information deemed to be included
by Rule 430A. The term "Prospectus" means the prospectus relating to the Notes,
as first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, if no such filing is required, the form of final prospectus
included in the Registration Statement at the Effective Date.
(b) On the Effective Date, the date the Prospectus is first filed with
the Commission pursuant to Rule 424(b) (if required), at all times when the
Prospectus is required to be delivered thereafter and on or prior to the Initial
Closing Date and, if later, the Option Closing Date, and when any post-effective
amendment to the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, the Registration
Statement and the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment or supplement thereto), including
the financial statements included in the Prospectus, did or will comply in all
material respects with all applicable provisions of the Act and the Rules and
Regulations. On the Effective Date and when any post-effective amendment to the
Registration Statement becomes effective, no part of the Registration Statement
or any such amendment did or will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading; and the Indenture
complies with the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act") and the rules and regulations of the Commission thereunder. The documents
filed by the Company with the Commission (the "Filed Documents") pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), when they
were filed with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, and none of the Filed Documents, when they were so
filed, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Initial Closing Date and, if later, the Option Closing
Date, the Prospectus did not or will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this Section 3(b) do
not apply to any statements or omissions made in reliance on and in conformity
with information relating to any Underwriter furnished in writing to the Company
by the Representatives specifically for inclusion in the Registration Statement
or Prospectus or any amendment or supplement thereto. For all purposes of this
Agreement, the cover page of the Prospectus and the section of the Prospectus
entitled "Underwriting" and the identification of counsel for the Underwriters
in the section of the Prospectus entitled "Legal Matters" constitute the only
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the preliminary prospectus,
the Registration Statement or the Prospectus. The Company has not distributed
any offering material in connection with the offering or sale of the Notes other
than the Registration
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Statement, the preliminary prospectus, the Prospectus or any other materials, if
any, permitted by the Act.
(c) The Company has only one subsidiary; such subsidiary is duly
organized and existing, and the total capitalization of such subsidiary is less
than $1,000. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of California. The Company has
full power and authority to conduct all the activities conducted by it, to own
or lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus and to execute and
deliver the Indenture, this Agreement and to execute, and cause to be
authenticated, issued, and delivered the Notes as herein contemplated, and to
cause the conversion Shares to be issued upon conversion of the Notes. The
Company is duly licensed or qualified to do business and in good standing as a
foreign corporation in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
licensing or qualification necessary, except where the failure to so qualify
would not have a material adverse effect on the Company. Except as set forth in
the Prospectus and as set forth in the first sentence of this Section 3(c), the
Company does not own directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity.
Complete and correct copies of the Company's articles of incorporation and by-
laws and all amendments thereto have been delivered to the Representatives, and
no changes therein will be made without the prior written consent of the
Representatives subsequent to the date hereof and prior to either Closing Date.
(d) The outstanding shares of Common Stock have been, and the
Conversion Shares to be issued upon conversion of the Notes in accordance with
the terms specified in the Indenture and the Notes, upon such issuance will be,
duly authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right. The Company has an authorized,
issued and outstanding capitalization as set forth in the Prospectus. The
description of the Common Stock, including without limitation the Conversion
Shares, contained in the Registration Statement and the Prospectus is complete
and accurate in all respects. The certificates representing the Common Stock
are, and the certificates representing the Conversion Shares will be upon
issuance, in due and proper form. Except as set forth in the Prospectus, the
Company does not have outstanding any options to purchase, or any rights or
warrants to subscribe for, or any securities or obligations convertible into, or
any contracts or commitments to issue or sell, any shares of Common Stock. The
Company has a sufficient number of authorized but unissued shares of Common
Stock to enable the Company to issue, without further stockholder action, all
the Conversion Shares. Neither the offering and sale of the Notes, as
contemplated by this Agreement, nor the registration, issuance or delivery of
the Conversion Shares, as contemplated by the Indenture and the Notes, gives
rise to any rights, other than those which have been waived in writing or
satisfied, for or relating to the registration or offering of any shares of
capital stock or other securities of the Company.
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(e) The financial statements included in the Registration Statement or
the Prospectus present fairly the financial condition of the Company as of the
respective dates thereof and the results of operations and cash flows of the
Company for the respective periods covered thereby, all in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in the
Prospectus. No other financial statements or schedules of the Company are
required by the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. KPMG Peat Marwick LLP (the
"Accountants"), who has reported on such financial statements, is an independent
accounting firm with respect to the Company as required by the Act and the Rules
and Regulations.
(f) The Company maintains a system of internal accounting control
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation 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 authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(g) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to either
Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
change in the capitalization of the Company, or any material adverse change in
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company arising for any reason whatsoever, (ii)
the Company has not incurred nor will it incur any material liabilities or
obligations, direct or contingent, other than in the ordinary course, nor has
the Company entered into nor will it enter into any material transactions not in
the ordinary course other than pursuant to this Agreement and the Indenture and
the transactions referred to herein and therein and (iii) the Company has not
and will not have paid or declared any dividends or other distributions of any
kind on any class of its capital stock.
(h) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
(i) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the best
of the Company's knowledge, threatened against the Company or any of its
officers in their capacity as such, before or by any federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding might
materially adversely affect the business, properties, condition (financial or
otherwise) or results of operations of the Company.
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(j) The Company has (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, other than governmental licenses, permits,
consents, orders, approvals and other authorizations where the failure to have
such would not have a material adverse effect on the business, properties,
condition (financial or otherwise) or results of operations of the Company, (ii)
complied in all respects with all laws, regulations and orders applicable to it
or its business, except for violations which would not have a material adverse
effect on the business, properties, condition (financial or otherwise) or
results of operations of the Company, and (iii) performed all its obligations
required to be performed by it, and is not in default under any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement, lease, contract, permit or other agreement or
instrument (collectively, a "contract or other agreement") to which it is a
party or by which its property is bound or affected, except for defaults (or
failures to perform) which would not have a material adverse effect on the
business, prospects, condition (financial or otherwise) or results of operations
of the Company. The Company is not in violation of any provision of its
articles of incorporation or by-laws.
(k) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, execution, authentication, issuance, sale or
delivery of the Notes by the Company or in connection with the issuance of the
Conversion Shares upon conversion of any of the Notes or in connection with the
execution, delivery and performance of this Agreement, the Indenture or the
Notes by the Company, except such as have been obtained under the Act or the
Rules and Regulations and such as may be required under state securities or Blue
Sky laws or the by-laws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and distribution by
the Underwriters of the Notes as contemplated hereby.
(l) The Company has full corporate power and authority to enter into
the Indenture and this Agreement, and to authorize, execute and cause the Notes
to be authenticated, issued and delivered, and the Conversion Shares to be
issued and delivered upon conversion of the Notes. This Agreement has been duly
authorized, executed and delivered by the Company. The execution, delivery and
performance of the Indenture, this Agreement, and the Notes and the consummation
of the transactions contemplated hereby and thereby do not and will not result
in the creation or imposition of any lien, charge or encumbrance upon any of the
Company's assets pursuant to the terms or provisions of, or result in a breach
or violation of or conflict with any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
(i) the Company's articles of incorporation or by-laws; or (ii) any contract or
other agreement to which the Company is a party or by which the Company or any
of its properties is bound or affected, other than a breach or default which
would not have a material adverse effect on the business, properties, condition
(financial or otherwise) or results of operations of the Company, or any
judgment, ruling, decree, order, law, statute, rule or regulation of any court
or other governmental agency or body applicable to the business or properties of
the Company.
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(m) The Company has good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in the
Prospectus or are not material to the business of the Company. The Company has
valid, subsisting and enforceable leases for the properties described in the
Prospectus as leased by it, with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of each of such
properties by the Company.
(n) There is no material document or contract of a character required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company is a party have been duly
authorized, executed and delivered by the Company, constitute valid and binding
agreements of the Company and are enforceable against the Company in accordance
with the terms thereof, except (i) as the Company's obligations may be affected
by bankruptcy, insolvency, reorganization, moratorium or similar laws, or by
equitable principles relating to creditors' rights generally, and (ii) that the
remedies of specific performance, injunction and other forms of equitable relief
are subject to certain tests of equity, jurisdiction, equitable defenses and the
discretion of the court before which any proceeding therefor may be brought.
(o) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Notes.
(p) Except as set forth in the Registration Statement and the
Prospectus, no holder of securities of the Company has rights to the
registration of any securities of the Company as a result of the filing of the
Registration Statement.
(q) The Notes have been approved for listing on the New York Stock
Exchange; the Conversion Shares, when issued upon conversion of the Notes, will
be approved for listing on the New York Stock Exchange.
(r) The Company is not involved in any material labor dispute nor, to
the knowledge of the Company, is any such dispute threatened.
(s) The Company owns or possesses, or can acquire on reasonable terms,
all material patents, patent applications, trademarks, service marks, trade
names, licenses, copyrights and unpatented and/or unpatentable proprietary or
other confidential information currently employed by it in connection with its
businesses, and the Company has not received any notice of infringement of or
conflict with asserted rights of any third party with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
business, properties, condition (financial or otherwise) or results of
operations of the Company, except as described in or contemplated by the
Prospectus.
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(t) Neither the Company nor, to the Company's knowledge, any employee
or agent of Company, has at any time during the last five years (i) made any
unlawful contribution to any candidate for foreign office, or failed to disclose
fully any contribution in violation of law, or (ii) made any payment to any
federal or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof.
(u) The Company is insured by insurers of recognized financial
responsibility or self-insured against such losses and risks and in such amounts
as are prudent and customary in the businesses in which they are engaged
including, without limitation, those losses and risks typically covered by
general liability, workers compensation and errors and omissions policies; the
Company has not been refused any insurance coverage sought or applied for; and
the Company does not have any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers or continue to be self-insured as
may be necessary to continue its business at a cost that would not materially
adversely affect the business, properties, condition (financial or otherwise) or
results of operations of the Company.
(v) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company) and has paid all taxes which it believes in good
faith were required to be paid by it and any other assessment, fine or penalty
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as described in the Prospectus.
(w) There are not material outstanding loans or advances or material
guarantees of indebtedness by the Company to or for the benefit of any of the
Company's officers or directors or any of the members of the families of any of
them.
(x) The information regarding loan originations and purchases, loan
sales and securitizations, delinquencies and real estate owned, compliance with
federal, state and local rules and regulations governing the business and
operations of the Company and the contracting of servicing rights contained in
the Prospectus does 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, in light of the circumstances under which they
were made, not misleading.
(y) The Company has not incurred any liability for any finder's fees
or similar payments in connection with the transactions herein contemplated.
(z) The Company has complied with, and is and will be in compliance
with, the provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder or is exempt therefrom.
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(aa) The Notes are in the forms contemplated by the Indenture, and
have been duly authorized by the Company, and when executed and authenticated in
accordance with the terms of the Indenture and delivered against payment
therefor in accordance with the terms hereof, will be the legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture. The
Notes, when executed, authenticated and delivered, will conform in all material
respects to the description thereof in the Prospectus.
(bb) The Indenture has been duly authorized by the Company and, at the
Initial Closing Date will have been duly executed and delivered by the Company
and, assuming the due authorization, execution and delivery thereof by the
Trustee, will be the legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms. The Indenture,
when executed and delivered, will conform in all material respects to the
description thereof in the Prospectus. The Indenture is has been qualified
under the Trust Indenture Act.
4. Agreements of the Company. The Company hereby covenants and agrees
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with the Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Notes by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
under the circumstances and the Representatives shall not have unreasonably
objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly, (1)
when the Registration Statement has become effective and when any post-effective
amendment thereto becomes effective, (2) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (3) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose or the threat thereof, (4) of the happening of
any event during the period mentioned in the second sentence of Section 4(f)
that in the judgment of the Company makes any material statement made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances in which they are made, not
misleading and (5) of receipt by the Company or any representative or attorney
of the Company of any other communication from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order as promptly as
practicable. If the Company has omitted any information from the Registration
Statement pursuant to Rule 430A, the Company will use its best efforts to
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comply with the provisions of and make all requisite filings with the Commission
pursuant to said Rule 430A and to notify the Representatives promptly of all
such filings.
(c) If, at any time when a prospectus relating to the Notes is required to
be delivered under the Act, any event occurs as a result of which the Prospectus
or the Registration Statement, as then amended or supplemented, would include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any other
reason it is necessary at any time to amend or supplement the Prospectus or the
Registration Statement to comply with the Act or the Rules and Regulations, the
Company will promptly notify the Representatives thereof and, subject to Section
4(b) hereof, will prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission or effects
such compliance.
(d) The Company will furnish to the Representatives, without charge, as
many conformed copies of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto as the Representatives may reasonably request and will furnish
to the Representatives, without charge, for transmittal to each of the other
Underwriters, a copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules but without
exhibits.
(e) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(f) On the Effective Date, and thereafter from time to time, the Company
will deliver to each of the Underwriters, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Notes may be sold, both in connection with the offering or sale of
the Notes and for any period of time thereafter during which the Prospectus is
required by law to be delivered in connection therewith.
(g) Prior to any public offering of the Notes by the Underwriters, the
Company will cooperate with the Representatives and counsel to the Underwriters
in connection with the registration or qualification of the Notes for offer and
sale under the securities or Blue Sky laws of such state and foreign
jurisdictions as the Representatives may reasonably request; provided, that in
no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to general service of process or taxation in any jurisdiction where
it is not now so subject.
(h) During the period of five years commencing on the Effective Date, the
Company will furnish to the Representatives and each other Underwriter who may
so request copies of such financial statements and other periodic and special
reports as the Company may from time
11
to time distribute generally to the holders of any class of its capital stock,
and will furnish to the Representatives and each other Underwriter who may so
request a copy of each annual or other report it shall be required to file with
the Commission; provided that the failure to comply with this Section 4(h) shall
not constitute a material breach of this Agreement.
(i) The Company will make generally available to holders of its securities
as soon as may be practicable but in no event later than the last day of the
fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(j) The Company will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or result,
under the Act or otherwise, in, or which will constitute, stabilization of the
price of any securities of the Company to facilitate the sale or resale of the
Notes.
(k) The Company hereby agrees, and will cause each shareholder, director
and executive officer of the Company identified on Schedule 4(k) hereto to
agree pursuant to agreements with the Underwriters in the form set forth in
Exhibit A, that they will not, for a period of 120 days after the date hereof,
without the prior written consent of NatWest on behalf of the Underwriters,
directly or indirectly, offer to sell, sell, contract to sell, grant any option
to purchase or otherwise dispose (or announce any offer, sale, grant of any
option to purchase or other disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable for shares of Common Stock;
provided, that the Company may issue an aggregate of 2,589,600 shares of Common
Stock in the ordinary course pursuant to the Company's stock option plans, and
provided further, that each of the Company and such executive officers and
directors shall be permitted to offer to sell, sell, contract to sell, grant any
option to purchase or otherwise dispose of shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock) during such 120
period so long as the transferee of such shares or securities agrees in writing,
for the benefit of the Underwriters, not to offer to sell, sell, contract to
sell, grant any option to purchase or otherwise dispose of such shares or
securities until the end of such 120 day period, unless such transferee has
received the prior written consent of NatWest. It is acknowledged that the
restriction contained in this Section shall not be applicable to the Option
Notes, or the issuance of Conversion Shares, or the sale by Imperial Credit
Industries, Inc. ("ICII") of up to 1,150,000 shares of Common Stock pursuant to
an underwriting agreement [dated the date hereof.]
(l) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company agrees to pay all costs
and expenses incident to the performance of the obligations of the Company under
this Agreement, including but not limited to costs and expenses of or relating
to (1) the preparation, printing and filing of the Registration Statement and
exhibits to it, each preliminary prospectus, the Prospectus and any amendment or
supplement to the Registration Statement or the Prospectus, (2) the preparation
and
12
delivery of certificates representing the Notes and the Conversion Shares, (3)
the printing of this Agreement, the Indenture, the Agreement Among Underwriters,
any Dealer Agreements and any Underwriters' Questionnaire, (4) furnishing
(including costs of shipping and mailing) such copies of the Registration
Statement, the Prospectus and any preliminary prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the offering
and sale of the Notes by the Underwriters or by dealers to whom Notes may be
sold, (5) the listing of the Notes and the Conversion Shares on the New York
Stock Exchange, (6) any filings required to be made by the Underwriters with the
NASD, and the fees, disbursements and other charges of counsel for the
Underwriters in connection therewith, (7) the registration or qualification of
the Notes for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 4(g), including the reasonable
fees, disbursements and other charges of counsel to the Underwriters in
connection therewith and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (8) counsel to the Company, (9) the
fees and expenses of the Trustee and counsel for the Trustee, and (10) the
transfer agent and conversion agent for the Conversion Shares.
(m) (i) If the sale of the Notes is not consummated because of a breach of
a representation or warranty contained herein by the Company, which breach in
the good faith determination of NatWest makes it impracticable or inadvisable to
market the Notes on the terms and in the manner contemplated by the Prospectus,
the Company will reimburse the several Underwriters for all out-of-pocket
expenses (including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith; (ii) if for
any reason the Company shall be unable to perform its obligations hereunder or
refuses to perform its obligations hereunder, the Company will reimburse the
several Underwriters for all out-of-pocket expenses (including the fees,
disbursements and other charges of counsel to the Underwriters) reasonably
incurred by them in connection herewith; and (iii) if the sale of the Notes is
not consummated for any reason other than those contemplated in (i) and (ii) of
this subsection, then the Underwriters will be solely responsible for their own
out-of-pocket expenses (including the fees, disbursements and other charges of
counsel to the Underwriters).
5. Representations and Warranties of NatWest Securities Limited. Upon the
------------------------------------------------------------
execution and delivery of this Agreement by the Company, the several
Underwriters propose to offer the Firm Notes for sale to the public upon the
terms set forth in the Prospectus. NatWest represents and agrees that: (i) it
has not offered or sold and will not offer or sell in the United Kingdom, by
means of any document, any Notes other than to persons whose ordinary business
it is to buy or sell shares or debentures (whether as principal or agent) or in
circumstances which do not constitute an offer to the public within the meaning
of the Companies Xxx 0000; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Xxx 0000 and other applicable
laws with respect to anything done by it in relation to the Notes in, from or
otherwise involving the United Kingdom or any other jurisdiction outside the
United States; and (iii) it has issued or passed on and will issue or pass on to
any person in the United Kingdom any document received by it in connection with
the issue of the Notes only if that person is of a kind described in Article
9(3) of the Financial Services Xxx 0000 (Investment Advertisements) (Exemptions)
Order 1996, or such person is one to whom the document can lawfully be issued or
passed on.
13
6. Conditions of the Obligations of the Underwriters. The obligations of
-------------------------------------------------
each Underwriter hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 5:00 p.m., New York City
time, on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Representatives and all filings required by Rule
424 of the Rules and Regulations and Rule 430A shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Notes under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities and (iv)
after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Representatives and the Representatives did not object thereto
in good faith within a reasonable period of time, and the Representatives shall
have received certificates, dated the Initial Closing Date and the Option
Closing Date and signed by the Chairman of the Board of Directors of the Company
or the Chief Executive Officer of the Company and the Chief Financial Officer of
the Company (who may, as to proceedings threatened or contemplated, rely upon
the best of their information and belief), to the effect of clauses (i), (ii)
and (iii).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, properties, condition
(financial or otherwise) or results of operations of the Company, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) the Company shall not have sustained any material loss or
interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, which
is not set forth in the Registration Statement and the Prospectus, if in the
judgment of NatWest any such development makes it impracticable or inadvisable
to consummate the sale and delivery of the Notes by the Underwriters at the
initial public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any of its officers or
directors in their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an unfavorable
ruling,
14
decision or finding would materially and adversely affect the business,
properties, condition (financial or otherwise) or results of operations of the
Company.
(e) Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects at each Closing Date
as if made on each such date, and all covenants and agreements herein contained
to be performed on the part of the Company and all conditions herein contained
to be fulfilled or complied with by the Company at or prior to each Closing Date
shall have been duly performed, fulfilled or complied with prior to such
applicable Closing Date.
(f) The Representatives shall have received an opinion of Xxxxxxx
Xxxxxxxx & Xxxx, counsel for the Company, addressed to the Underwriters and
dated the Initial Closing Date, or the Option Closing Date, as the case may be,
to the effect that:
(i) The Company is duly qualified or licensed to do business as a
foreign corporation in each of the jurisdictions specified in a schedule
attached to such opinion.
(ii) The Company has an authorized share capitalization as set forth
under the heading "Capitalization" in the Registration Statement and the
Prospectus.
(iii) The Notes have been duly authorized for listing on the New York
Stock Exchange.
(iv) The Registration Statement and the Prospectus (except as to the
financial statements and schedules contained therein as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Act.
(v) The Registration Statement has become effective under the Act
and, to such counsel's knowledge, no stop order proceedings with respect
thereto are pending or threatened under the Act.
(vi) No consent, approval, authorization or order of, or any filing
or declaration with, any federal or State of New York court or governmental
or regulatory commission, board, body, authority or agency is required in
connection with the authorization, execution, authentication, issuance, sale
or delivery of the Notes by the Company or in connection with the issuance of
the Conversion Shares upon conversion of any of the Notes or in connection
with the execution, delivery and performance of this Agreement, the Indenture
or the Notes by the Company, except such as have been obtained under the Act
or the Rules and Regulations and such as may be required under state
securities or Blue Sky laws or the by-laws and rules of the NASD in
connection with the purchase and distribution by the Underwriters of the
Notes as contemplated hereby.
15
(vii) The execution, delivery and performance of the Indenture, this
Agreement, and the Notes and the consummation of the transactions
contemplated hereby and thereby do not and will not conflict with, or result
in any breach of, or constitute a default under (nor constitute any event
which with notice, lapse of time or both would constitute a breach of or
default under), any provision of the articles or bylaws of the Company or any
provision of any partnership agreement or under any provision of any license,
indenture, lease, mortgage, deed of trust, bank loan, credit agreement or
other agreement or instrument to which the Company is a party or by which the
Company or its properties are bound or affected, in each case known to such
counsel based upon a certificate of the Company relating to its material
agreements and properties, or, so far as is known to such counsel, under any
law, regulation or rule or any decree, judgment or order applicable to the
Company.
(viii) The Company is not in breach of, or in default under (nor has
any event occurred which with notice, lapse of time or both would constitute
a breach of or default under), any license, indenture, lease, mortgage, deed
of trust, bank loan, credit agreement or any other agreement or instrument to
which the Company is a party or by which the Company or its properties are
bound or affected, in each case known to such counsel based upon a
certificate of the Company relating to its material agreements and
properties, which breach or default would have a material adverse effect on
the business, properties, assets, operations or condition (financial or
otherwise) of the Company.
(ix) To such counsel's knowledge, there are no contracts, licenses,
agreements, leases or documents of a character which are required to be filed
as exhibits to the Registration Statement or to be summarized or described in
the Prospectus which have not been so filed, summarized or described.
(x) To such counsel's knowledge, there are no actions, suits or
proceedings pending or threatened against the Company or any of its
properties, at law or in equity or before or by any commission, board, body,
authority or agency which are required to be described in the Prospectus but
are not so described.
(xi) Except as set forth in the Prospectus, to such counsel's
knowledge, the Company does not have outstanding any options to purchase, or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any
shares of Common Stock. The Company has a sufficient number of authorized but
unissued shares of Common Stock to enable the Company to issue, without
further stockholder action, all the Conversion Shares. To such counsel's
knowledge, neither the offering and sale of the Notes, as contemplated by
this Agreement, nor the registration, issuance or delivery of the Conversion
Shares, as contemplated by the Indenture and the Notes, gives rise to any
rights, other than those which have been waived in writing or satisfied, for
or relating to the registration, offering or issuance of any shares of
capital stock or other securities of the Company.
16
(xii) The statements in the Registration Statement and the Prospectus
under the following captions: "Risk Factors--Legislative or Regulatory
Risks," "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources," "Business--
Regulation," "Beneficial Ownership of Securities," "Description of the Notes"
and "Description of Capital Stock" insofar as they are descriptions of laws,
regulations and rules, of legal and governmental proceedings or of contracts,
agreements, leases and other legal documents, or refer to statements of law
or legal conclusions, have been reviewed by such counsel and are accurate in
all material respects.
(xiii) The Company is not an "investment company" or a person
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(xiv) Assuming the Indenture has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by the Trustee, the Indenture constitutes the legally valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms (subject to and limited by the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting the rights and remedies of
creditors, and as limited by the effect of general principles of equity,
whether enforcement is considered in a proceeding in equity or at law, and
the discretion of the court before which any proceeding therefor may be
brought); and the Indenture has been qualified under the Trust Indenture Act.
The Indenture conforms in all material respects to the description thereof in
the Prospectus.
(xv) The Notes are in the forms contemplated by the Indenture, and
assuming the Notes have been duly and validly authorized by the Company, and
when issued and authenticated in accordance with the terms of the Indenture
and delivered against payment therefor in accordance with the terms hereof,
the Notes constitute the legally valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture (subject to and limited by the
effect of bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights and
remedies of creditors, and as limited by the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or at
law, and the discretion of the court before which any proceeding therefor may
be brought). The Notes, when, issued, authenticated and delivered, will
conform in all material respects to the description thereof in the
Prospectus.
(g) The Representatives shall have received an opinion of Xxxxx &
Xxxxxxxxx, special California counsel for the Company, addressed to the
Underwriters and dated the Initial Closing Date, or the Option Closing Date, as
the case may be, to the effect that:
17
(i) The Company is validly existing as a corporation in good standing
under the laws of the State of California, with full corporate power and
authority to own its properties and conduct its business as described in the
Registration Statement and the Prospectus and to execute and deliver the
Indenture, this Agreement and to execute, and cause to be authenticated,
issued, and delivered the Notes as herein contemplated, and to cause the
Conversion Shares to be issued upon conversion of the Notes.
(ii) Each of this Agreement and the Indenture has been duly
authorized, executed and delivered by the Company, and the Notes have been
duly and validly authorized and executed by the Company.
(iii) The outstanding shares of capital stock of the Company, have
been duly authorized and validly issued and are fully paid, nonassessable,
and free of statutory preemptive or similar rights. The Conversion Shares
initially issuable upon conversion of the Notes have been duly and validly
authorized and reserved for issuance, and such Conversion Shares, when issued
upon such conversion will be validly issued, fully paid and nonassessable and
the issuance of such Conversion Shares upon such conversion will not be
subject to preemptive or other rights to subscribe for any shares of Common
Stock or any other equity securities of the Company pursuant to the articles
of incorporation or by-laws of the Company or by operation of law.
(iv) (a) The capital stock of the Company, including the Conversion
Shares, conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus; and (b) the
certificates for the Common Stock are in due and proper form.
(v) No consent, approval, authorization or order of, or any filing or
declaration with, any State of California court or governmental or regulatory
commission, board, body, authority or agency is required in connection with
the authorization, execution, authentication, issuance, sale or delivery of
the Notes by the Company or in connection with the issuance of the Conversion
Shares upon conversion of any of the Notes or in connection with the
execution, delivery and performance of this Agreement, the Indenture or the
Notes by the Company, except such as have been obtained under the Act or the
Rules and Regulations and such as may be required under state securities or
Blue Sky laws or the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Notes as contemplated
hereby.
(vi) The certificates representing the Common Stock are, and the
certificates representing the Conversion Shares will be upon issuance, in due
and proper form.
18
(h) Such opinion or opinions of Xxxxxxx & Xxxxx L.L.P., counsel for the
Underwriters dated the Initial Closing Date or the Option Closing Date, as the
case may be, with respect to the incorporation of the Company, the sufficiency
of all corporate proceedings and other legal matters relating to this Agreement,
the Notes, the Registration Statement and the Prospectus and other related
matters as you may reasonably require, and the Company shall have furnished to
such counsel such documents and shall have exhibited to them such papers and
records as they may reasonably request for the purpose of enabling them to pass
upon such matters. In connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company and governmental
officials.
In rendering such opinions, such counsel may rely as to matters of fact, on
certificates of officers of the Company and of governmental officials, in which
case their opinions are to state that they are so doing and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates are to be attached to the opinions.
In addition, each of Xxxxxxx Xxxxxxxx & Wood and Xxxxxxx & Xxxxx L.L.P.
shall state that such counsel has participated in conferences with officers and
other representatives of the Company, and the independent public accountants for
the Company and you at which the contents of the Registration Statement and the
Prospectus, and any supplements or amendments thereto, and related matters were
discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except as specified
above), and any supplements or amendments thereto, on the basis of the
foregoing, no facts have come to their attention that would lead them to believe
that either the Registration Statement or any amendments thereto, at the time
the Registration Statement or such amendments became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus, as of its date or at the Initial Closing Date or the
Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted 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 (it being understood that such counsel need express no
belief as to the financial statements or schedules and other financial or
statistical data included in the Registration Statement or Prospectus or any
amendments or supplements thereto or the Statement of Eligibility of the Trustee
on Form T-1 filed as part of the Registration Statement).
(i) Concurrently with the execution and delivery of this Agreement, or,
if the Company elects to rely on Rule 430A, on the date of the Prospectus, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company and its subsidiaries as required by the
Act and the Rules and Regulations and with respect to all financial and certain
other statistical and numerical information contained in the Registration
Statement. At the Initial Closing Date and, as to the Option Notes, the Option
Closing Date, the Accountants shall have furnished to the
19
Representatives a letter, dated the date of its delivery, which shall confirm,
on the basis of a review in accordance with the procedures set forth in the
letters from the Accountants, that nothing hascome to their attention during the
period from the date of the letter referred to in the prior sentence to a date
(specified in the letter) not more than three days prior to the Initial Closing
Date or the Option Closing Date, as the case may be, which would require any
change in their letter dated the date hereof if it were required to be dated and
delivered at the Initial Closing Date or the Option Closing Date, as the case
may be.
(j) At the Initial Closing Date and, as to the Option Notes, the Option
Closing Date, there shall be furnished to the Representatives an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company, in form and
substance satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, (x) the Registration Statement does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading and (y) the Prospectus does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (B) in the case of the certificate delivered at the
Initial Closing Date and the Option Closing Date, since the Effective Date no
event has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not untrue
or misleading in any material respect.
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the time
such certificate is delivered, true and correct in all material respects.
(iii) Each of the covenants required herein to be performed by the
Company on or prior to the date of such certificate has been duly, timely and
fully performed and each condition herein required to be complied with by the
Company on or prior to the delivery of such certificate has been duly, timely
and fully complied with.
(k) On or prior to the Initial Closing Date, the Representatives shall have
received the executed agreements referred to in Section 4(k).
(l) The Notes shall be qualified for sale in such states as the
Representatives may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Initial
Closing Date and the Option Closing Date.
(m) Prior to the Initial Closing Date, the Notes shall have been approved
for listing on the New York Stock Exchange, subject only to notice of issuance.
20
(n) On or prior to the Initial Closing Date, the Representatives have
received a copy of a letter between the Company and ICII in which ICII shall
acknowledge that the consummation of the transactions contemplated hereby will
not violate the terms of the indenture pursuant to which $90,000,000 of ICII's
Senior Notes due 2004 were issued.
(o) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested in connection with the Offering
and the transactions contemplated hereby.
7. Indemnification.
---------------
(a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on (i) any untrue statement or alleged untrue
statement made by the Company in Section 3 of this Agreement, (ii) any untrue
statement or alleged untrue statement of any material fact contained in (A) any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus and (B)
any application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the Notes
under the securities or Blue Sky laws thereof or filed with the Commission or
any securities association or securities exchange (each, an "Application") or
(iii) the omission or alleged omission to state in any preliminary prospectus,
the Registration Statement or the Prospectus or any supplement to the
Registration Statement or the Prospectus or any Application a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the Company will not be liable to the extent that such loss,
claim, liability, expense or damage arises from the sale of the Notes in the
public offering to any person by an Underwriter and is based on an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives on behalf of any Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus, or contained in a preliminary prospectus if a copy
of the Prospectus (or any amendment or supplement thereto) was not sent or given
by or on behalf of such Underwriter to a person asserting a loss, claim,
liability, expense or damage, if required by law so to have been delivered at or
prior to written confirmation of the sale of such Notes to such person, and, if
the Prospectus (or any amendment or supplement thereto) would have cured the
defect giving rise to such loss, claim, liability or damage. This indemnity
agreement will be in addition to any liability that the Company might otherwise
have.
21
(b) Each Underwriter will indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each director of the Company, each
officer of the Company who signs the Registration Statement to the same extent
as the foregoing indemnity from the Company to each Underwriter, but only
insofar as losses, claims, liabilities, expenses or damages are based solely on
any untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to any Underwriter as
set forth in the penultimate sentence in Section 3(b) hereof or furnished in
writing to the Company by the Representatives on behalf of such Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus; provided, however, that the cumulative liability
of each Underwriter pursuant to this Section 7, whether by indemnification or
contribution, shall be limited to the underwriting discounts or commissions
received by such Underwriter in connection with the sale of the Notes. This
indemnity agreement will be in addition to any liability that each Underwriter
might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section 7 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 7 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, which different or
additional defenses may not be asserted on behalf of the indemnified party by
counsel chosen by and also representing the indemnifying party without
prejudicing or potentially prejudicing the rights or defenses of the
indemnifying party, (3) a conflict or potential conflict exists (based on advice
of counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the right
to direct the defense of such action on behalf of the indemnified party) or (4)
the indemnifying party has not in fact employed counsel to
22
assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All
such fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly as they are incurred and upon receipt of
substantiation of such charges as the indemnifying party may reasonably request.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
Underwriters, such as persons who control the Company within the meaning of the
Act or the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for contribution)
to which the Company and any one or more of the Underwriters may be subject in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand, and the Underwriters on the other. The
relative benefits received by the Company on the one hand, and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the Offering (before deducting expenses) received by the Company
bears to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable law, the allocation of contribution shall be made
in such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the Company
on the one hand, and the Underwriters, on the other, with respect to the
statements or omissions which resulted in such loss, claim, liability, expense
or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the 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 or the Representatives on behalf of the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 7(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 7(d)
shall be deemed to include, for purpose of this Section 7(d), any legal or other
expenses reasonably incurred by such indemnified party in
23
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), (i) no Underwriter shall be
required to contribute, cumulatively, any amount in excess of the underwriting
discounts or commissions received by it less any amounts paid by such
Underwriter as indemnification pursuant to Section 7(b) hereof and (ii) no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 7(d) are several in
proportion to their respective underwriting obligations and not joint. For
purposes of this Section 7(d), any person who controls a party to this Agreement
within the meaning of the Act or the Exchange Act will have the same rights to
contribution as that party, and each director or officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 7(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 7(d). No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii) acceptance of
any of the Notes and payment therefor or (iii) any termination of this
Agreement.
8. Termination. The obligations of the several Underwriters under this
-----------
Agreement may be terminated at any time prior to the Initial Closing Date (or,
with respect to the Option Notes, on or prior to the Option Closing Date), by
notice to the Company from the Representatives, without liability on the part of
any Underwriter to the Company, if, prior to delivery and payment for the Notes
(or the Option Notes, as the case may be), in the sole judgment of the NatWest,
(i) trading in any of the equity securities of the Company shall have been
suspended by the Commission or by the New York Stock Exchange, (ii) trading in
securities generally on the New York Stock Exchange or the International Stock
Exchange of the United Kingdom shall have been suspended or limited or minimum
or maximum prices shall have been generally established on any of such
exchanges, or additional material governmental restrictions, not in force on the
date of this Agreement, shall have been imposed upon trading in securities
generally by any of such exchanges or by order of the Commission or any court or
other governmental authority, (iii) a general banking moratorium shall have been
declared by federal, New York State or United Kingdom authorities or (iv) any
material adverse change in the financial or securities markets in the United
States or United Kingdom or any outbreak or material escalation of hostilities
or declaration by the United States or the United Kingdom of a national
emergency or war or other calamity or crisis shall have occurred, the effect of
any of which is such as to make it, in the sole judgment of NatWest,
impracticable or inadvisable to market the Notes on the terms and in the manner
contemplated by the Prospectus.
24
9. Substitution of Underwriters. If any one or more of the Underwriters
----------------------------
shall fail or refuse to purchase any of the Firm Notes which it or they have
agreed to purchase hereunder, and the aggregate of Firm Notes which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount of Firm Notes, the
other Underwriters shall be obligated, severally, to purchase the Firm Notes
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase, in the proportions which the principal amount of Firm Notes which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate principal amount of Firm Notes which all such non-defaulting
Underwriters have so agreed to purchase, or in such other proportions as the
Representatives may specify; provided that in no event shall the maximum
principal amount of Firm Notes which any Underwriter has become obligated to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by more
than one ninth of the principal amount of Firm Notes agreed to be purchased by
such Underwriter without the prior written consent of such Underwriter. If any
Underwriter or Underwriters shall fail or refuse to purchase any Firm Notes and
the aggregate principal amount of Firm Notes which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase exceeds one-tenth of
the aggregate principal amount of the Firm Notes and arrangements satisfactory
to the Representatives and the Company for the purchase of such Firm Notes are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company
for the purchase or sale of any Notes under this Agreement. In any such case
either the Representatives or the Company shall have the right to postpone the
Initial Closing Date, but in no event for longer than seven days, in order that
the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any
action taken pursuant to this Section 9 shall not relieve any defaulting
Underwriter from liability to the Company or the Underwriters in respect of any
default of such Underwriter under this Agreement.
10. Miscellaneous. Notice given pursuant to any of the provisions of this
-------------
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, Xxx
Xxxxxxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxx 00000, Attention: Xxxxxx X.
Xxxxxx or (b) if to the Underwriters, to the Representatives at the office of
NatWest Securities Limited, 000 Xxxxxxxxxxx, Xxxxxx XX0X 0XX Xxxxxxx, Attention:
Xxxxxx Xxxx, with a copy to NatWest Securities Limited, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxxxxxx, Senior
Director. Any such notice shall be effective only upon receipt. Any notice
under Section 7 or 8 may be made by telex, facsimile or telephone, but if so
made by telex or telephone such notice shall be subsequently confirmed in
writing.
11. Beneficiaries. This Agreement has been and is made solely for the
-------------
benefit of the several Underwriters, the Company and of the controlling persons,
directors and officers referred to in Section 7, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of Notes from any of
the several Underwriters.
25
12. Action by Representatives. Any action required or permitted to be
-------------------------
taken by the Representatives under this Agreement may be taken by them jointly
or by NatWest alone.
13. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New York, without regard to principles
of conflict of laws.
14. Counterparts. This Agreement may be signed in two or more
------------
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
15. Amendments and Waivers. This Agreement may be amended, modified or
----------------------
altered, and any of its provisions waived, only in a writing signed on behalf of
the Company and the Underwriters.
16. Waiver of Trial by July. The Company and the Underwriters each hereby
-----------------------
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
26
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the several Underwriters.
Very truly yours,
SOUTHERN PACIFIC FUNDING CORPORATION
By: _____________________________
Name:
Title:
Confirmed as of the date first
above mentioned:
NATWEST SECURITIES LIMITED
XXXXXXXXXXX & CO., INC.
Acting on behalf of themselves and
as the Representatives of the other
several Underwriters named in Schedule I hereof
By: NATWEST SECURITIES LIMITED
By:____________________________________
27
SCHEDULE I
----------
UNDERWRITERS
Aggregate Principal Amount
Underwriter of Firm Notes to be Purchased
----------- -----------------------------
NatWest Securities Limited......... .
Xxxxxxxxxxx & Co., Inc............. .
-----------------------------
TOTAL.................... $75,000,000
Schedule 4(k)
-------------
Imperial Credit Industries, Inc.
H. Xxxxx Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Guy
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxx X. Xxxxx
X. Xxx Xxxxxx
Xxxxx X. Xxxxx
EXHIBIT A
---------
November ___, 1996
NATWEST SECURITIES LIMITED
XXXXXXXXXXX & CO., INC.
As Representatives of the
several Underwriters
c/o NatWest Securities Limited
000 Xxxxxxxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Dear Sirs:
In consideration of the agreement of the several Underwriters, for
which NatWest Securities Limited and Xxxxxxxxxxx & Co., Inc. (together, the
"Representatives") intend to act as Representatives, to underwrite a proposed
public offering (the "Offering") of Convertible Subordinated Notes due 2006 of
Southern Pacific Funding Corporation, a California corporation, (the "Company")
as contemplated by a registration statement with respect to such Notes filed
with the Securities and Exchange Commission on Form S-1 (Registration No. 333-
14627), the undersigned hereby agrees that the undersigned will not, directly or
indirectly, for a period of 120 days after the date of the Prospectus relating
to the public offering of such Notes, without the prior written consent of
NatWest Securities Limited on behalf of the Underwriters, offer to sell, sell,
contract to sell, grant any option to purchase or otherwise dispose (or announce
any offer, sale, grant of any option to purchase or other disposition) of any
shares of the Company's Common Stock (the "Common Stock") or any securities
convertible into, or exchangeable for, shares of Common Stock provided that the
undersigned shall be permitted to offer to sell, sell, contract to sell, grant
any option to purchase or otherwise dispose of shares of Common Stock (or
securities convertible into or exchangeable for shares of Common Stock) during
such 120-day period so long as the transferee of such shares or securities
agrees in writing, for the benefit of the Underwriters, not to offer to sell,
sell, contract to sell, grant any option to purchase or otherwise dispose of
such shares or securities until the end of such 120-day period, unless such
transferee has received the prior written consent of NatWest Securities Limited.
Very truly yours,
By: _______________________________
Name:
Title:
