Exhibit 1.1
6,400,000 Shares
IMPAC MORTGAGE HOLDINGS, INC.
Common Stock
($ 0.01 Par Value Per Share)
UNDERWRITING AGREEMENT
October 22, 2001
UNDERWRITING AGREEMENT
October 22, 2001
UBS Warburg LLC
CIBC World Markets Corp.
Xxxxxx Xxxxxxx Incorporated
Xxxxxx Merchant Partners, Inc.,
as Underwriters
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Impac Mortgage Holdings, Inc., a Maryland corporation (the
Company), proposes to issue and sell to the underwriters named in Schedule A
annexed hereto (the "Underwriters") an aggregate of 5,000,000 shares of Common
Stock, $ 0.01 par value per share (the "Common Stock"), of the Company (the
"Company Shares") and IMPAC Funding Corporation (the "Selling Stockholder")
proposes to sell to the Underwriters 1,400,000 shares of Common Stock. The
aggregate of 6,400,000 shares to be sold by the Company and the Selling
Stockholder is hereinafter referred to as the "Firm Shares". In addition, solely
for the purpose of covering over-allotments, the Company proposes to grant to
the Underwriters the option to purchase from the Company up to an additional
960,000 shares of Common Stock (the "Additional Shares"). The Firm Shares and
the Additional Shares are hereinafter collectively sometimes referred to as the
"Shares". The Shares are described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No. 333-34137)
including a prospectus, relating to the Company Shares and a registration
statement on Form S-3 (File No. 333-63456) including a prospectus, relating to
the Stockholder Shares (the "Selling Stockholder Registration Statement"), each
of which incorporates by reference documents which the Company has filed in
accordance with the provisions of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (collectively called the
"Exchange Act"). The Company has prepared a prospectus supplement (the
"Prospectus Supplement"), including the prospectuses
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included in the registration statements referred to above and the documents
incorporated by reference therein, setting forth the terms of the offering, sale
and plan of distribution of the Shares and additional information concerning the
Company and its business and the Selling Stockholder. The Company has furnished
to you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses, containing the prospectuses included in the
registration statements, as supplemented by a preliminary Prospectus Supplement
and the documents incorporated by reference therein (each thereof, including the
documents incorporated therein by reference, being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statements referred to above, each as amended when
they became effective, including all documents filed as a part thereof or
incorporated by reference therein, and including any information contained in a
prospectus subsequently filed with the Commission pursuant to Rule 424(b) under
the Act and also including any registration statement filed pursuant to Rule
462(b) under the Act, are herein called the "Registration Statement", and the
prospectuses, including all documents incorporated therein by reference,
included in the Registration Statement, in the form filed by the Company with
the Commission pursuant to Rule 424(b) under the Act on or before the second
business day after the date hereof (or such earlier time as may be required
under the Act), are herein called the "Prospectus". Any reference herein to the
Registration Statement, the Prospectus, any Preliminary Prospectus or any
amendment or supplement thereto shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein to the
terms "amend", "amendment", or supplement" with respect to the Registration
Statement, the Prospectus or any Preliminary Prospectus shall be deemed to refer
to and include the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein.
The Company, the Selling Stockholder and the Underwriters
agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and representations and
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subject to the terms and conditions herein set forth, the Company and the
Selling Stockholder agree, severally and not jointly, to sell to the respective
Underwriters and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company and the Selling Stockholder the aggregate number of
Firm Shares (subject to such adjustment as you may determine to avoid fractional
shares) which bears the same proportion to the number of Firm Shares to be sold
by the Company or by the Selling Stockholder, as the case may be, as the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule A
annexed hereto bears to the total number of Firm Shares to be sold by the
Company and the Selling
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Stockholder, in each case at a purchase price of $6.627 per Share. The
Company and the Selling Stockholder are advised by you that the Underwriters
intend (i) to make a public offering of their respective portions of the Firm
Shares as soon after the effective date of the Registration Statement as in your
judgment is advisable and (ii) initially to offer the Firm Shares upon the terms
set forth in the Prospectus. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
purchased by each of them (subject to such adjustment as you shall determine to
avoid fractional shares), all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company and the Selling Stockholder for the Firm Shares. This option may
be exercised by you on behalf of the several Underwriters at any time (but not
more than once) on or before the thirtieth day following the date hereof, by
written notice to the Company. Such notice shall set forth the aggregate number
of Additional Shares as to which the option is being exercised, and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to as the "Option Closing Date"; provided, however, that the
Option Closing Date shall not be earlier than the time of purchase (as defined
below) nor earlier than the second business day after the date on which the
option shall have been exercised nor later than the fifth business day after the
date on which the option shall have been exercised. The number of Additional
Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares).
As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares shall
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be made to the Company and the Selling Stockholder by Federal Funds wire
transfer, against delivery of the certificates for the Firm Shares to you
through the facilities of the Depository Trust Company (DTC) for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 10:00
A.M., New York City time, on October 26, 2001
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(unless another time shall be agreed to by you and the Company or unless
postponed in accordance with the provisions of Section 8 hereof). Such date and
time is referred to herein as the "Closing Date". The time at which such payment
and delivery are actually made is hereinafter sometimes called the time of
purchase. Certificates for the Firm Shares shall be delivered to you in
definitive form in such names and in such denominations as you shall specify on
the business day preceding the time of purchase. For the purpose of expediting
the checking of the certificates for the Firm Shares by you, the Company and the
Selling Stockholder agree to make such certificates available to you for such
purpose at least two full business days preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall
be made at the Option Closing Date in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify no later than the business day preceding the Option Closing
Date. For the purpose of expediting the checking of the certificates for the
Additional Shares by you, the Company agrees to make such certificates available
to you for such purpose at least two full business days preceding the Option
Closing Date.
3. Representations and Warranties of the Company. The Company and the
---------------------------------------------
Selling Stockholder, jointly and severally, represent and warrant to each of the
Underwriters that:
(a) The Company meets the requirements for use of Form S-3 and the Registration
Statement on Form S-3 relating to the Shares, including the Prospectuses and
such amendments to such Registration Statement as may have been required prior
to the date of this Agreement, has been prepared by the Company under the
provisions of the Act, has been filed with the Commission and has become
effective. No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose are pending or, to
the knowledge of the Company, threatened by the Commission. Copies of such
Registration Statement and amendments and of the Prospectus have been delivered
to the Underwriters. The Company has prepared and filed with the Commission
pursuant to Rule 424(b) under the Act a preliminary prospectus supplement
subject to completion, dated October 10, 2001, for use in connection with the
offering of the Shares (the "Preliminary Prospectus Supplement"). A final
Prospectus Supplement pertaining to the Shares will be prepared and filed by the
Company with the Commission in accordance with Rule 424(b) on or before the
second business day after the date hereof (or such earlier time as may be
required under the Act);
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(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 subsequent to and
including the 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, the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment or supplement
thereto) and any Preliminary Prospectus, including the financial statements
included or incorporated by reference in the Prospectus, did or will comply with
all applicable provisions of the Act and the Exchange Act, and will contain all
statements required to be stated therein in accordance with the Act and the
Exchange Act. 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. At the Effective Date,
the date of the Prospectus or any amendment or supplement to the Prospectus if
filed with the Commission and at the 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; and any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement have been so
described or filed. 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 Underwriters specifically for inclusion in the Registration
Statement or Prospectus or any amendment or supplement thereto. For all purposes
of this Agreement, the legend regarding stabilization set forth on the inside
front cover page of the Prospectus and the amounts of the selling concession and
reallowance set forth in the Prospectus Supplement under the caption
"Underwriting" constitute the only information relating to any Underwriter
furnished in writing to the Company by the Underwriters specifically for
inclusion in the Registration Statement, the Prospectus, the Preliminary
Prospectus Supplement or the Prospectus Supplement. The Company has not
distributed any offering material in connection with the offering or sale of the
Shares other than the Registration Statement, the Preliminary Prospectus, the
Prospectus or any other materials, if any, permitted by the Act;
(c) The documents which are incorporated by reference in the Prospectus or from
which information is so incorporated by reference, when they
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become effective or were filed with the Commission, as the case may be, complied
in all material respects with the requirements of the Act or the Exchange Act,
as applicable, and none of such documents 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 omitted to state a
material fact necessary in order to make the to make the statements therein, in
the light of the circumstances under which they were made, not misleading and
any further documents so filed and incorporated by reference shall, when they
are filed with the Commission, conform in all material respect with the
requirements of the Act or the Exchange Act, as applicable;
(d) The only subsidiaries (as defined in the Act) of the Company are IMH Assets
Corporation ("IMH Assets") and Impac Warehouse Lending Group, Inc. ("IWLG");
Novelle Financial Services, Inc. ("NFS") and Impac Secured Assets Corporation
("SAC") are wholly-owned subsidiaries of the Selling Stockholder; IMH Assets,
IWLG, NFS, SAC and the Selling Stockholder, an affiliate of the Company, are
collectively referred to herein as the "Subsidiaries"; complete and correct
copies of the certificates of incorporation and of the bylaws of the Company and
the Subsidiaries and all amendments thereto have been delivered to you, and
except as set forth in the exhibits to the Registration Statement, as of the
date hereof, no changes therein will be made subsequent to the date hereof and
prior to the Closing Date or, if later, the Option Closing Date. The Company and
each of its Subsidiaries is, and at the Closing Date and, if later, the Option
Closing Date, will be, a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation. The Company
and each of its Subsidiaries has, and at the Closing Date and, if later, the
Option Closing Date, will have, corporate 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. The Company and each of its Subsidiaries is, and at the Closing Date
and, if later, the Option Closing Date, will be, 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 will not have a material adverse effect
on the Company or any of its Subsidiaries or their respective business,
properties, business prospects, condition (financial or otherwise) or results of
operations or on the transactions contemplated hereby (a "Material Adverse
Effect"). All of the outstanding shares of the capital stock of the Subsidiaries
have been duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company or a Subsidiary (other than the
outstanding common stock of the Selling Stockholder, which is owned by Xxxxxx X.
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Xxxxxxxxx, Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx), to the extent and as is
described in the Prospectus, free and clear of all liens, encumbrances and
claims whatsoever. Except for the stock of the Subsidiaries and as disclosed in
the Registration Statement, the Company does not own, and at the Closing Date
and, if later, the Option Closing Date, will 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 (other than mortgage-backed securities held by the
Company for long-term investment in the ordinary course of business). The
outstanding shares of preferred stock of the Selling Stockholder have the rights
and preferences described in the Prospectus;
(e) All of the outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and non-assessable, have been issued in
compliance with all federal and state securities laws and were not issued in
violation of any preemptive right, resale right, right of first refusal or
similar right; the Shares to be issued and sold by the Company pursuant to this
Agreement have been duly authorized and upon such issuance will be validly
issued, fully paid and nonassessable and are not subject to any preemptive
right, resale right, right of first refusal or similar right and the
certificates for the Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of being such
holders. The description of the Common Stock in the Registration Statement and
the Prospectus is, and at the Closing Date and, if later, the Option Closing
Date, will be, complete and accurate in all respects. Except as set forth in the
Prospectus, there are no, and at the Closing Date and, if later, the Option
Closing Date, will not be, any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible or exchangeable
into, or any contracts, commitments, plans or arrangements to issue or sell, any
shares of capital stock of the Company, any shares of capital stock of any
Subsidiary or any such warrants, convertible or exchangeable securities or
obligations. The descriptions of the Company's stock option and other stock
plans or arrangements, and the options or other rights granted and exercised
thereunder, set forth in the Prospectus accurately present the information
required to be shown with respect to such plans, arrangements, options and
rights;
(f) As of June 30, 2001, the Company has an authorized capitalization as set
forth under the heading entitled "Actual" in the section of the Registration
Statement and the Prospectus entitled "Capitalization" and, as of the Closing
Date, the Company shall have an authorized capitalization as set forth under the
heading entitled "As Adjusted" in the section of the Registration Statement and
the Prospectus entitled "Capitalization";
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(g) The financial statements and schedules included or incorporated by reference
in the Registration Statement and the Prospectus present the consolidated
financial condition of the Company and the Selling Stockholder as of the
respective dates thereof and the consolidated results of operations and cash
flows of the Company and the Selling Stockholder for the respective periods
covered thereby, all in conformity with generally accepted accounting principles
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 or the Selling Stockholder are required by the Act and
the Exchange Act to be included in the Registration Statement or the Prospectus.
KPMG LLP (the "Accountants"), who have reported on such financial statements and
schedules, are independent accountants with respect to the Company and the
Selling Stockholder as required by the Act . The statements included in the
Registration Statement with respect to the Accountants pursuant to Item 509 of
Regulation S-K under the Act are true and correct in all material respects. The
selected financial data set forth in the Prospectus under the captions
"Capitalization" and "Selected Financial Data" fairly present the information
set forth therein on the basis stated therein;
(h) Each of the Company and its Subsidiaries maintains a system of internal
accounting controls 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 generally accepted accounting
principles 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 of assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences;
(i) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus and prior to the Closing Date and, if
later, the Option 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 of its
Subsidiaries, or any material adverse change in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and its Subsidiaries, (ii) neither the Company nor any of its
Subsidiaries has incurred nor will incur any material liabilities or
obligations, direct or contingent, nor has it entered into nor will it enter
into any material transactions other than pursuant to this Agreement and the
transactions referred to herein or in the ordinary course of business and (iii)
neither the Company nor any of its Subsidiaries has and none of them will have
paid or
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declared any dividends or other distributions of any kind on any class of their
respective classes of capital stock;
(j) Neither the Company nor any of its Subsidiaries is, and if operated in the
manner described in the Prospectus and after giving effect to the offering and
sale of the Shares, none of them will be, an "investment company," an entity
"controlled" by an "investment company" or an "affiliated person", or "promoter"
or "principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(k) Except as set forth in the Registration Statement and the Prospectus, there
are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
or any of their respective 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 result in a Material Adverse Effect;
(l) The Company and each of its Subsidiaries has, and at the Closing Date and,
if later, the Option Closing Date, will have (i) all governmental licenses,
permits, consents, orders, approvals and other authorizations, and has made all
governmental or regulatory filings, as are necessary to carry on its business as
contemplated in the Prospectus, (ii) complied in all respects with all laws,
regulations and orders applicable to it or its business and (iii) performed all
its obligations required to be performed by it, and is not, and at the Closing
Date and, if later, the Option Closing Date, will not be, in breach of or
default under, any indenture, mortgage, deed of trust, voting trust agreement,
loan agreement, bond, debenture, note agreement, lease, contract 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, the effect of any
of which, individually or in the aggregate, might result in a Material Adverse
Effect and no event has occurred which with notice, lapse of time or both would
result in such breach or default. To the knowledge of the Company and each of
its Subsidiaries, no other party under any contract or other agreement to which
it is a party is in breach or default in any respect thereunder. Neither the
Company nor any of its subsidiaries is, nor at the Closing Date and, if later,
the Option Closing Date, will any of them be, in violation of any provision of
its charter or by-laws;
(m) The Company has full corporate power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement
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of the Company and is enforceable against the Company in accordance with its
terms, except as the enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization and similar laws affecting creditors'
rights generally and moratorium laws in effect from time to time and by
equitable principles restricting the availability of equitable remedies. The
execution and delivery by the Company of, and the performance by the Company of
its obligations under, this Agreement, the consummation of the transactions
contemplated hereby and the application of the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under the caption "Use of Proceeds" will not result in the creation
or imposition of any lien, charge or encumbrance upon any of the assets of the
Company or any of its subsidiaries pursuant to the terms or provisions of, or
result in a breach or violation of 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,
the charter or by-laws of the Company or any of its Subsidiaries, any contract
or other agreement to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries or any of its properties is
bound or affected, or violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulation of any court or other governmental agency or
body applicable to the business or properties of the Company or any of its
Subsidiaries the effect of any of which, individually or in the aggregate, might
have a Material Adverse Effect;
(n) No consent, approval, authorization or order of, or any filing or
declaration with, any court or any national, state or local governmental agency,
regulatory commission, board, authority or body is required in connection with
the (i) authorization, issuance, transfer, sale or delivery of the Shares by the
Company, (ii) the execution, delivery and performance of this agreement by the
Company or (iii) the taking by the Company of any other action contemplated
hereby, except such as have been obtained under the Act 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 Shares;
(o) The Company and each of its subsidiaries 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, mortgages, security interests, claims
or restrictions, except such as are described in, or contemplated by, the
Prospectus and except such which would not have a Material Adverse Effect. The
Company and each of its Subsidiaries 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
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which do not materially interfere with the use made and proposed to be made of
such properties by the Company and such Subsidiaries;
(p) All legal or governmental proceedings, contracts, leases or documents 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 have been
so described or filed as required. All such contracts to which the Company or
any Subsidiary is a party have been duly authorized, executed and delivered by
the Company or such Subsidiary, constitute valid and binding agreements of the
Company or such Subsidiary and are enforceable against the Company or such
Subsidiary in accordance with the terms thereof;
(q) No statement, representation, warranty or covenant made by the Company in
this Agreement or made in any certificate of document required by this Agreement
to be delivered to the Underwriters was or will be, when made, inaccurate,
untrue or incorrect;
(r) 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 Shares;
(s) No person has the right, contractual or otherwise, to cause the Company to
issue to it, or register pursuant to the Act, any securities of the Company
because of the filing of the Registration Statement or the offering of the
Shares, nor does any person have preemptive rights, co-sale rights, rights of
first refusal or other rights to purchase any of the Shares other than those
that have been expressly waived prior to the date hereof;
(t) The Shares are duly authorized for listing, subject to official notice of
issuance, on the American Stock Exchange;
(u) Neither the Company nor any of its Subsidiaries is involved in any material
labor dispute nor, to the knowledge of the Company, is any such dispute
threatened;
(v) The Company and its Subsidiaries own, or are licensed or otherwise have the
full and exclusive right to use all material trademarks and trade names which
are used in or necessary for the conduct of their respective businesses as
described in the Prospectus. To the Company's knowledge, no claims have been
asserted by any person to the use of any such trademarks or trade names or
challenging or questioning the validity or effectiveness of any such trademark
or trade name. The use, in connection with the business
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and operations of the Company and its Subsidiaries, of such trademarks and trade
names does not, to the Company's knowledge, infringe on the rights of any
person;
(w) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the
Company, any officer, director, employee or agent acting on behalf of the
Company or any of its Subsidiaries has at any time (i) made any contributions to
any candidate for political office in violation of law, or failed to disclose
fully any contributions to any candidate for political office in accordance with
any applicable statute, rule, regulation or ordinance requiring such disclosure,
(ii) made any payment to any local, state, federal or foreign governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or allowed by applicable law, (iii) made
any payment outside the ordinary course of business to any purchasing or selling
agent or person charged with similar duties of any entity to which the Company
or any Subsidiary sells or from which the Company or any Subsidiary buys
products for the purpose of influencing such agent or person to buy products
from or sell products to the Company or such Subsidiary, or (iv) except as
described in the Prospectus, engaged in any transaction, maintained any bank
account or used any corporate funds except for transactions, bank accounts and
funds which have been and are reflected in the normally maintained books and
records of the Company or such Subsidiary;
(x) As of the Closing Date and, if later, the Option Closing Date, the Company
and its Subsidiaries shall be insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the business in which they engage as described in the
Prospectus; neither the Company nor any Subsidiary has been refused any
insurance coverage sought or applied for; and the Company has no reason to
believe that it or any Subsidiary will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its proposed
business at a cost that would not result in a Material Adverse Effect;
(y) As of the Closing Date and, if later, the Option Closing Date, the Company
shall be, and if operated in the manner described in the Prospectus shall
remain, qualified as a real estate investment trust ("REIT") under Sections 856
through 860 of the Internal Revenue Code of 1986 (the "Code"), and intends to
operate in a manner so as to continue to remain so qualified;
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(z) Neither the Company nor any of its Subsidiaries is, and if operated in the
manner described in the Prospectus, will not be a "broker" within the meaning of
Section 3(a)(4) of the Exchange Act or a "dealer" within the meaning of Section
3(a)(5) of the Exchange Act or required to be registered pursuant to Section
15(a) of the Exchange Act; and
(aa) The Company has obtained the agreement of (i) the Selling Stockholder and
(ii) each of the Company's and the Selling Stockholder's respective directors
and officers not to sell, offer to sell, contract to sell, hypothecate, grant
any option to sell or otherwise dispose of, directly or indirectly, any shares
of Common Stock or securities convertible into or exchangeable for Common Stock
or warrants or other rights to purchase Common Stock (other than options granted
pursuant to employee benefit plans existing on the date of this Agreement and,
in the case of the Company, shares of Common Stock issuable upon the exercise of
such outstanding options) for a period of 90 days after the date of the
Prospectus (or 45 days in the case of each officer and director of the Company
or the Selling Stockholder).
4. Representations and Warranties of the Selling Stockholder. The Selling
---------------------------------------------------------
Stockholder represents and warrants to each Underwriter that:
(a) the Selling Stockholder now is and at the time of delivery of such Shares
(and at the time of purchase) will be, the lawful owner of the number of Shares
to be sold by the Selling Stockholder pursuant to this Agreement and has and, at
the time of delivery thereof, will have valid and marketable title to such
Shares, and upon delivery of and payment for such Shares at the time of
purchase, the Underwriters will acquire valid and marketable title to such
Shares free and clear of any claim, lien, encumbrance, security interest,
community property right, restriction on transfer or other defect in title;
(b) All consents, approvals, authorizations and orders necessary for the
execution and delivery by the Selling Stockholder of this Agreement, and for the
sale and delivery of the Shares to be sold by it hereunder, have been obtained;
(c) The Selling Stockholder has full corporate power and authority to enter into
this Agreement, and this Agreement has been duly authorized, executed and
delivered by the Selling Stockholder, is a valid and binding agreement of the
Selling Stockholder and is enforceable against the Selling Stockholder in
accordance with the terms hereof, except for the indemnification and
contribution provisions hereof and except as may be limited by applicable
bankruptcy, insolvency, reorganization and similar laws affecting creditors'
rights generally and moratorium laws in effect from time to time and by
equitable principles restricting the availability of equitable remedies;
-14-
(d) The execution and delivery by the Selling Stockholder of, and the
performance by the Selling Stockholder of its agreements in, this Agreement do
not and will not (i) violate the charter or by-laws of the Selling Stockholder
or (ii) breach or result in a default under, cause the time for performance of
any obligation to be accelerated under, or result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Selling
Stockholder pursuant to the terms or provisions of any indenture, mortgage, deed
of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement, capital lease or other evidence of indebtedness of the Selling
Stockholder or (iii) result in any violation of the provisions of any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Selling Stockholder or its property; and
(e) The Selling Stockholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares.
5. Certain Covenants of the Company. The Company hereby agrees and the Selling
--------------------------------
Stockholder with respect to paragraphs (l) and (p) of this Section 5 hereby
agrees:
(a) to furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky
laws of such states as you may designate and to maintain such qualifications in
effect so long as required for the distribution of the Shares; provided that the
Company shall not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such state (except service of
process with respect to the offering and sale of the Shares); and to promptly
advise you of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose;
(b) to prepare the Prospectus in a form approved by the Underwriters and file
such Prospectus with the Commission pursuant to Rule 424(b) under the Securities
Act not later than 10:00 A.M., (New York City time), on or before the second
Business Day following the date of this Agreement and to make available to the
Underwriters in New York City, as soon as practicable, and thereafter from time
to time to furnish to the Underwriters, as many copies of the Prospectus (or of
the Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the Registration
Statement) as the Underwriters may
-15-
request for the purposes contemplated by the Act; in case any Underwriter is
required to deliver a prospectus within the nine-month period referred to in
Section 10(a)(3) of the Act in connection with the sale of the Shares, the
Company will prepare promptly upon request, but at the expense of such
Underwriter, such amendment or amendments to the Registration Statement and such
prospectuses as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to confirm such advice in
writing, when any post-effective amendment thereto becomes effective and when
the Prospectus is filed with the Commission pursuant to Rule 424(b) under the
Act (which the Company agrees to file in a timely manner under such Rules);
(d) to advise you promptly, confirming such advice in writing, of any request by
the Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or of notice of
institution of proceedings for, or the entry of a stop order suspending the
effectiveness of the Registration Statement and, if the Commission should enter
a stop order suspending the effectiveness of the Registration Statement, to make
every reasonable effort to obtain the lifting or removal of such order as soon
as possible; to advise you promptly of any proposal to amend or supplement the
Registration Statement or Prospectus, including by filing any documents that
would be incorporated therein by reference, and to file no such amendment or
supplement to which you shall object in writing;
(e) if necessary or appropriate, to file a registration statement pursuant to
Rule 462(b) under the Act;
(f) to furnish to you and, upon request, to each of the other Underwriters for a
period of five years from the date of this Agreement (i) copies of any reports
or other communications which the Company shall send to its stockholders or
shall from time to time publish or publicly disseminate, (ii) copies of all
annual, quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar form as may be designated by the Commission,
(iii) copies of documents or reports filed with any national securities exchange
on which any class of securities of the Company is listed, and (iv) such other
information as you may reasonably request regarding the Company or its
Subsidiaries, in each case as soon as such reports, communications, documents or
information becomes available;
(g) to advise the Underwriters promptly of the happening of any event known to
the Company within the time during which a Prospectus relating to the Shares is
required to be delivered under the Act which, in the judgment
-16-
of the Company, would require the making of any change in the Prospectus then
being used, or in the information incorporated therein by reference, so that the
Prospectus would not include an untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and, during such
time, to prepare and furnish, at the Company's expense, to the Underwriters
promptly such amendments or supplements to such Prospectus as may be necessary
to reflect any such change and to furnish you a copy of such proposed amendment
or supplement before filing any such amendment or supplement with the
Commission;
(h) to make generally available to its security holders, and to deliver to you,
an earnings statement of the Company (which will satisfy the provisions of
Section 11(a) of the Act) covering a period of twelve months beginning after the
effective date of the Registration Statement (as defined in Rule 158(c) of the
Act) as soon as is reasonably practicable after the termination of such
twelve-month period but not later than October 22, 2002;
(i) to furnish to its stockholders within 120 days after the end of each fiscal
year, for so long as the Company shall not be required to file annual and
periodic reports with the Commission under the Exchange Act, audited financial
statements (including a balance sheet and statements of income, stockholders'
equity and of cash flow of the Company for such fiscal year), accompanied by a
copy of the certificate or report thereon of nationally recognized independent
certified public accountants;
(j) to furnish to you three signed copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto (including
all exhibits thereto and documents incorporated by reference therein) and
sufficient conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(k) to furnish to you as early as practicable prior to the time of purchase and
the Option Closing Date, as the case may be, but not later than two business
days prior thereto, a copy of the latest available unaudited interim
consolidated financial statements, if any, of the Company and its Subsidiaries
which have been read by the Company's independent certified public accountants,
as stated in their letter to be furnished pursuant to Section 7(b) hereof;
(l) to apply the net proceeds from the sale of the Shares in the manner set
forth under the caption "Use of Proceeds" in the Prospectus;
(m) to comply with all provisions of any undertakings contained in the
Registration Statement;
-17-
(n) to pay all costs, expenses, fees and taxes (other than any transfer taxes
and fees and disbursements of counsel for the Underwriters except as set forth
under Section 6 hereof and (iii), (iv) and (vi) below) in connection with (i)
the preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the registration, issue,
sale and delivery of the Shares, (iii) the producing, word processing and/or
printing of this Agreement, any Agreement Among Underwriters, any dealer
agreements, any powers of attorney and any closing documents (including
compilations thereof) and the reproduction and/or printing and furnishing of
copies of each thereof to the Underwriters and (except closing documents) to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state laws and the determination of their
eligibility for investment under state law as aforesaid (including the legal
fees and filing fees and other disbursements of counsel for the Underwriters)
and the printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) any listing of the
Shares on any securities exchange or qualification of the Shares for quotation
on NASDAQ and any registration thereof under the Exchange Act, (vi) any filing
for review of the public offering of the Shares by the NASD and (vii) the
performance of the Company's other obligations hereunder;
(o) to furnish to you, before filing with the Commission subsequent to the
effective date of the Registration Statement and for so long as a prospectus is
required to be delivered in connection with the offering or delivery of the
Shares, a copy of any document proposed to be filed pursuant to Section 13, 14
or 15(d) of the Exchange Act;
(p) not to sell, offer or agree to sell, contract to sell, grant any option to
sell or otherwise dispose of, directly or indirectly, any shares of Common Stock
or securities convertible into or exchangeable or exercisable for Common Stock
or warrants or other rights to purchase Common Stock or any other securities of
the Company that are substantially similar to Common Stock or permit the
registration under the Act of any shares of Common Stock, except for the
registration of the Shares and the sales to the Underwriters pursuant to this
Agreement and except for options granted pursuant to employee benefit plans
existing on the date of this Agreement and for shares of Common Stock issuable
upon the exercise of such outstanding options for a period of 90 days after the
date hereof, without the prior written consent of UBS Warburg LLC (or 45 days in
the case of each officer and director of the Company or the Selling
Stockholder);
-18-
(q) to use its best efforts to cause the Shares to be listed on the American
Stock Exchange; and
(r) not at any time, directly or indirectly, take any action intended, or which
might reasonably be expected, to cause or result in, or which will constitute,
stabilization of the price of the shares of Common Stock to facilitate the sale
or resale of any of the Shares; and not invest in futures contracts, options on
futures contracts or options on commodities, unless the Company is exempt from
the registration requirements of the Commodity Exchange Act, as amended (the
"Commodity Act"), or otherwise complies with the Commodity Act. The Company will
not engage in any activities bearing on the Commodity Act, unless such
activities are exempt from the Commodity Act or otherwise comply with the
Commodity Act.
6. Reimbursement of Underwriters' Expenses. If this Agreement shall be
---------------------------------------
terminated by the Company or the Selling Stockholder pursuant to any of the
provisions hereof (otherwise than pursuant to Section 8 or 9) or if for any
reason the Company or the Selling Stockholder shall be unable to perform its or
their respective obligations hereunder, the Company and the Selling Stockholder
shall, in addition to paying the amounts described in Section 5(n) hereof, will
reimburse the several Underwriters for all of their out-of-pocket expenses
(including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection therewith.
7. Conditions of Underwriters' Obligations. The several obligations of the
---------------------------------------
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholder on the date
hereof and at the time of purchase (and the several obligations of the
Underwriters at the Option Closing Date are subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholder on the date hereof and at the time of purchase (unless previously
waived) and at the Option Closing Date, as the case may be), the performance by
the Company and the Selling Stockholder of their respective obligations
hereunder and to the following additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and at the Option
Closing Date, as the case may be, an opinion of Xxxxxxxxxxx & Xxxxxxxx LLP,
counsel for the Company, addressed to the Underwriters, and dated the time of
purchase, or the Option Closing Date, as the case may be, with reproduced copies
for each of the other Underwriters and in form satisfactory to Xxxxxxxx &
Xxxxxxxx, counsel for the Underwriters, stating that:
(i) The Company and each of its Subsidiaries is a corporation duly
incorporated, existing and in good standing under the laws of its
jurisdiction of incorporation and has corporate power and authority to
-19-
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. Each Subsidiary is duly
qualified to do business as a foreign corporation in good standing in each
jurisdiction where the ownership or leasing of the properties or the
conduct of its business requires such qualification, except where the
failure to so qualify would not have a Material Adverse Effect. The Company
is, directly or indirectly, the sole record owner and to such counsel's
knowledge the sole beneficial owner of all of the capital stock of IWLG,
and IMH Assets, and all of the Preferred Stock of the Selling Stockholder
to the extent and as described in the Prospectus. To such counsel's
knowledge, all of the outstanding common stock of the Selling Stockholder
is owned by Xxxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx,
each an executive officer of the Company. To such counsel's knowledge, the
Selling Stockholder is the beneficial owner of all of the outstanding
capital stock of NFS and SAC.
(ii) All of the outstanding shares of Common Stock and the shares of
capital stock of the Subsidiaries have been, and the Shares to be sold by
the Company when paid for by the Underwriters in accordance with the terms
of this Agreement will be, duly authorized, validly issued in compliance
with all federal and state securities laws, fully paid and nonassessable
and (a) to such counsel's knowledge, not issued in violation of any
preemptive right, resale right, right of first refusal or similar right and
(b) will not be subject to any right of first refusal, resale right or
preemptive or similar right under (i) the statutes, judicial and
administrative decisions and the rules and regulations of the governmental
agencies of the state of California, (ii) such Subsidiaries' charter or
by-laws or (iii) any instrument, document, contract or other agreement
referred to in the Registration Statement or any instrument, document,
contract or agreement filed as an exhibit to, or incorporated as an exhibit
by reference in, the Registration Statement. Except as described in the
Registration Statement or the Prospectus, to such counsel's knowledge, (x)
there is no commitment or arrangement to issue, and (y) there are no
outstanding options, warrants or other rights calling for the issuance of,
any share of capital stock of the Company or any Subsidiary to any person
or any security or other instrument that by its terms is convertible into,
exercisable for or exchangeable for capital stock of the Company.
(iii) The number of authorized shares of capital stock of the Company is as
set forth in the Prospectus under the caption "Capitalization". The
description of the Common Stock of the
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Company and the preferred stock of the Selling Stockholder contained in the
Prospectus conforms to the terms thereof contained in the charter of the
Company and the articles of incorporation of the Selling Stockholder,
respectively, and is complete and accurate in all material respects.
(iv) The Registration Statement, the Preliminary Prospectus and the
Prospectus (including any documents incorporated by reference into the
Registration Statement and the Prospectus, at the time they became
effective or were filed, as amended) comply (or complied) in all material
respects as to form with the requirements of the Act or the Exchange Act,
as applicable (except as to financial statements and related schedules and
other financial data contained in the Registration Statement or the
Prospectus, or incorporated by reference therein as to which such counsel
need express no opinion).
(v) To such counsel's knowledge, any instrument, document, lease, license,
contract or other agreement (collectively, "Documents") required to be
described or referred to in the Registration Statement or the Prospectus
has been properly described or referred to therein and any Document
required to be filed as an exhibit to the Registration Statement, or any
document incorporated by reference therein, has been filed as an exhibit
thereto or has been incorporated as an exhibit by reference therein; and,
to such counsel's knowledge, no default exists, nor has any event occurred
which with notice, lapse of time or both, would result in a default, in the
due performance or observance of any material obligation, agreement,
covenant or condition contained in any Document filed or required to be
filed as an exhibit to the Registration Statement, or any document
incorporated by reference therein.
(vi) To such counsel's knowledge, except as disclosed in the Registration
Statement or the Prospectus, as amended, no person or entity has the right
to require the registration under the Act of shares of Common Stock or
other securities of the Company or the Selling Stockholder by reason of the
filing or effectiveness of the Registration Statement.
(vii) To such counsel's knowledge, none of the Subsidiaries is in violation
of its charter or by-laws.
(viii) All descriptions in the Prospectus and the Prospectus Supplement as
such descriptions have been updated by descriptions in the Prospectus
Supplement, or incorporated by reference therein, of statutes, regulations
or legal or governmental proceedings to the
-21-
extent that they constitute matters of law or legal conclusions, are
accurate in all material respects and present in all material respects the
information required to be shown by the Act or the Exchange Act and the
rules and regulations promulgated thereunder.
(ix) The Company has the corporate power and authority to enter into this
Agreement, and this Agreement has been duly authorized, executed and
delivered by the Company.
(x) The execution and delivery by the Company of, and the performance by
the Company of its agreements in, this Agreement do not and will not (i)
breach or result in a default under, cause the time for performance of any
obligation to be accelerated under, or result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Company or
any of its Subsidiaries pursuant to the terms or provisions of, (x) any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement, capital lease or other evidence of
indebtedness of which such counsel has knowledge, (y) any voting trust
arrangement or any contract or other agreement that restricts the ability
of the Company to issue securities and of which such counsel has knowledge
or (z) any Document filed as an exhibit to, or incorporated as an exhibit
by reference in, the Registration Statement, (ii) breach or otherwise
violate any existing obligation of the Company under any court or
administrative order, judgment or decree of which such counsel has
knowledge and which names the Company or its Subsidiaries and is
specifically directed to it or its properties or its Subsidiaries or their
properties or (iii) violate applicable provisions of any statute or
regulation existing or in effect as of the date of such opinion.
(xi) No consent, approval, authorization or order of, or any filing or
declaration with, any court or any governmental agency, regulatory
commission, board, authority or body is required in connection with the
authorization, issuance, transfer, sale or delivery of the Shares by the
Company, in connection with the execution, delivery and performance of this
Agreement by the Company or in connection with the taking by the Company of
any action contemplated thereby or, if so required, all such consents,
approvals, authorizations and orders, have been obtained and are in full
force and effect, except such as have been obtained under the Act and the
Rules and Regulations and such as may be required under state securities or
Blue Sky laws or by the by-laws and rules of the NASD in connection with
the purchase and distribution by the Underwriters of the Shares.
-22-
(xii) None of the Company or any of its Subsidiaries is, and if operated
solely in the manner described in the Prospectus will be, (i) 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 or (ii) a "broker" within the meaning
of Section 3(a)(4) of the Exchange Act or a "dealer" within the meaning of
Section 3(a)(5) of the Exchange Act or required to be registered pursuant
to Section 15(a) of the Exchange Act.
(xiii) The Shares have been duly authorized for listing by the American
Stock Exchange upon official notice of issuance.
(xiv) To such counsel's knowledge, the Registration Statement has become
effective under the Act and no order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose
has been instituted or is threatened, pending or contemplated.
(xv) All legal or governmental proceedings, pending or threatened, required
by the Act or the Exchange Act and the rules and regulations promulgated
thereunder to be described in the Registration Statement or the Prospectus
of which such counsel has knowledge have been so described as required. To
such counsel's knowledge, except as set forth in or contemplated by the
Registration Statement and the Prospectus, there are no actions, suits,
proceedings or investigations pending or overtly threatened in writing
against the Company or any of its Subsidiaries or any of their respective
officers or directors in their capacities as such, before or by any court,
governmental agency or arbitrator which (i) seek to challenge the legality
or enforceability of this Agreement, (ii) seek to challenge the legality or
enforceability of any of the Documents filed, or required to be filed, as
exhibits to the Registration Statement or any document incorporated by
reference therein, (iii) seek damages or other remedies with respect to any
of the Documents filed, or required to be filed, as exhibits to the
Registration Statement, (iv) seek to impose criminal penalties upon the
Company, any of its Subsidiaries or any of their respective officers or
directors in their capacities as such and of which such counsel has
knowledge or (v) seek to enjoin any of the business activities of the
Company or any of its Subsidiaries or the transactions described in the
Prospectus; except (in the case of clauses (ii), (iii) and (v) above) where
such illegality, unenforceability, damages, penalties or injunction which
we believe would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
-23-
(xvi) Such counsel has participated in the preparation of the Registration
Statement, the Preliminary Prospectus and the Prospectus and, without
assuming any responsibility for the accuracy, completeness and fairness of
the statements contained in the Registration Statement, the Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto or in
any document incorporated by reference into the Preliminary Prospectus or
the Prospectus (except as and to the extent set forth in subparagraphs
(iii) and (viii) above), nothing has come to the attention of such counsel
that causes them to believe that, both as of the Effective Date and as of
the Closing Date and the Option Closing Date, the Registration Statement,
or any amendment thereto, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading
or that any Prospectus Supplement, Prospectus or any amendment or
supplement thereto, including any documents incorporated by reference into
the Prospectus Supplement or Prospectus, as the case may be, at the time it
was issued, at the time any such amended or supplemented Prospectus
Supplement or Prospectus, as the case may be, was issued, at the Closing
Date and at the Option Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order make the statements therein, in the light of the
circumstances in which they were made not misleading (except that such
counsel need not express any opinion as to financial statements and
schedules and other financial data contained in the Registration Statement
or the Prospectus or incorporated by reference therein).
In rendering the foregoing opinion, counsel may rely, to the
extent they deem such reliance proper, on the opinions (in form and
substance satisfactory to Underwriters' counsel) of other counsel
acceptable to Underwriters' counsel as to matters governed by the laws of
jurisdictions other than the United States, the State of California and the
State of New York, and as to matters of fact, upon certificates of officers
of the Company and of government officials; provided that such counsel
shall state that the opinion of any other counsel is in form satisfactory
to such counsel and, in such counsel's opinion, such counsel and the
Underwriters are justified in relying on such opinions of other counsel.
Copies of all such opinions and certificates shall be furnished to counsel
to the Underwriters on the Closing Date and the Option Closing Date.
(b) You shall have received from the Accountants letters dated, respectively,
the date of this Agreement, the time of purchase and the
-24-
Option Closing Date, as the case may be, and addressed to the Underwriters (with
reproduced copies for each of the Underwriters) in the forms heretofore approved
by UBS Warburg LLC.
(c) You shall have received at the time of purchase and at the Option Closing
Date, as the case may be, the favorable opinion of Xxxxxxxx & Xxxxxxxx, counsel
for the Underwriters, dated the time of purchase or the Option Closing Date, as
the case may be, with respect to the incorporation of the Company, the validity
of the Shares, the Registration Statement, the Prospectus and other matters as
you reasonably may request. In rendering such opinion, Xxxxxxxx & Xxxxxxxx may
rely upon the opinion of XxXxx Xxxxxx LLP on all matters of Maryland law.
(d) You shall have received at the time of purchase and at the Option Closing
Date, as the case may be, the favorable opinion of XxXxx Xxxxxx LLP, Maryland
counsel to the Company, dated the time of purchase or the Option Closing Date,
as the case may be, with reproduced copies for each of the other Underwriters,
and in form and substance satisfactory to Xxxxxxxx & Xxxxxxxx, counsel for the
Underwriters, stating it is limited to matters of Maryland law and that:
(i) The Company is a corporation duly organized, existing and in good
standing under the laws of its jurisdiction of incorporation and 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.
(ii) All of the outstanding shares of Common Stock have been, and the
Shares to be sold by the Company when paid for by the Underwriters in
accordance with the terms of this Agreement will be, duly authorized,
validly issued, fully paid and nonassessable and the outstanding Shares of
Common Stock were not and the Shares will not be subject to any right of
first refusal, resale right or preemptive or similar right under (i) the
statutes, judicial and administrative decisions and the rules and
regulations of the governmental agencies of the State of Maryland or (ii)
the Company's charter or by-laws.
(iii) The of authorized capital stock of the Company is as set forth in the
Prospectus Supplement under the caption "Capitalization". The description
of the Common Stock contained in the Prospectus conforms to the terms
thereof contained in the Company's charter and is complete and accurate in
all material respects. The form of certificate used to represent the Common
Stock is in due and proper form and complies in all material respects with
all applicable requirements of the Maryland General Corporation Law.
-25-
(iv) The Company is not (a) in violation of its charter or by-laws or (b),
to such counsel's knowledge, in violation of, or in default with respect
to, any law, rule, regulation, order, judgment or decree of the State of
Maryland, except, in the case of (b), as may be described in the Prospectus
or such as in the aggregate do not have a material adverse effect upon the
results of operations, business, properties, business prospects, condition
(financial or otherwise) of the Company or the transactions contemplated in
this Agreement.
(v) All descriptions in the Prospectus and the Prospectus Supplement as
such descriptions have been updated by descriptions in the Prospectus
Supplement, or incorporated by reference therein, of statutes, regulations
or legal or governmental proceedings as they pertain to the laws of the
state of Maryland and to the extent that they constitute matters of law or
legal conclusions are accurate in all material respects and present in all
material respects the information required to be shown, including those
contained in the Prospectus under the caption "Certain Provisions of
Maryland law and of the company's charter and bylaws", and in the
Prospectus Supplement under the caption "Certain changes to Maryland law."
(vi) The Company has full corporate power and authority to enter into this
Agreement, and this Agreement has been duly authorized, executed and
delivered by the Company.
(vii) The execution and delivery by the Company of, and the performance by
the Company of its agreements in, this Agreement do not and will not (i)
violate the Company's charter or by-laws or (ii) violate applicable
provisions of any statute or regulation in the State of Maryland.
(viii) No consent, approval, authorization or order of, or any filing or
declaration with, any court or any governmental agency, regulatory
commission, board, authority or body of the State of Maryland is required
in connection with the authorization, issuance, transfer, sale or delivery
of the Shares by the Company, in connection with the execution, delivery
and performance of this Agreement by the Company or in connection with the
taking by the Company of any action contemplated thereby or, if so
required, all such consents, approvals, authorizations and orders, have
been obtained and are in full force and effect.
(e) You shall have received at the time of purchase and at the Option Closing
Date, as the case may be, the favorable opinion of XxXxx Xxxxxx LLP, tax counsel
to the Company, dated the time of purchase or the Option
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Closing Date, as the case may be, with reproduced copies for each of the other
Underwriters, and in form and substance satisfactory to Xxxxxxxx & Xxxxxxxx,
counsel for the Underwriters, stating that:
(i) All descriptions in the Prospectus and the Prospectus Supplement as
such descriptions have been updated by descriptions in the Prospectus
Supplement, or incorporated by reference therein of statutes, regulations
or legal or governmental proceedings are accurate in all material respects
and present in all material respects the information required to be shown,
including those contained in the Prospectus under the caption "Federal
Income Tax Considerations," and those included in the Prospectus Supplement
under the caption "Material Federal Income Tax Consequences."
(f) You shall have received at the time of purchase and at the Option Closing
Date, as the case may be, the favorable opinion of Xxxxxx X. Xxxxxxxx, General
Counsel of the Company, dated the time of purchase or the Option Closing Date,
as the case may be, with reproduced copies for each of the other Underwriters
and in form and substance satisfactory to Xxxxxxxx & Xxxxxxxx, counsel for the
Underwriters, stating that:
(i) To such counsel's knowledge, the Company is not in violation of its
charter or bylaws and none of its Subsidiaries is in violation of its
charter or by-laws and none of the Company or any of its Subsidiaries is in
violation of, or in default with respect to, any law, rule, regulation,
order, judgment or decree of the United States or the State of California,
except as may be described in the Prospectus or such as in the aggregate do
not have a Material Adverse Effect.
(ii) Such counsel has participated in the preparation of the Registration
Statement, the Preliminary Prospectus and the Prospectus and, without
assuming any responsibility for the accuracy, completeness and fairness of
the statements contained in the Registration Statement, the Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto or in
any document incorporated by reference into the Preliminary Prospectus or
the Prospectus, nothing has come to the attention of such counsel that
causes him to believe that, both as of the Effective Date and as of the
Closing Date and the Option Closing Date, the Registration Statement, or
any amendment thereto, including the documents incorporated by reference
therein, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that any
Prospectus Supplement, Prospectus or any
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amendment or supplement thereto, including any documents incorporated by
reference into the Prospectus Supplement or Prospectus, as the case may be,
at the time it was issued, at the time any such amended or supplemented
Prospectus Supplement or Prospectus, as the case may be, was issued, at the
Closing Date and at the Option Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order make the statements therein, in the light of the
circumstances in which they were made, not misleading (except that such
counsel need not express any opinion as to financial statements and
schedules and other financial data contained in the Registration Statement
or the Prospectus or incorporated by reference therein).
In rendering the foregoing opinion, counsel may rely, to the
extent they deem such reliance proper, on the opinions (in form and
substance satisfactory to Underwriters' counsel) of other counsel
acceptable to Underwriters' counsel as to matters governed by the laws of
jurisdictions other than the United States and the State of California, and
as to matters of fact, upon certificates of officers of the Company and of
government officials; provided that such counsel shall state that the
opinion of any other counsel is in form satisfactory to such counsel and,
in such counsel's opinion, such counsel and the Underwriters are justified
in relying on such opinions of other counsel. Copies of all such opinions
and certificates shall be furnished to counsel to the Underwriters on the
Closing Date and the Option Closing Date.
(g) The Selling Stockholder shall furnish to you at the time of purchase and at
the Option Closing Date, as the case may be, a favorable opinion of Xxxxxxxxxxx
& Xxxxxxxx LLP , counsel for the Selling Stockholder, addressed to the
Underwriters, and dated the time of purchase, with reproduced copies for each of
the other Underwriters, and in form and substance satisfactory to Xxxxxxxx &
Xxxxxxxx, counsel for the Underwriters, stating that:
(i) The Selling Stockholder has the corporate power and authority to enter
into this Agreement, and this Agreement has been duly authorized, executed
and delivered by the Selling Stockholder;
(ii) No consent, approval, authorization or order of, or any filing or
declaration with, any court or any governmental agency, regulatory
commission, board, authority or body is required in connection with the
authorization, transfer, sale or delivery of the Selling Stockholder Shares
by the Selling Stockholder, in connection with the execution, delivery and
performance of this Agreement by the Selling Stockholder or in
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connection with the taking by the Selling Stockholder of any action
contemplated thereby or, if so required, all such consents, approvals,
authorizations and orders, have been obtained and are in full force and
effect, except such as have been obtained under the Act and the Rules and
Regulations and such as may be required under state securities or Blue Sky
laws or by the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Selling Stockholder
Shares;
(iii) Upon payment for and delivery of the Selling Stockholder Shares with
all necessary endorsements in accordance with the terms of the Underwriting
Agreement, and assuming the Underwriters are acquiring the Selling
Stockholder Shares in good faith without notice of any adverse claim, the
Underwriter's will acquire all rights in the Selling Stockholder Shares
that the Selling Stockholder had or had power to transfer and the
Underwriters will be the owner of the Selling Stockholder Shares, free and
clear of any adverse claim;
(iv) The execution and delivery by the Selling Stockholder of, and the
performance by the Selling Stockholder of its agreements in, this Agreement
do not and will not (i) violate the Articles of Incorporation or by-laws of
the Selling Stockholder, (ii) breach or result in a default under, cause
the time for performance of any obligation to be accelerated under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any of the assets of the Selling Stockholder pursuant to the terms or
provisions of, any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement, capital lease
or other evidence of indebtedness of which such counsel has knowledge,
(iii) breach or otherwise violate any existing obligation of the Selling
Stockholder under any court or administrative order, judgment or decree of
which such counsel has knowledge or (iv) violate applicable provisions of
any statute or regulation in the state of California or the United States.
(v) to such counsel's knowledge, the statements in the Prospectus under the
caption "Selling Security Holders and Plan of Distribution" insofar as such
statements constitute a summary of the matters referred to therein present
fairly the information called for with respect to such matters.
(h) You shall have received at the time of purchase and at the Option Closing
date, as the case may be, the favorable opinion of XxXxx Xxxxxx LLP, Delaware
counsel to the Company, dated the time of purchase or the Option Closing Date,
as the case may be, with reproduced copies for each
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of the other Underwriters, and in form and substance satisfactory to Xxxxxxxx &
Xxxxxxxx, counsel for the Underwriters, stating that it is limited to matters of
Delaware law and that:
(i) Novelle is a corporation duly organized, existing and in good standing
in the State of Delaware and 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
Statements and the Prospectus.
(ii) All of the outstanding shares of the capital stock of Novelle are duly
authorized, validly issued, fully paid and nonassessable, and the
outstanding shares of such capital stock were not subject to any right of
first refusal, resale right or preemptive or similar right under (i) the
statutes, judicial and administrative decisions and the rules and
regulations of the government agencies of the State of Delaware, or (ii)
the charter or bylaws.
(iii) All of the outstanding shares of capital stock of Novelle are owned
by the Selling Stockholder.
(i) No amendment or supplement to the Registration Statement or Prospectus,
including documents deemed to be incorporated by reference therein, shall be
filed prior to the time the Registration Statement becomes effective to which
you object in writing.
(j) All filings with the Commission required by Rule 424 under the Securities
Act to have been filed by the time of purchase or the Option Closing Date, as
the case may be, shall have been made within the applicable time period
prescribed for such filing by Rule 424.
(k) Prior to the time of purchase or the Option Closing Date, as the case may
be, (i) no stop order with respect to the effectiveness of the Registration
Statement shall have been issued under the Act or proceedings initiated under
Section 8(d) or 8(e) of the Act; (ii) the Registration Statement and all
amendments thereto, or modifications thereof, if any, shall 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;
and (iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall 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 the light of the circumstances
under which they are made, not misleading.
(l) Between the time of execution of this Agreement and the time of purchase or
the Option Closing Date, as the case may be, (i) no material and
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unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the business, condition or prospects
of the Company and its Subsidiaries taken as a whole shall occur or become known
and (ii) no transaction which is material and unfavorable to the Company shall
have been entered into by the Company or any of its Subsidiaries.
(m) The Company will, at the time of purchase or Option Closing Date, as the
case may be, deliver to you a certificate of two of its executive officers to
the effect that the representations and warranties of the Company as set forth
in this Agreement are true and correct as of each such date, that the Company
shall perform such of its obligations under this Agreement as are to be
performed at or before the time of purchase and at or before the Option Closing
Date, as the case may be and the conditions set forth in paragraphs (k) and (l)
of this Section 7 have been met.
(n) You shall have received signed letters, dated the date of this Agreement,
from the Selling Stockholder and each of the respective directors and officers
of the Company and the Selling Stockholder to the effect that such persons shall
not sell, offer or agree to sell, contract to sell, hypothecate, grant any
option to sell or otherwise dispose of, directly or indirectly, any shares of
Common Stock of the Company or securities convertible into or exchangeable or
exercisable for Common Stock or warrants or other rights to purchase Common
Stock or any other securities of the Company that are substantially similar to
the Common Stock (except for options granted pursuant to employee benefit plans
existing on the date of this Agreement and for issuances of Common Stock upon
the exercise of such outstanding options) for a period of 90 days after the date
of the Prospectus without UBS Warburg's prior written consent.
(o) The Company and the Selling Stockholder shall have each furnished to you
such other documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the time of
purchase and the Option Closing Date, as the case may be, as you may reasonably
request.
(p) The Shares shall have been approved for listing on the American Stock
Exchange, subject only to notice of issuance at or prior to the time of purchase
or the Option Closing Date, as the case may be.
(q) The Selling Stockholder will at the time of purchase and the Option Closing
Date, as the case may be, deliver to you a certificate of the Selling
Stockholder to the effect that the representations and the warranties of the
Selling Stockholder as set forth in this Agreement are true and correct as of
each such date.
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8. Effective Date of Agreement; Termination. This Agreement shall become
effective upon execution by you.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if, since the time of execution of
this Agreement or the respective dates as of which information is given in the
Registration Statement and Prospectus, (y) there has been any material adverse
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the operations, business, condition
or prospects of the Company and its Subsidiaries taken as a whole, which would,
in your judgment or in the judgment of such group of Underwriters, make it
impracticable to market the Shares, or (z) there shall have occurred any
downgrading, or any notice or announcement shall have been given or made of (i)
any intended or potential downgrading or (ii) any review or possible change that
does not indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company or any Subsidiary by any "nationally recognized
statistical rating organization", as that term is defined in Rule 436(g)(2)
under the Act or, if, at any time prior to the time of purchase or, with respect
to the purchase of any Additional Shares, the Option Closing Date, as the case
may be, trading in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended or limitations
or minimum prices shall have been established on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market, or if a banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in accordance
with its constitutional processes or there shall have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on the financial markets of
the United States as, in your judgment or in the judgment of such group of
Underwriters, to make it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 8, the Company, the Selling Stockholder
and each other Underwriter shall be notified promptly by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company or the Selling Stockholder, as the case may be, shall be unable to
comply with any of the terms of this Agreement, the Company or the Selling
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Stockholder, as the case may be, shall not be under any obligation or liability
under this Agreement (except to the extent provided in Sections 5(n), 6 and 10
hereof), and the Underwriters shall be under no obligation or liability to the
Company and the Selling Stockholder under this Agreement (except to the extent
provided in Section 10 hereof) or to one another hereunder.
9. Increase in Underwriters' Commitments. Subject to Sections 7 and 8, if any
Underwriter shall default in its obligation to take up and pay for the Firm
Shares to be purchased by it hereunder (otherwise than for a reason sufficient
to justify the termination of this Agreement under the provisions of Section 8
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set opposite the
names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company and the Selling Stockholder agree with the
non-defaulting Underwriters that it will not sell any Firm Shares hereunder
unless all of the Firm Shares are purchased by the Underwriters (or by
substituted Underwriters selected by you with the approval of the Company or
selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 9 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Shares which all Underwriters agreed to purchase hereunder, and
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if neither the non-defaulting Underwriters nor the Company shall make
arrangements within the five business day period stated above for the purchase
of all the Shares which the defaulting Underwriter or Underwriters agreed to
purchase hereunder, this Agreement shall be terminated without further act or
deed and without any liability on the part of the Company or the Selling
Stockholder to any non-defaulting Underwriter and without any liability on the
part of any non-defaulting Underwriter to the Company or the Selling
Stockholder. Nothing in this paragraph, and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
10. Indemnity and Contribution.
--------------------------
(a) The Company and the Selling Stockholder, jointly and
severally, agree to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, and any person who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any such
person may incur under the Act, the Exchange Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or in a
Prospectus (the term Prospectus for the purpose of this Section 10 being deemed
to include any Preliminary Prospectus, the Prospectus and the Prospectus as
amended or supplemented by the Company), or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
either such Registration Statement or Prospectus or necessary to make the
statements made therein not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information furnished in writing by or on behalf of any Underwriter through
you to the Company expressly for use with reference to such Underwriter in such
Registration Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading; provided,
however, that the indemnity agreement contained in this subsection (a) with
respect to any Preliminary Prospectus Supplement or amended Preliminary
Prospectus Supplement shall not inure to the benefit of any Underwriter (or to
the benefit of any person
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controlling such Underwriter) from whom the person asserting any such loss,
damage, expense, liability or claim purchased the Shares which is the subject
thereof if the Prospectus Supplement, as of its date, corrected any such alleged
untrue statement or omission and if such Underwriter failed to send or give a
copy of such Prospectus Supplement to such person at or prior to the written
confirmation of the sale of such Shares to such person, unless the failure is
the result of non-compliance by the Company with the first clause of paragraph
(b) of Section 5 hereof; provided, further, that the liability of the Selling
Stockholder pursuant to this subsection 10(a) shall not exceed the product of
the number of Shares to be sold by the Selling Stockholder and the public
offering price per share as set forth on the cover page of the Prospectus.
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company or the Selling Stockholder pursuant
to the foregoing paragraph, such Underwriter or such person shall promptly
notify the Company in writing of the institution of such Proceeding and the
Company or the Selling Stockholder shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the omission
to so notify the Company shall not relieve the Company or the Selling
Stockholder from any liability which the Company or the Selling Stockholder may
have to any Underwriter or any such person or otherwise. Such Underwriter or
such person shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
Underwriter or of such person unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the defense of such
Proceeding or the Company shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to have charge of the defense of
such Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from, additional to or in conflict with those available to the Company or the
Selling Stockholder (in which case neither the Company nor the Selling
Stockholder shall have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Company and the Selling Stockholder, and
paid as incurred (it being understood, however, that neither the Company nor the
Selling Stockholder shall be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). Neither the Company nor the Selling
Stockholder shall be liable
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for any settlement of any Proceeding effected without its written consent but if
settled with the written consent of the Company or the Selling Stockholder, the
Company and the Selling Stockholder agree to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers, the Selling Stockholder
and any person who controls the Company or the Selling Stockholder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons from and against any
loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company, the Selling Stockholder
or any such person may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information furnished in
writing by or on behalf of such Underwriter through you to the Company expressly
for use with reference to such Underwriter in the Registration Statement (or in
the Registration Statement as amended by any post-effective amendment thereof by
the Company) or in a Prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading.
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If any Proceeding is brought against the Company, the Selling
Stockholder or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Company, the
Selling Stockholder or such person shall promptly notify such Underwriter in
writing of the institution of such Proceeding and such Underwriter shall assume
the defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses;
provided, however, that the omission to so notify such Underwriter shall not
relieve such Underwriter from any liability which such Underwriter may have to
the Company, the Selling Stockholder or any such person or otherwise. The
Company, the Selling Stockholder or such person shall have the right to employ
its own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of the Company, the Selling Stockholder or such person
unless the employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or such
Underwriter shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from or additional
to or in conflict with those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred
(it being understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). No
Underwriter shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Company, the Selling Stockholder and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii)
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such indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding.
(c) If the indemnification provided for in this Section 10 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 10 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholder, on the
one hand, and the Underwriters, on the other hand, from the offering of the
Shares or (ii) if, the allocation provided by clause (i) above 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 and the Selling Stockholder, on the one hand, and of the
Underwriters, on the other, in connection with the statements or omissions which
resulted in such losses, damages, expenses, liabilities or claims, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholder, on the one hand, and the Underwriters,
on the other, shall be deemed to be in the same respective proportions as the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and the Selling
Stockholder and the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate public offering price of the Shares. The
relative fault of the Company and the Selling Stockholder, on the one hand, and
of the Underwriters, on the other, shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied by
the Company, by the Selling Stockholder or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, damages, expenses, liabilities and claims referred to in
this subsection shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding. In no event shall the liability of the
Selling Stockholder pursuant to this subsection 10(c)
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exceed the product of the number of Shares to be sold by the Selling Stockholder
and the public offering price per share as set forth on the cover page of the
Prospectus.
(d) The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 10 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
subsection (c) above. Notwithstanding the provisions of this Section 10, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by such Underwriter
and distributed to the public were offered to the public exceeds the amount of
any damage which such Underwriter has otherwise been required to pay by reason
of such untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 10 are several in proportion
to their respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in
this Section 10 and the covenants, warranties and representations of the Company
and the Selling Stockholder contained in this Agreement shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person (including each
partner, officer or director of such person) who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or
on behalf of the Company, its directors or officers or any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the Shares. The Company, the Selling stockholder and
each Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement or Prospectus.
11. Notices. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to UBS
Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention: Syndicate
Department and, if to the Company or the Selling Stockholder,
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shall be sufficient in all respects if delivered or sent to the Company at
the offices of the Company at 0000 Xxxx Xxxxxx, Xxxxxxx Xxxxx, XX 00000,
Attention: Xxx Xxxxxxxx.
12. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating
to this Agreement ("Claim"), directly or indirectly, shall be governed by, and
construed in accordance with, the laws of the State of New York. The Section
headings in this Agreement have been inserted as a matter of convenience of
reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company and the
Selling Stockholder consent to the jurisdiction of such courts and personal
service with respect thereto. The Company and the Selling Stockholder hereby
consent to personal jurisdiction, service and venue in any court in which any
Claim arising out of or in any way relating to this Agreement is brought by any
third party against UBS Warburg LLC or any indemnified party. Each of UBS
Warburg LLC and the Company and the Selling Stockholder (in the case of the
Company and the Selling Stockholder on its behalf and, to the extent permitted
by applicable law, on behalf of its stockholders and affiliates) waives all
right to trial by jury in any action, proceeding or counterclaim (whether based
upon contract, tort or otherwise) in any way arising out of or relating to this
Agreement. The Company and the Selling Stockholder agree that a final judgment
in any such action, proceeding or counterclaim brought in any such court shall
be conclusive and binding upon the Company and the Selling Stockholder and may
be enforced in any other courts in the jurisdiction of which the Company or the
Selling Stockholder is or may be subject, by suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Company and the Selling
Stockholder and to the extent provided in Section 10 hereof the controlling
persons, directors and officers referred to in such section, and their
respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
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15. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among
the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
Underwriters, the Company and the Selling Stockholder and their successors and
assigns and any successor or assign of any substantial portion of the Company's,
the Selling Stockholder's and any of the Underwriters' respective businesses
and/or assets.
17. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned subsidiary of UBS
AG, is not a bank and is separate from any affiliated bank, including any U.S.
branch or agency of UBS AG. Because UBS Warburg LLC is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBS Warburg LLC are not
deposits, are not insured by the Federal Deposit Insurance Corporation, are not
guaranteed by a branch or agency, and are not otherwise an obligation or
responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending
relationships with issuers of securities underwritten or privately placed by UBS
Warburg LLC. To the extent required under the securities laws, prospectuses and
other disclosure documents for securities underwritten or privately placed by
UBS Warburg LLC will disclose the existence of any such lending relationships
and whether the proceeds of the issue will be used to repay debts owed to
affiliates of UBS Warburg LLC.
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If the foregoing correctly sets forth the understanding among
the Company, the Selling Stockholder and the Underwriters, please so indicate
in the space provided below for the purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Company, the Selling
Stockholder and the Underwriters, severally.
Very truly yours,
IMPAC MORTGAGE HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------
Title: PRESIDENT
IMPAC FUNDING CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------
Title: PRESIDENT
Accepted and agreed to as of the
date first above written, on behalf of
themselves and the Underwriters
UBS WARBURG LLC
By: /s/ XXXXX X. XXXXXX
----------------------------
Title: DIRECTOR
By: /s/ XXXXX X. XXXXXX
----------------------------
Title: DIRECTOR
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS WARBURG LLC 3,403,400
CIBC WORLD CAPITAL MARKETS CORP. 1,259,000
XXXXXX XXXXXXX INCORPORATED 928,200
JOLSON MERCHANT PARTNERS, INC. 309,400
FLAGSTONE SECURITIES, LLC 125,000
LADENBURG XXXXXXXX & CO. INC. 125,000
XXXX XXXXX XXXX XXXXXX, INCORPORATED 125,000
XXXXXXX XXXXX & ASSOCIATES, INC. 125,000
-------------
Total ................ 6,400,000
=============
