EXHIBIT 1.1
370,000 Shares
SOUTHERN PACIFIC FUNDING CORPORATION
Common Stock
PLACEMENT AGENCY AGREEMENT
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March ., 1997
NATWEST SECURITIES LIMITED
000 Xxxxxxxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Dear Sirs:
Imperial Credit Industries, Inc. (the "Selling Shareholder") proposes to
sell 370,000 shares of authorized and outstanding Common Stock, no par value
(the "Common Stock") of Southern Pacific Funding Corporation, a California
corporation (the "Company"). The Selling Shareholder hereby confirms its
agreement with NatWest Securities Limited ("NatWest") with respect to the sale
of such 370,000 shares of the Common Stock (the "Shares") through NatWest as
agent (the "Agent"). This Agreement provides for the sale of Shares by the
Selling Shareholder directly to investors (as may be agreed to by the Selling
Shareholder and the Agent), pursuant to which the Agent will act as an agent of
the Selling Shareholder in soliciting Share purchases.
The Company and the Selling Shareholder confirm as follows their respective
agreements with NatWest, as agent of the Selling Shareholder.
1. Appointment as Agent.
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(a) Appointment. Subject to the terms and conditions stated herein, the
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Selling Shareholder hereby agrees that Shares will be sold exclusively to or
through the Agent. The Agent is authorized to engage the services of any other
broker or dealer in connection with the offer or sale of the Shares and is
authorized to appoint sub-agents. The Agent may allow any portion of the
placement fee in the form of a discount or otherwise it has received in
connection with any sale from the Selling Shareholder to such brokers or
dealers. The Selling Shareholder agrees that, during the period the Agent is
acting as the Selling Shareholder's agent hereunder,
unless otherwise agreed, the Selling Shareholder will not appoint other
agents to act on its behalf, or to assist it, in the placement of the Shares.
The Company consents to the appointment of NatWest as agent with respect to the
Shares.
(b) Solicitations as Agent. The Agent, acting solely as agent for the
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Selling Shareholder and not as principal, will solicit purchases of the Shares.
The Agent will communicate to the Selling Shareholder, orally, each offer to
purchase Shares solicited by such Agent on an agency basis, other than those
offers rejected by the Agent. The Agent shall have the right, in its discretion
reasonably exercised, to reject any proposed purchase of Shares, as a whole or
in part, and any such rejection shall not be deemed a breach of the Agent's
agreement contained herein. The Selling Shareholder may accept or reject any
proposed purchase of Shares, in whole or in part. The Agent shall make
reasonable efforts to assist the Selling Shareholder in obtaining performance by
each purchaser whose offer to purchase Shares has been solicited by the Agent
and accepted by the Selling Shareholder. The Agent shall not have any liability
to the Selling Shareholder in the event any such agency purchase is not
consummated for any reason. If the Selling Shareholder shall default on its
obligation to deliver Shares to a purchaser whose offer it has accepted, the
Selling Shareholder shall (i) hold the Agent harmless against any loss, claim or
damage arising from or as a result of such default by the Selling Shareholder
and (ii) notwithstanding such default, pay to the Agent any fee or commission to
which it would be entitled in connection with such sale.
(c) Reliance. The Company, the Selling Shareholder and the Agent agree
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that any Shares the placement of which the Agent arranges shall be placed by the
Agent, in reliance on the representations, warranties, covenants and agreements
of the Company and the Selling Shareholder contained herein and on the terms and
conditions and in the manner provided herein.
2. Solicitations as Agent.
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(a) On the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, when agreed by the
Selling Shareholder and the Agent, the Agent, as an agent of the Selling
Shareholder, will use its reasonable efforts to solicit offers to purchase the
Shares upon the terms and conditions set forth herein and in the Prospectus. All
Shares sold through the Agent as agent will be sold at a price as agreed to by
the Selling Shareholder and the related purchaser.
The Selling Shareholder reserves the right, in its sole discretion, to
suspend solicitation of purchases of the Shares through the Agent, as agent,
commencing at any time for any period of time or permanently. Upon receipt of
instructions from the Selling Shareholder, the Agent will forthwith suspend
solicitation of purchases from the Selling Shareholder until such time as the
Selling Shareholder has advised the Agent that such solicitation may be resumed.
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The Selling Shareholder agrees to pay the Agent a placement fee or
commission, in the form of a discount, equal to $. per for each Share sold by
the Selling Shareholder.
(b) Delivery of the Shares shall be made to the accounts of the
respective purchasers against payment of the purchase price in immediately
available funds to the order of the Selling Shareholder through the facilities
of The Depository Trust Company on the date agreed to between the Selling
Shareholder and the related purchasers of the Shares, and as consented to by the
Agent and the Company (the "Closing Date").
The cost of original issue tax stamps, if any, in connection with the
sale and delivery of the Shares by the Selling Shareholder to the respective
purchasers shall be borne by the Selling Shareholder. The Selling Shareholder
will pay and save the respective purchasers, the Agent and any subsequent holder
of the Shares harmless from any and all liabilities with respect to or resulting
from any failure or delay in paying federal and state stamp and other transfer
taxes, if any, which may be payable or determined to be payable in connection
with the original issuance, sale or delivery of the Shares.
3. Representations and Warranties of the Company. The Company represents,
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warrants and covenants to the Agent, as of the date hereof, as of the date of
each acceptance by the Selling Shareholder of an offer for the purchase of
Shares, and as of the Closing Date that:
(a) The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-.) relating to the registration of the Shares under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the Commission's rules and
regulations thereunder (collectively referred to as the "Rules and
Regulations"), including a preliminary prospectus, if any, and such amendments
to such registration statement as may have been required to the date of this
Agreement. The Commission has not issued any order preventing or suspending the
use of the Prospectus (as defined below) or the preliminary prospectus (as
defined below). The term "preliminary prospectus" as used herein means a
preliminary prospectus as contemplated by Rule 430 or Rule 430A ("Rule 430A") of
the Rules and Regulations included at any time as part of the registration
statement. Copies of such registration statement and amendments and of each
related preliminary prospectus, if any, have been delivered to the Agent. If
such registration statement has not become effective, a further amendment to
such registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective will be filed promptly by
the Company with the Commission. If such registration statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A will be filed by the Company with the
Commission in accordance with Rule 424(b) of the Rules and Regulations promptly
after execution and delivery of this Agreement. The term "Registration
Statement" means the registration statement relating to the Shares, as amended
at the time it becomes or became effective (the "Effective Date"), including
financial statements and all exhibits and any information deemed to be included
by Rule 430A. The term "Prospectus" means the prospectus relating to the Shares,
as first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or,
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if no such filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date.
(b) On the Effective Date, the date the Prospectus is first filed with
the Commission pursuant to Rule 424(b) (if required), at all times when the
Prospectus is required to be delivered thereafter and on or prior to the Closing
Date, and when any post-effective amendment to the Registration Statement
becomes effective or any amendment or supplement to the Prospectus is filed with
the Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included in the
Prospectus, did or will comply in all material respects with all applicable
provisions of the Act and the Rules and Regulations. On the Effective Date and
when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement or any such amendment did or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The documents filed by the Company with the Commission (the "Filed
Documents") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), when they were filed with the Commission, complied as to form
in all material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; and none of the Filed Documents,
when they were so filed, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, not misleading. At the Effective Date, the
date the Prospectus or any amendment or supplement to the Prospectus is filed
with the Commission and at the Closing Date, the Prospectus did not or will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. For
all purposes of this Agreement, the parties hereto agree that the Agent has not
provided any information to the Company or the Selling Shareholder for use in
the Registration Statement or the Prospectus. 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, if any, the
Prospectus or any other materials, if any, permitted by the Act.
(c) [THE COMPANY HAS ONLY ONE SUBSIDIARY; SUCH SUBSIDIARY IS DULY
ORGANIZED AND EXISTING, AND THE TOTAL CAPITALIZATION OF SUCH SUBSIDIARY IS LESS
THAN $1,000.] The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of California. The Company has full
power and authority to conduct all the activities conducted by it, to own or
lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. The Company is duly
licensed or qualified to do business and in good standing as a foreign
corporation in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such licensing
or qualification necessary, except where the failure to so qualify would not
have a material adverse effect on the Company. Except as set forth in the
Prospectus and as set forth in the first sentence of this Section 3(c), the
Company does not own directly or indirectly, any shares of stock or any other
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equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity.
Complete and correct copies of the Company's articles of incorporation and
by-laws and all amendments thereto have been delivered to the Agent, and no
changes therein will be made without the prior written consent of the Agent
subsequent to the date hereof and prior to the Closing Date.
(d) The outstanding shares of Common Stock have been (including without
limitation the Shares) duly authorized, validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar right. The
Company has an authorized, issued and outstanding capitalization as set forth in
the Prospectus. The description of the Common Stock, including without
limitation the Shares, contained in the Registration Statement and the
Prospectus is complete and accurate in all respects. The certificates
representing the Shares are in due and proper form. Except as set forth in the
Prospectus, the Company does not have outstanding any options to purchase, or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any shares
of Common Stock.
(e) The financial statements included in the Registration Statement or
the Prospectus present fairly the financial condition of the Company as of the
respective dates thereof and the results of operations and cash flows of the
Company for the respective periods covered thereby, all in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in the
Prospectus. No other financial statements or schedules of the Company are
required by the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. KPMG Peat Marwick LLP (the
"Accountants"), who has reported on such financial statements, is an independent
accounting firm with respect to the Company as required by the Act and the Rules
and Regulations.
(f) The Company maintains a system of internal accounting control
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(g) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Date,
except as set forth in or contemplated by the Registration Statement and the
Prospectus, (i) there has not been and will not have been any change in the
capitalization of the Company, or any material adverse change in the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company arising for any reason whatsoever, (ii) the Company
has not incurred nor will it incur any material liabilities or obligations,
direct or contingent, other than in the ordinary course, nor has the Company
entered into nor will it enter into any material transactions not in the
ordinary
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course other than pursuant to this Agreement and the transactions referred to
herein and (iii) the Company has not and will not have paid or declared any
dividends or other distributions of any kind on any class of its capital stock.
(h) The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
(i) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the best
of the Company's knowledge, threatened against the Company or any of its
officers in their capacity as such, before or by any federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding might
materially adversely affect the business, properties, condition (financial or
otherwise) or results of operations of the Company.
(j) The Company has (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, other than governmental licenses, permits,
consents, orders, approvals and other authorizations where the failure to have
such would not have a material adverse effect on the business, properties,
condition (financial or otherwise) or results of operations of the Company, (ii)
complied in all respects with all laws, regulations and orders applicable to it
or its business, except for violations which would not have a material adverse
effect on the business, properties, condition (financial or otherwise) or
results of operations of the Company, and (iii) performed all its obligations
required to be performed by it, and is not in default under any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement, lease, contract, permit or other agreement or
instrument (collectively, a "contract or other agreement") to which it is a
party or by which its property is bound or affected, except for defaults (or
failures to perform) which would not have a material adverse effect on the
business, prospects, condition (financial or otherwise) or results of operations
of the Company. The Company is not in violation of any provision of its articles
of incorporation or by-laws.
(k) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the execution, delivery and performance of this Agreement by the
Company, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or Blue Sky laws
or the by-laws and rules of the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the offer and sale of the Shares as contemplated
hereby.
(l) 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. The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not
result in the creation or imposition of any lien, charge or encumbrance upon any
of the Company's assets pursuant to the terms or provisions of, or
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result in a breach or violation of or conflict with any of the terms or
provisions of, or constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, (i) the Company's articles of incorporation or by-laws; or
(ii) any contract or other agreement to which the Company is a party or by which
the Company or any of its properties is bound or affected, other than a breach
or default which would not have a material adverse effect on the business,
properties, condition (financial or otherwise) or results of operations of the
Company, or any judgment, ruling, decree, order, law, statute, rule or
regulation of any court or other governmental agency or body applicable to the
business or properties of the Company.
(m) The Company has good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in the
Prospectus or are not material to the business of the Company. The Company has
valid, subsisting and enforceable leases for the properties described in the
Prospectus as leased by it, with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of each of such
properties by the Company.
(n) There is no material document or contract of a character required to
be described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company is a party have been duly
authorized, executed and delivered by the Company, constitute valid and binding
agreements of the Company and are enforceable against the Company in accordance
with the terms thereof, except (i) as the Company's obligations may be affected
by bankruptcy, insolvency, reorganization, moratorium or similar laws, or by
equitable principles relating to creditors' rights generally, and (ii) that the
remedies of specific performance, injunction and other forms of equitable relief
are subject to certain tests of equity, jurisdiction, equitable defenses and the
discretion of the court before which any proceeding therefor may be brought.
(o) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(p) Except as set forth in the Registration Statement and the
Prospectus, no holder of securities of the Company has rights to the
registration of any securities of the Company as a result of the filing of the
Registration Statement.
(q) The Shares have been approved for listing on the New York Stock
Exchange.
(r) The Company is not involved in any material labor dispute nor, to
the knowledge of the Company, is any such dispute threatened.
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(s) The Company owns or possesses, or can acquire on reasonable terms,
all material patents, patent applications, trademarks, service marks, trade
names, licenses, copyrights and unpatented and/or unpatentable proprietary or
other confidential information currently employed by it in connection with its
businesses, and the Company has not received any notice of infringement of or
conflict with asserted rights of any third party with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
business, properties, condition (financial or otherwise) or results of
operations of the Company, except as described in or contemplated by the
Prospectus.
(t) Neither the Company nor, to the Company's knowledge, any employee or
agent of the Company, has at any time during the last five years (i) made any
unlawful contribution to any candidate for foreign office, or failed to disclose
fully any contribution in violation of law, or (ii) made any payment to any
federal or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof.
(u) The Company is insured by insurers of recognized financial
responsibility or self-insured against such losses and risks and in such amounts
as are prudent and customary in the businesses in which they are engaged
including, without limitation, those losses and risks typically covered by
general liability, workers compensation and errors and omissions policies; the
Company has not been refused any insurance coverage sought or applied for; and
the Company does not have any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers or continue to be self-insured as
may be necessary to continue its business at a cost that would not materially
adversely affect the business, properties, condition (financial or otherwise) or
results of operations of the Company.
(v) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company) and has paid all taxes which it believes in good
faith were required to be paid by it and any other assessment, fine or penalty
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as described in the Prospectus.
(w) There are not material outstanding loans or advances or material
guarantees of indebtedness by the Company to or for the benefit of any of the
Company's officers or directors or any of the members of the families of any of
them.
(x) The information regarding loan originations and purchases, loan
sales and securitizations, delinquencies and real estate owned, compliance with
federal, state and local rules and regulations governing the business and
operations of the Company and the contracting of servicing rights contained in
the Prospectus does not and will not contain an untrue statement of a
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material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(y) The Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated.
(z) The Company has complied with, and is and will be in compliance
with, the provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder or is exempt therefrom.
4. Representations and Warranties of the Selling Shareholder. The Selling
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Shareholder represents, warrants and covenants to the Agent, as of the date
hereof and as of the Closing Date, that:
(a) The Selling Shareholder has full power and authority to enter into
this Agreement and the Selling Shareholder's Agreement (as defined below). All
authorizations and consents necessary for the execution and delivery by the
Selling Shareholder of this Agreement and the Selling Shareholder Agreement have
been given. This Agreement and the Selling Shareholder Agreement have each been
duly authorized, executed and delivered by or on behalf of the Selling
Shareholder.
(b) The Selling Shareholder has executed and delivered a Letter of
Transmittal and Custody Agreement (hereinafter referred to as the "Selling
Shareholder's Agreement") and in connection herewith the Selling Shareholder
further represents, warrants and agrees that the Selling Shareholder has
deposited in custody, under the Selling Shareholder's Agreement, with the
transfer agent and registrar named therein (the "Transfer Agent") as custodian,
certificates in negotiable form for the Shares, for the purpose of further
delivery pursuant to this Agreement. The Selling Shareholder Agreement is a
valid and binding agreement of the Selling Shareholder, enforceable against the
Selling Shareholder in accordance with its terms, except (i) as the Selling
Shareholder's obligations may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws, or by equitable principles relating
to creditors' rights generally, and (ii) that the remedies of specific
performance, injunction and other forms of equitable relief are subject to
certain tests of equity, jurisdiction, equitable defenses and the discretion of
the court before which any proceeding therefor may be brought. The Selling
Shareholder agrees that the Shares on deposit with the Transfer Agent are
subject to the interests of the Agent, that the arrangements made for such
custody are to that extent irrevocable, and that the obligations of the Selling
Shareholder hereunder shall not be terminated, except as provided in this
Agreement or in the Selling Shareholder's Agreement, by any act of the Selling
Shareholder, by operation of law, by the insolvency or other incapacity of such
Selling Shareholder or by the occurrence of any other event. If the Selling
Shareholder should become insolvent, declare or have declared in respect
thereof, bankruptcy, or if any other event should occur, before the delivery of
the Shares hereunder, the documents evidencing Shares then on deposit with the
Transfer Agent shall be delivered by the Transfer Agent in accordance with the
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terms and conditions of this Agreement as if such event had not occurred,
regardless of whether or not the Transfer Agent shall have received notice
thereof.
(c) The Selling Shareholder now has, and at the time of delivery thereof
hereunder will have, (i) good and marketable title to the Shares, free and clear
of all liens, encumbrances and claims whatsoever, and (ii) full legal right and
power, and all authorizations and approvals required by law, to sell, transfer
and deliver the Shares to the purchasers thereof and to make the
representations, warranties and agreements made by the Selling Shareholder
herein. Upon the delivery of and payment for the Shares as contemplated herein,
the Selling Shareholder will deliver good and marketable title thereto, free and
clear of all liens, encumbrances and claims whatsoever.
(d) On the Closing Date, all stock transfer or other taxes (other than
income taxes) which are required to be paid in connection with the sale and
transfer of the Shares to the purchasers thereof will have been fully paid or
provided for by the Selling Shareholder and all laws imposing such taxes will
have been fully complied with.
(e) The performance of this Agreement and the Selling Shareholder's
Agreement and the consummation of the transactions contemplated hereby and
thereby by the Selling Shareholder will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the Shares 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 result in the acceleration of
any obligation under any contract or other agreement to which the Selling
Shareholder is a party (including without limitation, the indenture pursuant to
which the Selling Shareholder has issued Senior Notes due 2004 and the indenture
pursuant to which the Selling Shareholder has issued Senior Notes due 2007) or
by which the Selling Shareholder or any of its property is bound or affected, or
under any ruling, decree, judgment, order, law, statute, rule or regulation of
any court or other governmental agency or body having jurisdiction over the
Selling Shareholder or the property of the Selling Shareholder. The Selling
Shareholder is not in violation of any provision of its articles of
incorporation or by-laws.
(f) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Selling Shareholder of the transactions on its part
contemplated herein or in the Selling Shareholder's Agreement, except such as
have been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the by-laws and rules of the
NASD in connection with the offer and sale of the Shares as contemplated herein.
(g) The sale of the Shares is not prompted by the actual knowledge of
the Board of Directors of Selling Shareholder of any material non-public
information concerning the Company.
(h) All information provided by the Selling Shareholder contained in the
Registration Statement and the Prospectus (as amended or supplemented, if the
Company shall have
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filed with the Commission any amendment or supplement thereto) complied and will
comply in all material respects with all applicable provisions of the Act and
the Rules and Regulations and such information is true and accurate. The parties
hereto agree that the only information provided by the Selling Shareholder
contained in the Registration Statement and the Prospectus is the information
contained therein regarding the Selling Shareholder under the caption
"Beneficial Ownership of Securities and Selling Shareholder."
(i) The Selling Shareholder has not distributed and will not distribute
any preliminary prospectus, the Prospectus or any other offering material in
connection with the offering and sale of the Shares. The Selling Shareholder has
not taken, directly or indirectly, any action designed, or which might
reasonably be expected, to cause or result in, under the Act or otherwise, or
which has caused or resulted in, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares.
5. Agreements of the Company and the Selling Shareholder.
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(a) The Company hereby covenants and agrees with the Agent as follows:
(i) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares, file any amendment or
supplement to the Registration Statement or the Prospectus, unless a copy
thereof shall first have been submitted to the Agent within a reasonable
period of time prior to the filing thereof under the circumstances and the
Agent shall not have unreasonably objected thereto in good faith.
(ii) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Agent promptly, (1) when
the Registration Statement has become effective and when any post-effective
amendment thereto becomes effective, (2) of any request by the Commission
for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (3) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose or the threat thereof, (4) of the happening of any event during the
period mentioned in the second sentence of Section 5(a)(vi) that in the
judgment of the Company makes any material statement made in the
Registration Statement or the Prospectus untrue or that requires the making
of any changes in the Registration Statement or the Prospectus in order to
make the statements therein, in light of the circumstances in which they
are made, not misleading and (5) of receipt by the Company or any
representative or attorney of the Company of any other communication from
the Commission relating to the Company, the Registration Statement, any
preliminary prospectus or the Prospectus. If at any time the Commission
shall issue any order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order as promptly as practicable. If the Company has
omitted any information from the Registration Statement pursuant to
11
Rule 430A, the Company will use its best efforts to comply with the
provisions of and make all requisite filings with the Commission pursuant
to said Rule 430A and to notify the Agent promptly of all such filings.
(iii) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus or the Registration Statement, as then amended or
supplemented, would include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or if for any other reason it is necessary at any time to amend
or supplement the Prospectus or the Registration Statement to comply with
the Act or the Rules and Regulations, the Company will promptly notify the
Agent thereof and, subject to Section 5(a)(ii) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(iv) The Company will furnish to the Agent, without charge, as many
conformed copies of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto as the Agent may reasonably request and will furnish to
the Agent, without charge, a copy of the Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules but without exhibits.
(v) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(vi) On the Effective Date, and thereafter from time to time, the
Company will deliver to Agent, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as the Agent may
reasonably request. The Company consents to the use of the Prospectus or
any amendment or supplement thereto by the Agent in connection with the
solicitation of purchases for the Selling Shareholder and by all dealers to
whom the Shares may be sold, both in connection with the offering or sale
of the Shares and for any period of time thereafter during which the
Prospectus is required by law to be delivered in connection therewith.
(vii) Prior to any public offering of the Shares, the Company will
cooperate with the Agent and its counsel in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such state and foreign jurisdictions as the
Agent may reasonably request; provided, that in no event shall the Company
be obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action which would subject it to general
service of process or taxation in any jurisdiction where it is not now so
subject.
12
(viii) During the period of five years commencing on the Effective
Date, the Company will furnish to the Agent, copies of such financial
statements and other periodic and special reports as the Company may from
time to time distribute generally to the holders of any class of its
capital stock, and will furnish to the Agent, a copy of each annual or
other report it shall be required to file with the Commission; provided
that the failure to comply with this Section 5(a)(viii) shall not
constitute a material breach of this Agreement.
(ix) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which
need not be audited but shall be in reasonable detail) for a period of 12
months ended commencing after the Effective Date, and satisfying the
provisions of Section 11(a) of the Act (including Rule 158 of the Rules and
Regulations).
(x) The Company will not at any time, directly or indirectly, take
any action intended, or which might reasonably be expected, to cause or
result, under the Act or otherwise, in, or which will constitute,
stabilization of the price of the shares of Common Stock to facilitate the
sale or resale of the Shares.
(b) The Selling Shareholder hereby covenants and agrees with the Agent
as follows:
(i) The Selling Shareholder will not, without the prior written
consent of NatWest, make any bid for or purchase any shares of Common Stock
during the 120-day period following the date hereof.
(ii) As soon as the Selling Shareholder is advised thereof, the
Selling Shareholder will advise the Agent and confirm such advice in
writing (i) of receipt by the Selling Shareholder, or by any representative
of the Selling Shareholder, of any communication from the Commission
relating to the Registration Statement, the Prospectus or any preliminary
prospectus, or any notice or order of the Commission relating to the
Company or the Selling Shareholder in connection with the transactions
contemplated by this Agreement and (ii) of the happening of any event
during the period from and after the Effective Date and until the Closing
Date that in the judgment of the Selling Shareholder makes any statement
made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(iii) The Selling Shareholder will not at any time, directly or
indirectly, take any action intended, or which might reasonably be
expected, to cause or result, under
13
the Act or otherwise, 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.
(c) (i) Each of the Company and the Selling Shareholder hereby covenants
and agrees with the Agent that, whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Selling
Shareholder agrees to pay or reimburse if paid by the Agent, all costs and
expenses incident to the performance of the obligations of the parties hereto
under this Agreement, including but not limited to costs and expenses of or
relating to (1) the preparation, printing and filing of the Registration
Statement and exhibits to it, each preliminary prospectus, the Prospectus and
any amendment or supplement to the Registration Statement or the Prospectus, (2)
the preparation and delivery of certificates representing the Shares, (3) the
printing of this Agreement and any related agreements, (4) furnishing (including
costs of shipping and mailing) such copies of the Registration Statement, the
Prospectus and any preliminary prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale of
the Shares, (5) the listing of the Shares on the New York Stock Exchange, (6)
any filings required to be made by the Agent with the NASD, including the fees
and disbursements of counsel to the Agent in connection therewith , (7) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant to Section
5(a)(vii), including the reasonable fees, disbursements and other charges of
counsel to the Agent in connection therewith and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (8) counsel to the
Company, the Selling Shareholder and the Agent, (9) the Company's independent
accounts, and (10) the Transfer Agent for the Shares.
This Section 5(c)(i) shall not affect any agreements relating to the
payment of expenses between the Company and the Selling Shareholder.
(d) Each acceptance by it of an offer for the purchase of Shares, and
each delivery of Agent to the Agent (through the Agent as agent) or to the
related purchaser, shall be deemed to be an affirmation that the representations
and warranties of the Company and the Selling Shareholder contained in this
Agreement and in any certificate theretofore delivered to the Agent pursuant
hereto are true and correct at the time of such acceptance or sale, as the case
may be, and an undertaking that such representations and warranties will be true
and correct at the time of delivery to the purchaser or its agent, or to the
Agent, of the Shares relating to such acceptance or sale, as the case may be, as
though made at and as of each such time (and it is understood that such
representations and warranties shall relate to the Registration Statement and
Prospectus as amended and supplemented to each such time).
6. Representations and Warranties of NatWest Securities Limited. NatWest
------------------------------------------------------------
represents and agrees that: (i) it has not offered or sold and will not offer or
sell in the United Kingdom, by means of any document, any Shares other than to
persons whose ordinary business it is to buy or sell shares or debentures
(whether as principal or agent) or in circumstances which do not constitute an
offer to the public within the meaning of the Companies Xxx 0000; (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Xxx 0000 and other applicable laws
14
with respect to anything done by it in relation to the Shares in, from or
otherwise involving the United Kingdom or any other jurisdiction outside the
United States; and (iii) it has issued or passed on and will issue or pass on to
any person in the United Kingdom any document received by it in connection with
the issue of the Shares only if that person is of a kind described in Article
9(3) of the Financial Services Xxx 0000 (Investment Advertisements) (Exemptions)
Order 1996, or such person is one to whom the document can lawfully be issued or
passed on.
7. Conditions of the Obligations of the Agent. The obligations of the
------------------------------------------
Agent hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Agent not later than 5:00 p.m., New York City time, on
the date of this Agreement or at such later date and time as shall be consented
to in writing by the Agent and all filings required by Rule 424 of the Rules and
Regulations and Rule 430A shall have been made.
(b)(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities and (iv)
after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Agent and the Agent did not object thereto in good faith within
a reasonable period of time, and the Agent shall have received certificates,
dated the date hereof and signed by the Chairman of the Board of Directors of
the Company or the Chief Executive Officer of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings threatened or
contemplated, rely upon the best of their information and belief), to the effect
of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, properties, condition
(financial or otherwise) or results of operations of the Company, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) the Company shall not have sustained any material loss or
interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, which
is not set forth in the Registration Statement and the Prospectus, if in the
judgment of NatWest any such development makes it impracticable or inadvisable
to consummate the sale and delivery of the Shares as contemplated hereby.
15
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any of its officers or
directors in their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an unfavorable
ruling, decision or finding would materially and adversely affect the business,
properties, condition (financial or otherwise) or results of operations of the
Company.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects at the date
hereof and at the Closing Date as if made on each such date, each of the
representations and warranties of the Selling Shareholder contained herein shall
be true and correct in all material respects at the date hereof and at the
Closing Date, as if made each such date, and all covenants and agreements herein
contained to be performed on the part of the Company and the Selling Shareholder
and all conditions herein contained to be fulfilled or complied with by the
Company and the Selling Shareholder at or prior to the date hereof and the
Closing Date shall have been duly performed, fulfilled or complied with prior to
such applicable date.
(f) The Agent shall have received an opinion of Xxxxxxx Xxxxxxxx &
Xxxx, counsel for the Company, addressed to the Agent and dated the date hereof,
to the effect that:
(i) The Company is duly qualified or licensed to do business as a
foreign corporation in each of the jurisdictions specified in a schedule
attached to such opinion.
(ii) The Company has an authorized share capitalization as set forth
under the heading "Capitalization" in the Registration Statement and the
Prospectus.
(iii) The Shares have been duly authorized for listing on the New
York Stock Exchange.
(iv) The Registration Statement and the Prospectus (except as to the
financial statements and schedules contained therein as to which such
counsel need express no opinion) comply as to form in all material respects
with the requirements of the Act.
(v) The Registration Statement has become effective under the Act
and, to such counsel's knowledge, no stop order proceedings with respect
thereto are pending or threatened under the Act.
(vi) No consent, approval, authorization or order of, or any filing
or declaration with, any federal or State of New York court or governmental
or regulatory commission, board, body, authority or agency is required in
connection with the execution, delivery and performance of this Agreement
by the Company, except such as have been obtained under the Act or the
Rules and Regulations and such as may be required under state
16
securities or Blue Sky laws or the by-laws and rules of the NASD in
connection with the offer and sale of the Shares as contemplated hereby.
(vii) The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not conflict with, or result in any
breach of, or constitute a default under (nor constitute any event which
with notice, lapse of time or both would constitute a breach of or default
under), any provision of the articles or bylaws of the Company or any
provision of any partnership agreement or under any provision of any
license, indenture, lease, mortgage, deed of trust, bank loan, credit
agreement or other agreement or instrument to which the Company is a party
or by which the Company or its properties are bound or affected, in each
case known to such counsel based upon a certificate of the Company relating
to its material agreements and properties, or, so far as is known to such
counsel, under any law, regulation or rule or any decree, judgment or order
applicable to the Company.
(viii) The Company is not in breach of, or in default under (nor has
any event occurred which with notice, lapse of time or both would
constitute a breach of or default under), any license, indenture, lease,
mortgage, deed of trust, bank loan, credit agreement or any other agreement
or instrument to which the Company is a party or by which the Company or
its properties are bound or affected, in each case known to such counsel
based upon a certificate of the Company relating to its material agreements
and properties, which breach or default would have a material adverse
effect on the business, properties, assets, operations or condition
(financial or otherwise) of the Company.
(ix) To such counsel's knowledge, there are no contracts, licenses,
agreements, leases or documents of a character which are required to be
filed as exhibits to the Registration Statement or to be summarized or
described in the Prospectus which have not been so filed, summarized or
described.
(x) To such counsel's knowledge, there are no actions, suits or
proceedings pending or threatened against the Company or any of its
properties, at law or in equity or before or by any commission, board,
body, authority or agency which are required to be described in the
Prospectus but are not so described.
(xi) Except as set forth in the Prospectus, to such counsel's
knowledge, the Company does not have outstanding any options to purchase,
or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or
sell, any shares of Common Stock. To such counsel's knowledge, the offering
and sale of the Shares, as contemplated by this Agreement, does not give
rise to any rights, other than those which have been waived in writing or
satisfied, for or relating to the registration, offering or issuance of any
shares of capital stock or other securities of the Company.
17
(xii) The statements in the Registration Statement and the Prospectus
under the following captions: "Risk Factors--Legislative or Regulatory
Risks," "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources,"
"Business--Regulation," "Beneficial Ownership of Securities and Selling
Shareholder" and "Description of Capital Stock" insofar as they are
descriptions of laws, regulations and rules, of legal and governmental
proceedings or of contracts, agreements, leases and other legal documents,
or refer to statements of law or legal conclusions, have been reviewed by
such counsel and are accurate in all material respects.
(xiii) The Company is not an "investment company" or a person
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(xiv) The Agreement has been duly delivered by the Company.
(g) The Agent shall have received an opinion of Xxxxx & Xxxxxxxxx,
special California counsel for the Company, addressed to the Agent and dated the
date hereof, to the effect that:
(i) The Company is validly existing as a corporation in good standing
under the laws of the State of California, with full corporate power and
authority to own its properties and conduct its business as described in
the Registration Statement and the Prospectus, to execute and deliver this
Agreement.
(ii) This Agreement has been duly authorized and executed by the
Company.
(iii) The outstanding shares of capital stock of the Company,
including without limitation the Shares, have been duly authorized and
validly issued and are fully paid, nonassessable, and free of statutory
preemptive or similar rights.
(iv) (a) The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained in
the Registration Statement and the Prospectus; and (b) the certificates for
the Common Stock, including without limitation the Shares, are in due and
proper form.
(v) No consent, approval, authorization or order of, or any filing or
declaration with, any State of California court or governmental or
regulatory commission, board, body, authority or agency is required in
connection with the execution, delivery and performance of this Agreement
by the Company, except such as have been obtained under the Act or the
Rules and Regulations and such as may be required under state securities or
Blue Sky laws or the by-laws and rules of the NASD in connection with the
offer and sale of the Shares as contemplated hereby.
18
(h) An opinion of Xxxxx X. Xxxxxx, Esq., General Counsel of the Selling
Shareholder, addressed to the Agent and dated the date hereof, to the effect
that:
(i) This Agreement and the Selling Shareholder's Agreement have each
been duly authorized, executed and delivered by or on behalf of the Selling
Shareholder and, except for the registration of the Shares under the Act,
such consents, approvals, authorizations, registrations or qualifications
as may be required under the Act and applicable state or foreign securities
laws in connection with the offer and sale of the Shares as contemplated
hereby, and the approval of the arrangements by the NASD, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement or the Selling Shareholder's
Agreement by the Selling Shareholder and the sale of the Shares as
contemplated by this Agreement.
(ii) The Selling Shareholder's Agreement is valid and binding
agreement of the Selling Shareholder, enforceable against the Selling
Shareholder in accordance with its terms except (a) as the Selling
Shareholder's obligations may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws, or by equitable principles
relating to creditors' rights generally, and (b) that the remedies of
specific performance, injunction and other forms of equitable relief are
subject to certain tests of equity, jurisdiction, equitable defenses and
the discretion of the court before which any proceeding therefor may be
brought.
(iii) Assuming that Shares are purchased from the Selling Shareholder
pursuant to this Agreement in good faith and without notice of any lien,
encumbrance, equity or any other adverse claim within the meaning of the
Uniform Commercial Code, upon the delivery of certificates for the Shares
pursuant to this Agreement with all necessary endorsements in accordance
with the terms of such agreement and upon delivery of the consideration
therefor by the purchaser or purchasers thereof, each of the purchasers who
have purchased such Shares will acquire such Shares free and clear of all
liens, encumbrances, equities or adverse claims within the meaning of the
Uniform Commercial Code.
(i) Such opinion or opinions of Xxxxxxx & Xxxxx L.L.P., counsel for the
Agent dated the date hereof, with respect to such matters as you may reasonably
require, and the Company and the Selling Shareholder shall have furnished to
such counsel such documents and shall have exhibited to them such papers and
records as they may reasonably request for the purpose of enabling them to pass
upon such matters. In connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company and governmental
officials.
In rendering such opinions, such counsel may rely as to matters of fact, on
certificates of officers of the Company, the Selling Shareholder and of
governmental officials, in which case their
19
opinions are to state that they are so doing and that the Agent is justified in
relying on such certificates and copies of said certificates are to be attached
to the opinions.
In addition, each of Xxxxxxx Xxxxxxxx & Wood and Xxxxxxx & Xxxxx L.L.P.
shall state that such counsel has participated in conferences with officers and
other representatives of the Company, representatives of the Selling Shareholder
and the independent public accountants for the Company and you at which the
contents of the Registration Statement and the Prospectus, and any supplements
or amendments thereto, and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as specified above), and any
supplements or amendments thereto, on the basis of the foregoing, no facts have
come to their attention that would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the Registration
Statement or such amendments became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief as to
the financial statements or schedules and other financial or statistical data
included in the Registration Statement or Prospectus or any amendments or
supplements thereto).
(j) Concurrently with the execution and delivery of this Agreement, or,
if the Company elects to rely on Rule 430A, on the date of the Prospectus, the
Accountants shall have furnished to the Agent a letter, dated the date of its
delivery, addressed to the Agent and in form and substance satisfactory to the
Agent, confirming that they are independent accountants with respect to the
Company and its subsidiaries as required by the Act and the Rules and
Regulations and with respect to all financial and certain other statistical and
numerical information contained in the Registration Statement.
(k) On the date hereof, there shall be furnished to the Agent an
accurate certificate, dated the date of its delivery, signed by each of the
Chief Executive Officer and the Chief Financial Officer of the Company, in form
and substance satisfactory to the Agent, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, (x) the Registration Statement does not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading and (y) the Prospectus does not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading and (B) since the Effective Date no event has occurred
as a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein not untrue or misleading in any
material respect.
20
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects.
(iii) Each of the covenants required herein to be performed by the
Company on or prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be complied with
by the Company on or prior to the delivery of such certificate has been
duly, timely and fully complied with.
(l) On the date hereof, there shall have been furnished to the Agent an
accurate certificate, dated the date of its delivery, signed by the Selling
Shareholder (or the Transfer Agent), in form and substance satisfactory to the
Agent, to the effect that the representations and warranties of the Selling
Shareholder contained herein are true and correct in all material respects on
and as of the date of such certificate as if made on and as of the date of such
certificate, and each of the covenants and conditions required herein to be
performed or complied with by the Selling Shareholder on or prior to the date of
such certificate has been duly, timely and fully performed or complied with.
(n) The Shares shall be qualified for sale in such states as the Agent
may reasonably request, each such qualification shall be in effect and not
subject to any stop order or other proceeding on the Closing Date.
(o) Prior to the Closing Date, the Shares shall have been approved for
listing on the New York Stock Exchange, subject only to notice of issuance.
(p) On the date hereof, and on the Closing Date, the Company and the
Selling Shareholder shall have furnished to the Agent such certificates, in
addition to those specifically mentioned herein, as the Agent may have
reasonably requested in connection with the offering of Shares and the
transactions contemplated hereby (each of the Company and the Selling
Shareholder recognizing and agreeing that if requested by the Agent, each or
both of them will deliver or cause to be delivered, such certificates, opinions
of counsel and/or letters of the independent accountants to the Company, as the
Agent shall request, each in substantially the form and scope as delivered on
the date of this Agreement as contemplated by this Section, modified to speak as
of the Closing Date).
8. Indemnification.
---------------
(a) The Company will indemnify and hold harmless Agent, the directors,
officers, employees and agents of the Agent and each person, if any, who
controls the Agent within the meaning of Section 15 of the Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all losses, claims, liabilities, expenses and damages (including
any and all investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), to which
21
they, or any of them, may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of or
are based on (i) any untrue statement or alleged untrue statement made by the
Company in Section 3 of this Agreement, (ii) any untrue statement or alleged
untrue statement of any material fact contained in (A) any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus and (B) any
application or other document, or any amendment or supplement thereto, executed
by the Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the Shares under the
securities or Blue Sky laws thereof or filed with the Commission or any
securities association or securities exchange (each, an "Application") or (iii)
the omission or alleged omission to state in any preliminary prospectus, the
Registration Statement or the Prospectus or any supplement to the Registration
Statement or the Prospectus or any Application a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares in the public
offering to any person by the Agent and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to the Agent furnished in writing to the
Company by the Agent expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus, or contained in a preliminary
prospectus if a copy of the Prospectus (or any amendment or supplement thereto)
was not sent or given by or on behalf of the Agent to a person asserting a loss,
claim, liability, expense or damage, if required by law so to have been
delivered at or prior to written confirmation of the sale of such Shares to such
person, and, if the Prospectus (or any amendment or supplement thereto) would
have cured the defect giving rise to such loss, claim, liability or damage. This
indemnity agreement will be in addition to any liability that the Company might
otherwise have.
(b) The Selling Shareholder will indemnify and hold harmless the Agent,
the directors, officers, employees and agents of the Agent and each person, if
any, who controls the Agent within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on (i) any untrue statement or alleged untrue
statement made by the Selling Shareholder in Section 4 of this Agreement, (ii)
any untrue statement or alleged untrue statement of any material fact contained
in any preliminary prospectus, the Registration Statement or the Prospectus or
any amendment or supplement to the Registration Statement or the Prospectus or
(iii) the omission or alleged omission to state in any preliminary prospectus,
the Registration Statement or the Prospectus or any supplement to the
Registration Statement or the Prospectus or a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, but only to the extent
that with
22
respect to clause (ii) and (iii), such loss, claim, liability, expense or damage
arises from the sale of the Shares in the public offering to any person by the
Agent and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to the Selling Shareholder as set forth in Section 4 (h) hereof;
provided, however, that the Selling Shareholder will not be liable to the extent
that such loss, claim, liability, expense or damage arises from the sale of the
Shares in the public offering to any person by the Agent and is based on an
untrue statement or omission or alleged untrue statement or omission contained
in a preliminary prospectus if a copy of the Prospectus (or any amendment or
supplement thereto) was not sent or given by or on behalf of the Agent to a
person asserting a loss, claim, liability, expense or damage, if required by law
so to have been delivered at or prior to written confirmation of the sale of
such Shares to such person, and, if the Prospectus (or any amendment or
supplement thereto) would have cured the defect giving rise to such loss, claim,
liability or damage. This indemnity agreement will be in addition to any
liability that the Selling Shareholder might otherwise have.
(c) The Agent will indemnify and hold harmless the Company, the Selling
Shareholder, each person, if any, who controls the Company or the Selling
Shareholder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, each director of the Company, each officer of the Company who
signs the Registration Statement to the same extent as the foregoing indemnities
from the Company and the Selling Shareholder to the Agent, but only insofar as
losses, claims, liabilities, expenses or damages are based solely on any untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to the Agent as set forth in the
penultimate sentence in Section 3(b) hereof or furnished in writing to the
Company and the Selling Shareholder by the Agent expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus; provided,
however, that the cumulative liability of the Agent pursuant to this Section 8,
whether by indemnification or contribution, shall be limited to the placement
fees, discounts or commissions received by the Agent from the Selling
Shareholder in connection with the sale of the Shares as contemplated hereby.
This indemnity agreement will be in addition to any liability that the Agent
might otherwise have.
(d) Any party that proposes to assert the right to be indemnified under
this Section 8 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 8, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 8 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel
23
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own counsel
in any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (1) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, which different or additional defenses may not be
asserted on behalf of the indemnified party by counsel chosen by and also
representing the indemnifying party without prejudicing or potentially
prejudicing the rights or defenses of the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred and upon receipt of
substantiation of such charges as the indemnifying party may reasonably request.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 8 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Selling Shareholder
or the Agent, the Company, the Selling Shareholder and the Agent will contribute
to the total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Company
from persons other than the Agent, such as persons who control the Company
within the meaning of the Act or the Exchange Act, officers of the Company who
signed the Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company, the Selling Shareholder and the
Agent may be subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company and the Selling Shareholder in the
aggregate, on the one hand, and the Agent on the other. The relative benefits
received by the Company and the Selling Shareholder, on the one hand, and the
Agent on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
and the Selling Shareholder in the aggregate bears to the total placement fees,
discounts and commissions received by the Agent from the Selling
24
Shareholder as contemplated hereby, in each case as set forth in the Prospectus.
If, but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the Company
and the Selling Shareholder, on the one hand, and the Agent, on the other, with
respect to the statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Agent, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, the Selling
Shareholder and the Agent agree that it would not be just and equitable if
contributions pursuant to this Section 8(e) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 8(e)
shall be deemed to include, for purpose of this Section 8(e), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(e), (i) the Agent shall not be required to
contribute, cumulatively, any amount in excess of the placement fees ,discounts
or commissions received by it from the Selling Shareholder as contemplated
hereby less any amounts paid by the Agent as indemnification pursuant to Section
8(e) hereof and (ii) no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8(e), any person who controls a
party to this Agreement within the meaning of the Act or the Exchange Act will
have the same rights to contribution as that party, and each director or officer
of the Company who signed the Registration Statement will have the same rights
to contribution as the Company, subject in each case to the provisions hereof.
Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 8(e), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 8(e). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(f) The indemnity and contribution agreements contained in this Section
8 and the representations and warranties of the Company and the Selling
Shareholder contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any investigation made by or on behalf of the
Agent, (ii) acceptance of any of the Shares and payment therefor or (iii) any
termination of this Agreement.
9. Termination. The obligations of the Agent under this Agreement may be
-----------
terminated at any time by notice to the Company from the Agent, without
liability on the part of any Agent to
25
the Company or the Selling Shareholder, if, prior to delivery and payment for
the Shares, in the sole judgment of the NatWest, (i) trading in any of the
equity securities of the Company shall have been suspended by the Commission or
by an exchange that lists the Shares, (ii) trading in securities generally on
the New York Stock Exchange or the International Stock Exchange of the United
Kingdom shall have been suspended or limited or minimum or maximum prices shall
have been generally established on any of such exchanges, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by any of such exchanges
or by order of the Commission or any court or other governmental authority,
(iii) a general banking moratorium shall have been declared by federal, New York
State or United Kingdom authorities or (iv) any material adverse change in the
financial or securities markets in the United States or United Kingdom or any
outbreak or material escalation of hostilities or declaration by the United
States or the United Kingdom of a national emergency or war or other calamity or
crisis shall have occurred, the effect of any of which is such as to make it, in
the sole judgment of NatWest, impracticable or inadvisable to market the Shares
on the terms and in the manner contemplated by the Prospectus.
10. Miscellaneous. Notice given pursuant to any of the provisions of this
-------------
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, Xxx
Xxxxxxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxx 00000, Attention: Xxxxxx X.
Xxxxxx, (b) if to the Selling Shareholder, at 00000 Xxxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxxx, Xxxxxxxxxx 00000, Attention: H. Xxxxx Xxxxxxx or (c) if to the
Agent, at the office of NatWest Securities Limited, 000 Xxxxxxxxxxx, Xxxxxx XX0X
0XX Xxxxxxx, Attention: Xxxxxx Xxxx, with a copy to NatWest Securities Limited,
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxx Xxxxxxxxx, Managing Director. Any such notice shall be effective only upon
receipt. Any notice under Section 9 may be made by telex, facsimile or
telephone, but if so made by telex or telephone such notice shall be
subsequently confirmed in writing.
11. Beneficiaries. This Agreement has been and is made solely for the
-------------
benefit of the Agent, the Company and the Selling Shareholder and of the
controlling persons, directors and officers referred to in Section 8, and their
respective successors and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term "successors and assigns" as
used in this Agreement shall not include a purchaser, as such purchaser, of
Shares from the Selling Shareholder.
12. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New York, without regard to principles
of conflict of laws.
13. Counterparts. This Agreement may be signed in two or more counterparts
------------
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
26
14. Amendments and Waivers. This Agreement may be amended, modified or
----------------------
altered, and any of its provisions waived, only in a writing signed on behalf of
the Company, the Selling Shareholder and the Agent.
15. Waiver of Trial by July. The Company, the Selling Shareholder and the
-----------------------
Agent each hereby irrevocably waive any right they may have to a trial by jury
in respect of any claim based upon or arising out of this Agreement or the
transactions contemplated hereby.
27
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholder and the Agent.
Very truly yours,
SOUTHERN PACIFIC FUNDING CORPORATION
By:
------------------------------
Name:
Title:
SELLING SHAREHOLDER:
IMPERIAL CREDIT INDUSTRIES, INC.
By:
------------------------------
Name:
Title:
Confirmed as of the date first
above mentioned:
NATWEST SECURITIES LIMITED, as agent
By:
---------------------------------
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