EXHIBIT 1.2
IMPAC MORTGAGE HOLDINGS, INC.
6,065,000 Shares of Common Stock
(par value $.01 per share)
SALES AGENCY AGREEMENT
April [ ], 1998
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Impac Mortgage Holdings, Inc., a Maryland corporation (the "Company"),
confirms its agreement with PaineWebber Incorporated (the "Agent"), as follows:
SECTION 1. Description of Securities. The Company proposes to issue and
-------------------------
sell through the Agent, as sales agent, up to 6,065,000 shares (the "Maximum
Amount") of Common Stock, par value $.01 per share (the "Stock"), on the terms
set forth in Section 3 hereof.
SECTION 2. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to, and agrees with, the Agent that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and the rules and regulations thereunder
("Rules and Regulations"). A registration statement on Form S-3 (Registration
No. 333-34137) with respect to the Stock, including a form of prospectus, has
been prepared by the Company in conformity with the requirements of the Act and
the Rules and Regulations and filed with the Securities and Exchange Commission
(the "Commission") and has become effective. Such registration statement and
prospectus may have been amended or supplemented prior to the date of this
Agreement. Any such amendment or supplement was so prepared and filed, and any
such
amendment or supplement filed after the effective date of such registration
statement has become effective. No stop order suspending the effectiveness of
the registration statement or any post-effective amendment thereto has been
issued, and no proceeding for that purpose has been instituted or, to the
knowledge of the Company, threatened by the Commission. Copies of such
registration statement and prospectus, any such amendment or supplement and all
documents incorporated by reference therein that were filed with the Commission
on or prior to the date of this Agreement have been delivered to the Agent. Such
registration statement, as it may have heretofore been amended, is referred to
herein as the "Registration Statement," and the final form of prospectus
included in the Registration Statement, as amended or supplemented from time to
time, is referred to herein as the "Prospectus." Any reference herein to the
Registration Statement, the Prospectus, or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated (or deemed to
be incorporated) by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement
or 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. As of the close of business on [April 23, 1998], 2,105,192
shares of Stock were available for issuance pursuant to the Registration
Statement, which permits their sale in the manner contemplated by this
Agreement. To the extent the Company desires to sell more than 2,105,192 shares
of Stock pursuant to this Agreement or to the extent the amount of Stock
registered under the Registration Statement is otherwise depleted, the Company
shall file a new registration statement with respect to such shares and shall
cause such registration statement to become effective. After the effectiveness
of said registration statement, all references to "Registration Statement"
included in this Agreement shall be deemed to include such new registration
statement.
(b) Each part of the Registration Statement, when such part became or
becomes effective, and the Prospectus and any amendment or supplement thereto,
on the date of filing thereof with the Commission and at each Filing Date (as
hereinafter defined), conformed or will conform in all material respects with
the requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, did not or
will not contain an untrue statement of a
2
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Prospectus and
any amendment or supplement thereto, on the date of filing thereof with the
Commission and at each Filing Date, did not or will not include an 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; except that the foregoing shall not apply to statements in
or omissions from any such document in reliance upon, and in conformity with,
written information relating to the Agent furnished to the Company by or on
behalf of the Agent, specifically for use in the Registration Statement, the
Prospectus or any amendment or supplement thereto.
(c) The documents incorporated by reference in the Registration Statement
or the Prospectus, or any amendment or supplement thereto, when they became or
become effective under the Act or were or are filed with the Commission under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the
case may be, conformed or will conform in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.
(d) The financial statements of the Company and its subsidiaries (defined
herein to include entities consolidated with the Company for the purposes of
generally accepted accounting principles), together with the related notes and
schedules, set forth or incorporated by reference in the Registration Statement
and Prospectus fairly present the financial condition and the results of
operations and cash flows of the Company and its subsidiaries as of the dates
indicated or for the periods therein specified and were prepared in conformity
with generally accepted accounting principles consistently applied throughout
the periods involved (except as otherwise stated therein).
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of its incorporation
with power and authority (corporate and other) to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and Prospectus; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
3
ownership or leasing of property or the conduct of business, except where the
failure to so qualify and be in good standing, considering all such cases in the
aggregate, would not have a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(f) Each "significant subsidiary" (as defined in Section 1-02 of
Regulation S-X and indicated below) of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and conduct its business as described in the
Registration Statement and Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify and be in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise; and
all of the issued and outstanding capital stock of each subsidiary has been duly
authorized and validly issued, is fully paid and nonassessable and is owned by
the Company, directly or through subsidiaries (other than the outstanding common
stock of Impac Funding Corporation, which is owned by Joseph R. Tomkinson,
William S. Ashmore and Richard J. Johnson), free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. The only
significant subsidiaries (as defined in Section 1-02 of Regulation S-X) of the
Company are Impac Secured Assets Corp., IMH Assets Corp., Impac Warehouse
Lending Group, Inc. and IMH/ICH Dove Street, LLC.
(g) The outstanding shares of capital stock of the Company and the Stock
have been duly authorized and are, or when issued as contemplated hereby will
be, validly issued, fully paid and nonassessable and conform, or when so issued
will conform, to the description thereof in the Prospectus. The stockholders of
the Company have no preemptive rights with respect to the Stock.
(h) Except as set forth in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus and prior to the
4
termination of this Agreement, neither the Company nor any of its subsidiaries
has incurred any liabilities or obligations, direct or contingent, or entered
into any transactions, not in the ordinary course of business, that are material
to the Company and its subsidiaries considered as a whole, and there has not
been any material change in the capital stock, short-term debt or long-term debt
of the Company and its subsidiaries, or any material change, or any development
involving a prospective material change, in the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(i) Except as set forth in the Prospectus, there is not pending or, to the
knowledge of the Company, threatened any action, suit or proceeding to which the
Company or any of its subsidiaries is a party, before or by any court or
governmental agency or body, that could reasonably be expected to result in any
material adverse change in the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or that could reasonably be expected
to materially and adversely affect the properties or assets thereof considered
as a whole.
(j) There are no contracts or documents of the Company or any of its
subsidiaries that are required to be filed as exhibits to the Registration
Statement or to any of the documents incorporated by reference therein by the
Act or the Exchange Act or by the rules and regulations of the Commission
thereunder that have not been so filed.
(k) All necessary action has been duly and validly taken by the Company to
authorize the execution, delivery and performance of this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(l) The performance of this Agreement and the consummation of the
transactions contemplated herein will not result in a breach or
5
violation of any of the terms and provisions of, or constitute a default under,
any agreement or instrument to which the Company or any of its subsidiaries is a
party or by which it is bound or to which any of the property of the Company or
any of its subsidiaries is subject except for such breaches or defaults that
would not in the aggregate have a material adverse effect on the Company's
ability to perform its obligations under this Agreement or on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise, nor will such
action result in the violation of the Company's charter or by-laws, or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
its properties, the effect of any of which would have a material adverse effect
on the Company's ability to perform its obligations under this Agreement, or on
the condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise; no consent, approval, authorization or order of, or filing with, any
court or governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except such as may
be required by state securities or blue sky laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and sale by the Agent of the Stock.
(m) Each of the Company and its subsidiaries has (i) good and marketable
title to all of the 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, condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, (ii) peaceful and undisturbed possession under all material leases
to which it is party as lessee, (iii) all governmental or regulatory licenses,
certificates, permits, authorizations, approvals, franchises or other rights
necessary to engage in the business currently conducted by it, except such as
are not material to the business, condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, (iv) no reason to believe that any
governmental body or agency is considering limiting, suspending or revoking any
such license,
6
certificate, permit, authorization, approval, franchise or right and (v) not
received any notice of and has no reason to believe that any governmental body
or agency is considering enacting, amending or repealing any statute, law,
ordinance or regulation required to be described in the Registration Statement
and Prospectus that is not so described as required. All material leases to
which the Company or any of its subsidiaries is a party are valid and binding
and, to the Company's knowledge, no default has occurred and is continuing
thereunder, and, to the knowledge of the Company, no material defaults by the
landlord are existing under any such leases.
(n) Each of the Company and its subsidiaries owns or possesses all of the
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names presently employed by them in connection with the business now
operated by them, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, if singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(o) The Company and its subsidiaries have not materially violated and are
in compliance in all material respects with all material laws, statutes,
ordinances, regulations, rules and orders of any foreign, federal, state or
local government and any other governmental department or agency, and any
judgment, decision, decree or order of any court or governmental agency,
department or authority, including, without limitation, environmental laws
applicable to it or its business. Neither the Company nor any of its
subsidiaries has received any notice to the effect that, or otherwise been
advised that, it is not in compliance with any such statutes, regulations,
rules, judgments, decrees, orders, ordinances or other laws, and the Company is
not aware of any existing circumstances which are likely to result in material
violations of any of the foregoing.
7
(p) The Company and its qualified real estate investment trust subsidiaries
are organized in conformity with the requirements for qualification as, and
operate in a manner that qualifies them as, a real estate investment trust under
the Internal Revenue Code of 1986, as amended (the "Code"), and the rules and
regulations thereunder and intends to be so qualified after consummation of the
transactions contemplated by this Agreement.
(q) The Company is not, and upon the issuance and sale of the Stock as
herein contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(r) Except as described in the Registration Statement and except as would
not, singly or in the aggregate, result in a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise, (A)
neither the Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code policy
or rule of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or, to the
knowledge of the Company, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigations or proceedings relating to any Environmental Law
against the Company
8
or any of its subsidiaries and (D) there are no events or circumstances that
might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
SECTION 3. Sale and Delivery of Securities. On the basis of the
-------------------------------
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
through the Agent, as sales agent, and the Agent agrees to sell, as sales agent
for the Company, on a reasonable efforts basis, up to the Maximum Amount of
Stock on the terms set forth herein.
The Stock, up to the Maximum Amount, is to be sold on a daily basis or
otherwise as shall be agreed to by the Company and the Agent. The Company will
designate the maximum amount of Stock to be sold by the Agent daily as
reasonably agreed to by the Agent and in any event not in excess of the amount
available for issuance under the currently effective Registration Statement.
Subject to the terms and conditions hereof, the Agent shall use its reasonable
efforts to sell all of the designated Stock up to the Maximum Amount.
Notwithstanding the foregoing the Company may instruct the Agent by
telephone (confirmed promptly by telecopy) not to sell Stock if such sales
cannot be effected at or above the price designated by the Company in any such
instruction; furthermore, the Company shall not authorize the issuance and sale
of, and the Agent shall not be obligated to use its reasonable efforts to sell,
any Stock at a price lower than the minimum price therefor designated from time
to time by the Company's Board of Directors and notified to the Agent in
writing. In addition, the Company or the Agent may, upon notice to the other
party hereto by telephone (confirmed promptly by telecopy), suspend the offering
of the Stock; provided, however, that such suspension or termination shall not
-------- -------
affect or impair the parties' respective obligations with respect to the Stock
sold hereunder prior to the giving of such notice.
If either party has reason to believe that the exemptive provisions set
forth in Rule 101(c)(1) of Regulation M under the Exchange Act are not satisfied
with respect to the Stock, it shall
9
promptly notify the other party and sales of Stock under this Agreement shall be
suspended until that or other exemptive provisions have been satisfied in the
judgment of each party. Unless otherwise agreed by the Company and the Agent,
the Agent shall sell the Stock only by means of ordinary brokers' transactions
on the American Stock Exchange (the "AMEX"). Unless otherwise agreed to by the
Company and the Agent, the Agent shall not solicit or arrange for the
solicitation of customer's orders in anticipation of or in connection with such
transactions, nor shall it sell short as principal shares of Stock of the
Company, except in connection with customary market making activities in the
Company's outstanding securities. The Agent shall not engage in any special
selling efforts or selling methods relating to the Stock within the meaning of
Rule 100 of Regulation M under the Exchange Act. The Agent shall calculate on a
weekly basis the average daily trading volume of the Stock.
The compensation to the Agent for sales of Stock shall be (i) 3.0% of the
gross sales price of the first 2,500,000 shares of Stock that may be sold
pursuant to this Agreement, (ii) 2.5% of the gross sales price of the second
2,500,000 shares that may be sold pursuant to this Agreement, and (iii) 2.25% of
the gross sales price of the remaining 1,065,000 shares that may be sold
pursuant to this Agreement. The remaining proceeds, after further deduction for
any transaction fees imposed by any governmental or self-regulatory organization
in respect of such sales, shall constitute the net proceeds to the Company for
such Stock (the "Net Proceeds").
The Agent shall provide written confirmation to the Company following the
close of trading on the AMEX each day in which Stock is sold under this
Agreement setting forth the amount of Stock sold on such day, the Net Proceeds
to the Company, and the compensation payable by the Company to the Agent with
respect to such sales.
Settlement for sales of Stock will occur on the third business day
following the date on which such sales are made (each such day, a "Settlement
Date"). On each Settlement Date, the Stock sold through the Agent for
settlement on such date shall be delivered by the Company to the Agent against
payment of the Net Proceeds for the sale of such Stock. Settlement for all
Stock shall be effected by free delivery of Stock to the Agent's account at The
Depository Trust Corporation in return for payments in same day funds
10
delivered to the account designated by the Company. If the Company shall default
on its obligation to deliver Stock on any Settlement Date, the Company shall (i)
hold the Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) pay the Agent any commission to
which it would otherwise be entitled absent such default. If the Agent breaches
this Agreement by failing to deliver proceeds on any Settlement Date for Stock
delivered by the Company, the Agent will pay the Company interest based on the
effective overnight Federal Funds rate.
At each Settlement Date, the Company shall be deemed to have affirmed each
representation, warranty, covenant and other agreement contained in this
Agreement, and on each Filing Date (as defined below), the Company shall affirm
in writing each representation, warranty, covenant and other agreement contained
in this Agreement. The Company covenants and agrees with the Agent that on or
prior to the second business day after the end of each calendar week during
which sales of Stock were made by the Agent (each such week a "Reporting
Period"), the Company will (i) file a prospectus supplement with the Commission
under the applicable paragraph of Rule 424(b) (each a "Filing Date"), which
prospectus supplement will set forth, with regard to such Reporting Period, the
dates included within the Reporting Period, the amount of Stock sold through the
Agent, the Net Proceeds to the Company and the compensation payable by the
Company to the Agent with respect to sales of Stock pursuant to this Agreement
and (ii) deliver such number of copies of each such prospectus supplement to the
AMEX as are required by such Exchange. Any obligation of the Agent to use its
reasonable efforts to sell the Stock shall be subject to the continuing accuracy
of the representations and warranties of the Company herein, to the performance
by the Company of its obligations hereunder and to the continuing satisfaction
of the additional conditions specified in Section 5 of this Agreement.
SECTION 4. Covenants of the Company. The Company covenants and agrees
------------------------
with the Agent that:
(a) During the period in which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will notify the Agent
promptly of the time when any subsequent amendment to the Registration Statement
has become effective or any subsequent supplement to the Prospectus has been
filed and of any
11
request by the Commission for any amendment or supplement to the Registration
Statement or Prospectus or for additional information; it will prepare and file
with the Commission, promptly upon the Agent's request, any amendments or
supplements to the Registration Statement or Prospectus that, in the Agent's
reasonable opinion, may be necessary or advisable in connection with the
distribution of the Stock by the Agent; the Company will not file any amendment
or supplement to the Registration Statement or Prospectus unless a copy thereof
has been submitted to the Agent a reasonable period of time before the filing
and the Agent has not reasonably objected thereto; and it will furnish to the
Agent at the time of filing thereof a copy of any document that upon filing is
deemed to be incorporated by reference in the Registration Statement or
Prospectus; and the Company will cause each amendment or supplement to the
Prospectus to be filed with the Commission as required pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations or, in the case
of any document to be incorporated therein by reference, to be filed with the
Commission as required pursuant to the Exchange Act, within the time period
prescribed.
(b) The Company will advise the Agent, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Stock for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its best efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such a stop order should be
issued.
(c) Within the time during which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will comply as far as it is
able with all requirements imposed upon it by the Act and by the Rules and
Regulations, as from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Stock as contemplated by the
provisions hereof and the Prospectus. If during such period any event occurs as
a result of which the Prospectus as then amended or supplemented would include
an 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 then
existing, not misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the Act, the
12
Company will promptly notify the Agent to suspend the offering of Stock during
such period and the Company will amend or supplement the Registration Statement
or Prospectus so as to correct such statement or omission or effect such
compliance.
(d) The Company will use its best efforts to qualify the Stock for sale
under the securities laws of such jurisdictions as the Agent designates and to
continue such qualifications in effect so long as required for the distribution
of the Stock, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction.
(e) The Company will furnish to the Agent and its counsel (at the expense
of the Company) copies of the Registration Statement, the Prospectus (including
all documents incorporated by reference therein) and all amendments and
supplements to the Registration Statement or Prospectus that are filed with the
Commission during the period in which a prospectus relating to the Stock is
required to be delivered under the Act (including all documents filed with the
Commission during such period that are deemed to be incorporated by reference
therein), in each case as soon as available and in such quantities as the Agent
may from time to time reasonably request and will also furnish copies of the
Prospectus to the AMEX in accordance with Rule 153 of the Rules and Regulations.
(f) The Company will make generally available to its security holders as
soon as practicable, but in any event not later than 15 months after the end of
the Company's current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that satisfies the provisions of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.
(g) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all of its expenses
incident to the performance of its obligations hereunder (including, but not
limited to, any transaction fees imposed by any governmental or self-regulatory
organization with respect to transactions contemplated by this Agreement and any
blue sky fees) and will pay the expenses of printing all documents relating to
the offering. The Agent will pay its own out-of-pocket costs and expenses
incurred in connection with the entering into of
13
this Agreement and the transactions contemplated by this Agreement, including,
without limitation, travel, reproduction, printing and similar expenses as well
as the fees and disbursements of its legal counsel; provided, however, that if
100,000 shares of Stock are not sold by the Agent pursuant to the terms of this
Agreement within one year of the date of this Agreement then the Company will
promptly, upon the request of the Agent, reimburse the Agent for the fees and
disbursements of the Agent's legal counsel incurred in connection with the
entering into of this Agreement and the matters contemplated hereby.
(h) The Company will apply the net proceeds from the sale of the Stock as
set forth in the Prospectus.
(i) The Company will not, directly or indirectly, offer or sell any shares
of the Company's common stock, par value $.01 per share ("Common Stock") (other
than the Stock offered pursuant to the provisions of this Agreement) or
securities convertible into or exchangeable for, or any rights to purchase or
acquire, Common Stock during the period from the date of this Agreement through
the final Filing Date for the sale of Stock hereunder without (a) giving the
Agent at least five business days' prior written notice specifying the nature of
the proposed sale and the date of such proposed sale and (b) suspending activity
under this program for such period of time as may reasonably be determined by
agreement of the Company and the Agent; provided, however, that no such notice
-------- -------
and suspension shall be required in connection with the Company's issuance or
sale of (i) shares of Common Stock pursuant to any employee or director stock
option or benefits plan, stock ownership plan, dividend reinvestment plan or
Stockholder Investment Program of the Company now in effect as such plans may be
amended from time to time, and (ii) Common Stock issuable upon conversion of
securities or the exercise of warrants, options or other rights in effect or
outstanding on the date hereof.
(j) The Company will, at any time during the term of this Agreement, as
supplemented from time to time, advise the Agent immediately after it shall have
received notice or obtain knowledge thereof, of any information or fact that
would alter or affect any opinion, certificate, letter and other document
provided to the Agent pursuant to Section 5 herein.
14
(k) Each time that (i) the Registration Statement or the Prospectus shall
be amended or supplemented (other than a supplement filed pursuant to Rule
424(b) under the Act that contains solely the information set forth in the final
paragraph of Section 3 of this Agreement) or (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus (other
than a Current Report on Form 8-K, unless the Agent shall otherwise reasonably
request), the Company shall furnish or cause to be furnished to the Agent
forthwith a certificate dated the date of effectiveness of such amendment, or
the date of filing with the Commission of such supplement or other document, as
the case may be, in form satisfactory to the Agent to the effect that the
statements contained in the certificate referred to in Section 5(f) hereof which
were last furnished to the Agent are true and correct at the time of such
amendment, supplement, or filing, as the case may be, as though made at and as
of such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in said Section 5(f), modified as necessary to relate to
the Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such certificate.
(l) Upon commencement of any sale of Stock under this Agreement, and each
time that (i) the Registration Statement or the Prospectus is amended or
supplemented (other than a supplement filed pursuant to Rule 424(b) under the
Act that contains solely the information set forth in the final paragraph of
Section 3 of this Agreement) or (ii) there is filed with the Commission any
document incorporated by reference into the Prospectus (other than a Current
Report on Form 8-K, unless the Agent shall otherwise reasonably request), the
Company shall furnish or cause to be furnished forthwith to the Agent and to
counsel to the Agent a written opinion of Freshman, Marantz, Orlanski, Cooper &
Klein, counsel to the Company ("Company Counsel"), or other counsel satisfactory
to the Agent, dated the date of effectiveness of such amendment, or the date of
filing with the Commission of such supplement or other document, as the case may
be, in form and substance satisfactory to the Agent, of the same tenor as the
opinion referred to in Section 5(d) hereof, but modified as necessary to relate
to the Registration Statement and the
15
Prospectus as amended and supplemented to the time of delivery of such opinion.
(m) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented to include additional amended financial information or
there is filed with the Commission any document incorporated by reference into
the Prospectus which contains additional amended financial information, the
Company shall cause KPMG Peat Marwick LLP, or other independent accountants
satisfactory to the Agent, forthwith to furnish the Agent a letter, dated the
date of effectiveness of such amendment, or the date of filing of such
supplement or other document with the Commission, as the case may be, in form
satisfactory to the Agent, of the same tenor as the letter referred to in
Section 5(e) hereof but modified to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.
(n) The Company hereby consents to the Agent trading in the Company's
Common Stock for the Agent's own account and at the same time as the Company's
sales pursuant to this Agreement.
SECTION 5. Conditions of Agent's Obligations. The obligations of the
---------------------------------
Agent to sell the Stock as provided herein shall be subject to the accuracy, as
of the date hereof, and as of each Settlement Date, of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or the Agent, threatened by
the Commission, and any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the Commission's satisfaction.
(b) The Agent shall not have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact that in the Agent's opinion is material, or omits to
state a fact that in the Agent's opinion is material and is required to be
stated therein or is necessary to make the statements therein not misleading.
16
(c) Except as contemplated in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there shall not have been any material change, on a consolidated
basis, in the capital stock of the Company and its subsidiaries, or any material
adverse change, or any development that may reasonably be expected to cause a
material adverse change, in the condition (financial or other), business,
prospects, net worth or results of operations of the Company and its
subsidiaries.
(d) The Agent shall have received at every date specified in Section 4(l)
hereof, opinions of Company Counsel, dated as of such date, to the effect that:
(i) The Company is a corporation duly incorporated and existing under
and by virtue of the laws of the State of Maryland and is in good standing
with the State Department of Assessments and Taxation, has full corporate
power and authority to conduct its business as described in the
Registration Statement and Prospectus and is duly qualified to do business
in each jurisdiction where such qualification is required, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise;
(ii) Each "significant subsidiary" (as such term is defined in Rule
1-02 of Regulation S-X under the Act) of the Company has been duly
incorporated and has corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and Prospectus; each of the Company's significant
subsidiaries is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation; and all of the issued
outstanding capital stock of each significant subsidiary of the Company has
been duly authorized and validly issued, is fully paid and nonassessable,
is owned by the Company, directly or indirectly, except for the Preferred
Stock of Impac Funding Corporation, free and clear of any mortgage, pledge,
lien, encumbrance, claim or equity;
17
(iii) The shares of Stock have been duly and validly authorized,
and, when issued and delivered to and paid for by the purchasers thereof
pursuant to this Agreement, will be fully paid and nonassessable and
conform in all material respects to the description thereof in the
Prospectus under the caption "Capital Stock" and the stockholders of the
Company have no preemptive rights with respect to the Stock; all corporate
action required to be taken for the authorization, issuance and sale of the
Stock has been validly and sufficiently taken; and the shares of Stock are
the subject of an effective registration statement permitting their sale in
the manner contemplated by this Agreement;
(iv) The Registration Statement has become effective under the Act;
to the knowledge of such counsel no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to our knowledge, threatened by the
Commission;
(v) The Registration Statement, when it became effective, and the
Prospectus and any amendment or supplement thereto, on the date of filing
thereof with the Commission (and at each Filing Date on or prior to the
date of the opinion), complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations; and the documents
incorporated by reference in the Registration Statement or Prospectus or
any amendment or supplement thereto, when filed with the Commission under
the Exchange Act, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder (except that we express no
opinion as to financial statements, schedules and other financial and
statistical data contained in the Registration Statement or the Prospectus,
or incorporated by reference therein);
(vi) The description in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings, contracts and other documents
are accurate in all material respects and fairly present the information
required to be shown; and such counsel does not know of any statutes or
legal or governmental proceedings required to be described in the
Prospectus that are not described as required, or of any
18
contracts or documents of a character required to be described in the
Registration Statement or Prospectus (or required to be filed under the
Exchange Act if upon such filing they would be incorporated by reference
therein) or to be filed as exhibits to the Registration Statement that are
not described and filed as required;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
(viii) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated herein by
the Company do not and will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any agreement
or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which it is bound or to which any of the
property of the Company or any of its subsidiaries is subject except for
such breaches or defaults that would not in the aggregate have a material
adverse effect on the Company's ability to perform its obligations under
this Agreement or on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, nor will such action result in
the violation of the Company's charter or by-laws, or any statute or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of its properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental agency
or body is required for the consummation of the transactions contemplated
by this Agreement in connection with the issuance or sale of the Stock by
the Company, except such as have been obtained under the Act and such as
may be required under state securities or blue sky laws or rules of the
NASD in connection with the sale and distribution of the Stock by the
Agent;
(ix) Except as may be disclosed in the Prospectus, such counsel
knows of no actions, suits or proceedings pending or threatened against or
affecting the Company or any of its subsidiaries or the business,
properties, business prospects, condition (financial or otherwise) or
results of operations of
19
the Company or any of its subsidiaries, or any of their respective officers
in their capacities as such, before or by any Federal or state or foreign
court, commission, regulatory body, wherein an unfavorable ruling, decision
or finding might materially and adversely affect the Company or any of its
subsidiaries or its business, properties, business prospects, condition
(financial or otherwise) or results of operations; and
(x) Commencing with the Company's taxable year ended December 31,
1995, the Company has been organized in conformity with the requirements
for qualification as a "real estate investment trust," and its proposed
method of operation has enabled and will enable it to meet the requirements
for qualification and taxation as a "real estate investment trust" under
the Code. The information presented in the Registration Statement under
the caption "Federal Income Tax Considerations," to the extent it
constitutes matters of law or legal conclusions, is accurate in all
material respects.
(xi) The Company is not, and upon the issuance and sale of the
Stock and the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of the
1940 Act.
In addition, such counsel shall state that such counsel has no reason to
believe that either the Registration Statement, at the time it (including each
Post-Effective Amendment thereto) 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 and any amendments or supplements thereto, on the date of
filing thereof with the Commission and at each Filing Date on or prior to the
date of the opinion, included an untrue statement of a material fact or omitted
to state a material fact necessary 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 opinion as to the financial
statements or other financial and statistical data included in any of the
documents mentioned in this paragraph.
(e) At the dates specified in Section 4(m) hereof, the Agent shall have
received a letter from KPMG Peat Marwick LLP,
20
independent public accountants for the Company, or other independent accountants
satisfactory to the Agent, dated the date of delivery thereof, substantially in
the form attached hereto as Annex I and otherwise in form and substance
satisfactory to Agent.
(f) The Agent shall have received from the Company a certificate, or
certificates, signed by the Chairman of the Board, the President or a Vice
President and by the principal financial or accounting officer of the Company,
dated as of the next business day following each Filing Date (each, a
"Certificate Date"), to the effect that, to their knowledge:
(i) The representations and warranties of the Company in this
Agreement are true and correct as if made at and as of the Certificate
Date, and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or prior to
the Commencement Date and each such each such Certificate Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
instituted or is threatened, by the Commission;
(iii) Since the date of this Agreement there has occurred no event
required to be set forth in an amendment or supplement to the Registration
Statement or Prospectus that has not been so set forth and there has been
no document required to be filed under the Exchange Act and the rules and
regulations of the Commission thereunder that upon such filing would be
deemed to be incorporated by reference in the Prospectus that has not been
so filed; and
(iv) Since the date of this Agreement, there has not been any
material adverse change, on a consolidated basis, in the business,
financial condition or results of operations of the Company and its
subsidiaries considered as one enterprise which has not been described in
an amendment or supplement to the Registration Statement or Prospectus.
In addition, on each Certificate Date the certificate shall also state that
the shares of Stock to be sold on that date have been duly and validly
authorized by the Company and that all
21
corporate action required to be taken for the authorization, issuance and sale
of the Stock on that date has been validly and sufficiently taken.
The Company will furnish the Agent with such conformed copies of such opinions,
certificates, letters and other documents as the Agent shall reasonably request.
SECTION 6. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to 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, but not limited to, any and all investigative,
legal and other expenses reasonably incurred in connection with, and any and all
amounts paid in settlement of, any action, suit or proceeding between any of the
indemnified parties and any indemnifying parties or between any indemnified
party and any third party, or otherwise, or any claim asserted), as and when
incurred, to which the Agent, or any such person, 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 of a 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 in any application or other
document executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Stock under the securities laws thereof or filed with the
Commission, or (ii) the omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the statements in
it not misleading, or (iii) any breach by any of the indemnifying parties of any
of their respective representations, warranties and agreements contained in
this Agreement, or (iv) the engagement of the Agent pursuant to, and the
performance by the Agent of the services contemplated by, this Agreement;
provided that this indemnity agreement shall not apply to the extent that such
loss, claim, liability, expense or damage arises from the sale of the Stock
pursuant to this Agreement
22
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 any document described in clause (a)(i) above (provided that the Company
shall not liable under this clause (iv) to the extent it is finally judicially
determined by a court of competent jurisdiction that such loss, claim,
liability, expense or damage resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Agent through its gross negligence
or willful misconduct). This indemnity agreement will be in addition to any
liability that the Company might otherwise have.
(b) The Agent agrees to indemnify and hold harmless the Company and its
directors and each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendments thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information concerning the Agent furnished to the
Company by the Agent expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto). This indemnity will be in addition to any
liability that the Agent might otherwise have; provided, however, that in no
case shall the Agent be liable or responsible for any amount in excess of the
total commissions received by the Agent.
(c) Any party that proposes to assert the right to be indemnified under
this Section 6 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 6, 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 (i) any liability that it might have to any indemnified party
otherwise than under this Section 6 and (ii) any liability that it may have to
any indemnified party under the
23
foregoing provisions of this Section 6 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 such commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party,
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (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. An indemnifying party will
not be liable for any settlement of any
24
action or claim effected without its written consent (which consent will not be
unreasonably withheld). No indemnifying party shall, without the prior written
consent of each indemnified party, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated by this Section 6 (whether or not any
indemnified party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising or that may arise out of such claim, action or proceeding.
Notwithstanding any other provision of this Section 6 (c), if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Agent, the Company
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, officers of the Company who
signed the Registration Statement and directors of the Company, who also may be
liable for contribution) to which the indemnified party may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company on the one hand and the Agent on the other. The relative benefits
received by the Company on the one hand and the Agent on the other hand shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company
25
bear to the total commissions received by the Agent from the sale of Stock on
behalf of the Company. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative
fault of the Company, on the one hand, and the 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 and the Agent
agree that it would not be just and equitable if contributions pursuant to this
Section 6(d) 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 6(d) shall be deemed to include, for
the purpose of this Section 6(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the foregoing provisions of this
Section 6(d), the Agent shall not be required to contribute any amount in excess
of the total commissions received by it under this Agreement and 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 6(d), any person
who controls a party to this Agreement within the meaning of the Act will have
the same rights to contribution as that party, and each 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 6(d), will notify any such party or parties from whom
26
contribution may be sought, but the omission so to notify will not relieve that
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). Except for a settlement entered
into pursuant to the last sentence of Section 6(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section 6
and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Agent, (ii) acceptance of the
Stock and payment therefore or (iii) any termination of this Agreement.
SECTION 7. Representations and Agreements to Survive Delivery. All
--------------------------------------------------
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Agent
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Agent or any
controlling persons, or the Company (or any of their officers, directors or
controlling persons), and shall survive delivery of and payment for the Stock.
SECTION 8. Termination.
-----------
(a) The Agent shall have the right by giving notice as hereinafter
specified at any time at or prior to any Filing Date, to terminate this
Agreement if (i) any material adverse change, or any development has occurred
that is reasonably expected to cause material adverse change, in the business,
financial condition or results of operations of the Company and its subsidiaries
has occurred which, in the judgment of such Agent, materially impairs the
investment quality of the Stock, (ii) the Company shall have failed, refused or
been unable, at or prior to the Filing Date, to perform any agreement on its
part to be performed hereunder, (iii) any other condition of the Agent's
obligations hereunder is not fulfilled, (iv) any suspension or limitation of
trading in the Stock on the AMEX, or any setting of minimum prices for trading
of the Stock on such exchange, shall have occurred, (v) any banking moratorium
shall have been declared by Federal or New York
27
authorities or (vi) an outbreak or material escalation of major hostilities in
which the United States is involved, a declaration of war by Congress, any other
substantial national or international calamity or any other event or occurrence
of a similar character shall have occurred since the execution of this Agreement
that, in the sole judgment of the Agent, makes it impractical or inadvisable to
proceed with the completion of the sale of and payment for the Stock to be sold
by the Agent on behalf of the Company. Any such termination shall be without
liability of any party to any other party except that the provisions of Section
4(g), Section 6 and Section 7 hereof shall remain in full force and effect
notwithstanding such termination.
(b) The Company shall have the right, by giving written notice as
hereinafter specified, to terminate this Agreement in its sole discretion on the
first anniversary of the date of this Agreement. Any such termination shall be
without liability of any party to any other party except that the provisions of
Section 4(g), Section 6 and Section 7 hereof shall remain in full force and
effect notwithstanding such termination.
(c) The Agent shall have the right, by giving written notice as
hereinafter specified, to terminate this Agreement in its sole discretion at any
time after the first anniversary of the date of this Agreement. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 4(g), Section 6 and Section 7 hereof shall remain
in full force and effect notwithstanding such termination.
(d) This Agreement shall remain in full force and effect unless terminated
pursuant to Sections 8(a), (b) or (c) above or otherwise by mutual agreement of
the parties; provided that any such termination by mutual agreement shall in all
cases be deemed to provide that Section 4(g), Section 6 and Section 7 shall
remain in full force and effect.
(e) Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
--------
not be effective until the close of business on the date of receipt of such
notice by the Agent or the Company, as the case may be. If such termination
shall occur prior to the Settlement Date for any sale of Stock, such sale shall
settle in
28
accordance with the provisions of the second to last paragraph of Section 3
hereof.
SECTION 9. Notices. All notices or communications hereunder shall be in
-------
writing and if sent to the Agent shall be mailed, delivered, telexed or
telecopied and confirmed to the Agent at PaineWebber Incorporated, 1285 Avenue
of the Americas, New York, New York 10019, telecopy no. (212) 713-4205,
attention: Corporate Finance Department, or if sent to the Company, shall be
mailed, delivered, telexed or telecopied and confirmed to the Company at 20371
Irvine Avenue, Santa Ana Heights, California 92707, telecopy no. (714) 438-2150,
attention: Richard J. Johnson. Each party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose.
SECTION 10. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the Company and the Agent and their respective successors and the
controlling persons, officers and directors referred to in Section 6 hereof, and
no other person will have any right or obligation hereunder.
SECTION 11. Adjustments for Stock Splits. The parties acknowledge and
----------------------------
agree that all share related numbers contained in this Agreement (including,
without limitation, the Maximum Amount) shall be adjusted to take into account
any stock split effected with respect to the Stock.
SECTION 12. Entire Agreement. This Agreement constitutes the entire
----------------
agreement and supersedes all other prior and contemporaneous agreements and
undertakings, both written and oral, among the parties hereto with regard to the
subject matter hereof.
SECTION 13. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
--------------
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 14. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
29
If the foregoing correctly sets forth the understanding between the Company
and the Agent, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Agent. Alternatively, the execution of this Agreement by the Company
and its acceptance by or on behalf of the Agent may be evidenced by an exchange
of telegraphic or other written communications.
Very truly yours,
IMPAC MORTGAGE HOLDINGS, INC.
By:
----------------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
ACCEPTED as of the date
first above written
PAINEWEBBER INCORPORATED
By:
----------------------------------
Name:
---------------------------
Title:
--------------------------
30