EXHIBIT 4.5
$70,000,000
IMPERIAL CREDIT CAPITAL TRUST I
REMARKETED PAR SECURITIES, SERIES A
REMARKETING AGREEMENT
---------------------
June 9, 1997
Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Imperial Credit Capital Trust I, a Delaware statutory business trust
(the "Trust"), is issuing today $70,000,000 in aggregate liquidation amount of
the Trust's Remarketed Par Securities, Series A (liquidation amount $1,000 per
Security) (the "Preferred Securities"), guaranteed (the "Guarantee"; together
with the Preferred Securities, the "Securities") by the Company (as defined
herein) to the extent set forth in the Guarantee Agreement, dated as of June 9,
1997 (the "Guarantee Agreement"), between the Company and Chase Trust Company of
California, as Guarantee Trustee (the "Guarantee Trustee"). Imperial Credit
Industries, Inc., a California corporation (the "Company"), will be the owner of
all of the beneficial ownership interests represented by common securities (the
"Common Securities") of the Trust. Concurrently with the issuance of the
Securities and the Company's purchase of all of the Common Securities, the Trust
will invest the proceeds of each thereof in the Company's Resettable Rate
Debentures, Series A (the "Resettable Rate Debentures, Series A"). The
Resettable Rate Debentures, Series A are to be issued pursuant to an Indenture,
dated as of June 9, 1997 (the "Indenture"), between the Company, the Trust,
Imperial Business Credit, Inc., a California corporation ("IBC"), Imperial
Credit Advisors, Inc., a California corporation ("ICA"), Franchise Mortgage
Acceptance Co. LLC, a California limited liability company ("FMA"), Auto
Marketing Network, Inc., a Florida corporation ("AMN"), and Chase Trust Company
of California, as Indenture Trustee (the "Indenture Trustee"). Collectively,
IBC, ICA, FMA and AMN are referred to as the "Guarantors".
Pursuant to a registration rights agreement, dated as of June 9, 1997
(the "Registration Rights Agreement"), among the Company, the Trust, the
Guarantors and the Initial Purchaser, the Company, the Trust and the Guarantors
have agreed, subject to the conditions stated therein, to file with the
Securities and Exchange Commission (the "Commission") a registration statement
within 30 days after the date of original issuance of the Preferred Securities
and to use their best efforts to commence an offer to exchange (the "Exchange
Offer") the Securities for Preferred Securities, Series B, of the Trust (the
"New Preferred Securities" and, together with the Preferred Securities, the
"Trust Preferred Securities") and a new Company guarantee pursuant to a new
guarantee agreement (the "New Guarantee Agreement") between the Company and the
Guarantee Trustee in respect of the New Preferred Securities (the "New
Guarantee" and, together with the New Preferred Securities, the "New
Securities"), which New Securities will have been registered under the
Securities Act, and will otherwise be identical in all respects to the
Securities or to cause a
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shelf registration statement to become effective under the Securities Act with
respect to the Securities and the Resettable Rate Debentures, Series A, and to
remain effective for the period designated in the Registration Rights Agreement.
In connection with the Exchange Offer, the Company's Resettable Rate Debentures,
Series B (the "New Debentures" and, together with the Resettable Rate
Debentures, Series A, the "Debentures"), to be issued pursuant to the Indenture,
are to be exchanged with the Trust for the Resettable Rate Debentures, Series A.
The Remarketing Agent (as defined herein) and Holders of Transfer Restricted
Securities (as defined in the Registration Rights Agreement) will be entitled to
the benefits of the Registration Rights Agreement.
The Amended and Restated Declaration of Trust of the Trust, dated as
of June 9, 1997 (the "Declaration"), provides for the Remarketing (as defined
below) of the New Preferred Securities, unless the New Securities have not been
issued pursuant to the Exchange Offer, in which event the Declaration provides
for the remarketing of the Preferred Securities; provided that if the Debentures
have been distributed to the holders of the Trust Preferred Securities in
liquidation of the Trust, the Indenture provides for the remarketing of the New
Debentures unless the New Debentures have not been issued in connection with the
Exchange Offer, in which event the Indenture provides for the remarketing of the
Resettable Rate Debentures, Series A. As used in this Agreement, the term
"Remarketed Securities" means the securities remarketed pursuant to the
Declaration or the Indenture, as the case may be; the term "Remarketing
Procedures" means Section 7.5 of the Declaration and Section 3.12 of the
Indenture; and the term "Remarketing" means the remarketing of the Remarketed
Securities pursuant to the Remarketing Procedures.
In connection with the Remarketing, the Company and the Trust (unless
the Debentures have been distributed to the holders of the Trust Preferred
Securities in liquidation of the Trust, in which case the Company only) (each,
an "Issuer of the Remarketed Securities") will prepare final Offering Materials
(as defined below) setting forth or including a description of the terms of the
Remarketed Securities, the terms of the Remarketing, a description of each
Issuer of the Remarketed Securities and any material developments relating to
the Company occurring after the date of the most recent financial statements
included therein. Each Issuer of the Remarketed Securities shall deliver copies
of the Offering Materials to the Remarketing Agent pursuant to the terms of this
Agreement. The Company and the Trust hereby confirm that they have authorized
the use of the Offering Materials in connection with the remarketing of the
Remarketed Securities by the Remarketing Agent in accordance with Section 1
hereof. As used herein, "Preliminary Offering Materials" and "Offering
Materials" shall mean, respectively, (i) if a registration statement is not
filed in connection with the Remarketing, any preliminary offering memorandum
and the final offering memorandum prepared in connection with such Remarketing
and (ii) if a registration statement is filed in connection with the
Remarketing, the Registration Statement and any amendments thereto referred to
in Section 2(a) and any preliminary prospectus included therein, and the
Registration Statement and the Prospectus (each as defined herein).
Capitalized terms used herein and not otherwise defined are used as
defined in the Declaration or the Indenture, as the case may be.
Section 1. Appointment and Obligations of the Remarketing Agent. (a)
The Trust and the Company hereby appoint Lehman Brothers Inc., as exclusive
remarketing agent (the
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"Remarketing Agent"), and Lehman Brothers Inc. accepts appointment as
Remarketing Agent, for the purpose of (i) remarketing Remarketed Securities on
behalf of the holders thereof and (ii) performing such other duties as are
assigned to the Remarketing Agent in the Remarketing Procedures, all in
accordance with and pursuant to the Remarketing Procedures.
(b) The Remarketing Agent agrees (i) to use commercially reasonable
efforts to remarket the Remarketed Securities tendered or deemed tendered to the
Remarketing Agent in the Remarketing, (ii) to notify each Issuer of the
Remarketed Securities promptly of the Adjusted Distribution Rate and (iii) to
carry out such other duties as are assigned to the Remarketing Agent in the
Remarketing Procedures, all in accordance with the provisions of the Remarketing
Procedures.
(c) The Remarketing Agent represents and warrants to the Company that
it will remarket the Remarketed Securities upon the terms and conditions set
forth in this Agreement and in the Offering Materials.
(d) On the Scheduled Remarketing Date, the Remarketing Agent shall
use commercially reasonable efforts to remarket at a price equal to 100% of the
liquidation or principal amount thereof, Remarketed Securities tendered or
deemed tendered for purchase. Prior to 4:00 P.M., New York City time, on the
Scheduled Remarketing Date, the Remarketing Agent shall determine the Adjusted
Distribution Rate, which shall be the rate per annum (rounded to the nearest
one-thousandth (0.001) of one percent per annum) which the Remarketing Agent
determines, in its sole judgment, to be the lowest rate per annum, if any, not
exceeding the Maximum Adjusted Distribution Rate that will enable it to remarket
all Remarketed Securities tendered or deemed tendered for remarketing at a price
of $1,000 per Remarketed Security.
(e) If any holder of Remarketed Securities timely delivered a Notice
of Election to tender such Remarketed Securities and separately notifies the
Remarketing Agent that such holder desires to purchase a number of Remarketed
Securities in the Remarketing, but only if the Adjusted Distribution Rate is not
less than a specified rate per annum, the Remarketing Agent shall give priority
to such holder's purchase of such number of Remarketed Securities in the
Remarketing, provided that the Adjusted Distribution Rate is not less than such
specified rate.
(f) By approximately 4:30 P.M., New York City time, on the Scheduled
Remarketing Date, the Remarketing Agent shall advise, by telephone (i) the
Depositary, the Property Trustee, the Indenture Trustee and each Issuer of the
Remarketed Securities of the Adjusted Distribution Rate and the number of
Remarketed Securities sold in the Remarketing, (ii) each purchaser of Remarketed
Securities (or the Depositary Participant thereof) of the Adjusted Distribution
Rate and the number of Remarketed Securities such purchaser is to purchase and
(iii) each purchaser to give instructions to its Depositary Participant to pay
the purchase price on the Remarketing Settlement Date in same day funds against
delivery of the Remarketed Securities purchased through the facilities of the
Depositary.
(g) If the Remarketing Agent is unable to remarket by 4:00 P.M., New
York City time, on the Scheduled Remarketing Date all Remarketed Securities
tendered or deemed tendered for purchase at a price of $1,000 per Remarketed
Security and receives notice from the Indenture
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Trustee that the Company has deposited with the Indenture Trustee, not later
than 12 Noon, New York City time, on the Business Day prior to the related
Scheduled Remarketing Settlement Date, sufficient moneys to redeem Debentures in
a principal amount equal to the liquidation or principal amount of the
Remarketed Securities not so remarketed, then the Remarketing Agent shall make
payment to the Depositary Participant of each tendering holder of Remarketed
Securities by the close of business on the Remarketing Settlement Date, against
delivery through the facilities of the Depositary of such holder's tendered
Remarketed Securities, of the purchase price for such tendered Remarketed
Securities sold in the Remarketing. If the Company shall not have deposited such
moneys with the Indenture Trustee prior to such time, the Remarketing Agent
shall not make payment to such Depositary Participant of such purchase price.
2. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees (i) on and as of the date the Offering
Materials are first distributed to holders of the Remarketed Securities (the
"Commencement Date"), (ii) on and as of each Effective Date (as defined herein),
if any, if such Effective Date is not the Commencement Date and (iii) on and as
of the Scheduled Remarketing Date on which Remarketing occurs (the "Remarketing
Date"), that:
(a) If a registration statement is required to be filed in connection
with the Remarketing, such registration statement, and any required amendment
thereto, with respect to the Remarketed Securities have (i) been prepared in
conformity in all material respects with the requirements of the Securities Act
and the rules and regulations (the "Rules and Regulations") of the Commission
thereunder, (ii) been filed with the Commission under the Securities Act and
(iii) become effective under the Securities Act. As used in this Agreement,
"Effective Time" means the date and the time as of which such registration
statement, or the most recent post-effective amendment thereto, if any, was
declared effective by the Commission; "Effective Date" means the date of the
Effective Time of such registration statement; "Preliminary Prospectus" means
each prospectus included in any such registration statement, or amendments
thereof, before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the Remarketing
Agent pursuant to Rule 424(a) of the Rules and Regulations; "Registration
Statement" means such registration statement, as amended at its Effective Time,
including any documents incorporated by reference therein at such time and all
information contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations in accordance with Section 5(b)
hereof and deemed to be a part of the Registration Statement as of the Effective
Time pursuant to paragraph (b) of Rule 430A of the Rules and Regulations; and
"Prospectus" means such final prospectus, as first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations. The Commission has not
issued any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus.
(b) If a registration statement is required to be filed in connection
with the Remarketing, the Registration Statement conforms (and the Prospectus
and any further amendments or supplements to the Registration Statement or the
Prospectus, when they become effective or are filed with the Commission, as the
case may be, will conform) in all respects to the requirements of the Securities
Act and the Rules and Regulations.
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(c) If a registration statement is required to be filed in connection
with the Remarketing, the documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder; and any further
documents so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder.
(d) (i) If a registration statement is required to be filed in
connection with the Remarketing, the Registration Statement and any amendment
thereto did not and will not, as of its Effective Date, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
(ii) each of the other Offering Materials and any amendment or supplement
thereto will 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 the
light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to information
contained in or omitted from the Offering Materials in reliance upon and in
conformity with written information furnished to either Issuer of the Remarketed
Securities by or on behalf of the Remarketing Agent specifically for inclusion
therein. Reference herein to the Offering Materials shall be deemed to refer to
and include any document filed by the Company under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), which is incorporated in the Offering
Materials by reference, and any reference to any amendment or supplement to the
Offering Materials shall be deemed to refer to and include any document filed
under the Exchange Act after the date of the Offering Materials and incorporated
by reference in the Offering Materials.
(e) If a registration statement is not required to be filed in
connection with the Remarketing, it is not required by applicable law or
regulation in connection with the Remarketing in the manner contemplated by this
Agreement to register the Remarketed Securities or, if the Remarketed Securities
include Trust Preferred Securities, the Resettable Rate Debentures, Series A or
the New Debentures under the Securities Act or to qualify the Declaration, the
New Guarantee (or, if the Exchange Offer has not been consummated, the
Guarantee) or the Indenture in respect of Remarketed Securities or the
Debentures under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(f) Each of the Company and IBC, ICA, FMA, AMN and any other
subsidiary of the Company (other than the Trust) that is a guarantor of the
Company's obligations under the Debentures immediately prior to the Remarketing
Settlement Date (collectively, the "Subsidiaries") has been duly organized and
is validly existing and in good standing under the laws of its respective
jurisdiction of incorporation or organization, is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
its ownership or leasing of property or the conduct of its business requires
such qualification (except where the failure to be so qualified and in good
standing would not have a Material Adverse Effect), and has all power and
authority necessary to own or hold its properties and to conduct the business in
which it is engaged. As used herein, "Material Adverse Effect" means a material
adverse effect on the condition (financial or
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otherwise), results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole.
(g) The authorized and outstanding capital stock of the Company as set
forth in the Offering Materials is accurate. All of the outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable and conform to the description thereof
contained in the Offering Materials.
(h) The Company owns a majority of the outstanding shares of capital
stock of, or membership interests in, as applicable, each of the Subsidiaries,
and all of such shares of capital stock or membership interests are duly
authorized and validly issued and are fully paid and nonassessable. All of such
shares of capital stock or membership interests, as applicable, of each of the
Subsidiaries are owned by the Company free and clear of any security interest,
claim, lien or encumbrance. Except as described in the Offering Materials,
there are no outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, shares of the capital stock or membership
interests of any of the Subsidiaries.
(i) Assuming due authorization, execution and delivery of this
Agreement by the Remarketing Agent, this Agreement is a legally valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and to general equitable principles
(whether considered in a proceeding in equity or at law).
(j) Assuming due authorization, execution and delivery thereof by the
Indenture Trustee, the Indenture is a legally valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and to general equitable principles (whether considered in a
proceeding in equity or at law).
(k) Assuming due authentication by the Indenture Trustee, the New
Debentures (or, if the Exchange Offer has not been consummated, the Resettable
Rate Debentures, Series A) are duly and validly issued and outstanding and
constitute the legally valid and binding obligations of the Company, entitled to
the benefits of the Indenture and enforceable against the Company in accordance
with their terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and to general equitable principles
(whether considered in a proceeding in equity or at law).
(l) Assuming due authorization, execution and delivery thereof by the
Guarantee Trustee, the New Guarantee Agreement (or, if the Exchange Offer has
not been consummated, the Guarantee Agreement) is a legally valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
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creditors' rights generally and to general equitable principles (whether
considered in a proceeding in equity or at law).
(m) The performance of this Agreement, the Indenture and the New
Debentures (or, if the Exchange Offer has not been consummated, the Resettable
Rate Debentures, Series A) and, if the Remarketed Securities are Trust Preferred
Securities, the Declaration and the New Guarantee Agreement (or, if the Exchange
Offer has not been consummated, the Guarantee Agreement) by the Company (the
"Company Transactions") does not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries is bound or to which
any of the property or assets of the Company or any of the Subsidiaries is
subject, nor will such actions result in any violation of the provisions of the
charter, by-laws, operating agreement or other organizational documents of the
Company or any of the Subsidiaries or any statute, order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Company,
any of the Subsidiaries or any of their properties or assets (except to the
extent any such conflict, breach, violation or default does not or will not, as
the case may be, have a Material Adverse Effect); and except for such consents,
approvals, authorizations, registrations or qualifications as may be required
under applicable state securities laws in connection with the initial
distribution of the Preferred Securities or the Remarketing by the Remarketing
Agent, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the Company Transactions.
(n) Neither the Company nor any of the Subsidiaries is in breach or
violation of any of the terms or provisions of any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of the Subsidiaries are a party or by which the Company or any of the
Subsidiaries are bound or to which any of the property or assets of the Company
or any of the Subsidiaries are subject, which breach or violation would have a
Material Adverse Effect, nor is the Company or any of the Subsidiaries in
violation of the provisions of its charter, by-laws, operating agreement or
other organizational documents or any statute or any judgment, order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their properties or assets,
which violation would have a Material Adverse Effect.
(o) The Remarketed Securities, the Indenture, this Agreement and, if
the Remarketed Securities are Trust Preferred Securities, the Declaration, the
New Guarantee Agreement (or, if the Exchange Offer has not been consummated, the
Guarantee Agreement) and the New Debentures (or, if the Exchange Offer has not
been consummated, the Resettable Rate Debentures, Series A) conform or will
conform in all material respects to the descriptions thereof contained in the
Offering Materials.
(p) There are no legal or governmental proceedings pending or, to the
Company's knowledge, threatened to which the Company or any of the Subsidiaries
is a party or of which any property or assets of the Company or any of the
Subsidiaries is the subject which, if determined
8
adversely to the Company or any of the Subsidiaries, could reasonably be
expected to have a Material Adverse Effect, otherwise than as set forth in the
Offering Materials.
(q) If a registration statement is required to be filed in connection
with the Remarketing, the conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(r) Neither the Company nor any of the Subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Offering Materials, any material losses or
interferences with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Materials; and, since such date, there have not
been any material changes in the capital stock or long-term debt of the Company
or any of the Subsidiaries or any material adverse changes in the condition
(financial or otherwise), results of operations, business or prospects of the
Company and the Subsidiaries, taken as a whole (a "Material Adverse Change"), or
any developments that could reasonably be expected to involve a prospective
Material Adverse Change, otherwise than as set forth or contemplated in the
Offering Materials.
(s) The financial statements (including the related notes) of the
Company included or incorporated by reference in the Offering Materials comply
as to form in all material respects with the requirements of the Securities Act,
present fairly the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods indicated, and
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
(t) The firm of independent public accountants who have certified
certain financial statements of the Company, whose report is included or
incorporated by reference in the Offering Materials and who have delivered the
initial letter referred to in Section 6(l) hereof (the "Independent Public
Accountants"), were independent public accountants under Rule 101 of AICPA's
Code of Professional Conduct and its interpretations and rulings during the
periods covered by the financial statements on which they reported included or
incorporated by reference in the Offering Materials.
(u) The Company and each of the Subsidiaries has good and marketable
title in fee simple to all real property and good title to all personal property
owned by each of them, in each case free and clear of all liens, encumbrances
and defects except (i) such as are described in the Offering Materials or (ii)
such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries; and all real property and buildings held
under lease by the Company and each of the Subsidiaries are held by them under
valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and the Subsidiaries. The
Company and each of the Subsidiaries enjoy peaceful and undisturbed possession
under all leases to which they are party as lessee, except where the failure to
enjoy peaceful and undisturbed possession would not have a
9
Material Adverse Effect. No consent need be obtained from any person with
respect to any such lease in connection with the transactions contemplated
hereby and in the Offering Materials, except for such as have been obtained or
the failure to obtain such consent would not have a Material Adverse Effect.
None of the properties or assets, the value of which is reflected in the
financial statements included in the Offering Materials, is held under any lease
(except for properties or assets held under capital leases and leasehold
improvements held under both capital leases and operating leases). The Company
and the Subsidiaries maintain such insurance as may be required by law and such
other insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated.
(v) The Company and the Subsidiaries own or possess adequate rights to
use all material patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service mark registrations, copyrights and
licenses necessary for the conduct of their businesses, and to the best of the
Company's knowledge, the conduct of their businesses will not conflict with, and
neither the Company nor any of the Subsidiaries has received any notice of any
claim of conflict with, any such rights of others (except in any such case for
any conflict that would not have a Material Adverse Effect).
(w) The Company and each of the Subsidiaries is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended (or any successor statute),
including the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company or any of its
subsidiaries would have any liability; none of the Company and its subsidiaries
has incurred or expects to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Section 412 or 4971 of the Internal Revenue Code of 1986, as amended (or any
successor statute), including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company or any of
its subsidiaries would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause the loss
of such qualification.
(x) The Company and the Subsidiaries have filed all federal, state and
local income and franchise tax returns required to be filed through the date
hereof and have paid, or made adequate reserve or provision for the payment of,
all taxes shown as due thereon, and the Company has no knowledge of any tax
deficiency that has had (or could have) a Material Adverse Effect, except as set
forth or contemplated in the Offering Materials.
(y) The Company and the Subsidiaries (i) make and keep accurate books
and records and (ii) maintain internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance with
management's specific authorization, (B) transactions are recorded as necessary
to permit preparation of their consolidated financial statements and to maintain
accountability for their assets, (C) access to their assets is permitted only in
accordance with management's specific authorization and (D) the reported
accountability for their assets is compared with existing assets at reasonable
intervals.
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(z) Neither the Company nor any of the Subsidiaries, nor any director,
officer, member, manager, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used any
corporate funds during the last five years for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made any
unlawful payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977 (or any successor statute); or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
(aa) Neither the Company nor any of the Subsidiaries is (i) an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and the rules
and regulations of the Commission thereunder or (ii) a "holding company" or a
"subsidiary company" or an "affiliate" of a holding company within the meaning
of the Public Utility Holding Company Act of 1935, as amended (the "PUHC Act").
(bb) Neither the Company nor any of the Subsidiaries has taken, nor
will any of them take, directly or indirectly, any action designed to, or that
could reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Remarketed Securities to facilitate the
remarketing of the Remarketed Securities.
3. Representations, Warranties and Agreements of the Company and the
Trust. The Company and the Trust, jointly and severally, represent, warrant and
agree, unless the Debentures have been distributed to the holders of the Trust
Preferred Securities in liquidation of the Trust at the time of making of the
following representations, (i) on and as of the Commencement Date, (ii) on and
as of each Effective Date, if any, if such Effective Date is not the
Commencement Date and (iii) on and as of the Remarketing Date, that:
(a) The Trust is validly existing as a statutory business trust in
good standing under the Business Trust Act of the State of Delaware (the
"Delaware Business Trust Act") with the trust power and authority to own
property and conduct its business as described in the Memorandum, and has
conducted and will conduct no business other than the transactions contemplated
by this Agreement as described in the Offering Materials; the Trust is not a
party to or bound by any agreement or instrument other than this Agreement, the
Declaration, the Registration Rights Agreement and the purchase agreement
relating to the initial distribution of the Preferred Securities (the "Purchase
Agreement"); the Trust has no liabilities or obligations other than those
arising out of the transactions contemplated by this Agreement, the Registration
Rights Agreement, the Declaration and the Purchase Agreement or described in the
Offering Materials; and the Trust is not a party to or subject to any action,
suit or proceeding of any nature.
(b) Assuming due authorization, execution and delivery of the
Declaration by the Property Trustee and the Delaware Trustee (each as defined in
the Declaration), the Declaration constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally
11
and general equitable principles (whether considered in a proceeding in equity
or at law), and will conform in all material respects to the descriptions
thereof contained in the Offering Materials.
(c) All of the outstanding Remarketed Securities and Common
Securities have been duly authorized and are validly issued, fully paid and non-
assessable and will conform in all material respects to the descriptions thereof
contained in the Offering Materials.
(d) Assuming due authorization execution and delivery of this
Agreement by the Remarketing Agent, this Agreement is a legally valid and
binding agreement of the Trust, enforceable against the Trust in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law).
(e) The performance of this Agreement, the Declaration, and the
Remarketed Securities by the Trust, and the distribution of the Debentures upon
the liquidation of the Trust in the circumstances contemplated by the
Declaration and described in the Offering Materials (the "Trust Transactions")
will not violate any statute or order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Trust or any of its
assets; and except for such consents, approvals, authorizations, registrations
or qualifications as may be required under applicable state securities laws in
connection with the initial distribution of the Preferred Securities or the
Remarketing, no consent, approval, authorization or order of or filing or
registration with, any such court or governmental agency or body was or is
required for the Trust Transactions.
(f) The Trust is not an "investment company" within the meaning of
such term under the Investment Company Act and the rules and regulations of the
Commission thereunder.
4. Fees and Expenses. (a) For the performance of its services as
Remarketing Agent hereunder, the Company, in its capacity as the issuer of the
Debentures, agrees to pay to the Remarketing Agent a fee, payable on the
Remarketing Settlement Date, equal to 3.50% of the liquidation or principal
amount of the outstanding Remarketed Securities tendered or deemed tendered for
purchase on the related Scheduled Remarketing Date, less such liquidation or
principal amount of the Remarketed Securities, if any, tendered or deemed
tendered for purchase and not sold in the Remarketing, by wire transfer to an
account designated by the Remarketing Agent. The percentage in the prior
sentence shall be reduced by .35% for each improvement in credit rating of the
Company's unsecured senior debt in effect on the Scheduled Remarketing Date
compared to B2, which is the credit rating of Moody's Investors Service Inc.
("Moody's") in effect on such debt on the date of issuance of the Remarketed
Securities. For the purposes of the foregoing, the credit rating of the
Company's unsecured senior debt shall be considered improved for each rating
category (including numerical, "+" or "-" or other indicators) that such rating
on the Scheduled Remarketing Date by Moody's or Standard & Poors Ratings Group
("S&P"), whichever is lower, is better than B2 or B or the equivalent of such
ratings by Moody's and S&P.
(b) The Company, in its capacity as the issuer of the Debentures,
agrees to pay: (a) the costs incident to the preparation and printing and, if
applicable, filing of the Preliminary Offering
12
Materials and the Offering Materials and any amendments and exhibits thereto;
(b) the costs of distributing the Preliminary Offering Materials and the
Offering Materials and any amendment or supplement thereto or any document
incorporated by reference therein; (c) the fees and expenses of qualifying the
Remarketed Securities under the securities laws of the several jurisdictions as
provided in Section 5(j) and of preparing, printing and distributing a Blue Sky
Memorandum (including related reasonable fees and expenses of counsel to the
Remarketing Agent required in connection with "blue sky" functions); (d) the
filing fees incident to securing any required review of the National Association
of Securities Dealers, Inc. of the terms of sale of the Remarketed Securities;
(e) any applicable listing and other fees; (f) all other costs and expenses
incident to the performance of the obligations of the Company and the Trust
under this Agreement; and (g) the reasonable fees and expenses of counsel to the
Remarketing Agent in connection with its duties hereunder. The Trust shall not
be liable for any fees and expenses included in this Section 4.
5. Further Agreements of the Company. The Company agrees:
(a) To furnish to the Remarketing Agent, (i) copies of the
Declaration, the New Guarantee Agreement (or, if the Exchange Offer has not been
consummated, the Guarantee Agreement) and the Indenture and any amendment to any
thereof and each report or other document mailed or made available to holders of
the Remarketed Securities (including annual and quarterly reports to
shareholders and all documents mailed or made available to its other security
holders) or filed by the Company with the Commission after the end of the fiscal
year of the Company preceding the Remarketing, (ii) notice of the purchase of
Remarketed Securities by the Company or any subsidiary or affiliate of the
Company as soon as the Company shall become aware of such purchase, (iii) notice
of the occurrence of any of the events set forth in Section 6(n) or (p), (iv)
notice of the giving or receipt of any notice under Section 8 and (v) in
connection with the Remarketing, such other information as the Remarketing Agent
may reasonably request from time to time, in such form as the Remarketing Agent
may reasonably request, including but not limited to, the financial condition of
the Company or any subsidiary thereof.
(b) To file a registration statement with the Commission if required
under the Securities Act in connection with the Remarketing and, in that event,
to prepare the Prospectus in a form approved by the Remarketing Agent and to
file such Prospectus pursuant to and within the time required by the Rules and
Regulations; to advise the Remarketing Agent, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Remarketing Agent with copies
thereof; to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus and for so long as the delivery of a prospectus is
required in connection with the Remarketing; to advise the Remarketing Agent,
promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the qualification
of the Remarketed Securities for remarketing in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and,
13
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(c) If a registration statement is required to be filed in connection
with the Remarketing, to furnish promptly to the Remarketing Agent and to
counsel for the Remarketing Agent a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(d) To furnish to the Remarketing Agent, without charge, as many
copies of the Offering Materials and any supplements and amendments thereto and,
if a registration statement is required to be filed in connection with the
Remarketing, as many conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto, as the
Remarketing Agent may reasonably request.
(e) If a registration statement is required to be filed in connection
with the Remarketing, to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Remarketing Agent, be required
by the Securities Act or requested by the Commission;
(f) Prior to filing with the Commission or otherwise making any
amendment or supplement to the Offering Materials, the Company shall furnish a
copy thereof to the Remarketing Agent and counsel to the Remarketing Agent and
will not effect any such amendment or supplement to which the Remarketing Agent
shall reasonably object by notice to the Company after a reasonable period to
review such amendment or supplement.
(g) If, at any time on or after the Commencement Date and prior to the
Remarketing Settlement Date, any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for the Remarketing
Agent or counsel for the Company, to amend or supplement the Offering Materials
in order that the Offering Materials will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances existing at the
time it is delivered in the Remarketing, or if it is necessary to amend or
supplement the Offering Materials to comply with applicable law, to promptly
prepare such amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Materials, as so amended or
supplemented, will comply with applicable law and to furnish to the Remarketing
Agent such number of copies as it may reasonably request.
(h) If a registration statement is filed in connection with the
Remarketing, as soon as practicable after the Effective Date of the Registration
Statement, to make generally available to the Company's security holders and to
deliver to the Remarketing Agent an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at the option of the
Company, Rule 158);
14
(i) For a period of five years following the Remarketing Settlement
Date, to furnish to the Remarketing Agent upon its request copies of any annual
reports, quarterly reports and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by
the Commission, and such other documents, reports and information as shall be
furnished by the Company to the Indenture Trustee, the Property Trustee or the
holders of the Remarketed Securities.
(j) To use its reasonable best efforts to qualify the Remarketed
Securities for sale under the securities or Blue Sky laws of such jurisdictions
as the Remarketing Agent reasonably designates and to continue such
qualifications in effect so long as reasonably required to complete the
distribution of the Remarketed Securities. The Company will also arrange for
the determination of the eligibility for investment of the Remarketed Securities
under the laws of such jurisdictions as the Remarketing Agent reasonably
requests. Notwithstanding the foregoing, the Company shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified or to file a general consent to service of process in any
jurisdiction.
(k) To take such steps as shall be necessary to ensure that none of
the Company, the Trust or any subsidiary of the Company shall become (i) an
"investment company" within the meaning of the Investment Company Act and the
rules and regulations of the Commission thereunder or (ii) a "holding company"
or a "subsidiary company" or an "affiliate" of a holding company within the
meaning of the PUHC Act.
(l) To take all reasonable steps to satisfy the conditions set forth
in Section 6 hereof.
6. Conditions to the Remarketing Agent's Obligations. The
obligations of the Remarketing Agent hereunder are subject, as of the
Commencement Date and at all times on or prior to the Scheduled Remarketing
Date, to the accuracy of the representations and warranties on the part of the
Company and the Trust herein, to the accuracy of the statements of officers of
the Company and of the Trust made pursuant to the provisions hereof, to the
performance by the Company and the Trust of their respective obligations
hereunder and to the following additional conditions:
(a) on each of the Commencement Date and the Scheduled Remarketing
Date, the Remarketing Agent shall have received:
(i) a certificate, dated such date and signed by an authorized
officer of the Trust acceptable to the Remarketing Agent, to the effect
that the representations and warranties of the Trust contained in this
Agreement are true and correct as of such date and that the Trust has
performed all of its obligations to be performed hereunder on or prior to
such date; and
(ii) a certificate, dated such date and signed by an authorized
officer of the Company to the effect that no event described in Section
6(g)(i) or (ii) or subsection 6(j) has occurred as of such date, and to the
effect that the representations and warranties of the Company contained in
the Agreement are true and correct as of such date and that the
15
Company has performed all of its obligations to be performed hereunder on
or prior to such date.
The officers signing and delivering such certificate on behalf of the Company
and the Trust may rely upon the best of their knowledge as to proceedings
threatened;
(b) each of the Company and the Trust shall have furnished to the
Remarketing Agent on each of the Commencement Date and the Scheduled Remarketing
Date, such additional certificates or other documents as are typically delivered
in connection with a transaction of this type and which the Remarketing Agent
may reasonably request;
(c) On the Commencement Date and the Scheduled Remarketing Date,
Freshman, Marantz, Orlanski, Cooper & Klein, a law corporation, counsel for the
Company and the Trust, or such other counsel satisfactory to the Remarketing
Agent, shall have furnished to the Remarketing Agent its written opinion, as
counsel to the Company and the Trust, addressed to the Remarketing Agent and
dated such date, in form and substance reasonably satisfactory to the
Remarketing Agent, to the effect that:
(i) Each of the Company and the Subsidiaries is validly existing
as a corporation or limited liability company, as applicable, and in
corporate or limited liability company good standing under the laws of its
jurisdiction of incorporation or organization, is qualified to do business
and is in corporate or limited liability company, as applicable, good
standing as a foreign corporation in each jurisdiction in which its
ownership or leasing of property or the conduct of its business requires
such qualification (except where the failure to be so qualified and in good
standing would not have a Material Adverse Effect), and has corporate or
limited liability company power to own its properties and conduct its
business;
(ii) The Company has corporate power to consummate the
transactions contemplated by, this Agreement;
(iii) The execution and delivery of this Agreement have been
duly authorized by all requisite corporate action of the Company; and this
Agreement has been duly executed and delivered by the Company;
(iv) Assuming due authorization, execution and delivery by the
Indenture Trustee, the Indenture is a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and to general equitable principles (whether
considered in a proceeding in equity or at law);
(v) Assuming due authentication by the Indenture Trustee, the
New Debentures (or, if the Exchange Offer has not been consummated, the
Resettable Rate Debentures, Series A) are legal, valid and binding
obligations of the Company, entitled to the benefits of the Indenture,
enforceable against the Company in accordance with their terms, subject to
16
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and to general equitable principles (whether
considered in a proceeding in equity or at law);
(vi) If the Remarketed Securities are Trust Preferred
Securities, assuming due authorization, execution and delivery by the
Guarantee Trustee, the New Guarantee Agreement (or, if the Exchange Offer
has not been consummated, the Guarantee Agreement) is the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and to
general equitable principles (whether considered in a proceeding in equity
or at law);
(vii) All of the outstanding shares of capital stock of, or
membership interests in, as applicable, each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and nonassessable, and
held of record by the Company free and clear of any security interest,
claim, lien or encumbrance; and, to our knowledge, there are no outstanding
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, shares of the capital stock or membership interests of
any of the Subsidiaries, except as described in the Offering Materials;
(viii) The performance of this Agreement, the Remarketed
Securities, the Indenture and the New Debentures (or, if the Exchange Offer
has not been consummated, the Resettable Rate Debentures, Series A) and, if
the Remarketed Securities are Trust Preferred Securities, the Declaration
and the New Guarantee Agreement (or, if the Exchange Offer has not been
consummated, the Guarantee Agreement) by the Company and the Trust, as
applicable, will not (A) to the to the knowledge of such counsel conflict
with or result in a breach or violation of, or constitute a default under,
any indenture, mortgage, deed of trust, loan or credit agreement, or any
other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries
or any of its or their property or assets are subject which such breach or
violation would have a Material Adverse Effect or (B) result in any
violation of the provisions of the charter or bylaws, or operating
agreements, as applicable, of the Company or any of the Subsidiaries or any
federal or California statute, or any order, rule or regulation of any
federal or California court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries or any of their
properties or assets; and except for such consents, approvals,
authorizations, registrations or qualifications as may be required under
applicable state securities laws in connection with the remarketing of the
Remarketed Securities by the Remarketing Agent, no consent, approval,
authorization or order of, or filing or registration with, any federal or
California court or governmental agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their properties or assets
is required for compliance by the Company with all of the provisions of
this Agreement other than, if a registration statement is required to be
filed in connection with the Remarketing, under the Securities Act;
17
(ix) The descriptions in the Offering Materials of the
Remarketed Securities, the Indenture and this Agreement and, if the
Remarketed Securities are Trust Preferred Securities, the Declaration and
the New Guarantee Agreement (or, if the Exchange Offer has not been
consummated, the Guarantee Agreement) and the New Debentures (or, if the
Exchange Offer has not been consummated, the Resettable Rate Debentures,
Series A) conform in all material respects to the descriptions thereof;
(x) Except as set forth or referred to in the Offering
Materials, no legal or governmental proceedings pending or, to the
knowledge of such counsel, threatened to which the Company or any of the
Subsidiaries is a party or of which any property or assets of the Company
or any of the Subsidiaries is the subject which, if determined adversely to
the Company or any of the Subsidiaries, could reasonably be expected to
have a Material Adverse Effect;
(xi) If a registration statement is required to be filed in
connection with the Remarketing, no stop order suspending the effectiveness
of the Registration Statement has been issued and, to the knowledge of such
counsel, no proceeding for that purpose is pending or threatened by the
Commission;
(xii) If a registration statement is required to be filed in
connection with the Remarketing, the Registration Statement, as of its
Effective Date, and the Prospectus, as of its date, and any further
amendments or supplements thereto, as of their respective dates, made by
the Company prior to the Remarketing Date (other than the financial
statements and other financial data contained therein, as to which such
counsel need express no opinion) complied as to form in all material
respects with the requirements of the Securities Act and the Rules and
Regulations; the documents incorporated by reference in the Prospectus and
any further amendment or supplement to any such incorporated document made
by the Company prior to the Scheduled Remarketing Date (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder;
(xiii) None of the Company, any of the Subsidiaries or the Trust
is (A) an "investment company" within the meaning of the Investment Company
Act and the rules and regulations thereunder or (B) a "holding company" or
a "subsidiary company" or an "affiliate" of a holding company within the
meaning of the PUHC Act;
(xiv) If no registration statement is required to be filed in
connection with the Remarketing, no registration of the Remarketed
Securities or, if the Remarketed Securities include Trust Preferred
Securities, the New Debentures (or, if the Exchange Offer has not been
consummated, the Resettable Rate Debentures, Series A) under the Securities
Act, and no qualification of the Indenture or, if the Remarketed Securities
are Trust Preferred Securities, the Declaration or the New Guarantee
Agreement (or, if the Exchange Offer has not been consummated, the
Guarantee Agreement) under the Trust Indenture Act of 1939,
18
as amended, is required for the Remarketing of the Remarketed Securities
solely in the manner contemplated by the Offering Materials;
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Issuers of the
Remarketed Securities, representatives of the Remarketing Agent and
representatives of counsel for the Remarketing Agent at which the contents of
the Offering Materials and related matters were discussed and, although such
counsel has not undertaken to investigate or verify independently, and does not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Materials, on the basis of the foregoing,
no information has come to the attention of such counsel that causes such
counsel to believe that, (x) if a registration statement was required to be
filed in connection with the Remarketing, the Registration Statement, as of the
Effective Date, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or (y) the other Offering Materials contained
or contains an untrue statement of a material fact or omitted or omits 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 (except, in each
case, as to financial statements, including the notes thereto, included therein,
as to which no belief need be expressed), as of the Commencement Date, the
Effective Date, if any, (if the Effective Date is not the Commencement Date) and
the Remarketing Date.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the federal laws of the United States of America
and the laws of the State of California.
(d) If the Remarketed Securities are Trust Preferred Securities, on
the Commencement Date and the Scheduled Remarketing Date, Simpson Thacher &
Bartlett, or such other counsel satisfactory to the Remarketing Agent, shall
have furnished to the Remarketing Agent its written opinion, as special tax
counsel for the Company and the Trust, addressed to the Remarketing Agent and
dated such date, in form and substance reasonably satisfactory to the
Remarketing Agent, to the effect that:
(i) The Trust will not be taxable as a corporation for United
States federal income tax purposes;
(ii) Subject to the qualifications set forth therein, the
statements made in the Offering Materials under the caption "Certain United
States Federal Income Tax Consequences" accurately describe the material
United States federal income tax consequences of the purchase, ownership
and disposition of the Remarketed Securities;
(e) If the Remarketed Securities include Trust Preferred Securities,
on the Commencement Date and the Scheduled Remarketing Date, Richards, Layton &
Finger, P.A., Delaware counsel for the Company and the Trust, or such other
counsel satisfactory to the Remarketing Agent, shall have furnished to the
Remarketing Agent its written opinion, on certain matters of Delaware law
relating to the validity of the Securities, addressed to the Remarketing
19
Agent and dated such date, in form and substance reasonably satisfactory to the
Remarketing Agent, to the effect that:
(i) The Trust is validly existing in good standing as a
business trust under the Delaware Trust Act with the business trust power
and authority to own property and to conduct its business as described in
the Offering Materials and to enter into and perform its obligations under
this Agreement, the Remarketed Securities and the Common Securities.
(ii) The Common Securities are validly issued and (subject to
the terms of the Declaration) fully paid undivided beneficial ownership
interests in the assets of the Trust (such counsel may note that the
holders of Common Securities will be subject to the withholding provisions
of Section 10.4 of the Declaration, will be required to make payment or
provide indemnity or security as set forth in the Declaration and will be
liable for the debts and obligations of the Trust to the extent provided in
Section 9.1(b) of the Declaration); under the Delaware Trust Act and the
Declaration the issuance of the Common Securities is not subject to
preemptive or other similar rights.
(iii) The Remarketed Securities are validly issued and
(subject to the terms of the Declaration) fully paid and non-assessable
undivided beneficial ownership interests in the Trust, the holders of the
Remarketed Securities will be entitled to the benefits of the Declaration
(subject to the limitations set forth in clause (v) below) and will be
entitled to the same limitation of personal liability under Delaware law as
extended to stockholders of private corporations for profit (such counsel
may note that the holders of Remarketed Securities are subject to the
withholding provisions of Section 10.4 of the Declaration and are required
to make payment or provide indemnity or security as set forth in the
Declaration).
(iv) All necessary trust action has been taken to duly
authorize the execution and delivery by the Trust of this Agreement.
(v) Assuming the Declaration has been duly authorized by the
Company and has been duly executed and delivered by the Company and the
Regular Trustees, and assuming due authorization, execution and delivery of
the Declaration by the Property Trustee and the Delaware Trustee, the
Declaration constitutes a valid and binding obligation of the Company and
the Regular Trustees, enforceable against the Company and the Regular
Trustees in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
receivership, liquidation, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and remedies, (ii) general principles of equity
(regardless of whether considered and applied in a proceeding in equity or
at law) and (iii) considerations of public policy and the effect of
applicable law relating to fiduciary duties.
(vi) The consummation by the Trust of the transactions
contemplated by this Agreement and compliance by the Trust with its
obligations hereunder will not violate
20
(i) any of the provisions of the Certificate of Trust or the Declaration or
(ii) any applicable Delaware law or administrative regulation.
(vii) Assuming that the Trust derives no income from or
connected with services provided within the State of Delaware and has no
assets, activities (other than having a Delaware Trustee as required by the
Delaware Trust Act and the filing of documents with the Secretary of State
of Delaware) or employees in the State of Delaware, no filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any Delaware court or Delaware governmental
authority or agency (other that as may be required under the securities or
blue sky laws of the state of Delaware, as to which such counsel need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of this Agreement.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the federal laws of the United States of America
and the laws of the State of Delaware.
(f) On the Commencement Date and the Scheduled Remarketing Date, with
respect to the letter of the Independent Public Accountants delivered to the
Remarketing Agent concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the Remarketing Agent a
letter (as used in this paragraph, the "bring-down letter") of such accountants,
addressed to the Remarketing Agent and dated such date (i) confirming that they
are independent public accountants within the meaning of the Securities Act and
under the guidelines of the American Institute of Certified Public Accountants,
(ii) stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Offering Materials, as of a date
not more than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial information
and other matters covered by the initial letter and (iii) confirming in all
material respects the conclusions and findings set forth in the initial letter.
(g) (i) Neither the Company nor any of the Subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Offering Materials losses or interferences with
their businesses, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Materials or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the Company or
any of the Subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Offering Materials, the effect of which, in any such case described in
clause (i) or (ii), is, in the sole judgment of the Remarketing Agent, so
material and adverse as to make it impracticable or inadvisable to proceed with
the Remarketing on the terms and in the manner contemplated herein and in the
Offering Materials.
(h) Without the prior written consent of the Remarketing Agent, the
Declaration or the Indenture shall not have been amended in any manner, or
otherwise contain any provision
21
contained therein as of the date hereof that, in the opinion of the Remarketing
Agent, materially changes the nature of the Remarketed Securities or the
Remarketing Procedures.
(i) Subsequent to the Commencement Date, there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock
Exchange or the Nasdaq National Market shall have been suspended or materially
limited; (ii) a banking moratorium shall have been declared by federal or state
authorities; (iii) the United States shall have become engaged in hostilities,
there shall have been an escalation in hostilities involving the United States
or there shall have been a declaration of a national emergency or war by the
United States; or (iv) there shall have occurred such a material adverse change
in general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the reasonable judgment of the Remarketing Agent,
impracticable or inadvisable to proceed with the Remarketing on the terms and in
the manner contemplated herein and in the Offering Materials.
(j) Subsequent to the Commencement Date, (i) no downgrading shall have
occurred in the rating accorded the Remarketed Securities by a "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Preferred Securities.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Remarketing Agent.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Remarketing
Agent and each person, if any, who controls the Remarketing Agent within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Remarketed Securities), to which the Remarketing Agent or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in the Preliminary Offering Materials or Offering Materials
or in any amendment or supplement thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (iii) any act or failure to act
or any alleged act or failure to act by the Remarketing Agent in connection
with, or relating in any manner to, the Remarketed Securities or the sale of
Remarketed Securities contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be
22
taken by such Remarketing Agent through its gross negligence or willful
misconduct), and shall reimburse the Remarketing Agent and each such controlling
person on a quarterly basis for any legal or other expenses reasonably incurred
by the Remarketing Agent or controlling person in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Offering Materials or Offering Materials or in any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company or the Trust by or on behalf of the Remarketing Agent
specifically for inclusion therein and described in a letter from the
Remarketing Agent to the Company. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to the
Remarketing Agent or to any controlling person of the Remarketing Agent.
(b) The Remarketing Agent shall indemnify and hold harmless the
Company, each of its directors and officers, the Trust and each Trustee, and
each person, if any, who controls the Company or the Trust within the meaning of
the Securities Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which the Company, any such
director or officer, the Trust or any such Trustee, or any such controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Materials or the Offering Materials, or in
any amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company or any Trustee by or on behalf of the Remarketing Agent
specifically for inclusion therein and described in a letter from the
Remarketing Agent to the Company, and shall reimburse the Company and any such
director or officer, the Trust or any such Trustee or any such controlling
person on a quarterly basis for any legal or other expenses reasonably incurred
by the Company, or any such director or officer, the Trust or any such Trustee
or any such controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in addition to
any liability which the Remarketing Agent may otherwise have to the Company, or
any such director or officer, the Trust or any such Trustee or any such
controlling person.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party pursuant to this Section 7 shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 7. If any such claim or action shall be
brought against an indemnified party, and it shall notify the
23
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties, which firm shall be designated in writing by the Remarketing Agent, if
the indemnified parties under this Section 7 consist of the Remarketing Agent or
any of its controlling persons, or by the Company, if the indemnified parties
under this Section 7 consist of the Company. any of its directors, officers, the
Trust or any Trustee or their respective controlling persons. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 7(a) or 7(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Trust on the one hand and the Remarketing Agent
on the other from such offering or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Trust on the one hand and the
Remarketing Agent on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Trust on the one hand and the Remarketing Agent
on the other with respect to such offering shall be deemed to be
24
in the same proportion as the total liquidation or principal amount of the
Remarketed Securities minus the fee paid to the Remarketing Agent pursuant to
Section 4(a) of this Agreement, on the one hand, and the total fees received by
the Remarketing Agent pursuant to Section 4(a), on the other hand, bear to the
total liquidation or principal amount of the Remarketed Securities. The 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 and the Trust, on the one
hand, or the Remarketing Agent, on the other hand, 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 Trust and the Remarketing
Agent agree that it would not be just and equitable if contributions pursuant to
this Section 7(d) were to be determined by pro rata allocation 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, damage or liability, or action in respect
thereof, referred to above in this Section 7(d) shall be deemed to include, for
purposes of this Section 7(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 provisions of this Section 7(d), the
Remarketing Agent shall not be required to contribute any amount in excess of
the amount by which the fees received by it under Section 4 exceed the amount of
any damages which the Remarketing Agent has otherwise paid or become liable to
pay by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11 of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
8. Resignation and Removal of Remarketing Agent. The Remarketing
Agent may resign and be discharged from its duties and obligations hereunder,
and the Company may remove the Remarketing Agent, by giving 60 days' prior
written notice, in the case of a resignation, to the Company, the Depositary,
the Property Trustee and the Indenture Trustee and, in the case of a removal,
such removed Remarketing Agent, the Depositary, the Property Trustee and the
Indenture Trustee; provided, however, that (i) the Company may not remove the
Remarketing Agent unless (A) the Remarketing Agent becomes involved as debtor in
a bankruptcy, insolvency or similar proceeding, (B) the Remarketing Agent shall
not be among the 15 underwriters with the largest volume underwritten in
dollars, on a lead or co-managed basis, of U.S. domestic debt securities during
the twelve-month period ended as of the last calendar quarter preceding the
Remarketing Date or (C) the Remarketing Agent shall be subject to one or more
legal restrictions preventing the performance of its obligations hereunder and
(ii) no such resignation nor any such removal shall become effective until the
Company shall have appointed at least one nationally recognized broker-dealer as
successor Remarketing Agent and such successor Remarketing Agent shall have
entered into a remarketing agreement with the Company in which it shall have
agreed to conduct the Remarketing in accordance with the Remarketing Procedures.
In such case, the Company will use its commercially reasonable efforts to
appoint a successor Remarketing Agent and enter into such a remarketing
agreement with such person as soon as reasonably practicable; provided, however,
that the Company shall not be required to enter into a remarketing agreement
with a successor Remarketing Agent that is on terms substantially dissimilar
with the terms hereof and in any event on terms less favorable than those set
forth herein. The provisions of Sections 4 and 7 shall survive the resignation
or removal of the Remarketing Agent pursuant to this Agreement.
25
9. Dealing in the Remarketed Securities. The Remarketing Agent is
not obligated to purchase any Remarketed Securities that would otherwise remain
unsold in a Remarketing. The Remarketing Agent may exercise any vote or join in
any action which any beneficial owner of Remarketed Securities may be entitled
to exercise or take pursuant to the Declaration or the Indenture with like
effect as if it did not act in any capacity hereunder. The Remarketing Agent,
in its individual capacity, either as principal or agent, may also engage in or
have an interest in any financial or other transaction with the Company as
freely as if it did not act in any capacity hereunder.
10. Remarketing Agent's Performance; Duty of Care. The duties and
obligations of the Remarketing Agent shall be determined solely by the express
provisions of this Agreement and the Declaration and the Indenture. No implied
covenants or obligations of or against the Remarketing Agent shall be read into
this Agreement, the Declaration or the Indenture. In the absence of bad faith
on the part of the Remarketing Agent, the Remarketing Agent may conclusively
rely upon any document furnished to it, which purports to conform to the
requirements of this Agreement, the Declaration or the Indenture as to the truth
of the statements expressed in any of such documents. The Remarketing Agent
shall be protected in acting upon any document or communication reasonably
believed by it to have been signed, presented or made by the proper party or
parties. The Remarketing Agent, acting under this Agreement, shall incur no
liability to the Company or to any holder of Remarketed Securities in its
individual capacity or as Remarketing Agent for any action or failure to act, on
its part in connection with a Remarketing or otherwise, except if such liability
is judicially determined to have resulted from the gross negligence or willful
misconduct on its part.
11. Termination. This Agreement shall terminate as to the
Remarketing Agent on the effective date of the resignation or removal of the
Remarketing Agent pursuant to Section 8. In addition, the obligations of the
Remarketing Agent hereunder may be terminated by it by notice given to the
Company or the Trust prior to 10:00 A.M., New York City time, on the Remarketing
Date if, prior to that time, any of the events described in Sections 6(e), (f),
(m), (n), (o) or (p) shall have occurred or if the Remarketing Agent shall
decline to perform its obligations under this Agreement for any reason permitted
hereunder.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Remarketing Agent, shall be delivered or sent by mail,
telex or facsimile transmission to Lehman Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department (Fax: 212-528-
8822), with a copy to Latham & Watkins, 633 W. Fifth Street, Los Angeles,
California, Attention: Bryant B. Edwards (Fax: 213-891-8763);
(b) if to the Company or the Trust, shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth in
the Offering Materials, Attention: H. Wayne Snavely (Fax: 310-373-9955), with a
copy to Freshman, Marantz, Orlanski, Cooper &
26
Klein, 9100 Wilshire Boulevard, Beverly Hills, California 90212, Attention:
Thomas J. Poletti (Fax: 310-274-8357).
Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Company shall be entitled to act and rely
upon any request, consent, notice or agreement given or made on behalf of the
Remarketing Agent.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Remarketing Agent, the Company,
the Trust and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
and the Trust contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control the Remarketing Agent
within the meaning of Section 15 of the Securities Act and (B) the indemnity
agreement of the Remarketing Agent contained in Section 7(b) of this Agreement
shall be deemed to be for the benefit of directors of the Company and the
Trustees and any person controlling the Company or the Trust within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Trust and the Remarketing Agent
contained in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall survive the Remarketing and shall remain in
full force and effect, regardless of any investigation made by or on behalf of
any of them or any person controlling any of them.
15. Definition of "Business Day" and "Subsidiary." For purposes of
this Agreement, "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature page follows]
27
If the foregoing correctly sets forth the agreement between the Company,
the Trust and the Remarketing Agent, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
Imperial Credit Industries, Inc.
By: /s/ H. Wayne Snavely
--------------------------------
Name: H. Wayne Snavely
Title: Chairman
Imperial Credit Capital Trust I
By: /s/ Kevin E. Villani
--------------------------------
Name: Kevin E. Villani
Title: Regular Trustee
Accepted:
Lehman Brothers Inc.
By: /s/ David J. Kim
--------------------------------
Name: David J. Kim
Title: Senior Vice President