EXHIBIT 10.20
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
BETWEEN
IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.
AND
IMPERIAL CREDIT ADVISORS, INC.
DATED AS OF
DECEMBER 29, 1997
- --------------------------------------------------------------------------------
1
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of December 29, 1997, by and between IMPERIAL CREDIT MORTGAGE HOLDINGS,
INC. a Maryland corporation (the "Company") and IMPERIAL CREDIT ADVISORS, INC. a
California corporation ("Imperial").
II. Consideration. Imperial and the Company have agreed to enter into this
-------------
Agreement to provide the registration rights set forth herein and to otherwise
perform their respective obligations hereunder in consideration of the mutual
covenants contained herein.
III. Definitions. The following definitions shall apply in addition to those
-----------
terms defined elsewhere herein:
A. "Common Stock" means the Company's Common Stock, $.01 par value per
------------
share.
B. "Continuous Offering" means an Offering pursuant to Rule 415 under the
-------------------
Securities Act, 17 C.F.R. 230.415, or any successor rule of the SEC, if
applicable.
C. "Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations promulgated thereunder.
D. "Offering" means any public offering of the Common Stock of the
--------
Company, whether or not subject to the registration requirements of the
Securities Act, and any other method of disposition of the Common Stock of the
Company that is subject to the registration requirements of the Securities Act
or any other applicable federal or state statute or regulation.
E. "Offering Documents" means all documents relating to an Offering which
------------------
are required to be filed with any governmental agency or authority or to be
delivered to any Person to whom securities of the Company are offered for sale
or sold, including, without limitation, Registration Statements, Prospectuses,
and preliminary Prospectuses, and all material incorporated by reference
therein, and any schedule or exhibit to any of the foregoing, in each case as
such documents may be amended from time to time.
F. "Party" means Imperial or the Company and "Parties" means both Imperial
----- -------
and the Company.
G. "Person" means any individual, corporation, partnership, limited
------
liability company, association, trust or unincorporated association.
H. "Prospectus" means the prospectus included in a Registration Statement,
----------
relating to an Offering in which Common Stock is included, as amended or
supplemented by a prospectus supplement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
2
I. "Registration Expenses" means, with respect to an Offering, any and all
---------------------
expenses incident to the Company's performance of or compliance with the
provisions of this Agreement, including without limitation (a) fees for any
filings required to be made with the National Association of Securities Dealers,
Inc., or the SEC in connection with such Offering, and any other registration
and filing fees, (b) all fees and expenses of complying with securities or blue
sky laws (including reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the Common Stock to be included in such
Offering), (c) all printing, messenger, telephone, and delivery expenses, (d)
all fees and expenses incurred in connection with the listing of the Common
Stock to be included in such Offering on any securities exchange, and (e) the
reasonable fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits
and/or "cold comfort" letters required by or incident to such performance and
compliance.
J. "Registration Statement" means a registration statement filed with the
----------------------
SEC pursuant to the Securities Act, relating to an Offering in which Common
Stock is included, including any pre- or post-effective amendment thereto, the
Prospectus included therein, and all material incorporated by reference therein,
and any schedule or exhibit to any of the foregoing.
K. "SEC" means the Securities and Exchange Commission.
---
L. "Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder.
M. "Securities Offering Regulations" means any regulations promulgated by
-------------------------------
any agency or authority of the United States government, under the Securities
Act, or any statute hereafter enacted into law, relating to or governing an
Offering of securities by the Company.
N. "Imperial Shares" means the shares of Common Stock, and any other
---------------
securities into which the Common Stock may be changed by virtue of any merger,
consolidation or recapitalization or otherwise, owned of record by Imperial as
of the date hereof.
IV. a. Incidental Registration Rights. If the Company proposes to make an
------------------------------
Offering of its Common Stock and to prepare Offering Documents not required
pursuant to Paragraph 4 (other than any registration by the Company on Form S-8
or a successor or substantially similar form of (A) an employee stock option,
stock purchase or compensation plan or securities issued or to be issued
pursuant to any such plan, or (B) a dividend investment plan), the Company will
give prompt written notice to Imperial of its intention to do so and of
Imperial's rights under this Paragraph 3. Upon the written request of Imperial
made within thirty (30) days after the receipt of any such notice (which request
shall specify the number of Imperial Shares intended to be disposed of by
Imperial), the Company will include in the Offering Documents relating to such
Offering all Imperial Shares that the Company has been requested to include by
Imperial; provided, that if at any time after giving written notice under this
Paragraph 3 the Company shall determine for any reason not to proceed with the
proposed Offering, the Company may, at its election, give written notice of such
determination to Imperial and thereupon shall be relieved of its obligations to
Imperial with respect to such proposed Offering under this Paragraph 3.
Imperial shall be entitled to withdraw its request
3
for the inclusion of Imperial Shares in an Offering and withdraw from the
Offering at any time before the time that the Offering Documents, including any
Registration Statement (if applicable), are declared effective and the Offering
has commenced.
B. Continuous Offering. If the Company intends to effect a Continuous
-------------------
Offering, the Company will give written notice thereof to Imperial and include
in such Offering all of the Imperial Shares which Imperial elects to include in
such Offering. During the period in which a Registration Statement (if
applicable) with respect to a Continuous Offering is effective, if Imperial
desires to sell Imperial Shares in a transaction covered by such Registration
Statement, it shall give notice to the Company of the proposed date of such sale
at least thirty (30) days before such proposed date of sale, and the Company
shall take all actions necessary to permit such sale. Within fifteen (15) days
of receipt of notice of a proposed sale by Imperial, the Company will advise
Imperial either that it has no objection of such a registered sale or that such
a registered sale should be delayed for up to four months, on the basis either
that the Company is involved in a confidential proposed transaction or
negotiations therefor (which have been previously disclosed to the Company's
Board of Directors) which would not require the Company to make or amend any
public filings under the securities laws at that time, or that such sale would
have a material adverse effect upon the Company's ability to access the capital
markets. If the Company has not objected to such proposed registered sale as
permitted in this subparagraph (b) within such fifteen (15) day period, the
Company shall take all actions necessary to permit such sale on the proposed
date of sale pursuant to such Registration Statement.
C. Underwritten Offerings. In the case of an underwritten Offering
----------------------
initiated by the Company under this Paragraph 3, including underwritten
Offerings effected as part of a Continuous Offering, the underwriter(s) and the
managing underwriter shall be selected by the Company. If the managing
underwriter advises the Company in writing that, in its opinion, the number of
Imperial Shares and securities of the Company, if any, being sold exceeds the
number that can be sold in such Offering, so as to be likely to have an adverse
effect on the price at which the Company can sell securities for its own
account, then there shall be included in such Offering (and in the Offering
Documents) first, securities of the Company being sold for its own account, and
second, the maximum number of Imperial Shares requested to be included in such
Offering which, in the opinion of such managing underwriter, can be sold without
have such adverse effect on such price. If Imperial Shares are so excluded from
registration in an Offering, the Company shall, upon the request of Imperial,
use its reasonable efforts to effect a registration with the SEC or take such
actions as shall be reasonably required to effect an Offering (in the event the
Imperial Shares are already registered with the SEC) in respect of such excluded
Imperial Shares as soon as practicable after consummation of such Offering.
Imperial may withdraw its Imperial Shares from such subsequent Offering without
costs or penalty at any time before the effective date of the Registration
Statement relating to such Offering.
D. Expenses. In connection with any offering of Imperial Shares in
--------
connection with a new issuance of Common Stock by the Company, the Company shall
pay all Registration Expenses.
4
V. Demand Registration Rights. Imperial, without limitation as to any other
--------------------------
method of disposition available to it, shall be entitled to dispose of any or
all of the Imperial Shares then held by it in accordance with the provisions of
this Paragraph 4.
A. Requests by Imperial. Upon the receipt by the Company of written
--------------------
notice from Imperial of its intent to sell all or part of its Imperial Shares in
an Offering subject to this Paragraph 4 at least 30 days before such proposed
date of sale, and specifying both the number of Imperial Shares to be sold and
the intended method of disposition, the Company will use its best efforts to
register such Imperial Shares so as to permit as soon as practicable the
requested sale of Imperial Shares. Within fifteen (15) days of receipt of
notice of a proposed sale by Imperial, the Company will advise Imperial either
that it has no objection of such a registered sale or that such a registered
sale should be delayed for up to four months, on the basis either the Company is
involved in a confidential proposed transaction or negotiations therefor (which
have been previously disclosed to the Company's Board of Directors) which would
not require the Company to make or amend any public filings under the securities
laws at that time. If the Company has not objected to such proposed registered
sale as permitted in this subparagraph (a) within such fifteen (15) day period,
the Company shall take all actions necessary to permit such sale on the proposed
date of sale pursuant to such Registration Statement. If, at any time after
giving 30 days written notice under this Paragraph 4, Imperial shall notify the
Company in writing that it has determined for any reason not to proceed with the
proposed Offering, then the Company shall terminate such Offering.
B. Limitation on Requests and Payment of Registration Expenses. Imperial
-----------------------------------------------------------
shall be entitled to make a request to the Company to register Imperial Shares
pursuant to the provisions of Paragraph 3(b) or this Paragraph 4 two times
within each one year period. The Company shall not be required to register
Imperial Shares in accordance with the provisions of Paragraph 4(a) if there is
outstanding at the time of the request an effective Registration Statement for a
Continuous Offering and Imperial can dispose of Imperial Share in accordance
with Paragraph 3(b). The Company will pay all Registration Expenses in
connection with the Offering of Imperial Shares requested by Imperial pursuant
to the second sentence of Paragraph 3(b) or this Paragraph 4. Any Offering
abandoned or terminated by Imperial after its filing in accordance with the
provisions of Paragraph 4(a) shall be deemed to be a request pursuant to this
Paragraph 4.
C. Selection of Underwriters. If Imperial specifies in the notice
-------------------------
delivered to the Company pursuant to Paragraph 4 that it intends to sell
Imperial Shares in an underwritten Offering pursuant to the second sentence of
Paragraph 3(b) or Paragraph 4, Imperial shall be entitled to select the
underwriter(s) and managing underwriter. If the Company issues and sells
securities of the same class as the Imperial Shares contemporaneously with any
Offering pursuant to Paragraph 3(b) or this Paragraph 4, the Company shall (i)
sell such securities to the underwriter(s) selected by Imperial pursuant to this
Paragraph 4(c) on the same terms and conditions as apply to Imperial and (ii)
execute and deliver a copy of the underwriting agreement relating to such
Offering. If the managing underwriter advises Imperial and the Company in
writing that, in its opinion, the number of securities requested to be included
in such Offering exceeds the number that can be sold in such Offering, so as to
be likely to have an adverse effect on the price at which the Imperial Shares or
securities being offered by the Company can be sold, then there shall be
included in such Offering (and in the Offering Documents relating to such
Offering) first, the maximum number of Imperial
5
Shares requested to be included in such Offering by Imperial and second, the
maximum number of securities, if any, proposed to be sold by the Company for its
own account or for the account of any other holder of the Company's securities,
which in the opinion of the managing underwriter can be sold without having such
adverse effect.
D. Registration on Form S-3. Imperial shall have the right to require the
------------------------
Company to register any or all of its shares on Form S-3 (or on Form S-1, if
Form S-3 is not available).
VI. The Company's Duties. If and whenever the Company is required to permit
--------------------
Imperial to effect any Offering as provided in Paragraphs 3 and 4, the Company
covenants and agrees that it will, as expeditiously as possible (but not later
than thirty (30) days after receipt of a request from Imperial to include
Imperial Shares in a given Offering):
A. (A) prepare all Offering Documents in accordance with all applicable
requirements of the Securities Act, and the Securities Offering Regulations,
including, if requested by Imperial and if permitted by the rules and
regulations of the SEC, a Registration Statement pursuant to Rule 415 of the
Securities Act or any successor rule of the SEC, with respect to such Offering
to permit the disposition of the Imperial Shares by Imperial in accordance with
the intended method of disposition (and, in the case of an underwritten
Offering, consistent in form, substance, and scope with customary practice for
the offering of securities of corporations by nationally recognized investment
banking firms), (B) file with the SEC such Offering Documents and all other
documents required to permit the disposition thereof; provided, that before
filing any such Offering Documents (including any documents incorporated by
reference therein), the Company will furnish to counsel(s) designated by
Imperial and to the underwriter(s), if any, copies of all such Offering
Documents, which Offering Documents shall be subject to the review of such
counsel(s) and the underwriter(s), if any, and, where feasible, the Company
shall make such changes in such Offering Documents as are reasonably requested
by such counsel(s) or underwriter(s), and (C) use its reasonable efforts to have
such Offering Documents declared effective by, and obtain all approvals from the
SEC to the extent necessary to permit the Offering; provided, however, that the
Company may discontinue any Offering that is being effected pursuant to
Paragraph 3 at any time before the effective date of the related Offering
Documents; and provided, further, that the Company shall not file any Offering
Document which shall be disapproved by Imperial within a reasonable period after
the same has been provided for review;
B. thereafter, prepare and file with the SEC such amendments and post-
effective amendments to the Offering Documents as may be necessary to keep the
Offering Documents continuously effective and cause the Offering Documents to be
supplemented by any required supplement, and as so supplemented to be filed, if
required, with the SEC during the period ending on the later of (i) such time as
all of the Imperial Shares covered by such Offering Documents have been disposed
of in accordance with the intended method of disposition set forth in such
Offering Documents or, in the case of an Offering made pursuant to Rule 415
under the Securities Act or any successor rule of the SEC (if applicable), if
securities remain unsold at the expiration of the Offering, such time as the
Company shall file, with the consent of Imperial, a post-effective amendment
with the SEC deregistering the securities which remain unsold at the termination
of the Offering or (ii) so long as a dealer is required to deliver a Prospectus
in connection with the Offering; provided, that
6
before filing any such post-effective amendment, the Company will furnish to
counsel(s) designated by Imperial and to the underwriter(s), if any, copies of
the post-effective amendment (including any other document proposed to be filed
therewith), which Offering Documents shall be subject to the review of such
counsel(s) and the underwriter(s), if any, and, where feasible, the Company
shall make such changes in such post-effective amendment as are reasonably
requested by such counsel(s) or underwriter(s);
C. furnish to Imperial and to the underwriter(s), if any, such number of
copies of the Offering Documents (including each amendment and supplement
thereto) as they may reasonably request in order to facilitate the disposition
of the Imperial Shares included in such Offering;
D. register or qualify, or cooperate with Imperial, the underwriter(s), if
any, and their respective counsel in registering or qualifying, all Imperial
Shares covered by the Offering Documents for offer and sale under the applicable
securities or blue sky laws of such jurisdictions as Imperial and the
underwriter(s), if any, shall reasonably request in writing, and do any and all
other acts and things which may be reasonably necessary or advisable to enable
Imperial and the underwriter(s), if any, to consummate the disposition in such
jurisdictions of the Common Stock covered by the Offering Documents; provided
however that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any tax
in any such jurisdiction where it is not then so subject;
E. use its reasonable efforts to cause such Common Stock covered by the
Offering Documents to be registered with or approved by such other governmental
agencies or authorities as may be necessary to enable Imperial and the
underwriter(s), if any, to consummate the disposition of such Common Stock;
F. cooperate reasonably with any managing underwriter to effect the sale
of any Imperial Shares, including but not limited to attendance of the Company's
executive officers at any planned "road show" presentations';
G. notify Imperial and the underwriter(s), if any, at any time when the
Offering Documents include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and at the request of Imperial or any underwriter, prepare and furnish to such
Person(s), such reasonable number of copies of any amendment or supplement to
the Offering Documents as may be necessary so that, as thereafter delivered to
the purchasers of such Common Stock, such Offering Documents shall not include
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and to deliver to
purchasers of any other securities of the Company included in the Offering
copies of such Offering Documents as so amended or supplemented;
H. keep Imperial informed of the Company's best estimates of the earliest
date on which the Offering Documents will become effective, and promptly notify
Imperial of (A) the effectiveness
7
of such Offering Documents, (B) a request by the SEC for an amendment or
supplement to such Offering Documents, (C) the issuance by the SEC of an order
suspending the effectiveness of the Offering Documents, or of the threat of a
proceeding for that purpose, and (D) the suspension of the qualification of any
securities included in the Offering Documents for sale in any jurisdiction or
the initiation or threat of any proceeding for that purpose;
I. comply with the provisions of the Securities Offering Regulations and
the Securities Act with respect to the disposition of all securities covered by
the Offering Documents in accordance with the intended method of distribution of
the sellers thereof set forth in such Offering Documents;
J. use its reasonable efforts to list the securities proposed to be sold
in such Offering on the American Stock Exchange, or on such other securities
exchange on which the Common Stock is then listed, not later than the closing of
the Offering contemplated thereby;
K. enter into such customary agreements (including but not limited to an
underwriting agreement in customary form) and take such other reasonable actions
as Imperial or the underwriter(s), if any, reasonably request in order to
expedite or facilitate the disposition of such Common Stock;
L. obtain such "cold comfort" letter(s) from the Company's independent
public accountants, in customary form and covering matters of the type
customarily covered by "cold comfort" letter(s), as Imperial or the
underwriter(s), if any, shall reasonably request; and
M. upon prior notice, make available for reasonable inspection by any
underwriter(s) participating in any disposition to be effected pursuant to the
Offering Documents and by any attorney, accountant, or other agent retained by
any such Person(s), its financial and other records, pertinent corporate
documents and properties of the Company, and such opportunities to discuss the
business of the Company with its officers, directors, and employees and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinions of such underwriters' respective counsels,
to conduct a reasonable investigation; provided, that any records, information,
or documents that are designated by the Company in writing as confidential shall
be kept confidential by each such Person, unless disclosure of such records,
information, or documents is required by law, by judicial or administrative
order, or in order to defend a claim asserted against such Person in connection
with such Offering.
VII. Information from Imperial.
-------------------------
A. Information. The Company may require Imperial to furnish it with such
-----------
information regarding Imperial and regarding the method of distribution as is
pertinent to the disclosure requirements relating to the Offering of such Common
Stock as the Company may from time to time reasonably request in writing.
B. Use of Offering Documents Upon Notice of Defects. Imperial agrees, and
------------------------------------------------
shall cause underwriter(s), if any, acting on its behalf to agree, that upon
receipt of any notice from the Company of the happening of any event of the kind
described in Paragraph 5(f), it will immediately
8
discontinue the use of the Offering Documents covering such Common Stock until
the receipt by Imperial and any such underwriter(s) of the copies of the
supplemented or amended Offering Documents contemplated by such clause and, if
so directed by the Company, Imperial will deliver and cause each underwriter, if
any, to deliver to the Company all copies, other than permanent file copies then
in the possession of Imperial or any such underwriter, of the Offering Documents
covering such Common Stock at the time of receipt of such notice. If the Company
shall give any such notice, the period mentioned in Paragraph 5(b) shall be
extended by the number of days during which offerings were suspended (i.e., the
period from and including the date of the receipt of such notice pursuant to
Paragraph 5(f), to and including the date when Imperial shall have received the
copies of the supplemented or amended Offering Documents contemplated by such
clause).
VIII. Resales; Reports Under Exchange Act. In order to permit Imperial to sell
-----------------------------------
the Imperial Shares, if it so desires, pursuant to any applicable resale
exemption under the Securities Offering Regulations or the Securities Act, the
Company will:
A. comply with all rules and regulations of the SEC in connection with use
of any such resale exemption;
B. make and keep available adequate and current public information
regarding the Company;
C. file with the SEC in a timely manner, all reports and other documents
required to be filed under the Securities Act, the Exchange Act, or the
Securities Offering Regulations;
D. furnish to Imperial copies of annual reports required to be filed under
the Exchange Act and the Securities Offering Regulations; and
E. furnish to Imperial, upon request, (A) a copy of the most recent
quarterly report of the Company and such other reports and documents filed by
the Company with the SEC and (B) such other information as may be reasonably
requested to permit Imperial pursuant to any applicable resale exemption under
the Securities Act or the Securities Offering Regulations, if any.
IX. Indemnification. The obligations of indemnification of the Parties set
---------------
forth in this Paragraph 8 shall be in addition to any liability which any Party
may otherwise have to any other party.
A. Indemnification by the Company. The Company agrees to indemnify and
------------------------------
hold harmless, to the full extent permitted by law, Imperial, its officers,
directors, employees and agents, each Person who participates as an underwriter
in an Offering, each officer, director, employee or agent of such an
underwriter, and each Person who controls (within the meaning of the Securities
Act) Imperial and such an underwriter against any and all losses, claims,
damages, liabilities, expenses, joint or several, including without limitation
reasonable legal or other expenses incurred in connection with investigating or
defending against any loss, claim, damage, or liability, or action or proceeding
(whether commenced or threatened) in respect thereof, caused by any untrue
statement or alleged untrue statement of a material fact contained in any of the
Offering Documents relating to such Offering, or any omission or alleged
omission to state therein a material fact required to be
9
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, except insofar as the
same are (i) made in reliance on and in conformity with any information about
Imperial or any underwriter furnished in writing to the Company by Imperial or
any underwriter specifically for inclusion in the Offering Documents relating to
such Offering or (ii) the result of the fact that Imperial or any underwriter
sold Common Stock subject to an Offering to a Person to whom there was not sent
or given, at or before the written configuration of such sale, a copy of the
final Offering Documents, if the Company has previously furnished copies thereof
to Imperial or underwriter and such final Offering Documents corrected such
untrue statement or alleged untrue statement or omission or alleged omission.
B. Indemnification by Imperial. Imperial agrees to indemnify and hold
---------------------------
harmless, to the full extent permitted by law, the Company, its officers,
directors, employees, and agents, each Person who participates as an underwriter
in an Offering, each officer, director, employee or agent of such an
underwriter, and each Person who controls (within the meaning of the Securities
Act) the Company and such underwriter against any and all losses, claims,
damages, liabilities, and expenses, joint or several, including without
limitation reasonable legal or other expenses incurred in connection with
investigating or defending against any loss, claim, damage, or liability, or
action or proceeding (whether commenced or threatened) in respect thereof,
caused by any untrue statement or alleged untrue statement of a material fact
contained in any of the Offering Documents relating to such Offering or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, but only to the extent
that such untrue statement or omission is made in reliance on and in conformity
with any information furnished in writing by Imperial concerning Imperial to the
Company specifically for inclusion in the Offering Documents relating to such
Offering.
C. Notices of Claims; Procedures. Promptly after receipt by an
-----------------------------
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Paragraph 8, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
indemnifying party of the commencement of such action; provided, that the
failure of the indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Paragraph 8, except
to the extent that the indemnifying party is actually materially prejudiced by
such failure to give notice. If any such action is brought against an
indemnified party (unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim) the indemnifying party will be entitled to participate
in and to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party for
any legal or other expenses subsequently incurred by the latter in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that, any Person entitled to indemnification hereunder shall have the
right to employ separate counsel and to participate in the defense of such
claim, but the fees and expenses of such counsel shall be at the expense of such
Person unless (A) the indemnifying party has agreed to pay
10
such fees or expenses or (B) the indemnifying party shall have failed to assume
the defense of such claim and employ counsel reasonably satisfactory to such
Person or (C) in the reasonable judgment of any such Person based upon advice of
its counsel, a conflict of interest may exist between such Person and the
indemnifying party with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person 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 claim on behalf of
such Person). If such defense is not assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include, as an unconditional term thereof, the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation. An indemnifying party who is
not entitled to or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel in each
jurisdiction for all parties indemnified by such indemnifying party with respect
to such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
D. Contribution. If the indemnification provided for this in this
------------
Paragraph 8 from the indemnifying party is unavailable to an indemnified party
hereunder (other than pursuant to the terms hereof) in respect of any losses,
claims, damages, liabilities, or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities, or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions that resulted in such losses,
claims, damages, liabilities, or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such action. The
amount paid or payable by a Party as a result of the losses, claims, damages,
liabilities, and expense referred to above shall be deemed to include, subject
to the limitations set forth in this Paragraph 8(d) any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding. The Parties agree that it would not be just and equitable if
contributions pursuant to this Paragraph 8(d) were determined by a pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to above. No Person guilty of fraudulent
misrepresentation shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
E. This Paragraph 8 shall apply to each Registration Statement filed by
the Company pursuant to this Agreement that includes Imperial Shares.
11
X. Miscellaneous.
-------------
A. Termination. Imperial's rights to demand registration or to
-----------
participate in underwritten Offerings of the Common Stock shall expire on
December 1, 2002.
B. Amendments and Waivers. This Agreement may be amended, and the Company
----------------------
may take any action herein prohibited or omit to perform any act herein required
to be performed by it, only if the Company shall have obtained the written
consent of Imperial to such amendment, action or omission to act.
C. Successors, Assigns and Transferees. This Agreement shall be binding
-----------------------------------
upon the parties hereto and their respective successors and assigns.
D. Notices. Any notice, request, demand, consent, approval or other
-------
communication permitted or required to be given to any of the parties hereunder
shall be deemed given when received, shall be in writing, and shall be delivered
in person or sent by certified mail, postage prepaid, or by private courier
service or by telecopy or telex, to such party at its address set forth below or
at such other address as such party may hereunder furnish in writing to the
other parties.
(i) if to the Company, to:
Imperial Credit Mortgage Holdings, Inc.
20371 Irvine Avenue
Santa Ana Heights, California 92707
Attention: Joseph R. Tomkinson
(ii) if to Imperial:
Imperial Credit Advisors, Inc.
23550 Hawthorne Blvd.
Building 1, Suite 240
Torrance, California 90505
Attention: Irwin Gubman, Esq.
E. Headings. The headings in this Agreement are for the convenience of
--------
reference only and shall not limit or otherwise affect the meaning of the
interpretation of this Agreement or any provision hereof.
F. Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, it being intended
that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
12
G. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when so executed shall be deemed an original, and
all such counterparts shall together constitute one and the same instrument.
H. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the United States of America and, in the absence of
controlling federal law, in accordance with the laws of the State of California.
I. Reference Provision.
-------------------
(i) Each controversy, dispute or claim between the parties arising
out of or relating to this Agreement, will be settled by a reference proceeding
in Orange County, California, in accordance with the provisions of Section 638
et seq. of the California Code of Civil Procedure, or their successor section
("CCP") , which shall constitute the exclusive remedy for the settlement of any
controversy, dispute or claim concerning this Agreement, including whether such
controversy, dispute or claim is subject to the reference proceeding and the
parties waive their rights to initiate any legal proceedings against each other
in any court or jurisdiction other than the Superior Court of Orange County (the
"Court"). The referee shall be a retired Judge of the Court selected by mutual
agreement of the parties, and if they cannot so agree within forty-five (45)
days after the date of the Contest, the referee shall be promptly selected by
the Presiding Judge of the Orange County Superior Court (or his representative).
The referee shall be appointed to sit as a temporary judge, with all of the
powers for a temporary judge, as authorized by law, and upon selection should
take and subscribe to the oath of office as provided for in Rule 244 of the
California Rules of Court (or any subsequently enacted Rule). Each party shall
have one preemptory challenge pursuant to CCP 170.6. The referee shall (a) be
requested to set the matter for hearing within sixty (60) days after the date of
the Contest and (b) try any and all issues of law or fact and report a statement
of decision upon them, if possible, within ninety (90) days of the Claim Date.
Any decision rendered by the referee will be final, binding and conclusive and
judgment shall be entered pursuant to CCP 644 in any court in the State of
California having jurisdiction. Any party may apply for a reference at any
time after thirty (30) days following notice to any other party of the nature of
the controversy, dispute or claim, by filing a petition for a hearing and/or
trial. All discovery permitted by this Agreement shall be completed no later
than fifteen (15) days before the first hearing date established by the referee.
The referee may extend such period in the event of a party's refusal to provide
requested discovery for any reason whatsoever, including, without limitation,
legal objections raised to such discovery or unavailability of a witness due to
absence or illness. No party shall be entitled to "priority" in conducting
discovery. Depositions may be taken by either party upon seven (7) days written
notice, and, request for production or inspection of documents shall be
responded to within ten (10) days after service. All disputes relating to
discovery which cannot be resolved by the parties shall be submitted to the
referee whose decision shall be final and binding upon the parties.
(ii) Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of all hearings, the order of presentation of
evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the
referee, except for trial, shall be conducted without a court reporter, except
that when any party so requests,
13
a court reporter will be used at any hearing conducted before the referee. The
party making such a request shall have the obligation to arrange for and pay for
the court reporter. The costs of the court reporter at the trial shall be borne
equally by the parties.
(iii) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the
close of the reference proceeding which shall dispose of all of the claims of
the parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered by the referee. The parties hereto
expressly reserve the right to findings of fact, conclusions of law, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this provision.
(iv) In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted), any
dispute between the parties that would otherwise be determined by the reference
procedure herein described will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge of the Orange County Superior
Court, in accordance with the California Arbitration Act, Sections 1280 through
1294.2 of the CCP as amended from time to time. The limitations with respect to
discovery as set forth hereinabove shall apply to any such arbitration
proceeding.
j. Entire Agreement. This Agreement embodies the entire Agreement of the
----------------
parties hereto in relation to the subject matter hereof and supersedes all prior
understandings or agreements, oral or written, with respect thereto among the
parties hereto.
k. Certain Remedies. Without in any way limited the remedies otherwise
----------------
available under this Agreement, the parties hereto acknowledge that, in the
event of any breach or nonperformance by any party of the agreements or
covenants required by this Agreement to be performed or observed by it, the
other parties shall be entitled to such equitable remedies as may be
appropriate, including, without limitation specific performance.
14
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or
caused this Agreement to be executed on its behalf as of the date first written
above.
IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.
By: /s/ Joseph R. Tomkinson
_________________________________
Name: Joseph R. Tomkinson
Title: Chief Executive Officer
IMPERIAL CREDIT ADVISORS, INC.
By: /s/ H. Wayne Snavely
________________________________
Name: H. Wayne Snavely
Title: Chairman
15