EXHIBIT 1.1
IMPAC MORTGAGE HOLDINGS,
INC.
6,200,000 Shares of Common Stock
(par value $.01 per share)
EQUITY DISTRIBUTION
AGREEMENT
May 12, 2004
UBS Securities LLC
299 Park Avenue
New York, New York 10171
Ladies and Gentlemen:
Impac Mortgage Holdings, Inc., a
Maryland corporation (the “ Company ”), confirms
its agreement with UBS Securities LLC (the “ Manager
”), as follows:
Section 1. Description of
Securities . The Company proposes to issue and sell through or
to the Manager, as sales agent and/or principal, up to 6,200,000
shares (the “ Shares ”) of the Company’s
common stock, par value $.01 per share (the “ Common
Stock ”), on the terms set forth in Section 3 of this
Agreement. The Company agrees that whenever it determines to sell
Shares directly to the Manager as principal, it will enter into a
separate agreement (each, a “ Terms Agreement ”)
in substantially the form of Annex I hereto, relating to such sale
in accordance with Section 3 of this Agreement.
Section 2. Representations and
Warranties of the Company . The Company represents and warrants
to the Manager that:
(a) The Company meets the
requirements for use of Form S-3 under the Securities Act of 1933,
as amended, and the rules and regulations thereunder (collectively
called the “ Act ”). A registration statement on
Form S-3 (Registration No. 333-111517) with respect to the Shares,
including a form of prospectus and such amendments or supplements
to such registration statement as may have been required prior to
the date of this Agreement, has been prepared by the Company under
the provisions of the Act, has been filed with the Securities and
Exchange Commission (the “ Commission ”), and
has become effective and which incorporates by reference documents
which the Company has filed in accordance with the provisions of
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively called the “ Exchange
Act ”). The Company has prepared a prospectus supplement
(the “ Prospectus Supplement ”), to the
prospectus included in the registration statement referred to above
and the documents incorporated by reference therein, setting forth
the terms of the offering, sale and plan of distribution of the
Shares and additional information concerning the Company and its
business. No stop order suspending the effectiveness of the
registration statement or any post-effective amendment thereto has
been issued and served on the Company, and no proceedings for that
purpose are pending or, to the knowledge of the Company, threatened
by the Commission. Copies of such registration statement and
prospectus, any such amendment or supplement and all documents
incorporated by reference therein that were filed with
the
Commission on or prior to the date of this
Agreement have been made available or delivered to the Manager.
Such registration statement, as it may have heretofore been
amended, is referred to herein as the “ Registration
Statement ,” and the final form of prospectus included in
the Registration Statement, as amended or supplemented from time to
time, is referred to herein as the “ Prospectus
.” Any reference herein to the Registration Statement, the
Prospectus or any amendment or supplement thereto shall be deemed
to refer to and include the documents incorporated (or deemed to be
incorporated) by reference therein, and any reference herein to the
terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement
or Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission
deemed to be incorporated by reference therein. As of the close of
business on May 11, 2004, securities in the amount of $387,875,000
were available for issuance pursuant to the Registration Statement,
which permits their sale in the manner contemplated by this
Agreement;
(b) Each part of the Registration
Statement, when such part became or becomes effective, and the
Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission and at each Filing Date (as
defined below), did or will in all material respects comply with
all applicable provisions of the Act and the Exchange Act. Each
part of the Registration Statement, when such part became or
becomes effective, did not or will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading. The Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission, did not
or will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement have been so described or filed. The
foregoing representations and warranties in this Section 2(b) do
not apply to any statements or omissions made in reliance on and in
conformity with information relating to the Manager furnished in
writing to the Company by the Manager specifically for inclusion in
the Registration Statement or Prospectus or any amendment or
supplement thereto. The Company has not distributed any offering
material in connection with the offering or sale of the Shares
other than the Registration Statement, the Prospectus or any other
materials, if any, permitted by the Act;
(c) The documents which are
incorporated by reference in the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or from which
information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be,
complied in all material respects with the requirements of the Act
or the Exchange Act, as applicable, and none of such documents
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or omitted to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading and any further documents so filed and incorporated by
reference shall, when they become effective under the Act or when
they are filed with the Commission, conform in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
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(d) The only subsidiaries (as
defined in the Act) of the Company are IMH Assets Corp. (“
IMH Assets ”), Impac Warehouse Lending Group, Inc.
(“ IWLG ”), Impac Funding Corporation (“
IFC ”) and Impac Multifamily Capital Corporation
(“ IMCC ”); Novelle Financial Services, Inc.
(“ NFS ”) and Impac Secured Assets Corp.
(“ SAC ”) are wholly-owned subsidiaries of IFC;
IMH Assets, IWLG, IMCC, NFS, SAC and IFC are collectively referred
to herein as the “ Subsidiaries ”; complete and
correct copies of the certificates of incorporation and of the
bylaws of the Company and the Subsidiaries and all amendments
thereto have been made available or delivered to the Manager. The
Company and each of its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation. The Company and each of its
Subsidiaries has the corporate power and authority to conduct all
the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in
the Prospectus. The Company and each of its Subsidiaries is duly
licensed or qualified to do business and in good standing as a
foreign corporation in all jurisdictions in which the nature of the
activities conducted by it, or the character of the assets owned or
leased by it, makes such licensing or qualification necessary,
except where the failure to so qualify will not have a material
adverse effect on the Company or any of its Subsidiaries or their
respective business, properties, business prospects, condition
(financial or otherwise) or results of operations or on the
transactions contemplated hereby (a “ Material Adverse
Effect ”). All of the outstanding shares of the capital
stock of the Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the
Company or a Subsidiary, to the extent and as is described in the
Prospectus, free and clear of all liens, encumbrances and claims
whatsoever. Except for the stock of the Subsidiaries and as
disclosed in the Prospectus, the Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term
debt securities of any corporation or have any equity interest in
any firm, partnership, joint venture, association or other entity
(other than mortgage-backed securities held by the Company for
long-term investment in the ordinary course of business). The
outstanding shares of preferred stock of IFC have the rights and
preferences described in the Prospectus;
(e) The financial statements and
schedules included or incorporated by reference in the Prospectus
present the consolidated financial condition of the Company as of
the respective dates thereof and the consolidated results of
operations and cash flows of the Company for the respective periods
covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
entire period involved, except as otherwise disclosed in the
Prospectus. No other financial statements of the Company are
required by the Act and the Exchange Act to be included in the
Prospectus. KPMG LLP (the “ Accountants ”), who
have reported on such financial statements and schedules, are
independent accountants with respect to the Company as required by
the Act. The statements included in the Registration Statement with
respect to the Accountants pursuant to Item 509 of Regulation S-K
under the Act are true and correct in all material
respects;
(f) All of the outstanding shares of
Common Stock have been duly authorized and validly issued, are
fully paid and non-assessable, have been issued in compliance with
all federal and state securities laws and were not issued in
violation of any preemptive right, resale right, right of first
refusal or similar right; the Shares to be issued and sold by the
Company pursuant to this Agreement and any Terms Agreement have
been duly authorized and upon such issuance will be validly issued,
fully paid and nonassessable and are not subject to any preemptive
right, resale right, right of first refusal or similar right and
the certificates for the Shares are in due and proper form and the
holders of the Shares will not be subject to personal
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liability by reason of being such holders. The
description of the Common Stock in the Prospectus is complete and
accurate in all material respects. Except as set forth in the
Prospectus, there are no options to purchase, or any rights or
warrants to subscribe for, or any securities or obligations
convertible or exchangeable into, or any contracts, commitments,
plans or arrangements to issue or sell, any shares of capital stock
of the Company, any shares of capital stock of any Subsidiary or
any such warrants, convertible or exchangeable securities or
obligations. The descriptions of the Company’s stock option
and other stock plans or arrangements, and the options or other
rights granted and exercised thereunder, set forth in the
Prospectus, accurately present the information required to be shown
with respect to such plans, arrangements, options and
rights;
(g) Each of the Company and its
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only
in accordance with management’s general or specific
authorization; (iv) the recorded accountability of assets is
compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; and
(v) any significant deficiencies or weaknesses in the design or
operation of internal accounting controls which could adversely
affect the Company’s ability to record, process, summarize
and report financial data, and any fraud, whether or not material,
that involves management or other employees who have a significant
role in internal controls, are adequately and promptly disclosed to
the Company’s independent auditors and the audit committee of
the Company’s board of directors;
(h) Subsequent to the respective
dates as of which information is given in the Prospectus, except as
set forth in or contemplated by the Prospectus, (i) there has not
been and will not have been any change in the capitalization of the
Company or any of its Subsidiaries, or any material adverse change
in the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company
and its Subsidiaries, (ii) neither the Company nor any of its
Subsidiaries has incurred nor will incur any material liabilities
or obligations, direct or contingent, nor has it entered into nor
will it enter into any material transactions other than pursuant to
this Agreement and the transactions referred to herein or in the
ordinary course of business and (iii) neither the Company nor any
of its Subsidiaries has and none of them will have paid or declared
any dividends or other distributions of any kind on any class of
their respective classes of capital stock;
(i) Except as set forth in the
Prospectus, there are no actions, suits or proceedings pending or,
to the knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries or any of their respective
officers in their capacity as such, before or by any Federal or
state court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, wherein an
unfavorable ruling, decision or finding might result in a Material
Adverse Effect;
(j) All legal or governmental
proceedings, contracts, leases or documents of a character required
to be described in the Prospectus or to be filed as an exhibit to
the Registration Statement have been so described or filed as
required. All such contracts to which the Company or any Subsidiary
is a party have been duly authorized, executed and delivered by the
Company or such Subsidiary, constitute valid and binding agreements
of the Company or such Subsidiary and are enforceable against the
Company or such Subsidiary in accordance with the terms
thereof
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and except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles;
(k) The Company and each of its
Subsidiaries has (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations, and has made all
governmental or regulatory filings, as are necessary to carry on
its business as contemplated in the Prospectus, (ii) complied in
all respects with all laws, regulations and orders applicable to it
or its business and (iii) performed all its obligations required to
be performed by it, and is not in breach of or default under, any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement, lease, contract or
other agreement or instrument (collectively, a “ contract
or other agreement ”) to which it is a party or by which
its property is bound or affected, the effect of any of which,
individually or in the aggregate, might result in a Material
Adverse Effect and no event has occurred which with notice, lapse
of time or both would result in such breach or default. To the
knowledge of the Company and each of its Subsidiaries, no other
party under any contract or other agreement to which it is a party
is in breach or default in any respect thereunder. Neither the
Company nor any of its Subsidiaries is in violation of any
provision of its charter or by-laws;
(l) The Company has full corporate
power and authority to enter into this Agreement and will have, at
the time of execution thereof, full corporate power and authority
to enter into any Terms Agreement. This Agreement has been and any
Terms Agreement will have been, at the time of execution and
delivery thereof, duly authorized, executed and delivered by the
Company and constitutes and, in the case of any Terms Agreement,
will constitute, a valid and binding agreement of the Company and
is enforceable, and, in the case of any Terms Agreement, will be
enforceable, against the Company in accordance with its terms,
except as the enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization and similar laws affecting
creditors’ rights generally and moratorium laws in effect
from time to time and by equitable principles restricting the
availability of equitable remedies. The execution and delivery by
the Company of, and the performance by the Company of its
obligations under, this Agreement and any Terms Agreement, the
consummation of the transactions contemplated hereby and the
application of the net proceeds from the offering and sale of the
Shares to be sold by the Company in the manner set forth in the
Prospectus under the caption “Use of Proceeds” will not
result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of its
Subsidiaries pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the
acceleration of any obligation under, the charter or by-laws of the
Company or any of its Subsidiaries, any contract or other agreement
to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of its
properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any
court or other governmental agency or body applicable to the
business or properties of the Company or any of its Subsidiaries
the effect of any of which, individually or in the aggregate, might
have a Material Adverse Effect;
(m) No consent, approval,
authorization or order of, or any filing or declaration with, any
court or any national, state or local governmental agency,
regulatory commission, board, authority or body is required in
connection with the (i) authorization, issuance, transfer, sale or
delivery of the Shares by the Company, (ii) the execution, delivery
and performance of
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this Agreement and any Terms Agreement by the
Company or (iii) the taking by the Company of any other action
contemplated hereby, except such as have been obtained under the
Act and such as may be required under state securities or Blue Sky
laws or the by-laws and rules of the National Association of
Securities Dealers, Inc. (the “ NASD ”) in
connection with the offer by sale through the Manager of the
Shares;
(n) The Company and each of its
Subsidiaries has good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear
of all liens, charges, encumbrances, mortgages, security interests,
claims or restrictions, except such as are described in, or
contemplated by, the Prospectus and except such which would not
have a Material Adverse Effect. The Company and each of its
Subsidiaries has valid, subsisting and enforceable leases for the
properties described in the Prospectus as leased by it, with such
exceptions as are not material and which do not materially
interfere with the use made and proposed to be made of such
properties by the Company and such Subsidiaries;
(o) The Company and its Subsidiaries
own, or are licensed or otherwise have the full and exclusive right
to use all material trademarks and trade names that are used in or
necessary for the conduct of their respective businesses as
described in the Prospectus. To the Company’s knowledge, no
claims have been asserted by any person to the use of any such
trademarks or trade names or challenging or questioning the
validity or effectiveness of any such trademark or trade name that
would have a Material Adverse Effect. The use, in connection with
the business and operations of the Company and its Subsidiaries, of
such trademarks and trade names does not, to the Company’s
knowledge, infringe on the rights of any person;
(p) The Company is, and if operated
in the manner described in the Prospectus shall remain, qualified
as a real estate investment trust (“ REIT ”)
under Sections 856 through 860 of the Internal Revenue Code of 1986
(the “ Code ”), and intends to operate in a
manner so as to continue to remain so qualified;
(q) Neither the Company nor any of
its Subsidiaries is, and if operated in the manner described in the
Prospectus and after giving effect to the offering and sale of the
Shares, none of them will be, an “investment company,”
an entity “controlled” by an “investment
company” or an “affiliated person”, or
“promoter” or “principal underwriter” for,
an “investment company,” as such terms are defined in
the Investment Company Act of 1940, as amended (the “
Investment Company Act ”);
(r) Neither the Company nor any of
its directors, officers or controlling persons has taken, directly
or indirectly, any action intended, or which might reasonably be
expected, to cause or result, under the Act or otherwise, in, or
which has constituted, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of
the Shares;
(s) No person has the right,
contractual or otherwise, to cause the Company to issue to it, or
register pursuant to the Act, any securities of the Company because
of the filing of the Registration Statement or the offering of the
Shares, nor does any person have preemptive rights, co-sale rights,
rights of first refusal or other rights to purchase any of the
Shares other than those that have been expressly waived prior to
the date hereof;
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(t) The Shares are duly authorized
for listing, subject to official notice of issuance, on the New
York Stock Exchange (the “ NYSE ”);
(u) Neither the Company nor any of
its Subsidiaries is involved in any material labor dispute nor, to
the knowledge of the Company, is any such dispute
threatened;
(v) Neither the Company nor any of
its Subsidiaries nor, to the knowledge of the Company, any officer,
director, employee or agent acting on behalf of the Company or any
of its Subsidiaries has at any time (i) made any contributions to
any candidate for political office in violation of law, or failed
to disclose fully any contributions to any candidate for political
office in accordance with any applicable statute, rule, regulation
or ordinance requiring such disclosure, (ii) made any payment to
any local, state, federal or foreign governmental officer or
official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed by
applicable law, (iii) made any payment outside the ordinary course
of business to any purchasing or selling agent or person charged
with similar duties of any entity to which the Company or any
Subsidiary sells or from which the Company or any Subsidiary buys
products for the purpose of influencing such agent or person to buy
products from or sell products to the Company or such Subsidiary,
or (iv) except as described in the Prospectus, engaged in any
transaction, maintained any bank account or used any corporate
funds except for transactions, bank accounts and funds which have
been and are reflected in the normally maintained books and records
of the Company or such Subsidiary;
(w) The Company and its Subsidiaries
is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent
and customary in the business in which they engage as described in
the Prospectus; neither the Company nor any Subsidiary has been
refused any insurance coverage sought or applied for; and the
Company has no reason to believe that it or any Subsidiary will not
be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its proposed business at a
cost that would not result in a Material Adverse Effect;
(x) Neither the Company nor any of
its Subsidiaries is, and if operated in the manner described in the
Prospectus, will not be a “broker” within the meaning
of Section 3(a)(4) of the Exchange Act or a “dealer”
within the meaning of Section 3(a)(5) of the Exchange Act or
required to be registered pursuant to Section 15(a) of the Exchange
Act;
(y) The Common Stock is an
“actively-traded security” excepted from the
requirements of Rule 101 of Regulation M under the Exchange Act by
subsection (c)(1) of such rule;
(z) Except as contemplated by
Section 3 of this Agreement, the Company has not incurred any
liability for any finder’s fees or similar payments in
connection with the transactions herein contemplated;
(aa) The Company has not entered
into any other sales agency agreements or other similar
arrangements with any agent or other representative in respect of
the Shares and the equity shelf program established by this
Agreement;
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(bb) The Company has established and
maintains disclosure controls and procedures (as such term is
defined in Rules 13a-15 and 15d-15 under the Exchange Act); such
disclosure controls and procedures are designed to ensure that
material information relating to the Company, including its
consolidated subsidiaries, is made known to the Company’s
Chief Executive Officer and its Chief Financial Officer by others
within those entities, and such disclosure controls and procedures
are effective to perform the functions for which they were
established; and
(cc) Since July 30, 2002, the
Company has not, directly or indirectly, including through any
subsidiary: (i) extended credit, arranged to extend credit, or
renewed any extension of credit, in the form of a personal loan (as
such term is used in Section 13(k) of the Exchange Act), to or for
any director or executive officer of the Company, or to or for any
family member or affiliate of any director or executive officer of
the Company; or (ii) made any material modification, including any
renewal thereof, to any term of any personal loan (as such term is
used in Section 13(k) of the Exchange Act) to any director or
executive officer of the Company, or any family member or affiliate
of any director or executive officer, which loan was outstanding on
July 30, 2002.
Section 3. Sale and Delivery of
Securities . (a) On the basis of the representations,
warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue
and sell through the Manager, as sales agent, and the Manager
agrees to use its reasonable efforts to sell, as sales agent for
the Company, the Shares on the following terms:
(i) The Shares are to be sold on a
daily basis or otherwise as shall be agreed to by the Company and
the Manager on any day that is a trading day for the NYSE (other
than a day on which the NYSE is scheduled to close prior to its
regular weekday closing time). The Company will designate the
maximum number of Shares to be sold by the Manager daily as
reasonably agreed to by the Manager and in any event not in excess
of the number of shares of Common Stock available for issuance
under the currently effective Registration Statement. Subject to
the terms and conditions hereof, the Manager shall use its
reasonable efforts to sell all of the designated Shares. The gross
sales price of any Shares sold under this Section 3(a) shall be the
market price for shares of the Company’s Common Stock on the
NYSE at the time of such sales multiplied by the number of Shares
sold by the Manager under this Section 3(a).
(ii) Notwithstanding the foregoing,
the Company may instruct the Manager by telephone (confirmed
promptly by telecopy) not to sell Shares if such sales cannot be
effected at or above the price designated by the Company in any
such instruction. Furthermore, the Company shall not authorize the
issuance and sale of, and the Manager shall not be obligated to use
its reasonable efforts to sell, any Share at a price lower than the
minimum price therefor designated from time to time by the
Company’s Board of Directors and notified to the Manager in
writing. In addition, the Company or the Manager may, upon notice
to the other party hereto by telephone (confirmed promptly by
telecopy), suspend the offering of the Shares; provided ,
however , that such suspension or termination shall not
affect or impair the parties’ respective obligations with
respect to the Shares sold hereunder prior to the giving of such
notice.
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(iii) The Manager hereby covenants
and agrees not to make any sales of Shares on behalf of the
Company, pursuant to this Section 3(a), other than (a) by means of
ordinary brokers’ transactions between members of the NYSE
that qualify for delivery of a Prospectus to the NYSE in accordance
with Rule 153 under the Act (such transactions are hereinafter
referred to as “ At the Market Offerings ”) and
(b) such other sales of Shares on behalf of the Company in its
capacity as agent of the Company as shall be agreed by the Company
and the Manager. The Company acknowledges and agrees that in the
event a sale of Shares on behalf of the Company would constitute
the sale of a “block” under Rule 10b-18(a)(14) under
the Exchange Act or a “distribution” within the meaning
of Regulation M under the Exchange Act or the Manager reasonably
believes it may be deemed an “underwriter” under the
Act in a transaction that is not an At the Market Offering, the
Company will provide to the Manager, at the Manager’s request
and upon reasonable advance notice to the Company, on or prior to
the Settlement Date, the opinions of counsel, accountants’
letters and officers’ certificates pursuant to Section 5
hereof that the Company would be required to provide to the Manager
in connection with a sale of Shares pursuant to a Terms Agreement,
each dated the Settlement Date, and such other documents and
information as the Manager shall reasonably request.
(iv) The compensation to the Manager
for sales of Shares, as an agent of the Company, shall be 3.00% of
the gross sales price of the Shares sold pursuant to this Section
3(a), and such rate of compensation shall not apply when the
Manager acts as principal. The remaining proceeds, after further
deduction for any transaction fees imposed by any governmental or
self-regulatory organization in respect of such sales, shall
constitute the net proceeds to the Company for such Shares (the
“ Net Proceeds ”).
(v) The Manager shall provide
written confirmation to the Company following the close of trading
on the NYSE each day in which Shares are sold under this Section
3(a) setting forth the number of Shares sold on such day, the Net
Proceeds to the Company, and the compensation payable by the
Company to the Manager with respect to such sales.
(vi) Settlement for sales of Shares
pursuant to this Section 3(a) will occur on the third business day
following the date on which such sales are made (each such day, a
“ Settlement Date ”). On each Settlement Date,
the Shares sold through the Manager for settlement on such date
shall be issued and delivered by the Company to the Manager against
payment of the Net Proceeds for the sale of such Shares. Settlement
for all such Shares shall be effected by free delivery of Shares to
the Manager’s account at The Depository Trust Company in
return for payments in same day funds delivered to the account
designated by the Company. If the Company shall default on its
obligation to deliver Shares on any Settlement Date, the Company
shall (a) hold the Manager harmless against any loss, claim or
damage arising from or as a result of such default by the Company
and (b) pay the Manager any commission to which it would otherwise
be entitled absent such default. If the Manager breaches this
Agreement by failing to deliver proceeds on any Settlement Date for
Shares delivered by the Company, the Manager will pay the Company
interest based on the effective overnight Federal Funds
rate.
(vii) At each Settlement Date and
Filing Date (as defined below), the Company shall be deemed to have
affirmed each representation and warranty contained in this
Agreement. The Company covenants and agrees with the Manager that
(a) with
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respect to each of the
Company’s first three fiscal quarters, on or prior to the
second business day after any date on which the Company shall be
obligated to file a quarterly report on Form 10-Q in respect of
such quarter and (b) with respect to the Company’s fourth
fiscal quarter for year 2004 and for each year thereafter, on or
prior to the thirty-seventh day after the end of such quarter in
which sales of Shares were made by the Manager pursuant to this
Section 3(a) (each such date, a “ Filing Date
”), the Company will file a prospectus supplement with the
Commission under the applicable paragraph of Rule 424(b), which
prospectus supplement will set forth, with regard to such quarter,
the number of Shares sold through the Manager as agent pursuant to
this Section 3(a) in At the Market Offerings, the Net Proceeds to
the Company and the compensation paid by the Company with respect
to such sales of Shares pursuant to this Section 3(a) and deliver
such number of copies of each such prospectus supplement to the
NYSE as are required by such exchange. Any obligation of the
Manager to use its reasonable efforts to sell the Shares on behalf
of the Company shall be subject to the continuing accuracy of the
representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the
continuing satisfaction of the additional conditions specified in
Section 5 of this Agreement.
(b) (i) If the Company wishes to
issue and sell Shares other than as set forth in Section 3(a) of
this Agreement (each, a “ Placement ”), it will
notify the Manager of the proposed terms of such Placement. If the
Manager, acting as principal, wishes to accept such proposed terms
(which it may decline to do for any reason in its sole discretion)
or, following discussions with the Company, wishes to accept
amended terms, the Manager and the Company will enter into a Terms
Agreement setting forth the terms of such Placement.
(ii) The terms set forth in a Terms
Agreement will not be binding on the Company or the Manager unless
and until the Company and the Manager have each executed such Terms
Agreement accepting all of the terms of such Terms Agreement. In
the event of a conflict between the terms of this Agreement and the
terms of a Terms Agreement, the terms of such Terms Agreement will
control.
(c) (i) Under no circumstances shall
the number of Shares sold pursuant to this Agreement and any Terms
Agreement exceed the number set forth in Section 1 or the number of
shares of Common Stock available for issuance under the currently
effective Registration Statement.
(ii) If either party has reason to
believe that the exemptive provisions set forth in Rule 101(c)(1)
of Regulation M under the Exchange Act are not satisfied with
respect to the Shares, it shall promptly notify the other party and
sales of Shares under this Agreement and any Terms Agreement shall
be suspended until that or other exemptive provisions have been
satisfied in the judgment of each party. The Manager shall
calculate on a weekly basis the average daily trading volume (as
defined by Rule 100 of Regulation M under the Exchange Act) of the
Common Stock.
(d) Each sale of Shares to the
Manager shall be made in accordance with the terms of this
Agreement and, if applicable, a Terms Agreement, which will provide
for the sale of such Shares to, and the purchase thereof by, the
Manager. A Terms Agreement may also specify certain provisions
relating to the reoffering of such Shares by the Manager. The
commitment of the Manager to purchase Shares pursuant to any Terms
Agreement shall be deemed to have been
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made on the basis of the representations and
warranties of the Company herein contained and shall be subject to
the terms and conditions herein set forth. Each Terms Agreement
shall specify the number of Shares to be purchased by the Manager
pursuant thereto, the price to be paid to the Company for such
Shares, any provisions relating to rights of, and default by,
underwriters acting together with the Manager in the reoffering of
the Shares, and the time and date (each such time and date being
referred to herein as a “ Time of Delivery ”)
and place of delivery of and payment for such Shares. Such Terms
Agreement shall also specify any requirements for opinions of
counsel, accountants’ letters and officers’
certificates pursuant to Section 5 of this Agreement and any other
information or documents required by the Manager.
Section 4. Covenants of the
Company . The Company agrees with the Manager:
(a) During the period in which a
prospectus relating to the Shares is required to be delivered under
the Act, to notify the Manager promptly of the time when any
subsequent amendment to the Registration Statement has become
effective or any subsequent supplement to the Prospectus has been
filed and of any request by the Commission for any amendment or
supplement to the Registration Statement or Prospectus or for
additional information; to prepare and file with the Commission,
promptly upon the Manager’s request, any amendments or
supplements to the Registration Statement or Prospectus that, in
the Manager’s reasonable opinion, may be necessary or
advisable in connection with the offering of the Shares by the
Manager; not to file any amendment or supplement to the
Registration Statement or Prospectus (other than any prospectus
supplement relating to the offering of other securities (including,
without limitation, Common Stock) other than pursuant to this
Agreement) unless a copy thereof has been submitted to the Manager
a reasonable period of time before the filing and the Manager has
not reasonably objected thereto; 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 for so long as the delivery
of a prospectus is required in connection with the offering or sale
of the Shares and to advise the Manager of any such filing; and to
furnish to the Manager, by e-mail to jorge.solares@ubsw.com or such
other e-mail address provided by the Manager, at the time of filing
thereof a copy of any document that upon filing is deemed to be
incorporated by reference in the Registration Statement or
Prospectus, provided that if the Company receives an error
message in its attempt to make such e-mail delivery, the Company
shall then comply with Section 9; and to cause each amendment or
supplement to the Prospectus to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424(b) of the
Act or, in the case of any document to be incorporated therein by
reference, to be filed with the Commission as required pursuant to
the Exchange Act, within the time period prescribed;
(b) To promptly advise the Manager,
of any request by the Commission for amendments or supplements to
the Registration Statement or Prospectus or for additional
information with respect thereto, or of notice of institution of
proceedings for, or the entry of a stop order suspending the
effectiveness of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain
the lifting or removal of such order as soon as possible; to
promptly advise the Manager of any proposal to amend or supplement
the Registration Statement or Prospectus (other than any prospectus
supplement relating to the offering of other securities (including,
without limitation, Common Stock), including by filing any
documents that would be incorporated therein by reference, and to
file no such amendment or supplement to which the Manager shall
object in writing;
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(c) To make available to the
Manager, as soon as practicable after the Registration Statement
becomes effective, and thereafter from time to time to furnish to
the Manager, copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the
Registration Statement) in such quantities and at such locations as
the Manager may reasonably request for the purposes contemplated by
the Act, which Prospectus and any amendments or supplements thereto
furnished to the Manager will be materially identical to the
version created to be transmitted to the Commission for filing via
EDGAR, except to the extent permitted by Regulation S-T; and for so
long as this agreement is in effect, the Company will prepare and
file promptly such amendment or amendments to the Registration
Statement and the Prospectus as may be necessary to comply with the
requirements of Section 10(a)(3) of the Act;
(d) To promptly notify the Manager
to suspend the offering of Shares upon the happening of any event
known to the Company within the time during which a Prospectus
relating to the Shares is required to be delivered under the Act
which, in the judgment of the Company, would require the making of
any change in the Prospectus then being used, or in the information
incorporated therein by reference, so that the Prospectus would not
include an untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they are made, not
misleading, and, during such time, to prepare and furnish, at the
Company’s expense, to the Manager promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any
such change and, to the extent it relates solely to the Shares, to
furnish the Manager with a copy of such proposed amendment or
supplement before filing any such amendment or supplement with the
Commission and thereafter promptly to furnish at the
Company’s own expense to the Manager, copies in such
quantities and at such locations as the Manager may from time to
time reasonably request of an appropriate amendment to the
Registration Statement or supplement to the Prospectus so that the
Prospectus as so amended or supplemented will (i) reflect such
change, or (ii) not, in the light of the circumstances when it is
so delivered, be misleading, or (iii) comply with applicable
securities laws;
(e) To furnish such information as
may be required and otherwise to cooperate in qualifying the Shares
for offering and sale under the securities or blue sky laws of such
states as the Manager may designate and to maintain such
qualifications in effect so long as required for the distribution
of the Shares; provided that the Company shall not be
required to qualify as a foreign corporation or to consent to the
service of process under the laws of any such state (except service
of process with respect to the offering and sale of the Shares);
and to promptly advise the Manager of the receipt by the Company of
any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such
purpose;
(f) To furnish to the Manager (i)
copies of any reports or other communications which the Company
shall send directly to its stockholders or shall from time to time
publish or publicly disseminate (except with respect to
information, other than press releases, on the Company’s
website), (ii) by email to jorge.solares@ubsw.com or such other
e-mail address provided by the Manager, copies of all annual,
quarterly and current reports filed with the Commission on Forms
10-K, 10-Q and 8-K (other than Form 8-K reporting Item 9 or Item
12), or such other similar form as may be designated by the
Commission, provided that if the Company receives an error
message in its attempt to make such e-mail delivery, the Company
shall then comply with Section 9, (iii) copies of any financial
statements or reports filed with any national
12
securities exchange on which any class of
securities of the Company is listed, and (iv) such other
information as the Manager may reasonably request regarding the
Company or its Subsidiaries, in each case as soon as such reports,
communications, documents or information becomes available, subject
to applicable law, including Regulation FD under the Exchange
Act;
(g) To make generally available to
its security holders (as defined in Rule 158(b)), and to deliver to
the Manager, an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a
period of twelve months beginning after the effective date of the
Registration Statement (as defined in Rule 158(c) of the Act) as
soon as is reasonably practicable after the termination of such
twelve-month period but not later than 60 days after the close of
such twelve-month period;
(h) Whether or not the transactions
contemplated hereunder are consummated or this Agreement is
terminated, to pay all of its expenses incident to the performance
of its obligations hereunder, including, but not limited to, such
costs, expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, the
Prospectus, each Prospectus Supplement, and any amendments or
supplements thereto, and the printing and furnishing of copies of
each thereof to the Manager (including costs of mailing and
shipment), (ii) the registration, issue, sale and delivery of the
Shares, (iii) any power of attorney and any closing documents
(including compilations thereof) and the reproduction and/or
printing and furnishing of copies of each thereof to the Manager
(including costs of mailing and shipment), (iv) the qualification
of the Shares for offering and sale under state laws and the
determination of their eligibility for investment under state law
as aforesaid (including the reasonable legal fees and filing fees
and other disbursements of counsel for the Manager) and the
printing and furnishing of copies of any blue sky surveys to the
Manager, (v) the listing of the Shar
