Exhibit 1.1(a)
IMPAC MORTGAGE HOLDINGS,
INC.
7,500,000 Shares of Common Stock
(par value $0.01 per share)
COMMON STOCK SALES
AGREEMENT
September 30, 2005
BRINSON PATRICK SECURITIES
CORPORATION
330 Madison Avenue, 9
th
Floor
New York, NY 10017.
Ladies and Gentlemen:
Impac Mortgage Holdings, Inc., a
Maryland corporation (the “ Company ”), confirms
its agreement with Brinson Patrick Securities Corporation (the
“ Manager ”), as follows:
Section 1. Description of
Securities . The Company proposes to issue and sell through the
Manager, as sales agent, up to 7,500,000 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.
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. 333-121562) 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 September 30, 2005,
securities in the amount of $1,000,000,000 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;
(d) Except for those subsidiaries
referenced in the following sentence, 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,
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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. All
other subsidiaries of the Company do not, individually or in the
aggregate, constitute a “significant subsidiary” (as
defined in Regulation S-X) of the Company and do not engage in any
operations other than in connection with, and are used for the
purpose of, issuing trust preferred securities. 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 consolidated financial
statements 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 consolidated financial statements of the
Company are required by the Act and the Exchange Act to be included
in the Prospectus. KPMG LLP (“ KPMG ”), who have
reported on such financial statements and schedules, and
Ernst & Young LLP (“ E&Y ” and
together with KPMG, the “ Accountants ”), who
will report on such consolidated financial statements, are
independent registered public accounting firms 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 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 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
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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) Except as disclosed in the
Prospectus, 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 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;
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(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. This Agreement
has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding agreement of the Company and is
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, 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 this 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
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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;
(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
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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
are 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) 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;
(z) Except as contemplated by
Section 3(d) of this Agreement, 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;
(aa) 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 except as disclosed in the Prospectus,
such disclosure controls and procedures are effective to perform
the functions for which they were established;
(bb) 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; and
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(cc) Each certificate delivered by
officers of the Company to the Manager pursuant to this Agreement
with respect to the satisfaction of the conditions set forth in
this Agreement and any interim financial data delivered by the
Company to the Manager shall constitute for purposes of this
Agreement a representation and warranty of the Company as to the
matters covered thereby to the Manager.
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 agent, and the
Manager agrees to sell, as agent for the Company, on a reasonable
efforts basis, up to the maximum amount of the Shares during the
term of this Agreement on the terms set forth herein. The Shares
will be sold from time to time as described in the Registration
Statement and Prospectus, in amounts, and subject to price
limitations, as directed by the Company.
(b) The Company or the Manager may,
upon notice to the other party hereto by telephone (confirmed
promptly by telecopy), at any time and from time to time suspend
the offering of Shares; provided, however, that such suspension
shall not affect or impair the parties’ respective
obligations with respect to the Shares sold hereunder prior to the
giving of such notice.
(c) The compensation to the Manager
for sales of Shares shall be at a fixed commission rate of 3% of
the gross sales price per share for the Shares sold under this
Agreement with respect to and including the first
$17.5 million of gross sales proceeds resulting from Shares
sold pursuant to this Section 3 and any shares of preferred
stock of the Company sold through the Manager as agent under
another agreement between the Manager and the Company and 2.5% of
the gross sales price per share for each additional Share sold
pursuant to this Section 3 and for each additional share of
preferred stock of the Company sold through the Manager as agent
under another agreement between the Manager and the Company. The
remaining proceeds, after further deduction for any transaction
fees imposed by any governmental or self-regulatory organization in
respect of such sale shall constitute the net proceeds to the
Company for such Shares (the “ Net Proceeds ”).
The Company and the Manager agree that in the event the Company
agrees to compensate an agent of the Company for sales of the
Company’s capital stock at a rate in excess of the rates set
forth herein, the Company shall promptly notify the Manager and
effective as of the date of any such agreement, the commission rate
hereunder shall be increased to such higher rate for so long as
such agent shall be entitled to such higher rate. At the time of
such increased rate of commission, the Company shall prepare and
file with the SEC and with any Trading Market a prospectus
supplement reflecting such increased rate of commission.
(d) The Manager acknowledges and
agrees that the Company may enter into an agreement providing for
the offering on an agency basis of the Company’s Common Stock
and/or preferred stock by UBS Securities LLC and/or Bear Stearns
and Co. Inc.; provided, however, that if such agreement provides
for compensation to such agents in excess of the rates provided for
herein, such rates are subject to the provisions of
Section 3(c) hereof. The Company covenants to provide written
notice to the Manager of its execution of any such agreement. The
Company represents, warrants and agrees with the Manager that on
any day on which it has directed the Manager to offer Shares of the
Company pursuant to this Section 3 it will not direct any
agent or underwriter with respect to the Company’s Common
Stock to offer or sell shares of the Company’s Common Stock
.
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(e) The Manager or its clearing
agent shall provide a written report, which may be by e-mail, to
the Company following the close of trading on the NYSE on each day
during which Shares are sold under this Section 3 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.
(f) The Company shall open and
maintain a trading account (the “ Trading Account
”) at a clearing agent designated by the Manager to
facilitate the transactions contemplated by this Agreement. The
Company shall, with respect to each sale of Shares, effect delivery
of the applicable number of Shares to the Trading Account, on or
before the third business day (or such other day as is industry
practice for regular-way trading and with prior notice from the
Manager) following each sale of the Stock (each, a “
Settlement Date ”). The Net Proceeds from the sale of
the Stock shall be available in the Trading Account following the
settlement of the sale on the Settlement Date. The Manager’s
compensation shall be withheld from the sales proceeds on each
Settlement Date and shall be paid to the Manager.
(g) At each Settlement Date and
Filing Date (as defined below), the Company shall be deemed to have
affirmed each representation, warranty, covenant and other
agreement contained in this Agreement. The Company covenants and
agrees with the Manager that (a) with 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 2005 and for each year thereafter,
on or prior to the forty second day after the end of such quarter
in which sales of Shares were made by the Manager pursuant to this
Section 3 (each such date, a “ Filing Date
”), the Company will at its expense 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, 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, and deliver such number of copies of each such
prospectus supplement to the NYSE, market makers, and Trading
Markets (as defined in Section 4(w), as are required by the
rules applicable to, or as requested by, such persons. Any
obligation of the Manager under this Agreement 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 below.
(h) If the Company shall default on
its obligation to deliver Shares on any Settlement Date, the
Company shall (i) hold the Manager harmless against any loss,
claim or damage arising from or as a result of such default by the
Company and (ii) pay the Manager any commission to which it
would otherwise be entitled absent such default.
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
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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
research@brinsonpatrick.com or to 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;
(c) To make available to the
Manager, as soon as practicable after each Registration Statement
becomes effective, and thereafter from time to time to furnish to
the Manager, at the expense of the Company, copies of the
Registration Statement and 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 and during the time a prospectus is required to be
delivered under the Act, as soon as available, 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; when the Trading Market (as
defined in Section 4(w) below) is a national securities
exchange, the Company will also furnish copies of the Prospectus
(or the Prospectus as then amended or supplemented) to such
exchange in accordance with Rule 153 under 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
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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
