EXHIBIT 1.1
DELTA XXXXX, INC.
$150,000,000
9 5/8% SENIOR NOTES DUE 2007
PURCHASE AGREEMENT
August 20, 1997
NationsBanc Capital Markets, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
Delta Xxxxx, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Initial Purchaser") $150,000,000
principal amount of its 9 5/8% Senior Notes due 2007 (the "Notes"). The Notes
will be fully and unconditionally guaranteed (the "Guarantees" and
collectively with the Notes, the "Securities") on a senior basis by each
subsidiary of the Company (the "Guarantors" and collectively with the
Company, the "Issuers"). The Notes are to be issued under an indenture
(the "Indenture") dated as of August 25, 1997 among the Issuer and The Bank
of New York, as trustee (the "Trustee").
The sale of the Securities to the Initial Purchaser will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the
Issuers that you will offer and sell the Securities purchased by you
hereunder in accordance with Section 3 hereof as soon as you deem
advisable.
In connection with the sale of the Securities, the Issuers have
prepared a preliminary offering memorandum, dated August 1, 1997 (the
"Preliminary Memorandum") and a final offering memorandum, dated August 20,
1997 (the "Final Memorandum"). Each of the Preliminary Memorandum and the
Final Memorandum sets forth certain information concerning the Issuers and
the Securities. The Issuers hereby confirm that they have authorized the
use of the Preliminary Memorandum and the Final Memorandum, and any
amendment or supplement thereto, in connection with the offer and sale of
the Securities by the Initial Purchaser. Unless stated to the contrary,
all references herein to the Final Memorandum are to the Final Memorandum
at the time of execution and delivery of this Agreement (the "Execution
Time") and are not meant to include any amendment or supplement, or any
information incorporated by reference therein, subsequent to the Execution
Time.
The Initial Purchaser and its direct and indirect
transferees will be entitled to the benefits of the Registration
Rights Agreement, substantially in the form attached hereto as
Exhibit A (the "Registration Rights Agreement"), pursuant to
which the Issuers will agree to use their best efforts to
commence an offer to exchange the Securities for Exchange
Securities (the "Exchange Securities") that have been registered
under the Securities Act, and that otherwise are identical in all
respects to the Securities, or to cause a shelf registration
statement to become effective under the Securities Act and to
remain effective for the period designated in such Registration
Rights Agreement.
1. Representations and Warranties. The Issuers jointly
and severally represent and warrant to the Initial Purchaser as
set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof,
did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. The Final Memorandum,
at the date hereof, does not, and at the Closing Date (as
defined below) will not (and any amendment or supplement
thereto, at the date thereof and at the Closing Date, will
not), contain any untrue statement of a material fact or
omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however that
the Issuers make no representation or warranty as to the
information contained in or omitted from the Preliminary
Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Issuers by or on
behalf of the Initial Purchaser specifically for inclusion
therein.
(b) Neither the Issuers, nor any of their "Affiliates"
(as defined in Rule 501(b) of Regulation D under the
Securities Act ("Regulation D")), nor any person acting on
their behalf has, directly or indirectly, made offers or
sales of any security, or solicited offers to buy any
security, under circumstances that would require the
registration of the Securities under the Securities Act.
Neither the Issuers, nor any of their Affiliates, nor any
person acting on their behalf has engaged in any form of
general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or
sale of the Securities (provided, that the Issuers make no
representations regarding the Initial Purchaser). The
Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act. The Final Memorandum
and each amendment or supplement thereto, as of its date,
contains the information specified in Rule 144A(d)(4) under
the Act. The Issuers have been advised by the National
Association of Securities Dealers, Inc. Private Offerings,
Resales and Trading through the Automated Linkages Market
("PORTAL") that the Securities have been designated PORTAL
eligible securities in accordance with the rules and
regulations of the National Association of Securities
Dealers, Inc.
(c) Neither the Company nor any of its subsidiaries is
an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company
Act"), without taking account of any exemption arising out
of the number of holders of any Issuer's securities.
(d) Assuming (i) that the representations and
warranties and covenants of the Initial Purchaser contained
in Section 3 hereof are true, correct and complete and (ii)
that the Initial Purchaser complies with its covenants in
Section 3 hereof, (A) registration under the Securities Act
of the Securities or qualification of the Indenture under
the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), is not required in connection with the
offer and sale of the Securities to the Initial Purchaser in
the manner contemplated by the Final Memorandum or this
Agreement and (B) initial resales of the Securities by the
Initial Purchaser on the terms and in the manner set forth
in the Final Memorandum and Section 4 hereof are exempt from
the registration requirements of the Securities Act.
(e) Since the respective dates as of which information
is given in the Preliminary Memorandum and the Final
Memorandum, except as otherwise stated therein, (i) there
has been no material adverse change in the condition
(financial or otherwise), earnings, affairs or business
prospects of the Company and its subsidiaries considered as
a whole, whether or not arising in the ordinary course of
business and (ii) there have been no material transactions
entered into by the Company or any of its subsidiaries
(collectively, a "Material Adverse Change").
(f) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of
the State of Delaware with corporate power and authority to
own, lease and operate its properties and conduct its
business as described in the Preliminary Memorandum and the
Final Memorandum; and the Company is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which the conduct of its
business requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not, singly or in the aggregate, reasonably be
expected to have a material adverse effect on the condition
(financial or otherwise), earnings, affairs or business
prospects of the Company and its subsidiaries considered as
a whole (a "Material Adverse Effect").
(g) All of the issued and outstanding capital stock of
the Company is owned by Alchem Capital Corporation, a
Delaware corporation, and, at June 28, 1997, was as set
forth in the "Actual" column under the caption
"Capitalization" in the Preliminary Memorandum and the Final
Memorandum. All of the shares of capital stock of the
Company have been duly authorized and validly issued and are
fully paid and nonassessable. Attached as Schedule A hereto
is a complete and accurate list of each subsidiary of the
Company. Each of the subsidiaries of the Company has been
duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own,
lease and operate its properties and conduct its business as
described in the Preliminary Memorandum and the Final
Memorandum and is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which the conduct of its business requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not, singly or
in the aggregate, reasonably be expected to have a Material
Adverse Effect. All of the issued and outstanding capital
stock of each subsidiary has been duly authorized and
validly issued and is fully paid and nonassessable, and,
except as described in the Preliminary Memorandum and the
Final Memorandum, all such capital stock of each subsidiary
is owned by the Company, directly or through subsidiaries,
free and clear of any mortgage, pledge, lien, encumbrance,
claim or equity.
(h) This Agreement has been duly authorized, executed
and delivered by the Issuers and constitutes the valid and
binding agreement of the Issuers, enforceable against the
Issuers in accordance with its terms, except that (i)
enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law) and (ii) the enforceability of any indemnification or
contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying
such laws.
(i) The Notes have been duly authorized by the
Company, and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and
paid for by the Initial Purchaser in accordance with this
Agreement, will constitute the valid and binding obligations
of the Company enforceable against the Company in accordance
with the terms, and will be entitled to the benefits, of the
Indenture, except that enforcement thereof may be subject to
(A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors'
rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
(j) The Guarantees endorsed on the Notes have been
duly authorized by each Guarantor and when the Notes are
executed and authenticated in accordance with the provisions
of the Indenture and delivered to and the Securities have
been paid for by the Initial Purchaser in accordance with
this Agreement, the Guarantees will constitute the valid and
binding obligation of the Guarantors enforceable against the
Guarantors in accordance with their terms and will be
entitled to the benefits of the Indenture except that
enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
(k) The Indenture has been duly authorized, executed
and delivered by the Issuers and (assuming the due execution
and delivery thereof by the Trustee) is a legally valid and
binding agreement of the Issuers, enforceable against the
Issuers in accordance with its terms, except that
enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
(l) The Exchange Securities have been duly authorized,
and, when duly executed, authenticated, issued and
delivered, will be validly issued and outstanding, and will
constitute the valid and binding obligations of the Issuers,
entitled to the benefits of the Indenture and enforceable
against the Issuers in accordance with their terms except
that enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
(m) The Registration Rights Agreement has been duly
authorized by the Issuers, and when duly executed and
delivered by the Issuers (assuming the due execution and
delivery by the Initial Purchaser), will constitute a valid
and binding agreement of the Issuers, enforceable against
the Issuers in accordance with its terms except that (i)
enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law) and (ii) the enforceability of any indemnification or
contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying
such laws.
(n) On the Closing Date, the New Credit Agreement (as
defined in the Final Memorandum) and the guarantee of the
obligations thereunder by the Guarantor (a) shall have been
duly authorized, executed and delivered by the Company and
the Guarantor, respectively, and will constitute the valid
and binding agreement of the Company and the Guarantor,
respectively, enforceable against the Company and the
Guarantors, as applicable, in accordance with their terms
except that (i) enforcement thereof may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors'
rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a
proceeding in equity or at law) and (ii) the enforceability
of any indemnification or contribution provisions thereof
may be limited under applicable securities laws or public
policies; and (b) shall be in full force and effect. On the
Closing Date, no event of default or event which, with the
giving of notice or passage of time or both, would
constitute an event of default shall have occurred under the
New Credit Agreement or guarantee thereof by the Guarantor
and all conditions to the extension of credit thereunder
still have been satisfied without waiver.
(o) On the Closing Date, the Parent Credit Agreement
(as defined in the Final Memorandum) and the guarantee of
the obligations thereunder by certain subsidiaries of Delta
Woodside Industries, Inc. other than the Issuers (a) shall
have been duly authorized, executed and delivered by Delta
Woodside Industries, Inc. and such subsidiaries,
respectively, and will constitute the valid and binding
agreements of Delta Woodside Industries, Inc. and such
subsidiaries, respectively, enforceable against Delta
Woodside Industries, Inc. and each such subsidiary in
accordance with their terms except that (i) enforcement
thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law) and (ii)
the enforceability of any indemnification or contribution
provisions thereof may be limited under applicable
securities laws or public policies; and (b) shall be in full
force and effect. On the Closing Date, no event of default
or event which, with the giving of notice or passage of time
or both, would constitute an event of default shall have
occurred under the Parent Credit Agreement or guarantee
thereof and all conditions to the extension of credit
thereunder still have been satisfied without waiver.
(p) The execution, delivery and performance of this
Agreement, the Indenture, the Registration Rights Agreement,
and the New Credit Agreement by the Issuers (to the extent
each is a party thereto), and the consummation of the
transactions contemplated hereby and thereby and the
issuance and sale of the Securities and Exchange Securities
by the Issuers will not conflict with or result in a breach
or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or
instrument to which either the Company or any of its
subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the properties
or assets of the Company or any of its subsidiaries are
subject, nor will such actions result in any violation of
the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any statute to which it may be
subject or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their
properties or assets (except to the extent any such
conflict, breach, violation or default singly or in the
aggregate, would not reasonably expected to have a Material
Adverse Effect); and except for such consents, approvals,
authorizations, registrations or qualifications as may be
required under applicable state securities and Blue Sky laws
in connection with the purchase and distribution of the
Securities by the Initial Purchaser or as set forth in the
Registration Rights Agreement, no consent, approval,
authorization or order of, or filing or registration with,
any such court or governmental agency or body is required
for the execution, delivery and performance of this
Agreement, the Indenture, the Registration Rights Agreement
and, the New Credit Agreement by the Issuers, the
consummation of the transactions contemplated hereby and
thereby, and the issuance and sale of the Notes and Exchange
Securities by the Issuers.
(q) Neither the Company nor any of its subsidiaries is
in breach or violation of any of the terms or provisions of
any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its
subsidiaries are subject, nor is the Company or any of its
subsidiaries in violation of the provisions of its
respective charter or by-laws or any statute or any
judgment, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
Company, any of its subsidiaries or any of their properties
or assets (except to the extent any such conflict, breach,
violation or default is cured at or prior to the Closing
Date and within the grace period applicable thereto or would
not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect).
(r) The descriptions of the Securities, the Indenture
and the Registration Rights Agreement contained in the Final
Memorandum are accurate summaries in all material respects.
(s) Except as set forth in the Registration Rights
Agreement, there are no contracts, agreements or
understandings between the Company or any of its
subsidiaries and any person granting such person the right
to require the Company or any of its subsidiaries to file a
registration statement under the Securities Act with respect
to any securities owned or to be owned by such person or to
require the Company or any of its subsidiaries to include
such securities in any securities being registered pursuant
to any registration statement filed by the Company or any of
its subsidiaries under the Securities Act.
(t) Except as set forth in the Preliminary Memorandum
and the Final Memorandum, there is no action, suit or
proceeding before or by any court or governmental agency or
body, domestic or foreign, now pending or, to the knowledge
of the Issuers, threatened against or affecting the Company
or any of its subsidiaries, which would reasonably be
expected to result in a Material Adverse Change or singly or
in the aggregate, reasonably be expected to have a Material
Adverse Effect or materially and adversely affect the
offering of the Securities.
(u) Except as set forth in the Final Memorandum, the
Company and each of its subsidiaries has good and
indefeasible title in fee simple to all real property and
good and indefeasible title to all personal property owned
by it and necessary in the conduct of the business of the
Company or such subsidiary in each case free and clear of
all liens, encumbrances and defects except (i) such as are
referred to in the Final Memorandum or (ii) such as do not
materially and adversely affect the value of such property
to the Company or such subsidiary, and do not interfere with
the use made and proposed to be made of such property by the
Company or such subsidiary to an extent that such
interference would, singly or aggregate, reasonably be
expected to have a Material Adverse Effect. The Company and
its subsidiaries possess adequate certificates,
authorizations or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary
to conduct the business now operated by them, and except as
set forth in the Final Memorandum, neither the Company nor
any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of
any such certificate, authority or permit which, singly or
in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(v) KPMG Peat Marwick LLP, who have certified certain
financial statements of the Company and its subsidiaries,
are independent public accountants within the meaning of the
Securities Act and the rules and regulations thereunder.
The combined financial statements included in the
Preliminary Memorandum and the Final Memorandum present
fairly in all material respects the combined financial
position of the Issuers, on a combined basis, as at the
dates indicated and the results of their operations and the
changes in their combined financial position for the periods
specified; said financial statements have been prepared in
conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved,
except as indicated therein. The Company and each of its
subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with
management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management's general or specific
authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to
any differences.
(w) Neither the Company nor any of its subsidiaries is
now or, after giving effect to the issuance of the
Securities, and the application of the proceeds thereof,
will be (i) insolvent, (ii) left with unreasonably small
capital with which to engage in its anticipated businesses
or (iii) incurring debts beyond its ability to pay such
debts as they become due.
(x) Except as would not reasonably be expected to have
a Material Adverse Effect, the Company and its subsidiaries
own or otherwise possess the right to use all patents,
trademarks, service marks, trade names and copyrights, all
applications and registrations for each of the foregoing,
and all other proprietary rights and confidential
information used in the conduct of their respective
businesses as currently conducted; and neither the Company
nor any of its subsidiaries has received any notice or is
otherwise aware, of any infringement of or conflict with the
rights of any third party with respect to any of the
foregoing which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would
reasonably be expected to have a Material Adverse Effect.
(y) The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the
protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental
Laws on the business, operations and properties of the
Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities
and any potential liabilities to third parties). On the
basis of such review, the Company has reasonably concluded
that such associated costs and liabilities would not, singly
or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(z) No labor problem or disturbance with the employees
of the Company or any of its subsidiaries exists or, to the
knowledge of the Issuers, is threatened which, singly or in
the aggregate, would reasonably be expected to have a
Material Adverse Effect.
(aa) Neither the Company nor any of its subsidiaries,
nor, to any Issuers' knowledge, any director, officer,
agent, employee, stockholder or other person, in any such
case, acting on behalf of the Company or any of its
subsidiaries, has used any corporate funds during the last
five years for any unlawful contribution, gift,
entertainment or other unlawful expense relating to
political activity; made any unlawful payment to any foreign
or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made
any bribe, payoff, influence payment, kickback or other
payment that is unlawful.
(ab) Neither the Company nor any of its subsidiaries
has taken, and none of them will take, any action that would
cause this Agreement or the issuance or sale of the
Securities and Exchange Securities to violate Regulation G,
T, U or X of the Board of Governors of the Federal Reserve
System or analogous foreign laws and regulations.
(ac) The Issuers have complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of
Florida) relating to doing business with the Government of
Cuba or with persons or affiliates located in Cuba.
(ad) The Issuers do not own or otherwise possess the
right to use any patents, trademarks, service marks, trade
names and copyrights, the loss of which would result in a
Material Adverse Effect. Neither of the Issuers has
received any notice of any infringement of or conflict with
the rights of any third party with respect to any patents,
trademarks, service marks, trade names and copyrights which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material
Adverse Effect.
2. Purchase and Sale. On the basis of the
representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Issuers agree to
sell to the Initial Purchaser and the Initial Purchaser agrees to
purchase the Securities at a purchase price equal to 97.125% of
the principal amount thereof.
The Issuers shall not be obligated to deliver any of
the Securities to be delivered except upon payment for all the
Securities to be purchased as provided herein.
3. Sale and Resale of the Securities by the Initial
Purchaser. The Initial Purchaser represents and warrants to the
Issuers that it will offer the Securities to be purchased
hereunder for resale only upon the terms and conditions set forth
in this Agreement and in the Final Memorandum. The Initial
Purchaser hereby represents and warrants to, and agrees with, the
Issuers that the Initial Purchaser (i) will not solicit offers
for, or offer or sell, the Notes by means of any form of general
solicitation or general advertising within the meaning of
Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act, and (ii) will
solicit offers for the Notes only from, and will offer, sell or
deliver the Notes, as part of its initial offering, only to the
following persons (each an "Eligible Purchaser") (A) persons in
the United States whom the Initial Purchaser reasonably believes
to be qualified institutional buyers ("QIBs") as defined in Rule
144A under the Securities Act, as such rule may be amended from
time to time ("Rule 144A") or, if any such person is buying for
one or more institutional accounts for which such person is
acting as fiduciary or agent, only when such person has
represented to the Initial Purchaser that each such account is a
QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and (B) to a limited number
of institutional accredited investors as defined in Rule 501(a)
(1), (2), (3) or (7) under Regulation D ("Accredited Investors")
that, prior to their purchase of the Securities, executes and
delivers a letter containing certain representations and
agreements in the form attached as Annex A to the Final
Memorandum, and in each case, in transactions under Rule 144A or
Regulation D in private sales exempt from registration under the
Securities Act.
4. Delivery of and Payment for the Notes. Delivery
of and payment for the Securities shall be made at the office of
Xxxxx & Xxx Xxxxx, PLLC, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx at 9:00 A.M., New York City time, on August 25, 1997, or
at such other date or place as shall be determined by agreement
between the Initial Purchaser and the Company. This date and
time are sometimes referred to as the "Closing Date." On the
Closing Date, the Issuers shall deliver or cause to be delivered
the Securities to the Initial Purchaser for the account of the
Initial Purchaser against payment to or upon the order of the
Company of the purchase price by wire transfer in federal (same-
day) funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further
condition of the obligation of the Initial Purchaser hereunder.
Upon delivery, the Securities shall be in definitive fully
registered form and registered in the name of Cede & Co., as
nominee of the Depositary Trust Company ("DTC"), or such other
name or names and in such denominations as the Initial Purchaser
shall request in writing not less than one business day prior to
the Closing Date. For the purpose of expediting the checking and
packaging of the Securities, the Issuers shall make the
Securities available for inspection by the Initial Purchaser in
New York, New York, not later than 2:00 P.M., New York City time,
on the business day prior to the Closing Date.
5. Further Agreements of the Issuers. The Issuers
jointly and severally agree with the Initial Purchaser as set
forth below in this Section 5:
(a) The Issuers will furnish to the Initial
Purchaser, without charge, as many copies of the Final
Memorandum and any supplements and amendments thereto as it
may reasonably request.
(b) Prior to making any amendment or supplement
to the Preliminary Memorandum or the Final Memorandum, the
Issuers shall furnish a copy thereof to the Initial
Purchaser and counsel to the Initial Purchaser and will not
effect any such amendment or supplement to which the Initial
Purchaser shall reasonably object by notice to the Company
after a reasonable period to review.
(c) If, at any time prior to completion of the
distribution of the Securities by the Initial Purchaser, any
event shall occur or condition exist as a result of which it
is necessary, in the opinion of counsel for the Initial
Purchaser or counsel for the Issuers, to amend or supplement
the Final Memorandum in order that the Final Memorandum will
not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the
statements therein not misleading in light of the
circumstances existing at the time it is delivered to a
purchaser, or if it is necessary to amend or supplement the
Final Memorandum to comply with applicable law, the Issuers
will promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so
that the Final Memorandum, as so amended or supplemented,
will comply with applicable law and furnish to the Initial
Purchaser such number of copies of such amendment or
supplement as it may reasonably request.
(d) So long as any Securities are outstanding and
are "Restricted Securities" within the meaning of Rule
144(a)(3) under the Securities Act and during any period in
which the Issuers are not subject to Section 13 or 15(d) of
the Exchange Act of 1934, as amended (the "Exchange Act"),
the Issuers will furnish to holders of the Securities and
prospective purchasers of Securities designated by such
holders, upon request of such holders or such prospective
purchasers, the information, if any, required to be
delivered pursuant to Rule 144A(d)(4) under the Securities
Act.
(e) So long as the Securities and Exchange
Securities are outstanding, the Issuers will furnish to the
Initial Purchaser copies of any annual reports, quarterly
reports and current reports filed with the Securities and
Exchange Commission ("SEC") on Forms 10-K, 10-Q and 8-K, or
such other similar forms as may be designated by the SEC,
and such other documents, reports and information as shall
be furnished by the Issuers to the Trustee or to the holders
of the Securities and Exchange Securities pursuant to the
Indenture.
(f) The Issuers will use their best efforts to
qualify the Securities for sale under the securities or Blue
Sky laws of such jurisdictions as the Initial Purchaser
reasonably designates and to continue such qualifications in
effect so long as reasonably required for the distribution
of the Securities. The Issuers will also arrange for the
determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the
Initial Purchaser reasonably requests. Notwithstanding the
foregoing, neither of the Issuers shall be obligated to
qualify as a foreign corporation in any jurisdiction in
which it is not so qualified or to file a general consent to
service of process or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is
not otherwise subject.
(g) The Issuers will use their best efforts to
permit the Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the
National Association of Securities Dealers, Inc. relating to
trading in the PORTAL market and to permit the Securities to
be eligible for clearance and settlement through DTC.
(h) The Issuers will not, and will cause their
Affiliates not to, sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) in a transaction that could
be integrated with the sale of the Securities in a manner
which would require the registration under the Securities
Act of the Securities.
(i) Except following the effectiveness of any
Registration Statement (as defined in the Registration
Rights Agreement) and except for such offers as may be made
as a result of, or subsequent to, filing such Registration
Statement or amendments thereto prior to the effectiveness
thereof, the Issuers will not, and will cause their
affiliates not to, solicit any offer to buy or offer to sell
the Securities by means of any form of general solicitation
or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section
4(2) of the Securities Act.
(j) The Company will apply the net proceeds from
the sale of the Securities as set forth in the Final
Memorandum.
(k) The Issuers will take such steps as shall be
necessary to ensure that neither the Company nor any of its
subsidiaries shall become an "investment company" within the
meaning of the Investment Company Act, or (ii) a "holding
company" or a "subsidiary company" or an "affiliate" of a
holding company within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(l) The Issuers will not, and will cause their
Affiliates not to, take any actions which would require the
registration under the Securities Act of the Securities
(other than pursuant to the Registration Rights Agreement).
(m) Prior to the consummation of the Exchange
Offer or the effectiveness of an applicable shelf
registration statement if, in the reasonable judgment of the
Initial Purchaser, the Initial Purchaser or any of its
Affiliates are required to deliver an offering memorandum in
connection with sales of, or market-making activities with
respect to, the Securities, (A) the Issuers will
periodically amend or supplement the Final Memorandum so
that the information contained in the Final Memorandum
complies with the requirements of Rule 144A of the
Securities Act, (B) the Issuers will amend or supplement the
Final Memorandum when necessary to reflect any material
changes in the information provided therein so that the
Final Memorandum will not contain any untrue statement of a
material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the
circumstances existing as of the date the Final Memorandum
is so delivered, not misleading and (C) the Issuers will
provide the Initial Purchaser with copies of each such
amended or supplemented Final Memorandum, as the Initial
Purchaser may reasonably request.
The Issuers hereby expressly acknowledge that the
indemnification and contribution provisions of Section 8
hereof are specifically applicable and relate to each
offering memorandum, registration statement, prospectus,
amendment or supplement referred to in this Section 5(m).
(n) The Issuers will do all things reasonably
necessary to satisfy the closing conditions set forth in
Section 7 hereof.
6. Expenses. The Issuers jointly and severally,
agree to pay (a) the costs incident to the authorization,
issuance, sale and delivery of the Securities and Exchange
Securities and any issue or stamp taxes payable in that
connection; (b) the costs incident to the preparation and
printing of the Preliminary Memorandum, the Final Memorandum and
any amendments, supplements and exhibits thereto; (c) the costs
of distributing the Preliminary Memorandum, the Final Memorandum
and any amendment or supplement thereto; (d) the fees and
expenses of qualifying the Securities and Exchange Securities
under the securities laws of the several jurisdictions as
provided in Section 5(f) and of preparing, printing and
distributing a Blue Sky Memorandum (including reasonable related
fees and expenses of counsel to the Initial Purchaser); (e) the
cost of printing the Securities and the Exchange Securities; (f)
the fees and expenses of the Trustee and any agent of the Trustee
and the fees and disbursements of any counsel for the Trustee in
connection with the Indenture and the Securities and Exchange
Securities; (g) any fees paid to rating agencies in connection
with the rating of the Securities and Exchange Securities; (h)
the costs and expenses of DTC and its nominee, including its book-
entry system; (i) all expenses and listing fees incurred in
connection with the application for quotation of the Securities
on the PORTAL market; and (j) all other costs and expenses
incident to the performance of the obligations of the Issuers
under this Agreement.
7. Conditions of Initial Purchaser's Obligations.
The obligations of the Initial Purchaser to purchase the
Securities shall be subject to the accuracy of the
representations and warranties on the part of the Issuers
contained herein at the Execution Time and the Closing Date, to
the accuracy of the statements of the Issuers made in any
certificates pursuant to the provisions hereof, to the
performance by the Issuers of their obligations hereunder in all
material respects and to the following additional conditions:
(a) The Initial Purchaser shall not have
discovered and disclosed to the Company on or prior to the
Closing Date that the Final Memorandum or any amendment or
supplement thereto contains an untrue statement of a fact
which, in the opinion of Xxxxxx & Xxxxxxx, counsel for the
Initial Purchaser, is material or omits to state a fact
which, in the opinion of such counsel, is material and is
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The Final Memorandum shall have been printed
and copies distributed to the Initial Purchaser as soon as
practicable but in no event later than on the Business Day
following the date of this Agreement or at such later date
and time as to which the Initial Purchaser may agree, and no
stop order suspending the qualification or exemption from
qualification of the Securities in any jurisdiction referred
to in Section 5(f) shall have been issued and no proceeding
for that purpose shall have been commenced or shall be
pending or threatened.
(c) No action shall have been taken and no
statute, rule, regulation or order shall have been enacted,
adopted or issued by any governmental agency which would, as
of the Closing Date, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect; no action,
suit or proceeding shall have been commenced and be pending
against or affecting or, to the knowledge of the Company,
threatened against, the Company or any of its subsidiaries
before any court or arbitrator or any governmental body,
agency or official that, singly or in the aggregate, if
adversely determined, would reasonably be expected to result
in a Material Adverse Effect; and no stop order shall have
been issued by the SEC or any governmental agency of any
jurisdiction referred to in Section 5(f) preventing the use
of the Final Memorandum, or any amendment or supplement
thereto, or which would reasonably be expected to have a
Material Adverse Effect.
(d) Since the dates as of which information is
given in the Final Memorandum and other than as set forth in
the Final Memorandum, (i) there shall not have been any
Material Adverse Change, or any development that is
reasonably likely to result in a Material Adverse Change, or
any material change in the long-term debt, or material
increase in the short-term debt, from that set forth in the
Final Memorandum; (ii) no dividend or distribution of any
kind shall have been declared, paid or made by the Company
on any class of its capital stock; (iii) the Company and its
subsidiaries shall not have incurred any liabilities or
obligations, direct or contingent, that are material,
individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole, and that are required to be
disclosed on a balance sheet or notes thereto in accordance
with generally accepted accounting principles and are not
disclosed on the latest balance sheet or notes thereto
included in the Final Memorandum.
(e) The Initial Purchaser shall have received a
certificate, dated the Closing Date, signed on behalf of the
Company by (i) E. Xxxxx Xxxxxx, XX, Chief Executive Officer
and (ii) Xxxxxx X. Xxxxxxxxx, Chief Financial Officer,
confirming that (A) such officers have participated in
conferences with other officers and representatives of the
Issuers, representatives of the independent public
accountants of the Issuers and representatives of counsel to
the Issuers at which the contents of the Final Memorandum
and related matters were discussed and (B) the matters set
forth in paragraphs (b), (c) and (d) of this Section 7 are
true and correct as of the Closing Date.
(f) All corporate proceedings and other legal
matters incident to the authorization, form and validity of
this Agreement, the Securities, the Exchange Securities, the
Indenture, the Registration Rights Agreement, the Final
Memorandum, the New Credit Agreement, the Parent Credit
Agreement and all other legal matters relating to this
Agreement and the transactions contemplated hereby and
thereby, shall be reasonably satisfactory in all material
respects to counsel for the Initial Purchaser, and the
Issuers shall have furnished to such counsel all documents
and information that they may reasonably request to enable
them to pass upon such matters.
(g) Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A., a
Professional Association, counsel for the Issuers, shall
have furnished to the Initial Purchaser its written opinion
(containing customary limitations and approvals that shall
be reasonably satisfactory in all material respects to the
Initial Purchaser's counsel), addressed to the Initial
Purchaser and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchaser, to the
effect that:
(i) Each of the Issuers is validly existing
as a corporation and is in good standing under the laws
of its jurisdiction of incorporation. The Company is
duly qualified to do business as a foreign corporation
in the states of North Carolina and South Carolina.
The Guarantor is duly qualified to do business as a
foreign corporation in the state of New York.
(ii) Assuming, (i) the accuracy of and
compliance with the representations, warranties and
covenants of the Issuers set forth in Section 1 of this
Agreement, and (ii) the accuracy of and compliance with
the Initial Purchaser's representations, warranties and
covenants set forth in this Agreement, the offer,
issuance, sale and delivery of the Securities to the
Initial Purchaser, and the initial reoffer, resale and
delivery of the Securities by the Initial Purchaser, as
contemplated by this Agreement and the Final
Memorandum, do not require registration under the
Securities Act, or qualification of the Indenture under
the Trust Indenture Act, it being understood that no
opinion is expressed as to any subsequent resale of
Securities or any resale of Securities by any person
other than the Initial Purchaser.
(iii) Each of the Issuers has the
corporate power and authority to execute and deliver,
and to consummate the transactions contemplated by,
this Agreement; the Company has the corporate power and
authority to issue and deliver the Notes as
contemplated by this Agreement; and the Guarantor has
the corporate power and authority to issue and deliver
the Guarantee as contemplated by this Agreement;
(iv) The execution and delivery of this
Agreement have been duly authorized by all requisite
corporate action of each Issuer, and this Agreement has
been duly executed and delivered by each Issuer;
(v) The execution and delivery of the
Indenture have been duly authorized by all requisite
corporate action of each Issuer; and the Indenture has
been duly executed and delivered by each Issuer, and
assuming due authorization, execution and delivery by
the Trustee, is a valid and binding agreement of each
Issuer, enforceable against each Issuer in accordance
with its terms, except that enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other
similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general
principles of equity (regardless of whether
enforceability is considered in a proceeding in equity
or at law) and the exercise of discretionary authority
of any court before which a proceeding may be brought;
(vi) The execution and delivery of the
Securities have been duly authorized by all requisite
corporate action of each of the Issuers; the Notes have
been duly executed and delivered by the Company and the
Guarantee has been duly executed and delivered by the
Guarantor and, assuming due authentication by the
Trustee, the Notes and the Guarantee are valid and
binding obligations of the Company and the Guarantor,
respectively, entitled to the benefits of the
Indenture, enforceable against the Company and the
Guarantor in accordance with their terms, except that
enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights
generally and (B) general principles of equity
(regardless of whether enforceability is considered in
a proceeding in equity or at law) and the exercise of
discretionary authority of any court before which a
proceeding may be brought;
(vii) The execution and delivery of the
Exchange Securities have been duly authorized by all
requisite corporate action of each of the Issuers; and,
when duly executed and delivered by the Company and the
Guarantors and duly authenticated by the Trustee, will
be valid and binding obligations of the Company and the
Guarantors, entitled to the benefits of the Indenture,
enforceable against the Company and the Guarantors in
accordance with their terms, except that enforcement
thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity
or at law) and the exercise of discretionary authority
of any court before which a proceeding may be brought;
(viii) The execution and delivery of the
Registration Rights Agreement have been duly authorized
by all requisite corporate action of each of the
Issuers; the Registration Rights Agreement has been
duly executed and delivered by the Issuers and,
assuming due authorization, execution and delivery by
the Initial Purchaser, the Registration Rights
Agreement is a valid and binding agreement of each of
the Issuers, enforceable against each of the Issuers in
accordance with its terms, except that (i) enforcement
thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity
or at law) and the exercise of discretionary authority
of any court before which a proceeding may be brought
and (ii) the validity and enforceability of any
indemnification or contribution provisions thereof may
be limited under applicable securities laws or public
policies;
(ix) All of the capital stock of the
Guarantor is owned of record by the Company. All
shares of capital stock of the Guarantor have been duly
authorized and validly issued, are fully paid and
nonassessable and except as disclosed in the Final
Memorandum, to the knowledge of such counsel, all such
shares are owned by the Company free and clear of any
security interests, liens, pledges or encumbrances.
(x) The execution and delivery by the
Issuers of this Agreement, the Indenture, the
Registration Rights Agreement and the New Credit
Agreement (or, in the case of the Guarantor, the
guarantee related thereto), the consummation by the
Issuers of the Offering, the Exchange Offer or the
Refinancing (each as defined in the Final Memorandum)
and the issuance and sale of the Securities and
Exchange Securities by the Issuers will not (A) to the
knowledge of such counsel, result in a breach or
violation of any of the terms or provisions of, or
constitute a default under, any material agreement or
instrument of the Company or any of its subsidiaries
that has been identified as such in a certificate to
such counsel by the Issuers or (B) result in any
violation of the provisions of the charter or bylaws of
the Company or any of its subsidiaries, or, to the
knowledge of such counsel, any applicable law, rule or
regulation (other than Securities Laws (as defined
below) as to which an opinion is given in paragraph
(ii) above) with respect to the Company or any of its
subsidiaries or, to the knowledge of such counsel, any
rule or regulation (other than Securities Laws (as
defined below) as to which an opinion is given in
paragraph (ii) above) or order of any court or
governmental agency having jurisdiction over the
Company or any of its subsidiaries, except for such
violations that would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse
Effect; and, to the knowledge of such counsel, except
for such consents, approvals or authorizations of, or
filings, registrations or qualifications with,
governmental authorities as may be required under the
Securities Act and the rules and regulations
thereunder, the Trust Indenture Act and the rules and
regulations thereunder or applicable states securities
or Blue Sky laws, rules or regulations (all of such
laws, rules and regulations are collectively referred
to herein as "Securities Laws") in connection with the
purchase and distribution of the Notes by the Initial
Purchaser and as set forth in, and in order to
consummate the transactions contemplated by, the
Registration Rights Agreement, no consent, approval,
authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required in connection with the execution and delivery
by the Issuers of this Agreement, the Indenture, the
Registration Rights Agreement or the New Credit
Agreement and the consummation by the Issuers of the
Refinancing (as defined in the Final Memorandum) and
the issuance and sale of the Securities and Exchange
Securities by the Issuers;
(xi) The descriptions in the Final
Memorandum of the Indenture, the Securities, the
Registration Rights Agreement and the New Credit
Agreement are accurate summaries of such documents in
all material respects;
(xii) To the knowledge of such counsel,
the statements made in the Final Memorandum under the
headings "Business _ Legal Proceedings" and "Business _
Environmental and Regulatory Matters" (such statements
may be specifically identified on a schedule to such
counsel's opinion, subject to reasonable approval by
the Initial Purchaser's counsel), to the extent they
constitute matters of law or legal conclusions, have
been reviewed by such counsel and fairly present in all
material respects the information disclosed therein.
(xiii) To such counsel's knowledge, no
legal or governmental proceedings are pending to which
any Issuer is a party that would be required under the
Securities Act to be described in a registration
statement or a prospectus delivered at the time of the
confirmation of the sale of an offering of securities
registered under the Securities Act and are not
described in the Final Memorandum, or, to such
counsel's knowledge, that seek to restrain, enjoin,
prevent the consummation of or otherwise challenge the
issuance or sale of the Securities to the Initial
Purchaser or the consummation of the transactions
described in the Final Memorandum under the caption
"Use of Proceeds;"
(xiv) To such counsel's knowledge,
neither of the Issuers nor any of their subsidiaries is
(i) subject to registration and regulation as an
"investment company" within the meaning of the
Investment Company Act, or (ii) a "holding company" or
a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility
Holding Company Act of 1935, as amended;
(xv) When the Securities are issued and
delivered pursuant to this Agreement, such Securities
will not be of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as securities
of any of the Issuers that are listed on a national
securities exchange registered under Section 6 of the
Exchange Act or quoted on an automated inter-dealer
quotation system; and
(xvi) Assuming the Initial Purchaser
purchases the Securities in accordance with Rule 144A
under the Securities Act, neither the issuance or sale
of the Securities nor the application by the Company of
the net proceeds thereof as set forth in the Final
Memorandum will violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
In addition, such counsel shall also state that such
counsel has participated in conferences with officers and
representatives of the Issuers, representatives of the
independent public accountants for the Issuers and the
Initial Purchaser and its counsel at which the contents of
the Final Memorandum and related matters were discussed and,
although such counsel is not passing upon and does not
assume any responsibility for and has not verified the
accuracy, completeness or fairness of the statements
contained in the Final Memorandum, and has not made any
independent check or verification thereof, on the basis of
the foregoing (relying as to materiality to a large extent
upon facts provided by officers and other representatives of
the Issuers), no facts have come to the attention of such
counsel that lead such counsel to believe that the Final
Memorandum, as of its date or the Closing Date, contained an
untrue statement of a material fact or omitted to state any
material fact necessary to make the statements therein, in
light of the circumstances under which there were made, not
misleading (it being understood that such counsel need
express no belief or opinion with respect to the financial
statements and notes thereto and other financial and
statistical data included therein).
(h) You shall have received on the Closing Date
an opinion of Xxxxxx & Xxxxxxx, counsel for the Initial
Purchaser, dated the Closing Date and addressed to you, in
form and substance reasonably satisfactory to you.
(i) The Issuers and the Trustee shall have
entered into the Indenture and the Initial Purchaser shall
have received counterparts, conformed as executed, thereof.
(j) The Issuers and the Initial Purchaser shall
have entered into the Registration Rights Agreement and the
Initial Purchaser shall have received counterparts,
conformed as executed, thereof.
(k) The Issuers shall have entered into the New
Credit Agreement (the form and substance of which shall be
reasonably acceptable to the Initial Purchaser) and the
Initial Purchaser shall have received counterparts,
conformed as executed, thereof and of all other documents
and agreements entered into in connection therewith. There
shall exist at and as of the Closing Date no conditions that
would constitute a default (or an event that with notice or
the lapse of time, or both, would constitute a default)
under the New Credit Agreement. On the Closing Date, the
New Credit Agreement shall be in full force and effect and
shall not have been modified.
(l) At the Execution Time and at the Closing
Date, KPMG Peat Marwick LLP shall have furnished to the
Initial Purchaser a letter or letters, dated respectively as
of the Execution Time and as of the Closing Date, in form
and substance reasonably satisfactory to the Initial
Purchaser, confirming that they are independent accountants
within the meaning of the Securities Act and the Exchange
Act and the applicable rules and regulations thereunder and
Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants (the "AICPA") and
otherwise reasonably satisfactory in form and substance to
the Initial Purchaser and their counsel.
(m) (i) Neither of the Issuers nor any of their
subsidiaries shall have sustained since the date of the
latest financial statements included in the Final Memorandum
losses or interferences with their businesses, taken as a
whole, from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Final
Memorandum or (ii) since such date there shall not have been
any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting
the general affairs, management, financial position,
stockholders' equity or results of operations of the Company
or its subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Final Memorandum, the effect of
which, in any such case described in clause (i) or (ii), is,
in the reasonable judgment of the Initial Purchaser, so
material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of
the Securities being delivered on the Closing Date on the
terms and in the manner contemplated herein and in the Final
Memorandum.
(n) Subsequent to the execution and delivery of
this Agreement there shall not have occurred any of the
following: (i) trading in securities generally on the New
York Stock Exchange or The NASDAQ Stock Market's National
Market or in the over-the-counter market shall have been
suspended or materially limited, or minimum prices shall
have been established on such exchange by the SEC, or by
such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become
engaged in hostilities, there shall have been an escalation
in hostilities involving the United States or there shall
have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a
material adverse change in general economic, political or
financial conditions (or the effect of international
conditions on the financial markets in the United States
shall be such) as to make it, in the reasonable judgment of
the Initial Purchaser, impracticable or inadvisable to
proceed with the offering or delivery of the Securities
being delivered on the Closing Date on the terms and in the
manner contemplated herein and in the Final Memorandum.
(o) Xxxxxx & Xxxxxxx shall have been furnished
with such documents, in addition to those set forth above,
as they may reasonably require for the purpose of enabling
them to review or pass upon the matters referred to in this
Section 7 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any
of the representations, warranties or conditions herein
contained.
(p) Prior to the Closing Date, the Issuers shall
have furnished to the Initial Purchaser such further
information, certificates and documents as the Initial
Purchaser may reasonably request.
All opinions, letters, evidence and certificates
mentioned above or elsewhere in this Agreement shall be deemed to
be in compliance with the provisions hereof only if they are in
form and substance reasonably satisfactory to counsel for the
Initial Purchaser.
8. Indemnification and Contribution. (a) The Issuers
jointly and severally agree to indemnify and hold harmless the
Initial Purchaser, the directors, officers, employees and agents
(including, without limitation, attorneys) of the Initial
Purchaser and each person who controls the Initial Purchaser
within the meaning of either the Securities Act or the Exchange
Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Memorandum, the Final Memorandum or
any information provided by the Issuers to any holder or
prospective purchaser of Notes pursuant to Section 5(e), or in
any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agree to
reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action: provided, however, that the Issuers will not
be liable in any such case to any Initial Purchaser or to the
other indemnified parties listed above to the extent that any
such loss, claim, damage, liability or action arises out of or is
based upon any such untrue statement or alleged untrue statement
or omission or alleged omission made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with
written information furnished to the Issuers by or on behalf of
the Initial Purchaser specifically for inclusion therein.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Issuers, their directors, officers, employees and
agents (including, without limitation, attorneys), and each
person who controls the Issuers within the meaning of either the
Securities Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Issuers to the Initial Purchaser,
but only with reference to written information relating to the
Initial Purchaser furnished to the Issuers by or on behalf of the
Initial Purchaser specifically for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or
supplement thereto). This indemnity agreement will be in
addition to any liability which the Initial Purchaser may
otherwise have. The Issuers and the Initial Purchaser
acknowledge that the statements set forth in the last paragraph
of the cover page and under the heading "Plan of Distribution" in
the Preliminary Memorandum and the Final Memorandum constitute
the only information furnished in writing by or on behalf of the
Initial Purchaser for inclusion in the Preliminary Memorandum or
the Final Memorandum (or any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 8,
notify the indemnifying party in writing of the commencement
thereof, but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii)
will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below);
provided, however that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified
party would, in the opinion of legal counsel to the indemnified
party, present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and
the indemnified party shall have been informed in writing by
legal counsel that there may be legal defenses available to it
and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any
reason, the Issuers and the Initial Purchaser agree to contribute
to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively
"Losses") to which the Issuers and one or more of the Initial
Purchaser may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Issuers and by the
Initial Purchaser from the offering of the Securities; provided,
however, that in no case shall the Initial Purchaser be
responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by the Initial
Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
Issuers and the Initial Purchaser shall contribute in such
proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Issuers and of the
Initial Purchaser in connection with the statements or omissions
which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Issuers shall
be deemed to be equal to the total net proceeds from the offering
(before deducting expenses), and benefits received by the Initial
Purchaser shall be deemed to be equal to the total purchase
discounts and commissions received by the Initial Purchaser from
the Issuers in connection with the purchase of the Securities
hereunder. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to
information provided by the Issuers or the Initial Purchaser.
The Issuers and the Initial Purchaser agree that it would not be
just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8,
each person who controls the Initial Purchaser within the meaning
of either the Securities Act or the Exchange Act and each
director, officer, employee and agent of the Initial Purchaser
shall have the same rights to contribution as the Initial
Purchaser, and each person who controls the Issuers within the
meaning of either the Securities Act or the Exchange Act and each
partner, officer, director, employee and agent of the Issuers
shall have the same rights to contribution as the Issuers,
subject in each case to the applicable terms and conditions of
this paragraph (d).
9. Termination. The obligations of the Initial
Purchaser hereunder may be terminated by the Initial Purchaser by
notice given to and received by the Company prior to delivery of
and payment for the Securities if, prior to that time, any of the
events described in Sections 7(m) or 7(n) shall have occurred or
if the Initial Purchaser shall decline to purchase the Securities
for any reason permitted under this Agreement.
10. Reimbursement of Initial Purchaser's Expenses. If
(a) the Issuers shall fail to tender the Securities for delivery
to the Initial Purchaser otherwise than for any reason permitted
under this Agreement or (b) the Initial Purchaser shall decline
to purchase the Securities for any reason permitted under this
Agreement, the Issuers shall reimburse the Initial Purchaser for
the reasonable fees and expenses of their counsel and for such
other reasonable out-of-pocket expenses as shall have been
incurred by them in connection with this Agreement and the
proposed purchase of the Securities, and upon demand the Issuers
shall pay the full amount thereof to the Initial Purchaser.
11. Notices, etc. All statements, requests, notices
and agreements hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be
delivered or sent by mail, telex or facsimile transmission
to NationsBanc Capital Markets, Inc., 000 Xxxxx Xxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Xxxx Xxxxx (Fax: 000-000-0000), with a copy to
Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxx Xxxxxxxxx (Fax: 000-000-0000);
(b) if to the Company, shall be delivered or sent
by mail, telex or facsimile transmission to the address of
the Company set forth in the Final Memorandum, Attention:
Xxxxxx X. Xxxxxxxxx (Fax: 000-000-0000), with a copy to
Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A., Attention: Xxxx X.
Xxxxxxx and Xx X. Xxxxx (Fax: 000-000-0000).
Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Issuers
shall be entitled to act and rely upon any request, consent,
notice or agreement given or made on behalf of the Initial
Purchaser.
12. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the
Initial Purchaser, the Issuers and their respective successors.
This Agreement and the terms and provisions hereof are for the
sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the
Issuers contained in this Agreement shall also be deemed to be
for the benefit of directors, officers, employees and agents
(including, without limitation, attorneys) of the Initial
Purchaser and the person or persons, if any, who control an
Initial Purchaser within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Initial
Purchaser contained in Section 8(b) of this Agreement shall be
deemed to be for the benefit of directors of the Issuers,
officers, employees and agents (including, without limitation,
attorneys) of the Issuers and any person controlling any of the
Issuers within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this
Section 12, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision contained
herein.
13. Survival. The respective indemnities,
representations, warranties and agreements of the Issuers and the
Initial Purchaser contained in this Agreement or made by or on
behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Securities and shall
remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any
of them.
14. Definition of "Business Day." For purposes of
this Agreement, "business day" means each Monday, Tuesday,
Wednesday, Thursday and Friday that is not a day on which banking
institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
16. Counterparts. This Agreement may be executed in
one or more counterparts and, if executed in more than one
counterpart, the executed counterparts shall each be deemed to be
an original but all such counterparts shall together constitute
one and the same instrument.
17. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of,
or to affect the meaning or interpretation of, this Agreement.
[Signature page follows]
If the foregoing correctly sets forth the agreement
between the Issuers and the Initial Purchaser, please indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
Delta Xxxxx, Inc.
By:
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice
President, Chief
Financial Officer
and Treasurer
Delta Xxxxx Marketing, Inc.
By:
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice
President, Chief
Financial Officer
and Treasurer
The foregoing Agreement is hereby
confirmed, accepted and agreed as
of the date first above written.
NationsBanc Capital Markets, Inc.
By:
Name: Xxxx X. Xxxxx
Title: Director
EXHIBIT A
Registration Rights Agreement
SCHEDULE A
SUBSIDIARIES
Name Jurisdiction of Incorporation
1. Delta Xxxxx Marketing, Inc. Delaware
