$150,000,000
Delta Financial Corporation
_____% Senior Notes due 2004
UNDERWRITING AGREEMENT
__________, 1997
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ BROTHERS
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Delta Financial Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell $150,000,000 principal amount of its
_____% Senior Notes due 2004 (the "Notes") to the several underwriters named in
Schedule I hereto (the "Underwriters"). The Notes are to be fully and
unconditionally guaranteed (the "Guarantees," and together with the Notes, the
"Securities"), on a joint and several basis, by each subsidiary of the Company
set forth on Schedule II hereto (the "Guarantors," and together with the
Company, the "Registrants.") The Securities are to be issued pursuant to the
provisions of an Indenture to be dated as of __________ __, 1997 (the
"Indenture") among the Registrants and ______________, as Trustee (the
"Trustee").
SECTION 1. Registration Statement and Prospectus. The
Registrants have prepared and filed with the Securities and Exchange Commission
(the "Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1 (Registration
No. 333- ___________), including a prospectus, relating to the Securities. The
registration statement, as amended at the time it became effective, including
the information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Act, is hereinafter
referred to as the "Registration Statement"; and the prospectus in the form
first used to confirm sales of Securities is hereinafter referred to as the
"Prospectus". If the Registrants have filed or are required pursuant to the
terms hereof to file a registration statement pursuant to Rule 462(b) under the
Act registering additional ____% Senior Notes due 2004 (a "Rule 462(b)
Registration Statement"), then, unless otherwise specified, any reference herein
to the term "Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement.
SECTION 2. Agreements to Sell and Purchase.
(a) On the basis of the representations and warranties contain
d in this Agreement, and subject to its terms and conditions, the Registrants
agree to issue and sell, and each Underwriter agrees, severally and not jointly,
to purchase from the Registrants the principal amount of Securities set forth
opposite the name of such Underwriter in Schedule I hereto at a price equal to
____% of the principal amount thereof (the "Purchase Price").
(b) The Registrants confirm their engagement of ▇▇▇▇▇ ▇▇▇▇▇▇
Inc. ("SBI"), one of the underwriters listed in Schedule I hereto, as, and SBI
hereby confirms its agreement with the Registrants to render services as, a
"qualified independent underwriter," within the meaning of Section (b)(15) of
Rule 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc. (the "NASD") with respect to the offering and sale of the
Securities. SBI, solely in its capacity as qualified independent underwriter and
not otherwise, is referred to herein as the "QIU." As compensation for the
services of the QIU hereunder, the Registrants agree to pay SBI $5,000 on the
Closing Date. The Registrants agree that the yield at which the Securities are
sold to the public will be no lower than the yield recommended by SBI acting as
QIU.
SECTION 3. Terms of Public Offering. The Company is advised by
you that the Underwrit rs propose (i) to make a public offering of their
respective portions of the Securities as soon after the execution and delivery
of this Agreement as in your judgment is advisable and (ii) initially to offer
the Securities upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. Delivery to the Underwriters
of and payment for the Securities shall be made at 9:00 A.M., New York City
time, on __________ , 1997 (the "Closing Date") at such place as you shall
designate. The Closing Date and the location of delivery of and payment for the
Securities may be varied by agreement between you and the Registrants.
Certificates for the Securities shall be registered in such
names and issued in such denominations as you shall request in writing not later
than two full business days prior to the Closing Date. Such certificates shall
be made available to you for inspection not later than 9:30 A.M., New York City
time, on the business day prior to the Closing Date. Certificates in definitive
form evidencing the Securities will be delivered to you on the Closing Date with
any transfer taxes thereon duly paid by the Registrants, for the respective
accounts of the several Underwriters, against payment to the Company of the
Purchase Price therefor by wire transfer of Federal or other funds immediately
available in New York City.
SECTION 5. Agreements of the Registrants. The Registrants,
jointly and severally, agree with you:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (iii) when
any amendment to the Registration Statement becomes effective, (iv) if the
Registrants is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, when the Rule 462(b) Registration Statement has
become effective and (v) of the happening of any event during the period
referred to in Section 5(d) below which makes any statement of a material fact
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made in the Registration Statement or the Prospectus untrue or which requires
any additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Registrants will use their best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to you, without charge, four signed copies of
the Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(c) To prepare the Prospectus in a form approved by you and to
file the Prospectus in such form with the Commission within the applicable
period specified in Rule 424(b) under the Act; not to file any further amendment
to the Registration Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to which you
shall reasonably object after being so advised; and to prepare and file with the
Commission, promptly upon your reasonable request, any amendment to the
Registration Statement or amendment or supplement to the Prospectus which may be
necessary or advisable in connection with the distribution of the Securities by
you, and to use its best efforts to cause any such amendment to the Registration
Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first
business day after the date of this Agreement and from time to time thereafter
for such period as in the opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection with sales by an Underwriter or
a dealer, to furnish in New York City to each Underwriter and dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event
shall occur as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with applicable law, forthwith to
prepare and file with the Commission an appropriate amendment or supplement to
the Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with law, and to
furnish to each Underwriter and to such dealers as you shall specify, such
number of copies thereof as such Underwriter or dealers may reasonably request.
(f) Prior to any public offering of the Securities, to
cooperate with you and counsel for the Underwriters in connection with the
registration or qualification of the Securities for offer and sale by the
several Underwriters and by dealers under the state securities or Blue Sky laws
of such jurisdictions as you may request, to continue such qualification in
effect so long as required for distribution of the Securities and to file such
consents to service of process or other documents as may be necessary in order
to effect such registration or qualification.
(g) To mail and make generally available to its security
holders as soon as practicable an earnings statement that shall satisfy the
provisions of Section 11(a) of the Act, and to advise you in writing when such
statement has been so made available.
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(h) So long as the Securities are outstanding, (i) to mail and
make generally available as soon as practicable after the end of each fiscal
year to the record holders of the Securities a financial report of the Company
and its subsidiaries on a consolidated basis (and a similar financial report of
all unconsolidated subsidiaries, if any), all such financial reports to include
a consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
independent certified public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(i) So long as the Securities are outstanding, to furnish to
you as soon as available a reasonable number of copies of all reports or other
communications furnished to its security holders or furnished to or filed with
the Commission or any national securities exchange on which any class of
securities of any Registrant is listed and such other publicly available
information concerning the Company and its subsidiaries as you may reasonably
request.
(j) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the Registrants' obligations
under this Agreement, including: (i) the fees, disbursements and expenses of the
Registrants' counsel and the Registrants' accountants in connection with the
registration and delivery of the Securities under the Act and all other fees or
expenses in connection with the preparation, printing, filing and distribution
of the Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing prior to or during the period specified in Section 5(d),
including the mailing and delivering of copies thereof to the Underwriters and
dealers in the quantities specified herein, (ii) all costs and expenses related
to the transfer and delivery of the Securities to the Underwriters, including
any transfer or other taxes payable thereon, (iii) all costs of printing or
producing all agreements or documents in connection with the offering, purchase,
sale or delivery of the Securities (other than this Agreement, the Indenture and
the Securities), (iv) all expenses in connection with the registration or
qualification of the Securities for offer and sale under the securities or Blue
Sky laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and reasonable fees and disbursements of counsel for
the Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and reasonable disbursements of
counsel for the Underwriters in connection with the review and clearance of the
offering of the Securities by the NASD, (vi) the cost of printing certificates
representing the Securities, (vii) the costs and charges of any transfer agent,
registrar and/or depositary (including the Depository Trust Company), (viii) any
fees charged by rating agencies for the rating of the Securities and (ix) and
all other reasonable costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section.
(k) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise transfer or dispose of any debt securities of the Registrants
or any warrants, rights or options to purchase or otherwise acquire debt
securities of the Registrants substantially similar to the Securities (other
than the Securities), without the prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation.
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(l) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Registrants prior to the Closing Date and to satisfy all conditions precedent to
the delivery of the Securities.
(m) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Securities, to file a
Rule 462(b) Registration Statement with the Commission registering the
Securities not so covered in compliance with Rule 462(b) by 10:00 P.M., New York
City time, on the date of this Agreement and to pay to the Commission the filing
fee for such Rule 462(b) Registration Statement at the time of the filing
thereof or to give irrevocable instructions for the payment of such fee pursuant
to Rule 111(b) under the Act.
SECTION 6. Representations and Warranties of the Registrants.
The Registrants, jointly and severally, represent and warrant to each
Underwriter that:
(a) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Registrants after
the effectiveness of this Agreement); any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become eff ctive no later
than 10:00 P.M., New York City time, on the date of this Agreement; and no stop
order suspending the effectiveness of the Registration Statement is in effect,
and, to the Registrants' knowledge, no proceedings for such purpose are pending
before or threatened by the Commission.
(b)(i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Registrants after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Registrants after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Registrants are required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement and any amendments thereto, when they become effective
(A) will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (B) will comply in all material respects with the
Act, (iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, 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, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein, and (v) each
preliminary prospectus filed as part of the registration statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Act, complied when so filed in all material respects with the Act, and did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in any preliminary prospectus based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(c) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease
5
and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole. The Company has no subsidiaries other than the Guarantors.
(d) All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights.
(e) All of the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company, free and clear of
any security interest, mortgage, pledge, claim, lien, encumbrance or adverse
interest of any nature (each a "Lien"). Except as otherwise set forth in the
Registration Statement or the Prospectus, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale or Liens related to or entitling any person, other than the
Company, to purchase or otherwise to acquire any shares of the capital stock of,
or other ownership interest in, any subsidiary of the Company.
(f) The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and has been duly
authorized, executed and delivered by the Registrants and is a valid and binding
agreement of each of the Registrants, enforceable in accordance with their terms
except as (A) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (B) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(g) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company, enforceable in accordance with their
terms except as (A) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (B) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(h) The Securities and the Indenture conform as to legal
matters to the description thereof contained in the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound.
(j) The execution, delivery and performance of this Agreement,
the Indenture and the Securities by the Registrants, compliance by the
Registrants with all the provisions hereof and thereof and the consummation of
the transactions contemplated hereby and thereby will not require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states) and
6
will not conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws of the Company or any of its
subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective property is
bound, or violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their respective
property.
(k) There are no legal or governmental proceedings pending or,
to the Registrants' knowledge, threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their respective property
is or could be subject that are required to be described in the Registration
Statement or the Prospectus and are not so described; nor are there 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 that are not so described or filed as
required.
(l) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations promulgated thereunder, or any federal or state
usury or consumer credit laws, except for such violations which, singly or in
the aggregate, would not have a material adverse effect on the business,
prospects, financial condition or results of operation of the Company and its
subsidiaries, taken as a whole.
(m) There are no costs or liabilities associated with
Environmental Laws (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) which
would, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole.
(n) This Agreement has been duly authorized, executed and
delivered by each of the Registrants.
(o) KPMG Peat Marwick LLP are independent public accountants
with respect to the Company and its subsidiaries as required by the Act.
(p) The consolidated financial statements, together with
related schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated in the
Registration Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set forth
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) is, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(q) None of the Registrants is and, after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, none of the
7
Registrants will be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(r) There are no contracts, agreements or understandings
between any Registrants and any person granting such person the right to require
the Registrants to file a registration statement under the Act with respect to
any securities of the Registrants or to require the Registrants to include such
securities with the Securities registered pursuant to the Registration
Statement.
(s) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement),
(i) there has not occurred any material adverse change or any development
involving a prospective material adverse change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or contingent.
(t) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(u) All tax returns required to be filed by the Company or any
of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due or claimed to be due from such entities have been paid, other than those
being contested in good faith and for which adequate reserves have been provided
or those currently payable without penalty or interest.
(v) The Company and each of its subsidiaries maintain
insurance (subject to customary deductibles and retentions) with responsible
insurance companies in such amounts and against such risks as is customarily
carried by responsible companies engaged in similar businesses.
(w) The Guarantees have been duly authorized by each of the
Guarantors and, when executed and authenticated in accordance with the
provisions of the Indenture, will conform in all material respects to the
description thereof in the Prospectus, will be valid and binding obligations of
each of the Guarantors, will be entitled to the benefits of the Indenture and
enforceable in accordance with their terms except as (A) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (B) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability.
SECTION 7. Indemnification. (a) Each Registrant, jointly and
severally, agrees to indemnify and hold harmless each Underwriter, its
directors, its officers and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), from and against any and
all losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with defending or
investigating any matter, including any action, that could give rise to any such
losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission
8
based upon information relating to any Underwriter furnished in writing
to the Company by such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Registrants, their respective directors,
officers who sign the Registration Statement and any person controlling the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the Registrants
to such Underwriter but only to the extent that an untrue statement or omission
or alleged omission was made in reliance upon or in conformity with written
information furnished to the Registrants by such Underwriter for use in the
Registration Statement.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 7(a) or 7(b)
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not be
required to assume the defense of such action pursuant to this Section 7(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing, which authorization shall not be unreasonably withheld,
by the indemnifying party, (ii) the indemnifying party shall have failed to
assume the defense of such action or employ counsel reasonably satisfactory to
the indemnified party or (iii) the named parties to any such action (including
any impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ Securities Corporation, in the case of parties indemnified pursuant
to Section 7(a), and by the Company, in the case of parties indemnified pursuant
to Section 7(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than ten business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault,
9
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 7 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Registrants on the one hand and the Underwriters on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause 7(d)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 7(d)(i) above
but also the relative fault of the Registrants and the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Registrants and
the Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company,
and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Securities, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Registrants and the Underwriters shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Registrants or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Registrants and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7(d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses incurred by such indemnified party in connection with investigating or
defending any matter that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective principal amount of Securities purchased by each of the Underwriters
hereunder and not joint.
(e) The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
SECTION 8. Indemnification of Qualified Independent
Underwriter.
(a) Each of the Registrants, jointly and severally, agrees to
indemnify and hold harmless the QIU and each person, if any, who controls the
QIU within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages, liabilities or
judgments (including without limiting the foregoing the reasonable legal and
other expenses incurred in connection with any action, suit or proceeding or any
claim asserted) arising out of: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a
10
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities, judgments or expenses are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to the omission or alleged untrue statement or omission based upon
information relating to the QIU furnished in writing to the Registrants by the
QIU expressly for use therein; or (ii) the QIU having acted, failed to act or
alleged to have failed to act in its capacity as the "qualified independent
underwriter" with respect to the offer and sale of the Notes; provided, however,
that to the extent that any such loss, claim, damage, liability or judgment
referred to in the foregoing clause (ii) is found in a final judgment by a court
of competent jurisdiction, not subject to further appeal, to have resulted from
the willful misconduct or gross negligence of the QIU, the Registrants will not
be liable to that extent; provided, however, that the foregoing indemnity with
respect to any untrue statements contained in or omission from a preliminary
prospectus shall not inure to the benefit of the QIU (or any person controlling
such QIU) from whom the person asserting any such loss, liability, claim, damage
or expense purchased any of the Securities which are subject thereof if such
person was not sent or given a copy of the Prospectus at or prior to the written
confirmation of the sale of such Securities to such person and the untrue
statement contained in or omission from such preliminary prospectus was
corrected in the Prospectus. This indemnity agreement will be in addition to any
liability which the Registrants may otherwise have to the persons referred to
above in Section 7 and this Section 8(a).
(b) In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be brought against
the QIU or any person controlling the QIU (for purposes of this Section 8(b),
the QIU and/or such controlling person, as appropriate, shall hereinafter be
referred to as the "Indemnified"), based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Registrants shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to the
QIU furnished to the Registrants in writing by the QIU expressly for use in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any preliminary prospectus or (ii) the QIU having acted, failed to act or
alleged to have failed to act in its capacity as the "qualified independent
underwriter" with respect to the offer and sale of the Securities, and with
respect to which indemnity may be sought against the Registrants (each of the
Registrants, as appropriate, for purposes of this Section 8(b), are hereinafter
referred to as the "Indemnifier"), the QIU shall promptly notify the Registrants
in writing and the Registrants shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified to represent
the Indemnified and any others the Indemnifier may designate and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
action or proceeding, the Indemnified shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
the Indemnified unless (i) the Indemnifier and the Indemnified shall have
mutually agreed to the retention of such counsel, (ii) the Indemnifier shall
have failed to assume the defense and employ counsel or (iii) the named parties
to any such proceeding (including any impleaded parties) include both an
Indemnifier and the Indemnified and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
among them. It is understood that the Indemnifier shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
(a) the reasonable fees and expenses of more than one separate firm (in addition
to local counsel) for the QIU and all persons, if any, who control the QIU
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act and (b) the reasonable fees and expenses of more than one separate firm (in
addition to local counsel) for the Registrants, their respective directors,
their respective officers who sign the Registration Statement and each person,
if any, who controls the Registrants within the meaning of either such Section
and that all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for
11
the QIU and such control persons of the QIU, such firm shall be designated in
writing by the QIU. In the case of any such separate firm for the Registrants,
and such directors, officers and control persons of the Registrants, such firm
shall be designated in writing by the Company. The Indemnifier shall not be
liable for any settlement of any proceeding effected without its written
consent; but if settled with such consent of if there be a final judgment for
the plaintiff, the Indemnifier agrees to indemnify the Indemnified from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the immediately preceding sentence, if in any case where the
fees and expenses of counsel are at the expense of the Indemnifier and the
Indemnified shall have requested the Indemnifier to reimburse the Indemnified
for such fees and expenses of counsel as incurred, the Indemnifier agrees that
it shall be liable for any settlement of any action effected without its written
consent if (i) such settlement is entered into more than ten business days after
the receipt by the Indemnifier of the aforesaid request and (ii) such
Indemnifier shall have failed to reimburse the Indemnified in accordance with
such request for reimbursement prior to the date of such settlement. No
Indemnifier shall, without the prior written consent of the Indemnified, effect
any settlement of any pending or threatened proceeding in respect of which the
Indemnified is or could have been a party and indemnity could have been sought
hereunder by the Indemnified, unless such settlement includes an unconditional
release of the Indemnified from all liability on claims that are the subject
matter of such proceeding.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities, judgments and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Registrants on the
one hand and the QIU on the other hand from the offering of the Notes or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Registrants
on the one hand and the QIU on the other hand in connection with the statements
or omissions or actions or failure to act which resulted in such losses, claims,
damages, liabilities, judgments or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Registrants on
the one hand and the QIU on the other hand shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Notes (before
deducting expenses) received by the Registrants, as set forth in the cover page
of the Prospectus, bear to the fee received by the QIU for acting as the
"qualified independent underwriter" as set forth in Section 2(b) hereof. The
relative fault of the Registrants on the one hand and the QIU on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information supplied by the Registrants on the one hand or the
QIU on the other hand and the party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission and
whether the QIU's recommendation, advice or services as QIU pursuant to Section
2(b) hereof involved any willful misconduct or gross negligence on the part of
the QIU.
(d) The Registrants and the QIU agree that it would not be
just and equitable if contribution pursuant to Section 8(a) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, the QIU shall not be required
to contribute any amount in excess of the amount by which its fee received for
acting as "qualified independent underwriter" as set
12
forth in Section 2(b) hereof exceeds the amount of any damages which the QIU has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission or by reason of alleged willful
misconduct or gross negligence. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
SECTION 9. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters to purchase the Securities under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Registrants
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(b) If the Registrants are required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration Statement shall have become effective by 10:00 P.M., New
York City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) On or after the date hereof there shall not have occurred
any downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating of any of the
Registrants' outstanding indebtedness (including, without limitation, the
placing of any securities on negative or developing watch or negative or
developing outlook) by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act.
(d) 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, prevent the issuance of
the Securities; and no injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction shall have been issued as of
the Closing Date which would prevent the issuance of the Securities.
(e) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement),
(i) there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(e)(i),
9(e)(ii) or 9(e)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Securities on the terms and in
the manner contemplated in the Prospectus.
(f) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, in their
capacities as the President and Chief Executive Officer and Chief Financial
Officer of the Company, respectively, confirming the matters set forth in
Sections 9(a), 9(b), 9(d) and 9(e).
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and
13
counsel for the Underwriters), dated the Closing Date, of Stroock & Stroock &
▇▇▇▇▇ LLP, counsel for the Company, to the effect that:
(i) each of the Company and its subsidiaries has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has
the corporate power and authority to carry on its business as described
in the Prospectus and to own, lease and operate its properties;
(ii) each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction in which the nature of its business
or its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole;
(iii) all the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any preemptive or similar
rights;
(iv) all of the outstanding shares of capital stock of
each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and, to the best
of such counsel's knowledge after due inquiry, are owned by the
Company, free and clear of any security interest, claim, lien or
encumbrance;
(v) the Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except as (_)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (_) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(vi) the Indenture has been duly qualified under the
Trust Indenture Act and has been duly authorized, executed and
delivered by the Registrants and is a valid and binding agreement of
each of the Registrants, enforceable in accordance with its terms
except as (_) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(_) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability;
(vii) the Registrants have full corporate power and
authority to enter into this Agreement and consummate the transactions
provided for herein and this Agreement has been duly authorized,
executed and delivered by the Registrants and this Agreement, assuming
due authorization, execution and delivery by each other party hereto,
is a valid and binding agreement of the Registrants, enforceable
against the Registrants in accordance with its terms, except as (_) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(viii) the Registration Statement has become effective
under the Act and, to the best of such counsel's knowledge after due
inquiry, no stop order suspending its effectiveness has
14
been issued and no proceedings for that purpose are pending before or
contemplated by the Commission;
(ix) the statements under the captions
"Business-Regulation", "Business-Environmental Matters", "Business-
Legal Proceedings" and "Description of the Notes" in the Prospectus
and Items 14 and 15 of Part II of the Registration Statement, insofar
as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents
and proceedings, provided that the opinions as to "Business-
Regulation" may be provided by The Law Offices of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇;
(x) neither the Company nor any of its subsidiaries is
in material violation of its respective charter or by-laws;
(xi) the execution, delivery and performance of this
Agreement, the Indenture and the Securities by the Registrants,
compliance by the Registrants with all the provisions hereof and
thereof and the consummation of the transactions contemplated hereby
and thereby will not require any consent, approval, authorization or
other order of, or qualification with, any court or governmental body
or agency (except such as may be required under the securities or Blue
Sky laws of the various states) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of its subsidiaries
or any indenture, loan agreement, mortgage, lease, or, to the best of
such counsel's knowledge after due inquiry, other agreement or
instrument that is material to the Company and its subsidiaries, taken
as a whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
property is bound, or violate or conflict with any applicable law or
any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, any
of its subsidiaries or their respective property;
(xii) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to which
the Company or any of its subsidiaries is or could be a party or to
which any of their respective property is or could be subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described, or of 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 that are not so described or filed as
required;
(xiii) to the best of such counsel's knowledge after due
inquiry, neither the Company nor any of its subsidiaries has violated
any Environmental Law or any provisions of the Employee Retirement
Income Security Act of 1974, as amended, or the rules and regulations
promulgated thereunder, except for such violations which, singly or in
the aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of operation of the
Company and its subsidiaries, taken as a whole;
(xiv) none of the Registrants is and, after giving effect
to the offering and sale of the Notes and the application of the
proceeds thereof as described in the Prospectus, none of the
Registrants will be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended;
(xv) to the best of such counsel's knowledge after due
inquiry, there are no
15
contracts, agreements or understandings between the Registrants and
any person granting such person the right to require the Registrants
to file a registration statement under the Act with respect to any
securities of the Registrants or to require the Registrants to include
such securities with the Securities registered pursuant to the
Registration Statement;
(xvi) each of the Guarantors has duly authorized the
Guarantees, which, when executed and authenticated in accordance with
the provisions of the Indenture, and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be
valid and binding obligations of each of the Guarantors, enforceable
against each of them in accordance with the terms of the Guarantees
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally and
(b) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability
(regardless of whether such enforceability is considered in a
proceeding at law or in equity);
(xvii) to the best of such counsel's knowledge after due
inquiry, there are no actions, suits or proceedings pending or
threatened against the Company or any subsidiary or any of their
respective properties at law or in equity or before or by any
commission, board, body, authority or agency which are required to be
described in the Prospectus but are not so described;
(xviii) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for the financial statements
and other financial data included therein as to which no opinion need
be expressed) comply as to form with the Act; (_) and
(xix) to the best of such counsel's knowledge after due
inquiry, neither the Company nor any subsidiary is in breach of, or in
default under (nor has any event occurred which with notice, lapse of
time or both would constitute a breach of or default under), any
indenture, mortgage (under which the Company or any subsidiary is
mortgagor), trust (under which the Company or any subsidiary is
trustor), lease, bank loan, credit agreement or any other agreement or
instrument to which the Company or any subsidiary is a party or by
which the Company or any subsidiary or their respective properties are
bound or affected or under any law, regulation or rule or any decree,
judgment or order applicable to the Company or any subsidiary, which
breach or default would have a material adverse effect on the
business, properties, assets, operations or condition (financial or
otherwise) of the Company and any subsidiary, taken as a whole.
The opinion of Stroock & Stroock & ▇▇▇▇▇ LLP described in Section 9(g)
above shall be rendered to you at the request of the Company and shall so state
therein.
(h) In addition, in the opinion of Stroock, Stroock and ▇▇▇▇▇
LLP described in Section 9(g) above, Stroock, Stroock and ▇▇▇▇▇ LLP shall state
that such counsel has no reason to believe that at the time the Registration
Statement became effective or on the date of this Agreement, the Registration
Statement and the prospectus included therein (except for the financial
statements and other financial data as to which such counsel need not express
any belief and except for that part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture
Act) contained any 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 and such counsel has no reason to believe that the
Prospectus, as amended or supplemented, if applicable (except for the financial
statements and other financial data, as aforesaid) contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
16
(i) You shall have received on the Closing Date an opinion,
dated the Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Underwriters, as to
the matters referred to in Sections 9(g)(v), 9(g)(vi), 9(g)(vii), 9(g)(ix) (but
only with respect to the statements under the caption "Description of Notes" and
"Underwriting") and 9(h).
In giving such opinions with respect to the matters covered by
Section 9(h), ▇▇▇▇▇▇▇ & Stroock & ▇▇▇▇▇ LLP and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification except as specified.
(j) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from KPMG Peat Marwick
LLP, independent public accountants, containing the information and statements
of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(k) The Registrants shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Registrants at or prior to
the Closing Date.
SECTION 10. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and would, in your judgment, make it impracticable to
market the Securities on the terms and in the manner contemplated in the
Prospectus, (ii) the suspension or material limitation of trading in securities
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities on any such
exchange or the Nasdaq National Market, (iii) the suspension of trading of any
securities of the Registrants on any exchange or in the over-the-counter market,
(iv) the enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of any court or other governmental
authority which in your opinion materially and adversely affects, or will
materially and adversely affect, the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole, (v)
the declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date any one or more of the Underwriters
shall fail or refuse to purchase the Securities which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of Securities
which such defaulting Underwriter or Underwriters, as the case may be, agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date by all Underwriters,
each non-defaulting Underwriter shall be obligated severally, in the proportion
which the principal amount of Securities set forth opposite its name
17
in Schedule I bears to the aggregate principal amount of Securities which
all the non-defaulting Underwriters, as the case may be, have agreed to
purchase, or in such other proportion as you may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters, as the case may
be, agreed but failed or refused to purchase on such date; provided that in no
event shall the aggregate principal amount of Securities which any Underwriter
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 9 by an amount in excess of one-ninth of such principal amount of
Securities without the written consent of such Underwriter. If on the Closing
Date any Underwriter or Underwriters shall fail or refuse to purchase Securities
and the aggregate principal amount of Securities with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Securities to be purchased by all Underwriters and arrangements satisfactory to
you and the Registrants for purchase of such Securities are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter and the Registrants. In any such case
which does not result in termination of this Agreement, either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
SECTION 11. Miscellaneous. Notices given pursuant to any
provision of this Agreement shall be addressed as follows: (i) if to the
Company, to ▇▇▇▇ ▇▇▇▇▇▇, Delta Financial Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ and (ii) if to any Underwriter or to you, to
you c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department, or in any case to
such other address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Registrants and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Securities, regardless of (i) any investigation, or statement as
to the results thereof, made by or on behalf of any Underwriter, the officers
or directors of any Underwriter, any person controlling any Underwriter, the
Registrants, the officers or directors of the Registrants or any person
controlling the Registrants, (ii) acceptance of the Securities and payment for
them hereunder and (iii) termination of this Agreement.
If for any reason the Securities are not delivered by or on
behalf of the Registrants as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Registrants agree to
reimburse the several Underwriters for all out-of-pocket expenses (including the
fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Registrants, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the Registrants' directors and the Registrants' officers who
sign the Registration Statement and their respective successors and assigns, all
as and to the extent provided in this Agreement, and no other person shall
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include a purchaser of any of the Securities
from any of the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
18
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
19
Please confirm that the foregoing correctly sets forth the
agreement between the Registrants and the several Underwriters.
Very truly yours,
DELTA FINANCIAL CORPORATION
By:
-------------------------------
Name:
Title:
DELTA FUNDING CORPORATION
By:
-------------------------------
Name:
Title:
FIDELITY MORTGAGE, INC.
By:
-------------------------------
Name:
Title:
FIDELITY MORTGAGE (FLORIDA), INC.
By:
-------------------------------
Name:
Title:
DF SPECIAL HOLDINGS CORP.
By:
-------------------------------
Name:
Title:
20
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ BROTHERS
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By
------------------------------------
21
SCHEDULE I
Principal Amount of
Securities
Underwriters to be Purchased
------------ -------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Total $ 150,000,000.00
SCHEDULE II
Delta Funding Corporation
Fidelity Mortgage, Inc.
Fidelity Mortgage (Florida), Inc.
DF Special Holdings