EXHIBIT 10.50(a)
ATLANTIC COAST AIRLINES, ISSUER
ATLANTIC COAST AIRLINES, INC., GUARANTOR
PURCHASE AGREEMENT
September 19, 1997
Xxxxxx Xxxxxxx & Co.
Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
Atlantic Coast Airlines, a California corporation (the
"Company"), in connection with the financing of (i) the debt portion of ten
leveraged aircraft leases and (ii) the purchase of four aircraft, proposes that
First National Bank of Maryland, as trustee (the "Trustee"), issue and sell to
you (the "Placement Agent") its Pass Through Certificates, Series 1997-1 in the
aggregate principal amounts and with the interest rates and final distribution
dates set forth on Schedule I hereto (the "Certificates") on the terms and
conditions stated herein. The aggregate principal amount of Certificates due on
each such final distribution date is referred to as a "Pass Through Certificate
Designation".
The Certificates will be issued pursuant to four separate pass
through trust agreements each to be dated as of September 25, 1997 (collectively
the "Pass Through Trust Agreements") among Atlantic Coast Airlines, Inc., a
Delaware corporation (the "Guarantor"), the Company and the Trustee. The Pass
Through Trust Agreements are related to the creation and administration of
Atlantic Coast Air Pass Through Trust Series 1997-1A (the "Class A Trust"),
Atlantic Coast Airlines Pass Through Trust Series 1997-1B (the "Class B Trust"),
Atlantic Coast Airlines Pass Through Trust Series 1997-1C (the "Class C Trust")
and Atlantic Coast Airlines Pass Through Trust Series 1997-1D (the "Class D
Trust", and together with the Class A Trust, the Class B Trust and the Class C
Trust, the "Trusts"). Certain amounts of interest payable on the Certificates to
be issued by the Class A Trust, the Class B Trust and the Class C Trust will be
entitled to the benefits of a separate liquidity facility for each such Trust.
ING Bank N.V. (the "Liquidity Provider") will enter into three separate
revolving credit agreements (each, a "Liquidity Facility") to be dated as of
September 25, 1997 for the benefit of the holders of the Certificates issued by
the Class A Trust, the Class B Trust and the Class C Trust, respectively. The
Liquidity Provider and the holders of the Certificates will be entitled to the
benefits of an Intercreditor Agreement to be dated as of September 25, 1997 (the
"Intercreditor Agreement") among the Trusts, First National Bank of Maryland, as
Subordination Agent (the "Subordination Agent"), and the Liquidity Provider.
The Certificates will be offered without being registered
under the Securities Act of 1933, as amended (the "Securities Act"), in reliance
on exemptions therefrom.
In connection with the sale of the Certificates, the Guarantor
and the Company have prepared a preliminary offering memorandum (the
"Preliminary Memorandum") and will prepare a final offering memorandum (the
"Final Memorandum" and, with the Preliminary Memorandum, each a "Memorandum")
setting forth or including a description of the terms of the Certificates, the
terms of the offering and a description of the Company and its business.
Capitalized terms not otherwise defined in this Agreement
shall have the meanings specified therefor in the Pass Through Trust Agreements
or in the Indentures referred to in the Pass Through Trust Agreements; provided
that as used in this Agreement, the term "Operative Agreements" shall include
the Pass Through Trust Agreements.
1. Representations and Warranties. The Guarantor and the Company represent and
warrant to, and agree with, you that as of the date hereof:
(a) The Preliminary Memorandum does not contain and the Final
Memorandum, in the form used by the Placement Agent to confirm sales and on the
Closing Date, 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 Section 1(a) do not apply to
statements or omissions in either Memorandum based upon information relating to
the Placement Agent furnished to the Guarantor or the Company in writing by the
Placement Agent through you expressly for use therein.
(b) Each of the Guarantor and the Company has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in each
Memorandum and to perform its obligations under this Agreement and the Operative
Agreements to which it is, or is to be, a party; each of the Guarantor and the
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse effect
on the Guarantor and its subsidiaries, taken as a whole (a "Material Adverse
Effect").
(c) This Agreement has been duly authorized, executed and
delivered by the Guarantor and the Company.
(d) On or prior to the Closing Date, the issuance of the
Certificates will be duly authorized by the Trustee. When executed,
authenticated, issued and delivered in the manner provided for in the related
Pass Through Trust Agreement and sold and paid for as provided in this
Agreement, each of the Certificates will be valid and binding obligations of the
Trustee entitled to the benefits of the related Pass Through Trust Agreement,
enforceable against the Trustee in accordance with its terms, except as limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or at
law).
(e) On or prior to the Closing Date, the issuance of the
Equipment Notes will be authorized by the related Owner Trustee or the Company,
as the case may be. When duly executed and delivered by the related Owner
Trustee, or the Company, as the case may be, and duly authenticated by the
Indenture Trustee in accordance with the terms of the related Indenture, each of
the Equipment Notes will be duly issued under such related Indenture and will
constitute the valid and binding obligations of such Owner Trustee or the
Company, as the case may be, and the holders thereof will be entitled to the
benefits of such related Indenture, except as limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
(f) The Operative Agreements to which the Guarantor and/or the
Company is, or is to be, a party, have each been duly authorized by the
Guarantor or the Company, as the case may be, are or will be substantially in
the form heretofore supplied to you and, when duly executed and delivered by the
Guarantor or Company, as the case may be, will constitute valid and binding
obligations of the Guarantor or Company, as the case may be, except (i) as
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a proceeding
in equity or at law) and (ii) in the case of each Lease and each Indenture, as
the case may be, as limited by applicable laws which may affect the remedies
provided in such Lease or such Indenture, as the case may be, which laws,
however, do not make the remedies provided in such Lease inadequate for the
practical realization of the rights and benefits provided thereby. On the
Delivery Date, the related Leases and other Operative Agreements to which the
Guarantor and/or the Company is, or is to be, a party will constitute the valid
and binding obligations of the Guarantor and/or the Company, as the case may be,
except (i) as limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law) and (ii) in the case of each Lease and each
Indenture, as limited by applicable laws which may affect the remedies provided
in such Lease or such Indenture, as the case may be, which laws, however, do not
make the remedies provided in such Lease inadequate for the practical
realization of the rights and benefits provided thereby. The Certificates, the
Equipment Notes, the Indentures, and the Leases and other Operative Agreements
to which the Guarantor and/or the Company is, or is to be, a party will conform
in all material respects to the descriptions thereof in the Final Memorandum.
(g) The execution and delivery by the Guarantor and/or the
Company of this Agreement and the Operative Agreements to which the Guarantor
and/or the Company is, or is to be, a party, the consummation by the Guarantor
and the Company of the transactions contemplated in this Agreement and such
Operative Agreements, and compliance by the Guarantor and the Company with the
terms of this Agreement and such Operative Agreements will not contravene (i)
the certificate of incorporation or by-laws of the Guarantor and/or the Company,
as the case may be, (ii) any provision of applicable law or any agreement or
other instrument binding upon the Guarantor or any of its subsidiaries or (iii)
any judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Guarantor or any subsidiary other than, in the case of
clauses (ii) and (iii) above, such contraventions that would not individually or
in the aggregate have a Material Adverse Effect, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the valid authorization, execution, delivery and
performance by the Guarantor and/or the Company of this Agreement and the
Operative Agreements to which the Guarantor and/or the Company is, or is to be,
a party, or the consummation by the Guarantor or the Company of the transactions
contemplated by this Agreement and such Operative Agreements, except such as may
be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Certificates and the Equipment Notes
and except for filings or recordings with the Federal Aviation Administration
(the "FAA") and under the Uniform Commercial Code as in effect in Utah and
Virginia, which filings or recordings shall have been made, or duly presented
for filing, on or prior to the date of issuance of the Equipment Notes for any
Aircraft or the Delivery Date therefor, as may be applicable.
(h) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Guarantor and its subsidiaries, taken as a whole, from that set forth in the
Preliminary Memorandum.
(i) There are no legal or governmental proceedings pending or
threatened to which the Guarantor or any of its subsidiaries is a party or to
which any of the properties of the Guarantor or any of its subsidiaries is
subject other than proceedings accurately described in all material respects in
each Memorandum and proceedings that would not have a Material Adverse effect,
or on the power or ability of the Guarantor or the Company to perform its
obligations under this Agreement or any of the Operative Agreement, to which it
is, or is to be, a party, or to consummate the transactions contemplated by the
Final Memorandum.
(j) Except as described in the Final Memorandum, neither the
Guarantor nor the Company is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound or to which any of
its properties may be subject, except for such defaults that would not have a
Material Adverse Effect.
(k) Except as disclosed in the Final Memorandum, the Guarantor
and its subsidiaries have good and marketable title to all real properties and
all other properties and assets owned by them, in each case free from liens,
encumbrances and defects except where the failure to have such title would not
have a Material Adverse Effect; and except as disclosed in the Final Memorandum,
the Guarantor and its subsidiaries hold any leased real or personal property
under valid and enforceable leases with no exceptions that would have a Material
Adverse Effect.
(l) Except as disclosed in the Final Memorandum, no labor
dispute with the employees of the Guarantor or any of its subsidiaries exists or
to the knowledge of the Guarantor or any of its subsidiaries is imminent that
might have a Material Adverse Effect.
(m) Neither the Guarantor, the Company nor any affiliate (as
defined in Rule 501(b) of Regulation D under the Securities Act, an "Affiliate")
of the Guarantor or the Company has directly, or through any agent, (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act) which is or will be integrated
with the sale of the Certificates in a manner that would require the
registration under the Securities Act of the Certificates or (ii) engaged in any
form of general solicitation or general advertising in connection with the
offering of the Certificates (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.
(n) None of the Guarantor, the Company, its Affiliates or any
person acting on its or their behalf (other than the Placement Agent) has
engaged in any directed selling efforts (as that term is defined in Regulation S
under the Securities Act ("Regulation S")) with respect to the Certificates and
the Guarantor, the Company and its Affiliates and any person acting on its or
their behalf (other than the Placement Agent) have complied with the offering
restrictions requirement of Regulation S.
(o) The Guarantor is subject to Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(p) The Certificates satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(q) It is not necessary in connection with the offer, sale and
delivery of the Certificates to the Placement Agent in the manner contemplated
by this Agreement to register the Certificates under the Securities Act or to
qualify any of the Indentures or Pass Through Trust Agreements under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
(r) None of the Guarantor, the Company nor any of the Trusts
is an "investment company", within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act"); and none of the Trusts, after
giving effect to the offering and sale of the Certificates and the application
of the proceeds thereof as described in the Final Memorandum, will be an
"investment company" as defined in the Investment Company Act.
(s) The accountants that examined and issued an auditors
report with respect to the consolidated financial statements of the Guarantor
and its consolidated subsidiaries included in the Final Memorandum are
independent public accountants within the meaning of the Securities Act and the
regulations thereunder.
(t) The consolidated financial statements included in the
Final Memorandum present fairly the consolidated financial position of the
Guarantor and its consolidated subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows or changes in financial
position of the Guarantor and its consolidated subsidiaries for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The financial statement schedules, if any,
included in the Final Memorandum present fairly the information required to be
stated therein.
(u) The Guarantor and its subsidiaries (i) are in compliance
in all material respects 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,
have a Material Adverse Effect.
(v) To the best of the Guarantor's and the Company's
knowledge, after due inquiry, no disposal, release or discharge of hazardous or
toxic substances or wastes, pollutants or contaminants has occurred on, in, at
or about any of the facilities of the Guarantor or its subsidiaries; no actions
or claims based on any Environmental Law, which actions or claims reasonably
would be likely, singly or in the aggregate, to have a Material Adverse Effect,
are pending or, to the best of the Guarantor's and the Company's knowledge,
threatened against the Guarantor or its subsidiaries.
(w) The Guarantor and its subsidiaries have complied with all
provisions of Section 517.075, Florida Statutes (Chapter 92-198, Laws of
Florida).
(x) The Company is a "citizen of the United States" (as
defined in Section 40102(a)(15) of Title 49 of the United States Code, as
amended) and is an air carrier operating under a certificate of public
convenience and necessity issued by the Secretary of Transportation pursuant to
Section 41102 of Xxxxx 00, Xxxxxx Xxxxxx Code. There is in force with respect to
the Company an air carrier operating certificate issued by the Federal Aviation
Administration pursuant to 14 C.F.R. Part 119. All of the outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable and are owned by the Guarantor, free and clear
of any pledge, lien, security interest, charge, claim, equity or encumbrance of
any kind.
(y) The Guarantor and its subsidiaries possess adequate
certificates, authorities and permits issued by appropriate governmental
agencies or bodies necessary to conduct, in all material respects, the business
now operated by them and have not received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit that
reasonably would be likely to, individually or in the aggregate, have a Material
Adverse Effect.
(z) No Appraiser is an affiliate of the Guarantor or the
Company or, to the knowledge the Guarantor or of the Company, has a substantial
interest, direct or indirect, in the Guarantor or the Company. To the knowledge
of the Guarantor or the Company, none of the officers and directors of any of
such appraisers are connected with the Guarantor or the Company or any of its
affiliates as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
The representations and warranties contained in this Agreement
shall be true and correct as of the date of this Agreement and as of the Closing
Date.
2. Offering. You have advised the Guarantor and the Company
that the Placement Agent will make an offering of the Certificates purchased by
the Placement Agent hereunder on the terms to be set forth in the Final
Memorandum as soon as practicable after this Agreement is entered into as in
your judgment is advisable.
3. Purchase and Delivery. The Guarantor and the Company hereby
agree to cause the Trustee to sell to the Placement Agent, and the Placement
Agent, upon the basis of the representations and warranties herein contained,
but subject to the conditions hereinafter stated, agrees to purchase from the
Trustee the principal amount of Certificates of each Pass Through Certificate
Designation set forth in Schedule I hereto at a purchase price of 100% of the
principal amount thereof.
Payment for the Certificates shall be made against delivery of
the Certificates at a closing (the "Closing") to be held at the office of
Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M.,
local time, on September 25, 1997, or at such other time on the same or such
other date, not later than September 30, 1997, as shall be designated in writing
by you. The time and date of such payment are herein referred to as the Closing
Date. Delivery of the Certificates shall be made to your account at The
Depository Trust Company against payment by the Placement Agent of the purchase
price thereof to or upon the order of the Trustee by wire transfer. The
Certificates shall be in definitive or global form and registered in the name of
Cede & Co. or in such other names, and in such denominations as you may request
in writing at least one full business day in advance of the Closing Date in
definitive or global form. The Company agrees to have the Certificates available
for inspection, checking and packaging by you in New York, New York not later
than 1:00 P.M. on the business day prior to the Closing Date.
As compensation to the Placement Agent for its commitment and
obligations hereunder in respect of the Certificates, including its undertaking
to distribute the Certificates, each Owner Trustee will pay to the Placement
Agent an amount equal to that percentage of the aggregate principal amount of
each Pass Through Certificate Designation (to the extent that such Designation
relates to Equipment Notes to be issued by such Owner Trustee or the Company,
respectively) purchased by it as set forth in Schedule I; provided that if any
Owner Trustee fails to pay such amounts when due, the Company will pay such
amounts. Such payment shall be made by Federal funds check or other immediately
available funds.
4. Conditions to Closing. The obligations of the Placement
Agent under this Agreement to purchase the Certificates will be subject to the
following conditions:
(a) Subsequent to the date of this Agreement and prior to the Closing Date,
(i) 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 accorded any of the
Guarantor's or the Company's securities, including the Certificates, by
any "nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations, of the
Guarantor and its subsidiaries, taken as a whole, from that set forth
in the Preliminary Memorandum that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to market
the Certificates on the terms and in the manner contemplated in the
Final Memorandum.
(b) You shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Guarantor and
the Company, to the effect set forth in clause (a)(i) above and to the effect
that the representations and warranties of the Guarantor and the Company
contained in this Agreement are true and correct as of the Closing Date and that
the Guarantor and the Company have complied with all of the agreements and
satisfied all of the conditions on their part to be performed or satisfied on or
before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date (i) opinions
of Xxxxxx, Xxxx & Xxxxxxxx and Xxxxxxxx Xxxxxxx LLP, independent counsel for the
Guarantor and the Company, each dated the Closing Date, to the effect set forth
in Exhibit A and B, respectively, (ii) opinion of General Counsel of the
Guarantor and the Company, dated the Closing Date, to the effect set forth in
Exhibit C and (iii) an opinion of Ober, Kaler, Xxxxxx & Xxxxxxx, independent
counsel for the Trustee, dated the Closing Date, to the effect set forth in
Exhibit D.
(d) You shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Placement Agent, dated the Closing Date, in
form and substance satisfactory to you.
(e) 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 the Guarantor's and the
Company's independent public accountants, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Final Memorandum.
(f) The Guarantor and the Company shall have furnished to you
and to counsel for the Placement Agent, in form and substance satisfactory to
you, such other documents, certificates and opinions as such counsel may
reasonably request in order to pass upon the matters referred to in Section 3(d)
and in order to evidence the accuracy and completeness of any of the
representations, warranties or statements, the performance of any covenant by
the Guarantor or the Company theretofore to be performed, or the compliance with
any of the conditions herein contained.
(g) Each of the Appraisers shall have furnished to the
Placement Agent a letter from such Appraiser, addressed to the Guarantor and the
Company and dated the Closing Date, confirming that such Appraiser and each of
its directors and officers (i) is not an affiliate of the Guarantor, the Company
or any of its affiliates, (ii) does not have any substantial interest, direct or
indirect, in the Guarantor, the Company or any of its affiliates and (iii) is
not connected with the Guarantor, the Company or any of its affiliates as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
(h) On the Closing Date, the Certificates shall be rated "A-"
in the case of the Certificates of the Class A Trust, "BBB" in the case of the
Certificates of the Class B Trust, "BB-" in the case of the Certificates of the
Class C Trust and "BB-" in the case of the Certificates of the Class D Trust, by
Standard & Poor's Ratings Service; and "A3" in the case of the Certificates of
the Class A Trust, "Baa3" in the case of the Certificates of the Class B Trust,
"Ba2" in the case of the Certificates of the Class C Trust and "B1" in the case
of the Certificates of the Class D Trust by Xxxxx'x Investors Services, Inc.
5. Covenants of the Company. In further consideration of the
agreements of the Placement Agent contained in this Agreement, the Guarantor and
the Company covenant as follows:
(a) To furnish to you, without charge, during the period
mentioned in paragraph (c) below, as many copies of the Final
Memorandum, any documents incorporated by reference therein and any
supplements and amendments thereto as you may reasonably request and to
use its best efforts to deliver such copies to you by 12 noon (New York
time) on the second business day following the execution of this
Agreement.
(b) Before amending or supplementing either Memorandum, to
furnish to you a copy of each such proposed amendment or supplement and
not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the date hereof and prior to
the date on which all of the Certificates shall have been sold by the
Placement Agent, any event shall occur or condition exist as a result
of which it is necessary in your judgment to amend or supplement the
Final Memorandum in order to make the statements therein, in the light
of the circumstances when such Memorandum is delivered to a purchaser,
not misleading, or if, with the opinion of counsel to the Placement
Agent it is necessary to amend or supplement such Memorandum to comply
with applicable law, forthwith to prepare and furnish, at their own
expense, to the Placement Agent, either amendments or supplements to
such Memorandum so that the statements in such Memorandum as so amended
or supplemented will not, in the light of the circumstances when such
Memorandum is delivered to a purchaser, be misleading or so that such
Memorandum, as so amended or supplemented, will comply with applicable
law.
(d) To endeavor to qualify the Certificates for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
(e) To cause the Financing Agreements to be duly executed and
delivered by each of the parties thereto on or before the Closing Date
or such later date as may be agreed by the Guarantor, the Company and
the Placement Agent (which later date shall in no case be later than
October 2, 1997); the representations and warranties of the Guarantor
and the Company contained in each of the Financing Agreements shall be
true and correct as of the date of execution and delivery thereof
(except to the extent that they relate solely to an earlier date in
which case they shall be true and correct as of such earlier date) and
the Placement Agent shall have received a certificate of a Vice
President of each of the Guarantor and the Company, dated as of the
Closing Date (or such later date, as the case may be), to such effect.
The Company agrees to furnish to the Placement Agent, promptly after
the Closing Date (or such later date, as the case may be) and the
applicable Delivery Date as defined in the applicable Financing
Agreement, a copy of each opinion required to be delivered under the
applicable Financing Agreement addressed to the Placement Agent and of
such other documents furnished in connection with the fulfillment of
the conditions precedent therein as the Placement Agent or counsel for
the Placement Agent may reasonably request.
(f) Whether or not any sale of such Certificates is
consummated, to pay all expenses incident to the performance of their
obligations under this Agreement, including: (i) the preparation of
each Memorandum and all amendments and supplements thereto, (ii) the
preparation, issuance and delivery of the Certificates, (iii) the fees
and disbursements of the Company's counsel and accountants and the
Indenture Trustee, the Subordination Agent, the Trustees and their
counsel, (iv) the qualification of such Certificates under securities
or Blue Sky laws in accordance with the provisions of Section 5(d),
including filing fees and the fees and disbursements of counsel for the
Placement Agent in connection therewith and in connection with the
preparation of any Blue Sky or legal investment memoranda, (v) the
printing and delivery to the Placement Agent in quantities as
hereinabove stated of copies of the Memorandum and any amendments or
supplements thereto, (vi) any fees charged by rating agencies for the
rating of such Certificates, (vii) all document production charges and
expenses of counsel to the Placement Agent (but not including their
fees for professional services) in connection with the preparation of
this Agreement, (viii) the fees and expenses, if any, incurred in
connection with the admission of such Certificates for trading in
PORTAL or any other appropriate market system, (ix) the costs and
expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the Certificates,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Company, travel and lodging expense of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road
show, and (x) all other costs and expenses incident to the performance
of the obligations of the Guarantor and the Company hereunder for which
provision is not otherwise made in this Section.
(g) Neither the Guarantor, the Company nor any Affiliate will
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) which could
be integrated with the sale of the Certificates in a manner which would
require the registration under the Securities Act of such Certificates.
(h) Not to solicit any offer to buy or offer or sell the
Certificates 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.
(i) While any of the Certificates remain outstanding, to make
available, upon request, to any seller of such Certificates the
information specified in Rule 144A(d)(4) under the Securities Act,
unless the Guarantor is then subject to Section 13 or 15(d) of the
Exchange Act.
(j) None of the Guarantor, the Company, their Affiliates or
any person acting on its or their behalf (other than the Placement
Agent) will engage in any directed selling efforts (as that term is
defined in Regulation S) with respect to the Certificates, and the
Company and their Affiliates and each person acting on its or their
behalf (other than the Placement Agent) will comply with the offering
restrictions of Regulation S.
(k) For a period of five years after the Closing Date, to make
available to the Placement Agent copies of all annual reports,
quarterly reports and current reports filed by the Guarantor with the
Securities and Exchange Commission (the "Commission") on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall
be furnished by the Company to the holders of Certificates or the
Guarantor to its security holders generally; provided that at such time
the Guarantor has securities registered under Section 12(b) or 12(g) of
the Exchange Act.
(l) During the period of two years after the Closing Date,
upon request, to furnish to the Placement Agent and any holder of
Certificates a copy of the restrictions on transfer applicable to the
Certificates.
(m) During the period of two years the Closing Date, not to,
and not to permit any of their affiliates (as defined in Rule 144 under
the Securities Act) to, resell any of the Certificates that have been
reacquired by any of them.
(n) During the period of two years after the Closing Date, not
to be or become an open-end investment company, unit investment trust
or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act, or a
closed-end investment company required to be registered, but not
registered, under the Investment Company Act.
(o) In connection with the offering, until the Placement Agent
shall have notified the Guarantor and the Company of the completion of
the resale of the Certificates, neither the Company nor any of its
affiliates has bid for or purchased or will bid for or purchase, either
alone or with one or more other persons, for any account in which it or
any of its affiliates has a beneficial interest any Certificates; and
neither it nor any of its affiliates will make bids or purchases for
the purpose of creating actual, or apparent, active trading in, or of
raising the price of, the Certificates.
(p) Between the date of this Agreement and the Closing Date,
neither the Guarantor nor the Company will without your prior written
consent offer, sell, or enter into any agreement to sell, any public
debt securities registered under the Securities Act or any debt
securities which may be resold in a transaction exempt from the
registration requirements of the Securities Act in reliance on Rule
144A thereunder and which are marketed through the use of a disclosure
document containing substantially the same information as a prospectus
for similar debt securities registered under the Securities Act (other
than the Certificates).
(q) If requested by you, to use their best efforts to permit
the Certificates 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;
unless so requested by you, the Guarantor or the Company will not take
any action to permit the Certificates to be designated PORTAL
securities without your prior consent, which shall not be unreasonably
withheld.
6. Offering of Certificates; Restrictions on Transfer. (a) The
Placement Agent represents and warrants that it is a qualified institutional
buyer as defined in Rule 144A under the Securities Act (a "QIB"). The Placement
Agent, agrees with the Company that (i) it will not solicit offers for, or offer
or sell, such Certificates by 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 and (ii) it will solicit offers for such Certificates only
from, and will offer such Certificates only to, persons that it reasonably
believes to be (A) in the case of offers inside the United States, (x) QIBs or
(y) other institutional accredited investors (as defined in Rule 501(a) (1),
(2), (3) or (7) under the Securities Act) ("institutional accredited investors")
that, prior to their purchase of the Certificates, deliver to the Placement
Agent a letter containing the representations and agreements set forth in
Appendix III to the Final Memorandum and (B) in the case of offers outside the
United States, to persons other than U.S. persons ("foreign purchasers", which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)) that, in each case, in purchasing such Certificates are
deemed to have represented and agreed as provided in the Final Memorandum under
the caption "Transfer Restrictions."
(b) The Placement Agent, represents, warrants, and agrees with
respect to offers and sales outside the United States that:
(i) it understands that no action has been or will be taken in
any jurisdiction by the Guarantor or the Company that would permit a
public offering of the Certificates, or possession or distribution of
either Memorandum or any other offering or publicity material relating
to the Certificates, in any country or jurisdiction where action for
that purpose is required;
(ii) it will comply with all applicable laws and regulations
in each jurisdiction in which it acquires, offers, sells or delivers
Certificates or has in its possession or distributes either Memorandum
or any such other material, in all cases at its own expense;
(iii) the Certificates have not been and will not be
registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the Securities Act
or pursuant to an exemption from the registration requirements of the
Securities Act;
(iv) it has offered the Certificates and will offer and sell
the Certificates (A) as part of its distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the
offering of the Certificates and the Closing Date, only in accordance
with Rule 903 of Regulation S or another exemption from the
registration requirements of the Securities Act. Accordingly, neither
the Placement Agent, its Affiliates nor any persons acting on its or
their behalf have engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the
Certificates, and any the Placement Agent, its Affiliates and any such
persons have complied and will comply with the offering restrictions
requirements of Regulation S;
(v) it has not offered or sold and will not offer or sell any
Certificates to persons in the United Kingdom prior to the expiring of
the period six months from the issue date of the Certificates except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995 (the "Regulations"); (B) has complied and will comply
with all applicable provisions of the Financial Services Xxx 0000 and
the Regulations with respect to anything done by it in relation to the
Certificates in, from or otherwise involving the United Kingdom; and
(C) has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue
of the Certificates to a person who is of a kind described in Article
11(3) of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on;
(vi) it understands that the Certificates have not been and
will not be registered under the Securities and Exchange Law of Japan,
and represents that it has not offered or sold, and agrees that it will
not offer or sell, any Certificates, directly or indirectly in Japan or
to any resident of Japan except (A) pursuant to an exemption from the
registration requirements of the Securities and Exchange Law of Japan
and (B) in compliance with any other applicable requirements of
Japanese law.
Terms used in this Section 6 have the meanings given to them by Regulation S.
7. Indemnification and Contribution. (a) The Guarantor and the
Company, jointly and severally, agree to indemnify and hold harmless the
Placement Agent, and each person, if any, who controls the Placement Agent
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, or is under common control with, or is controlled by, the
Placement Agent, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by the Placement Agent or any such controlling or affiliated
person in connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a material fact
contained in either Memorandum (as amended or supplemented if the Guarantor or
the Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in light of the circumstances under
which they were made not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to the
Placement Agent furnished to the Guarantor or the Company in writing by the
Placement Agent through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any Preliminary Memorandum
shall not inure to the benefit of the Placement Agent or any person controlling
the Placement Agent if a copy of the Final Memorandum (as then amended or
supplemented if the Guarantor or the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of the Placement
Agent to the person asserting any such losses, claims, damages or liabilities,
if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Certificates to such person, and if the Final
Memorandum (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Guarantor or the Company with Section 5(a)
hereof.
(b) The Placement Agent agrees to indemnify and hold harmless
the Guarantor and the Company, each of their directors, their officers and each
person, if any, who controls the Guarantor or the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Guarantor and the Company to the
Placement Agent, but only with reference to information relating to the
Placement Agent furnished to the Guarantor or the Company in writing by the
Placement Agent through you expressly for use in either Memorandum or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated in the case of
parties indemnified pursuant to paragraph (a) above and by the Guarantor or the
Company in the case of parties indemnified pursuant to paragraph (b) above. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Guarantor and the Company, on the one hand, and the
Placement Agent, on the other hand, from the offering of such Certificates 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
the Guarantor and of the Company on the one hand and the Placement Agent on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Guarantor and the Company
on the one hand and the Placement Agent on the other hand in connection with the
offering of such Certificates shall be deemed to be in the same respective
proportions as the net proceeds from the offering of such Certificates (before
deducting expenses) received by the Trusts and the total discounts and
commissions received by the Placement Agent in respect thereof bear to the
aggregate offering price of such Certificates. The relative fault of the
Guarantor and the Company on the one hand and of the Placement Agent 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 or alleged
omission to state a material fact relates to information supplied by the
Guarantor or the Company or by the Placement Agent and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Guarantor, the Company and the Placement Agent agree
that it would not be just or equitable if contribution pursuant to this Section
7 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in paragraph
(d) above 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 7, the Placement Agent shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Certificates resold by it in the initial placement of such
Certificates were offered to investors exceeds the amount of any damages that
the Placement Agent 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The indemnity and contribution
provisions contained in this Section 7 and the representations and warranties of
the Guarantor and the Company contained in this Agreement shall remain operative
and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of the Placement Agent or
any person controlling the Placement Agent or by or on behalf of the Guarantor
or the Company, its officers or directors or any person controlling the
Guarantor or the Company and (iii) acceptance of and payment for any of the
Certificates. 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.
8. Termination. This Agreement shall be subject to termination
by notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event singly or
together with any other such event makes it, in your judgment, impracticable to
market the Certificates on the terms and in the manner contemplated in the Final
Memorandum. If this Agreement is terminated by the Placement Agent in accordance
with the provisions of this Section 8, the Guarantor and the Company shall
reimburse the Placement Agent for all its reasonable out-of-pocket expenses,
including the fees and disbursements of counsel for the Placement Agent.
9. All notices and other communications under this Agreement
shall be in writing, and, if sent to the Placement Agent, shall be mailed,
delivered or sent by facsimile transmission to:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Facsimile number: (000) 000-0000
or, if sent to the Guarantor or the Company, will be mailed, delivered or sent by facsimile transmission
to it at:
Atlantic Coast Airlines
000 X Xxxx Xxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile number: (000) 000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx
0000 Xxxxxxxxxxx Xxx., X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile number: (000) 000-0000
10. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
If this Agreement shall be terminated by the Placement Agent
because of any failure or refusal on the part of the Guarantor or the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Guarantor or the Company shall be unable to perform its
obligations under this Agreement, the Guarantor and the Company will, jointly
and severally, reimburse the Placement Agent for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
the Placement Agent in connection with this Agreement or the offering
contemplated hereunder.
This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Please confirm your agreement to the foregoing by signing in
the space provided below for that purpose and returning to us a copy hereof,
whereupon this Agreement shall constitute a binding agreement between us.
Very truly yours,
ATLANTIC COAST AIRLINES, INC.
By
ATLANTIC COAST AIRLINES
By
Agreed, September 19, 1997
Xxxxxx Xxxxxxx & Co.
Incorporated
By
3
SS_NYL4/246328
SS_NYL4/246328
SS_NYL4/246328
SCHEDULE I
3
SS_NYL4/246328
Pass Through Aggregate Final
Certificate Principal Interest Distribution
Designation Amounts Rate Date
1997-1A $57,714,000 7.20% 1/1/2014
1997-1B 24,734,000 7.35 1/1/2011
1997-1C 23,333,000 8.75 1/1/2007
1997-1D 5,805,000 7.97 1/1/2000
---------
Total: $111,586,000
Fees payable to the Placement Agent:
$1,180,766 (1.058 % of the aggregate principal amount of the Certificates; includes $125,000
advisory fee pursuant to Engagement Letter of September 9, 1997)
A-1
