EXHIBIT 1.1
CORNELL CORRECTIONS, INC.
2,750,000 Shares
Common Stock
($.001 Par Value)
FORM OF
UNDERWRITING AGREEMENT
[ ], 1997
UNDERWRITING AGREEMENT
[ ], 1997
SBC WARBURG DILLON READ INC.
EQUITABLE SECURITIES CORPORATION
XXXXXXXXXXX XXXXXXX SECURITIES, INC.
as Managing Underwriters
c/o SBC Warburg Dillon Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Cornell Corrections, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell, and the persons named in Schedule B annexed hereto
(the "FIRM SELLING STOCKHOLDERS") propose to sell, to the underwriters named in
Schedule A annexed hereto (the "UNDERWRITERS") an aggregate of 2,750,000 shares
(the "FIRM SHARES") of Common Stock, par value $.001 per share (the "COMMON
STOCK"), of the Company, of which 2,250,000 shares are to be issued and sold by
the Company and an aggregate of 500,000 shares are to be sold by the Firm
Selling Stockholders in the respective amounts set forth under the caption
"Number of Firm Shares" in Schedule B annexed hereto.
In addition, solely for the purpose of covering over-allotments, the
persons named in Schedule C annexed hereto (the "ADDITIONAL SELLING
STOCKHOLDERS," and, together with the Firm Selling Stockholders, the "SELLING
STOCKHOLDERS") propose to grant to the Underwriters the option to purchase from
the Additional Selling Stockholders up to an additional 412,500 shares of Common
Stock (the "ADDITIONAL SHARES") in the respective amounts set forth under the
caption "Maximum Number of Additional Shares" in Schedule C annexed hereto. The
Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the "SHARES." The Shares are described in the Prospectus which is
referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "ACT"), with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-1 (333- ), including a
prospectus, relating to the Shares. The Company has furnished to you, for use by
the Underwriters and by dealers, copies of one or more preliminary prospectuses
(each, a "PRELIMINARY PROSPECTUS") relating to the Shares. Except where the
context otherwise requires, the registration statement, as amended when it
becomes effective, including all documents filed as a part thereof, and
including any information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 424(b) under the Act and deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is herein called the "REGISTRATION STATEMENT," and the prospectus, in
the form filed by the Company with the Commission pursuant to Rule 424(b) under
the Act or, if no such filing is required, the form of final prospectus included
in the Registration Statement at the time it became effective, is herein called
the "PROSPECTUS." If the Company has filed an abbreviated registration statement
to register additional shares of Common Stock pursuant to Rule 462(b) under the
Act, then any reference herein to Registration Statement shall be deemed to
include such Rule 462(b) registration statement.
The Company, the Selling Stockholders and the Underwriters agree as
follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and
representations and the other terms and conditions herein set forth, the Company
and each of the Firm Selling Stockholders, severally and not jointly, agree to
sell to the respective Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase from the Company and each Firm Selling
Stockholder the respective number of Firm Shares (subject to such adjustment as
you may determine to avoid fractional shares) which bears the same proportion to
the number of Firm Shares to be sold by the Company or by such Firm Selling
Stockholder, as the case may be, as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule A annexed hereto bears to the total
number of Firm Shares to be sold by the Company and the Firm Selling
Stockholders, in each case at a purchase price of $ per Share. You shall release
the Firm Shares for public sale promptly after this Agreement becomes effective.
You may from time to time increase or decrease the public offering price after
the initial offering to such extent as you may determine.
In addition, the Additional Selling Stockholders hereby grant to the
several Underwriters the option to purchase, and upon the basis of the
warranties and representations and the other terms and conditions herein set
forth, the Underwriters shall have the right to purchase, severally and not
jointly, from the Additional Selling Stockholders, all or a portion of the
Additional Shares as may be necessary to cover over-allotments made in
connection with the offering of the Firm Shares, at the same purchase price per
share to be paid by the Underwriters to the Company and the Firm Selling
Stockholders for the Firm Shares. This option may be exercised at any time (but
not more than once) on or before the thirtieth day following the date hereof, by
written notice from SBC Warburg Dillon Read Inc. ("SBC WARBURG DILLON READ") to
the Company and the Additional Selling Stockholders. Such notice shall set forth
the aggregate number of Additional Shares as to which the option is being
exercised, and the date and time when the Additional Shares are to be delivered
(such date and time, the "ADDITIONAL TIME OF PURCHASE"); PROVIDED, HOWEVER, that
the additional time of purchase shall not be earlier than the time of purchase
(as defined below) nor earlier than the second business day after the date on
which the option shall have been exercised nor later than the eighth business
day after the date on which the option shall have been exercised. As used
herein, "BUSINESS DAY" shall mean a day on which the American Stock Exchange,
Inc. (the "AMERICAN STOCK EXCHANGE") is open for trading. The number of
Additional Shares to be sold to each Underwriter shall be the number which bears
the same proportion to the aggregate number of Additional Shares being purchased
as the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A annexed hereto bears to the total number of Firm Shares (subject, in
each case, to such adjustment as you may determine to avoid fractional shares).
The number of Additional Shares to be sold by each Additional Selling
Stockholder shall be the number which bears the same proportion to the aggregate
number of Additional Shares being sold by all Additional Selling Stockholders as
the maximum number of Additional Shares set forth opposite the name of such
Selling Stockholder in Schedule B annexed hereto bears to [412,500] (subject, in
each case, to such adjustment as you may determine to avoid fractional shares).
Pursuant to a power of attorney, which shall be satisfactory to the
Underwriters, granted by each of the Selling Stockholders ("POWER-OF-ATTORNEY"),
Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxxx will act as representatives of such Selling
Stockholders. The foregoing representatives (the "REPRESENTATIVES OF THE SELLING
STOCKHOLDERS") are authorized, on behalf of such Selling Stockholders, to
execute any documents necessary or desirable in connection with the sale of the
Shares to be sold hereunder by such Selling Stockholders, to make delivery of
the certificates for such Shares, to receive the proceeds of the sale of such
Shares, to give receipts for such proceeds, to pay therefrom the expenses to be
borne by such Selling Stockholders in connection with the sale and public
offering of the Shares, to distribute the balance of such proceeds to such
Selling Stockholders in proportion to the number of Shares sold by such Selling
Stockholders, to receive notices on behalf of such Selling Stockholders and to
take such other action as may be necessary or desirable in connection with the
transactions contemplated by this Agreement.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Shares shall be made to the Company and each of the Firm Selling Stockholders by
Federal (same day) funds, at the office of SBCWDR in New York City, against
delivery of the certificates for the Firm Shares to you for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 10:00
A.M., New York City time, on , 1997 (unless another time shall be agreed to by
you and the Company or unless postponed in accordance with the provisions of
Section 10 hereof). The time at which such payment and delivery are actually
made is hereinafter sometimes called the "TIME OF PURCHASE." Certificates for
the Firm Shares shall be delivered to you in definitive form in such names and
in such denominations as you shall specify on the second business day preceding
the time of purchase. For the purpose of expediting the checking of the
certificates for the Firm Shares by you, the Company and the Firm Selling
Stockholders agree to make such certificates available to you for such purpose
at least one full business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be
made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify on the second business day preceding the
additional time of purchase. For the purpose of expediting the checking of the
certificates for the Additional Shares by you, the Additional Selling
Stockholders agree to make such certificates available to you for such purpose
at least one full business day preceding the additional time of purchase.
The Selling Stockholders will pay all applicable state transfer
taxes, if any, involved in the transfer to the several Underwriters of the
Shares to be purchased by them from the Selling Stockholders.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each of the Underwriters that:
(a) (i) each Preliminary Prospectus when filed as a part of the
Registration Statement, or filed pursuant to Rule 424 under the Act, and
the Registration Statement and the Prospectus at the time the Registration
Statement became or becomes effective, including at the time of
effectiveness of any post-effective amendment, complied when so filed and
will fully comply in all material respects with the provisions of the Act,
(ii) the Registration Statement at all such times did not and will 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 not misleading, and (iii) the Prospectus at all such times did not
and will 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; PROVIDED, HOWEVER, that the Company makes no
warranty or representation with respect to any statement contained in the
Registration Statement or the Prospectus in reliance upon and in
conformity with information concerning the Underwriters and furnished in
writing by or on behalf of any Underwriter through you to the Company
expressly for use in the Registration Statement or the Prospectus;
(b) as of the date of this Agreement, the Company has an authorized
capitalization as set forth under the heading entitled "Pro Forma" in the
section of the Registration Statement and the Prospectus entitled
"Capitalization" and, as of the time of purchase, the Company shall have
an authorized capitalization as set forth under the heading "Pro Forma As
Adjusted" in the section of the Registration Statement and Prospectus
entitled "Capitalization." Except as described in the Registration
Statement and the Prospectus, there are no outstanding options, warrants
or other rights to acquire any capital stock of the Company and the
Company has no shares of capital stock reserved for issuance; all of the
issued and outstanding shares of capital stock including Common Stock of
the Company have been duly authorized and validly issued and are fully
paid and non-assessable; none of the issued shares of capital stock of the
Company have been issued or are owned or held in violation of any
preemptive rights of stockholders; the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws
of the State of Delaware, with full power and authority to own its
properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and to
issue and sell the Shares to be sold by the Company as herein
contemplated;
(c) all of the issued and outstanding shares of capital stock of
each of the subsidiaries of the Company listed on Exhibit 21.1 to the
Registration Statement (the "SUBSIDIARIES") (A) are owned directly by the
Company or by a wholly-owned Subsidiary of the Company, (B) have been duly
authorized and validly issued and are fully paid and non-assessable, and
(C) except as described in the Registration Statement and the Prospectus,
are owned free and clear of any pledge, lien, encumbrance, security
interest or other claim; there are no outstanding rights, subscriptions,
warrants, calls, preemptive rights, options or other agreements of any
kind with respect to the capital stock of any of the Subsidiaries; other
than the Subsidiaries, the Company does not own, directly or indirectly,
any capital stock or other equity securities of any other corporation or
any ownership interest in any partnership, joint venture or other
association; each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation, with full corporate power and
authority to own its respective properties and to conduct its respective
business;
(d) the Company and each of the Subsidiaries are duly qualified or
licensed by and are in good standing in each jurisdiction in which they
conduct their respective businesses and in which the failure to be so
licensed or qualified, singly or in the aggregate with all other such
failures, could have a material adverse effect on the operations,
business, condition (financial or otherwise), or prospects of the Company
and the Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"); and
the Company and each of the Subsidiaries are in compliance in all material
respects with the laws, orders, rules, regulations and directives issued
or administered by such jurisdictions;
(e) the Board of Directors of the Company has duly adopted
resolutions authorizing the issuance and sale of the Shares to be sold by
the Company; the Shares to be sold by the Company, when issued and
delivered to and paid for by the Underwriters as contemplated hereby, will
be duly authorized and validly issued and fully paid and non-assessable,
free and clear of any pledge, lien, encumbrance, security interest,
preemptive right or other claim;
(f) neither the Company nor any of the Subsidiaries is in breach of,
or in default under (nor has any event occurred that with notice, lapse of
time, or both would constitute a breach of, or default under), (i) its
respective charter or by-laws, (ii) the performance or observance of any
obligation, agreement, covenant or condition contained in any license,
indenture, lease, mortgage, deed of trust, bank loan or credit agreement
or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or their respective
properties may be bound or affected, or (iii) any Federal, state or local
foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of the Subsidiaries or any regulation,
guideline or other policy of any Federal, state or local governmental or
regulatory commission, board, body, authority or agency applicable to the
business of the Company or any of the Subsidiaries, except, in the case of
breaches or defaults described in clauses (ii) and (iii) above, where such
breaches or defaults, singly or in the aggregate with all other such
breaches or defaults, would not have a Material Adverse Effect; the
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will not conflict with, or result
in any breach of or constitute a default under (nor constitute any event
that with notice, lapse of time, or both would constitute a breach of, or
default under) (i) any provision of the charter or by-laws of the Company
or any of the Subsidiaries, (ii) any provision of any license, indenture,
lease, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company or any of the Subsidiaries is
a party or by which any of them or their respective properties may be
bound or affected, or (iii) any Federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Company or any of the Subsidiaries or any regulation, guideline or other
policy of any Federal, state or local governmental or regulatory
commission, board, body, authority or agency applicable to the business of
the Company or any of the Subsidiaries;
(g) this Agreement has been duly authorized, executed and delivered
by the Company;
(h) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof set forth under the
caption "Description of Capital Stock" contained in the Registration
Statement and the Prospectus and the certificates for the Shares are in
due and proper form and the holders of the Shares will not be subject to
personal liability by reason of being such holders;
(i) no approval, authorization, consent or order of or filing with
any Federal, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the issuance and
sale of the Shares to be sold by the Company as contemplated hereby other
than registration of such Shares under the Act;
(j) no person has the right, contractual or otherwise, to cause the
Company to register pursuant to the Act any shares of capital stock or
other securities of the Company upon the issue and sale of the Shares to
the Underwriters hereunder (except pursuant to registration rights which
have been waived and except with respect to Shares registered under the
Registration Statement), nor does any person have preemptive rights,
rights of first refusal or other rights to purchase any of the Shares
which have not been waived;
(k) Xxxxxx Xxxxxxxx LLP, whose reports on the consolidated financial
statements of the Company and its Subsidiaries are filed with the
Commission as part of the Registration Statement and the Prospectus, are
independent certified public accountants as required by the Act and the
applicable published rules and regulations thereunder;
(l) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all
necessary filings required under any Federal, state, local or foreign law,
regulation or rule, and has obtained all necessary authorizations,
consents and approvals from other persons, in order to conduct its
respective business, except where the failure to have, make or obtain such
licenses, authorizations, consents, approvals or filings, singly or in the
aggregate with all other such failures, would not have a Material Adverse
Effect; neither the Company nor any of the Subsidiaries is in violation
of, or in default under, any such license, authorization, consent or
approval, which violation or default, singly or in the aggregate with all
other such violations and defaults, could have a Material Adverse Effect;
(m) all legal or governmental proceedings, contracts or documents of
a character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement have
been so described or filed as required;
(n) there is no action, suit or proceeding pending or, to the
Company's knowledge, threatened against the Company or any of the
Subsidiaries or any of their respective properties, at law or in equity,
or before or by any Federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency that, singly or in
the aggregate with all other such actions, suits and proceedings, could
have a Material Adverse Effect or which seeks to enjoin or restrain the
execution, delivery and performance of this Agreement, the incurrence of
the obligations herein set forth and the consummation of the transactions
contemplated hereby;
(o) the audited and unaudited financial statements included in the
Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and its Subsidiaries as of the dates
indicated and the consolidated results of operations and changes in
financial position of the Company and the Subsidiaries for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods presented; the pro forma financial information included
in the Registration Statement and the Prospectus has been prepared in
accordance with the applicable requirements of Rule 11-02 of Regulation
S-X and the assumptions used in the preparation thereof are, in the
opinion of the Company, reasonable;
(p) subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as may be
otherwise stated in the Registration Statement or Prospectus, there has
not been (A) any material and unfavorable change or any development
involving a prospective material and unfavorable change in or affecting
the business, properties, results of operations or condition (financial or
otherwise), present or prospective, of the Company and the Subsidiaries,
taken as a whole, (B) any transaction, which is material to the Company
and its Subsidiaries, taken as a whole, contemplated or entered into by
the Company or any of its Subsidiaries or (C) any obligation, contingent
or otherwise, directly or indirectly incurred by the Company or any of the
Subsidiaries which is material to the Company and the Subsidiaries, taken
as a whole;
(q) the Company has obtained the written agreement (each, a "LOCK-UP
AGREEMENT") in the form previously provided by the Underwriters of each of
its directors and officers and certain of its stockholders previously
specified by the Managing Underwriters not to sell, contract to sell,
grant any option to sell or otherwise dispose of, directly or indirectly,
any shares of Common Stock or securities convertible into or exchangeable
for Common Stock or warrants or other rights to purchase Common Stock for
a period of 90 days after the date of the Prospectus, without the prior
written consent of SBCWDR;
(r) except as disclosed in the Registration Statement and the
Prospectus, each material contract, agreement or arrangement to which the
Company or any Subsidiary is a party or by which it is bound is in full
force and effect; neither the Company nor any Subsidiary has received
notice from any of the other parties to any such contract, agreement or
arrangement that such other party intends not to perform or terminate such
contract, agreement or arrangement, and neither the Company nor any
Subsidiary has any reason to believe that any of the other parties to any
such contract, agreement or arrangement will be unable to perform or
intend to terminate such contract, agreement or arrangement; neither the
Company nor any subsidiary has been informed by any contracting entity,
whether governmental, quasi-governmental or non-governmental, that the
Company or such Subsidiary will not be permitted to rebid for a material
contract;
(s) except as described in the Registration Statement and the
Prospectus, the Company and the Subsidiaries have good title to all
properties and assets owned by them and have good leasehold interests in
each property and asset leased by them, in each case free and clear of all
pledges, liens, encumbrances, security interests, charges, mortgages and
defects, except such as do not materially affect the value of such
property and such as do not interfere with the use made and proposed to be
made of such properties by the Company and the Subsidiaries;
(t) the business, operations and facilities of the Company and each
of the Subsidiaries have been and are being conducted in compliance with
all applicable laws, ordinances, rules, regulations, licenses, permits,
approvals, plans, authorizations or requirements relating to occupational
safety and health, or pollution, or protection of health or the
environment, or reclamation (including, without limitation, those relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic substances, materials or wastes into
ambient air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes, whether solid, gaseous
or liquid in nature) or otherwise relating to remediating real property of
any governmental department, commission, board, bureau, agency or
instrumentality of the United States, any state or political subdivision
thereof, or any foreign jurisdiction, and all applicable judicial or
administrative agency or regulatory decrees, awards, judgments and orders
relating thereto, except any violation thereof which would not, singly or
in the aggregate, have a Material Adverse Effect; and neither the Company
nor any of its Subsidiaries has received any notice from a governmental
instrumentality or any third party alleging any violation thereof or
liability thereunder (including, without limitation, liability for costs
of investigating or remediating sites containing hazardous substances
and/or damages to natural resource);
(u) except as described in the Registration Statement and the
Prospectus, to the Company's knowledge, no labor union or any
representative thereof has made any attempt to organize or represent
employees of the Company or the Subsidiaries; neither the Company nor any
of the Subsidiaries has been subject to a strike or other work stoppage
since the respective dates of their organization and, to the Company's
knowledge, no strikes or work stoppages are contemplated against the
Company or the Subsidiaries;
(v) the Company and each of the Subsidiaries have filed all federal
or state income and franchise tax returns required to be filed and have
paid all taxes shown thereon as due and there is no material tax
deficiency which has been or is reasonably likely to be asserted against
the Company or any of the Subsidiaries; all material tax liabilities of
the Company and the Subsidiaries are adequately provided for on the books
of the Company and the Subsidiaries; and
(w) the Company, either directly or through one or more
Subsidiaries, has in effect, with financially sound insurers, insurance
with respect to its business and properties and the business and
properties of the Subsidiaries against liability, loss or damage of the
kind customarily insured against by corporations engaged in the same or
similar businesses and similarly situated, of such type and in such
amounts as are customarily carried under similar circumstances by such
other corporations.
(x) neither the Company nor any of its officers, directors or
affiliates (within the meaning of the Act) has taken, directly or
indirectly, any actions in violation of Regulation M ("Regulation M")
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter that:
(a) such Selling Stockholder now is, and at the time of delivery of
its Shares (whether at the time of purchase or the additional time of
purchase, as the case may be) will be, the lawful owner of the number of
Shares to be sold by such Selling Stockholder pursuant to this Agreement
and has and, at the time of delivery thereof (whether at the time of
purchase or the additional time of purchase, as the case may be), will
have valid and marketable title to such Shares, and upon delivery of and
payment for such Shares, the Underwriters will acquire valid and
marketable title to such Shares free and clear of any claim, lien,
encumbrance, security interest, community property right, restriction on
transfer or other defect in title;
(b) such Selling Stockholder has and at the time of delivery of the
Shares to be sold by such Selling Stockholders (whether at the time of
purchase or the additional time of purchase, as the case may be) will have
full legal right, power and capacity, and any approval required by law
(other than those imposed by the Act and the securities or blue sky laws),
to sell, assign, transfer and deliver such Shares in the manner provided
in this Agreement;
(c) this Agreement, the Custody Agreement, dated as of the date
hereof, among the Company, as custodian, and the Selling Stockholders (the
"CUSTODY AGREEMENT"), and the Lock-Up Agreement executed by such Selling
Stockholder have been duly executed and delivered by such Selling
Stockholder;
(d) when the Registration Statement becomes effective and at all
times subsequent thereto through the latest of the time of purchase,
additional time of purchase and the termination of the offering of the
Shares, the Registration Statement and any amendments thereto, solely as
it relates to such Selling Stockholder, will 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 not
misleading, and the Prospectus, and any supplements thereto, solely as it
relates to such Selling Stockholder, will 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;
(e) the Power-of-Attorney has been duly executed and delivered by
such Selling Stockholder and is a legal, valid and binding agreement of
such Selling Stockholder enforceable in accordance with its terms; such
Selling Stockholder has duly and irrevocably authorized the
Representatives of the Selling Stockholder, on behalf of such Selling
Stockholder, to execute and deliver this Agreement and any other document
necessary or desirable in connection with the transactions contemplated
hereby and to deliver the Shares to be sold by such Selling Stockholder
and receive payment therefor pursuant hereto; and
(f) the sale of such Selling Stockholder's Shares pursuant to this
Agreement is not prompted by any information concerning the Company which
is not set forth in the Prospectus.
(g) neither such Selling Stockholder nor any of its affiliates has
taken, directly or indirectly, any action in violation of Regulation M.
5. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to make available to you in New York City, as soon as
practicable after the Registration Statement becomes effective (but in any
event not later than 1:00 P.M. on the business day immediately following
the date hereof), and thereafter, from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes contemplated
by the Act;
(b) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes effective
and (ii) if Rule 430A under the Act is used, when the Prospectus is filed
with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner under such Rule);
(c) to advise you promptly (and to confirm such advice in writing)
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto or the issuance by the Commission of a stop order
suspending the effectiveness of the Registration Statement or the
threatening or initiation of any proceedings for that purpose; to make
every reasonable effort to prevent the issuance of any stop order or if
any stop order should have been entered by the Commission, to obtain the
lifting or removal thereof as soon as possible; to advise you promptly of
any proposal to amend or supplement the Registration Statement or the
Prospectus and to file no such amendment or supplement to which you shall
object in writing;
(d) to furnish to you and, upon request, to each of the other
Underwriters, for a period of five years from the date of this Agreement
(i) copies of any reports or other communications which the Company shall
send to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar form as may be designated by the Commission, and (iii) such other
information as you may reasonably request regarding the Company or the
Subsidiaries;
(e) to advise the Underwriters promptly of the happening of any
event known to the Company within the time during which a prospectus
relating to the Shares is required to be delivered under the Act which, in
the judgment of the Company, would require the making of any change in the
Prospectus then being used so that the Prospectus would not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading, and, during such
time, to prepare and furnish, at the Company's expense, to the
Underwriters promptly such amendments or supplements to such Prospectus as
may be necessary to reflect any such change and to furnish you a copy of
such proposed amendment or supplement before filing any such amendment or
supplement with the Commission;
(f) to make generally available to its security holders, and to
deliver to you, an earning statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act, including, without limitation,
Rule 158) covering a period of twelve months beginning after the effective
date of the Registration Statement but not later than the last day of the
fifteenth full calendar month following the calendar quarter in which such
effective date falls, as soon as is reasonably practicable after the
termination of such twelve-month period;
(g) to furnish to you four signed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto) and sufficient conformed copies
of the foregoing (other than exhibits unless specifically requested) for
distribution of a copy to each of the other Underwriters;
(h) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim consolidated financial statements, if any, of the
Company and the Subsidiaries which have been read by the Company's
independent certified public accountants, as stated in their letter to be
furnished pursuant to Section 8(c) of this Agreement;
(i) to apply the net proceeds from the sale of the Shares by the
Company in the manner set forth under the caption "Use of Proceeds" in the
Registration Statement and Prospectus;
(j) to furnish to you, contemporaneously with the filing with the
Commission subsequent to the effective date of the Registration Statement
and during the period referred to in paragraph (f) above, a copy of any
document proposed to be filed pursuant to Sections 13, 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "EXCHANGE ACT");
(k) to cause the Shares to be listed on the American Stock Exchange;
and
(l) not to take, directly or indirectly, any action in violation of
Regulation M.
6. CERTAIN COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.
(a) The Company agrees with each Underwriter that, the Company will
pay all expenses, fees and taxes (other than any transfer taxes and fees
and disbursements of counsel for the Underwriters except as set forth
under Section 7 hereof or (iii) or (iv) below) in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and
the printing and furnishing of copies of each thereof to the Underwriters
and to dealers (including costs of mailing and shipment), (ii) the
issuance, sale and delivery of the Shares by the Company and the Selling
Stockholders, (iii) the word processing and/or printing of this Agreement,
any Agreement Among Underwriters, any dealer agreements, any Statements of
Information, the Custody Agreement and the Power-of-Attorney and the
reproduction and/or printing and furnishing of copies of each thereof to
the Underwriters and dealers (including costs of mailing and shipment),
(iv) the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v) any
listing of the Shares on the American Stock Exchange, (vi) the filing for
review of the public offering of the Shares by the NASD and (vii) the
performance of the Company's and the Selling Stockholders' other
obligations hereunder.
(b) The Company and each of the Selling Stockholders agree with each
Underwriter that, for a period of 90 days after the date of the
Prospectus, the Company will not issue, and the Company and the Selling
Stockholders will not sell, contract to sell, grant any option to sell or
otherwise dispose of, directly or indirectly, any shares of Common Stock
or securities convertible into or exchangeable for Common Stock or
warrants or other rights to purchase Common Stock or permit the
registration under the Act of any shares of Common Stock without the prior
written consent of SBCWDR, except that (i) the Company may register the
Shares, and the Company and the Selling Stockholders may sell the Shares
to the Underwriters, pursuant to this Agreement, and (ii) the Company may
issue shares of Common Stock upon the exercise of outstanding warrants or
the exercise of outstanding options, provided that the Company shall have
obtained a Lock-Up Agreement from each such person to whom such shares of
Common Stock are issued. [Additional exceptions, if any, to be discussed].
(c) Each of the Selling Stockholders agree with each Underwriter
that such Selling Stockholder shall advise the Company and the
Underwriters promptly of any additional or changed information relating to
such Selling Stockholder known by such Selling Stockholder which, within
the time during which a prospectus relating to the Shares is required to
be delivered under the Act, would require the making of any change in the
Prospectus then being used so that, with respect to the information
concerning such Selling Stockholder, the Prospectus would not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 10 hereof or the default by one or more
of the Underwriters in its or their respective obligations hereunder, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of their counsel.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholders on the
date hereof and at the time of purchase (and the several obligations of the
Underwriters at the additional time of purchase are subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Stockholders on the date hereof and at the time of purchase (unless previously
waived) and at the additional time of purchase, as the case may be), the
performance by the Company and the Selling Stockholders of their obligations
hereunder and to the following conditions:
(a) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of
Liddell, Sapp, Zivley, Hill & XxXxxx, L.L.P, counsel for the Company,
addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies
for each of the other Underwriters and in form satisfactory to Xxxxxx
Xxxxxx & Xxxxxxx, counsel for the Underwriters, stating that:
(i)the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement
and to issue, sell and deliver the Shares being sold by it as herein
contemplated;
(ii) each of the Subsidiaries of the Company listed on
Schedule D annexed hereto (each, a "Designated Subsidiary") has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of
incorporation with corporate power and authority to own its
respective properties and to conduct its respective business as
described in the Registration Statement and Prospectus;
(iii) the Company and the Designated Subsidiaries are duly
qualified to do business, and are in good standing as a corporation,
in each state listed opposite the name of such corporation on
Schedule D annexed hereto;
(iv) all of the issued and outstanding shares of capital stock
of each of the Subsidiaries (A) are owned directly by the Company or
by a wholly-owned Subsidiary of the Company, (B) have been duly
authorized and validly issued and are fully paid and non-assessable,
and (C) to such counsel's knowledge, except as described in the
Registration Statement and the Prospectus, are owned free and clear
of any claim, security interest, preemptive rights, restriction on
transfer or other defect in title; and, to such counsel's knowledge,
except as described in the Registration Statement and the
Prospectus, there are no outstanding rights, subscriptions,
warrants, calls, options or other agreements of any kind with
respect to the capital stock of the Company or any of the
Subsidiaries;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the Shares have been duly and validly authorized, and the
Shares to be issued by the Company, when issued and delivered to and
paid for by the Underwriters in accordance with this Agreement, will
be duly and validly issued and will be fully paid and
non-assessable;
(vii) as of the date of the opinion, the Company has an
authorized capitalization as set forth under the caption
"Capitalization" in the Registration Statement and the Prospectus;
(viii) the outstanding shares of capital stock of the Company
have been duly and validly authorized and issued, and are fully
paid, non-assessable and free of statutory and, to such counsel's
knowledge, contractual preemptive rights; the Shares to be sold by
the Company when issued will be free of statutory and contractual
preemptive rights and will not be issued in violation of any rights
of first refusal or similar rights to purchase any Shares which have
not been waived; the certificates for the Shares conform to the
requirements of the Delaware General Corporation Law, the Company's
restated certificate of incorporation and by-laws as in effect on
the date of the opinion and the rules and regulations of the
American Stock Exchange and the holders of the Shares, after making
payment therefor as contemplated hereby and absent conduct on the
part of the holder that would make the failure to impose liability
on such holder inequitable under Delaware law, will not be subject
to personal liability by reason of being such holders;
(ix) the capital stock of the Company, including the Shares,
conforms as to legal matters in all material respects to the
description thereof set forth under the caption "Description of
Capital Stock" in the Registration Statement and Prospectus;
(x) the Registration Statement and the Prospectus (other than
(a) the financial statements and related schedules contained therein
or omitted therefrom, including the notes thereto and the auditors'
reports thereon, (b) the other financial and statistical data
contained therein or omitted therefrom and (c) the exhibits thereto,
as to which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act;
(xi) the Registration Statement has become effective under the
Act and, to such counsel's knowledge, no stop order proceedings with
respect thereto are pending or threatened under the Act;
(xii) no approval, authorization, consent or order of or
filing with any Federal, state or local governmental or regulatory
commission, board, body, authority or agency is legally required to
be obtained by the Company in connection with the issuance and sale
of the Shares to be sold by the Company as contemplated hereby other
than registration of such Shares under the Act (except such counsel
need express no opinion as to any necessary qualification under the
state securities or blue sky laws of the various jurisdictions in
which such Shares are being offered by the Underwriters);
(xiii) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby do not and will not result in any
breach of, or constitute a default under (nor constitute any event
which with notice, lapse of time, or both, would constitute a breach
of or default under), (a) any provisions of the charter or by-laws
of the Company or any of the Subsidiaries or (b) any provision of
any license, indenture, lease, mortgage, deed of trust, loan, credit
agreement or other agreement or instrument known to such counsel to
which the Company or any of the Subsidiaries is a party or by which
any of them or their respective properties are bound or affected, or
(c) any law, regulation or rule or any decree, judgment or order
known to such counsel to be applicable to the Company or any of the
Subsidiaries;
(xiv) to such counsel's knowledge, neither the Company nor any
of its Subsidiaries 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), (a) any license,
indenture, lease, mortgage, deed of trust, loan, credit agreement or
any other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or their respective
properties are bound or affected, or (b) any law, regulation or rule
or any decree, judgment or order applicable to the Company or any of
its Subsidiaries, which breach or default would, singly or in the
aggregate, have a Material Adverse Effect;
(xv) to such counsel's knowledge, there are no contracts,
licenses, agreements, leases or documents of a character which are
required to be filed as exhibits to the Registration Statement which
have not been so filed;
(xvi) to such counsel's knowledge, there are no actions, suits
or proceedings pending or threatened against the Company or any of
the Subsidiaries 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; and
(xvii) to such counsel's knowledge, no person has the right,
contractual or otherwise, to cause the Company to register pursuant
to the Act any shares of capital stock or other securities of the
Company upon the issue and sale of the Shares to the Underwriters
hereunder (except pursuant to registration rights which have been
waived and except with respect to Shares registered under the
Registration Statement).
In addition, such counsel shall state that in connection with the
preparation of the Registration Statement and the Prospectus, such counsel
has participated in various discussions and meetings with officers and
other representatives of the Company, representatives of the independent
public accountants of the Company and representatives of the Underwriters
at which the contents of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon and does not
assume responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus (except
as and to the extent stated in subparagraphs (vii) and (ix) above), on the
basis of the foregoing (relying as to materiality to a large extent upon
the opinions of officers and other representatives of the Company) nothing
has come to the attention of such counsel that causes it to believe that
the Registration Statement (other the than (i) financial statements and
related schedules contained therein or omitted therefrom (including the
notes to the financial statements and auditors' reports on the financial
statements), (ii) the other financial and statistical information
contained therein or omitted therefrom and (iii) the exhibits thereto, as
to which such counsel need not express an opinion) at the time such
Registration Statement became effective contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
that the Prospectus (other than (i) the financial statements and related
schedules contained therein or omitted therefrom (including the notes to
the financial statements and the auditors' reports on the financial
statements) and (ii) the other financial or statistical information
contained therein or omitted therefrom, as to which such counsel need not
express an opinion) at the date of such Prospectus, and as of the time of
purchase or additional time of purchase, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
In rendering their opinion, Liddell, Sapp, Zivley, Hill & XxXxxx,
L.L.P. may limit their opinion to the Delaware General Corporation Law,
the general contract law of the State of New York, the laws of the United
States of America and the laws of the State of Texas, in each case as in
effect on the date of such opinion, and may rely as to factual matters on
certificates of public officials and officers of the Company or the
Subsidiaries, provided that copies of such certificates are provided to
you.
(b) The Selling Stockholders shall furnish to you at the time of
purchase or the additional time of purchase, as the case may be, (i) an
opinion of , in the case of Concord Partners II, L.P. and
Concord Partners Japan Limited ("Concord"), counsel for Concord, (ii) an
opinion of , in the case of Internationale Nederlanden (U.S.)
Capital Corportion ("ING Capital"), counsel for ING Capital, (iii) an
opinion of, in the case of Charterhouse Equity Partners II, L.P.
("Charterhouse"), counsel for Charterhouse, and (iv) an opinion of
, in the case of Xxxxx University, counsel for Xxxxx
University, in each case addressed to the Underwriters, and dated the time
of purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters, and in form and
substance satisfactory to Xxxxxx Xxxxxx & Xxxxxxx, counsel for the
Underwriters, stating that:
(i) this Agreement, the Custody Agreement and a Lock-Up
Agreement have been duly executed and delivered by or on behalf of
such Selling Stockholder and each of the Custody Agreement and the
Lock-Up Agreement is a legal, valid and binding agreement of such
Selling Stockholder;
(ii) the Power-of-Attorney has been duly executed and
delivered by such Selling Stockholder and is the legal, valid and
binding agreement of such Selling Stockholder;
(iii) such Selling Stockholder has full legal right and power,
and has obtained any authorization or approval required by law
(other than those imposed by the Act and the securities or blue sky
laws of certain jurisdictions), to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder in the
manner provided in this Agreement;
(iv) delivery of certificates for the Shares by such Selling
Stockholder pursuant hereto will pass valid and marketable title
thereto to the Underwriters, free and clear of any claim, lien,
encumbrance, security interest, community property right,
restriction on transfer or other defect in title;
(v) each of the Representatives of the Selling Stockholder has
been duly authorized by such Selling Stockholder to execute and
deliver on behalf of such Selling Stockholder this Agreement and any
other document necessary or desirable in connection with the
transactions contemplated hereby and to deliver the Shares to be
sold by such Selling Stockholder; and
(vi) to the best of such counsel's knowledge, the statements
in the Prospectus under the caption "Principal and Selling
Stockholders" insofar as such statements constitute a summary of the
matters referred to therein present fairly the information called
for with respect to such matters.
(c) You shall have received from Xxxxxx Xxxxxxxx LLP, letters dated,
respectively, the date of this Agreement and the time of purchase and
additional time of purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the
forms heretofore approved by the Managing Underwriters.
(d) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion of
Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, in form
and substance satisfactory to you.
(e) No amendment or supplement to the Registration Statement or
Prospectus shall be filed prior to the time of purchase or the additional
time of purchase to which you object in writing.
(f) The Registration Statement shall have become effective at or
before 5:00 P.M., New York City time, on the date of this Agreement, or if
Rule 430A under the Act is used, the Prospectus shall have been filed with
the Commission in accordance with Rule 424(b) under the Act at or before
5:00 P.M., New York City time, on the date of this Agreement, unless a
later time, but not later than 5:00 p.m., New York City time, on the
second full business day after the date of this Agreement, shall have been
agreed to by you and the Company; PROVIDED, HOWEVER, that the Company and
you or any group of Underwriters, including you, who have agreed hereunder
to purchase in the aggregate at least 50% of the Firm Shares may from time
to time agree on a later time for the effectiveness of the Registration
Statement.
(g) Prior to the time of purchase or the additional time of
purchase, as the case may be: (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under
the Act or proceedings initiated under Section 8(d) or 8(e) of the Act;
(ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall 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 not misleading; and
(iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall 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 are made, not misleading.
(h) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no
material and unfavorable change or any development involving a prospective
material unfavorable change in or affecting the business, properties,
results of operations or condition (financial or otherwise) of the Company
and its Subsidiaries, taken as a whole shall occur or become known, (ii)
no transaction which is material and unfavorable to the Company and its
Subsidiaries, taken as a whole shall have been entered into by the Company
or any of its Subsidiaries and (iii) there has not been any obligation,
contingent or otherwise, directly or indirectly, incurred by the Company
or any of its Subsidiaries which is material to the Company and its
Subsidiaries, taken as a whole.
(i) The Company will, at the time of purchase or the additional time
of purchase, as the case may be, deliver to you a certificate of two of
its executive officers to the effect that the representations and
warranties of the Company as set forth in this Agreement and the
conditions set forth in paragraphs (g) and (h) of this Section 8 have been
met and that they are true and correct as of each such date.
(j) The signed Lock-Up Agreements shall remain in full force and
effect.
(k) The Shares shall have been listed on the American Stock
Exchange, subject only to notice of issuance, at or prior to the time of
purchase.
(l) The Selling Stockholders will at the time of purchase or the
additional time of purchase, as the case may be, deliver to you a
certificate to the effect that the representations and the warranties of
the Selling Stockholders as set forth in this Agreement are true and
correct as of each such date.
(m) The Company and the Selling Stockholders shall have furnished to
you such other documents and certificates as to the accuracy and
completeness of any statement in the Registration Statement and the
Prospectus as of the time of purchase and the additional time of purchase,
as the case may be, as you may reasonably request.
(n) The Company and the Selling Stockholders shall have performed
such of their respective obligations under this Agreement as are to be
performed by the terms hereof at or before the time of purchase and at or
before the additional time of purchase, as the case may be.
9. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if, at any time prior to the time of
purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or minimum prices shall have been established
on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market, or if a banking moratorium shall have been declared either by
the United States or New York State authorities, or if the United States shall
have declared war in accordance with its constitutional processes or there shall
have occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis of such magnitude in its effect on
the financial markets of the United States as, in your judgment or in the
judgment of such group of Underwriters, make it impracticable to market the
Shares.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 9, the Company, the Representatives of the
Selling Stockholders and each other Underwriter shall be notified promptly by
letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated by
this Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company or
the Selling Stockholders, as the case may be, shall be unable to comply with any
of the terms of this Agreement, the Company or the Selling Stockholders, as the
case may be, shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 6(a), 7 and 11 hereof), and the
Underwriters shall be under no obligation or liability to the Company and the
Selling Stockholders under this Agreement (except to the extent provided in
Section 11 hereof) or to one another hereunder.
10. INCREASE IN UNDERWRITERS' COMMITMENTS. If any Underwriter shall
default in its obligation to take up and pay for the Firm Shares to be purchased
by it hereunder and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the aggregate principal amount of Firm
Shares they are obligated to purchase pursuant to Section 1 hereof) the number
of Firm Shares agreed to be purchased by all such defaulting Underwriters, as
hereinafter provided. Such Shares shall be taken up and paid for by such
non-defaulting Underwriter or Underwriters in such amount or amounts as you may
designate with the consent of each Underwriter so designated or, in the event no
such designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company and the Selling Stockholders agree with the
non-defaulting Underwriters that they will not sell any Firm Shares hereunder
unless all of the Firm Shares are purchased by the Underwriters (or by
substituted Underwriters selected by you with the approval of the Company or
selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 10 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
11. INDEMNITY BY THE COMPANY, THE SELLING STOCKHOLDERS AND THE
UNDERWRITERS.
(a) The Company and the Selling Stockholders, individually and not
jointly, agree to indemnify, defend and hold harmless each Underwriter and any
person who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, from and against any loss, expense, liability
or claim (including the reasonable cost of investigation) which, jointly or
severally, any such Underwriter or any such controlling person may incur under
the Act, the Exchange Act or otherwise, insofar as such loss, expense, liability
or claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this Section
11 being deemed to include any Preliminary Prospectus, the Prospectus and the
Prospectus as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in either such Registration Statement or Prospectus or necessary to
make the statements made therein not misleading, except insofar as any such
loss, expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by any Underwriter through you
to the Company expressly for use with reference to such Underwriter in such
Registration Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated in either such Registration Statement or
Prospectus or necessary to make such information not misleading; PROVIDED,
HOWEVER, that the indemnity agreement contained in this subsection (a) with
respect to any Preliminary Prospectus or amended Preliminary Prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such loss,
expense, liability or claim purchased the Shares which are the subject thereof
if the Prospectus corrected any such alleged untrue statement or omission and if
such Underwriter failed to send or give a copy of the Prospectus to such person
at or prior to the written confirmation of the sale of such Shares to such
person; PROVIDED, FURTHER, that no Selling Stockholder shall be responsible for
losses, expenses, liability or claims arising out of or based upon such untrue
statement or omission or allegation thereof based upon information other than
information provided in writing by such Selling Stockholder expressly for use in
the Registration Statement.
If any action is brought against an Underwriter or controlling
person in respect of which indemnity may be sought against the Company or any
Selling Stockholder pursuant to the foregoing paragraph, such Underwriter shall
promptly notify the Company and the Representatives of the Selling Stockholders
in writing of the institution of such action and the Company or such Selling
Stockholder, as the case may be, shall assume the defense of such action,
including the employment of counsel and payment of expenses. Such Underwriter or
such controlling person shall have the right to employ its or their own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or of such controlling person unless the employment
of such counsel shall have been authorized in writing by the Company or such
Selling Stockholder in connection with the defense of such action or the Company
or such Selling Stockholder shall not have employed counsel to have charge of
the defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to the Company or such
Selling Stockholder (in which case the Company or such Selling Stockholder shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Company or such Selling Stockholder, as the case may be,
and paid as incurred (it being understood, however, that the Company or such
Selling Stockholder shall not be liable for the expenses of more than one
separate counsel in any one action or series of related actions in the same
jurisdiction representing the indemnified parties who are parties to such action
which firm shall be designated in writing by SBCWDR). Anything in this paragraph
to the contrary notwithstanding, neither the Company nor such Selling
Stockholder shall be liable for any settlement of any such claim or action
effected without its written consent.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, the Selling Stockholders, their respective directors and
officers, and any person who controls the Company or any Selling Stockholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
from and against any loss, expense, liability or claim (including the reasonable
cost of investigation) which, jointly or severally, the Company, any Selling
Stockholder or any such person may incur under the Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use with
reference to such Underwriter in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in the Prospectus, or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such information
required to be stated in either such Registration Statement or Prospectus or
necessary to make such information not misleading.
If any action is brought against the Company, any Selling
Stockholder or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Company, such
Selling Stockholder or such person shall promptly notify such Underwriter in
writing of the institution of such action and such Underwriter shall assume the
defense of such action, including the employment of counsel and payment of
expenses. The Company, such Selling Stockholder or such person shall have the
right to employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Company, such Selling Stockholder or
such person unless the employment of such counsel shall have been authorized in
writing by such Underwriter in connection with the defense of such action or
such Underwriter shall not have employed counsel to have charge of the defense
of such action or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that such Underwriter shall not be liable for the expenses
of more than one separate counsel in any one action or series of related actions
in the same jurisdiction representing the indemnified parties who are parties to
such action). Anything in this paragraph to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of any such claim or action
effected without the written consent of such Underwriter.
(c) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 11 in respect of any losses, expenses, liabilities or claims referred to
therein, then each applicable 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, expenses, liabilities or claims
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other hand from the offering of the Shares 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 Company and
the Selling Stockholders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault of
the Company and the Selling Stockholders on the one hand and of the Underwriters
on the other shall be determined by reference to, among other things, whether
the untrue statement or alleged untrue statement of a material fact or omission
or alleged omission relates to information supplied by the Company, by the
Selling Stockholders or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, expenses, liabilities and claims referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any claim or action. Notwithstanding
anything to the contrary contained in this Section 11(c), in no event shall any
Selling Stockholder be required to pay an aggregate amount of contribution or
other payments in respect of losses, expenses, liabilities or claims under this
Section 11(c) which would be greater than the aggregate amount such Selling
Stockholder would have been required to pay under Section 11(a) in respect of
such losses, expenses, liabilities or claims if such indemnification were
available.
(d) The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
11 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 that does
not take account of the equitable considerations referred to in subsection (c)
above. Notwithstanding the provisions of this Section 11, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by such Underwriter 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
statement 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 Underwriter's obligations to contribute
pursuant to this Section 11 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 11 and the covenants, warranties and representations of the Company and
the Selling Stockholders contained in this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter, or any person who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of
the Company, its directors and officers, the Selling Stockholders or any person
who controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and shall survive any termination of this Agreement or
the issuance and delivery of the Shares. The Company, such Selling Stockholder
and each Underwriter agree promptly to notify the others of the commencement of
any litigation or proceeding against it and, in the case of the Company, against
any of the Company's officers and directors in connection with the issuance and
sale of the Shares, or in connection with the Registration Statement or
Prospectus.
(f) The Company acknowledges for all purposes under this Agreement
(including this Section 11 and Section 3(a) hereof) that the statements set
forth in the last paragraph on the cover page of the Prospectus, the last
paragraph on the inside front cover page of the Prospectus and the fourth and
twelfth paragraphs under the caption "Underwriting" in the Prospectus constitute
the only written information furnished to the Company by or on behalf of the
Underwriters through you or your counsel expressly for use in the Registration
Statement, any Preliminary Prospectus, or the Prospectus (or any amendment or
supplement to any of them) and that no Underwriter shall be deemed to have
provided any information (and therefore are not responsible for any statements
or omissions) pertaining to any arrangement or agreement with respect to any
party other than such Underwriter.
(g) Notwithstanding any other provision of this Xxxxxxx 00, xxxx of
the Selling Stockholders shall be liable for indemnification or contribution
payments or any other payments under this Section 11 in an aggregate amount
exceeding the proceeds received by such Selling Stockholder from the sale of
Shares hereunder.
12. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
SBC Warburg Dillon Read Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department, if to the Company or to any of the Selling
Stockholders, shall be sufficient in all respects if delivered or sent to the
Company at the offices of the Company at 0000 Xxxxxxx, Xxxxx 000X, Xxxxxxx,
Xxxxx 00000, Attention: Chief Executive Officer.
13. CONSTRUCTION. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York. The Section headings in
this Agreement have been inserted as a matter of convenience of reference and
are not a part of this Agreement.
14. PARTIES AT INTEREST. The Agreement herein set forth has been and
is made solely for the benefit of the Underwriters, the Company, the Selling
Stockholders and the controlling persons, directors and officers referred to in
Section 11 hereof, and their respective successors, assigns, executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters who
shall not be deemed a successor or assign by reason of such purchase) shall
acquire or have any right under or by virtue of this Agreement.
15. ACTION ON BEHALF OF MANAGING UNDERWRITERS. Any action required
or permitted to be taken by the Managing Underwriters under this Agreement may
be taken by them jointly or by SBCWDR.
16. COUNTERPARTS. This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholders and the Underwriters, please so indicate in
the space provided below for the purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Company, the Selling
Stockholders and the Underwriters, severally.
Very truly yours,
CORNELL CORRECTIONS, INC.
By:__________________________
Name:
Title:
The Selling Stockholders listed on Schedules
B and C hereto
By:__________________________
Name:
Attorney-in-Fact
Accepted and agreed to as of the
date first above written, on
behalf of themselves and the other
several Underwriters named in
Schedule A
SBC WARBURG DILLON READ INC.
EQUITABLE SECURITIES CORPORATION
XXXXXXXXXXX XXXXXXX SECURITIES, INC.
By: SBC WARBURG DILLON READ INC.
By: ________________________
Name:
Title:
SCHEDULE A
NUMBER OF FIRM SHARES
UNDERWRITER
SBC Warburg Dillon Read Inc.............................
Equitable Securities Corporation .......................
Xxxxxxxxxxx Xxxxxxx Securities, Inc. ...................
Total.............................................. 2,750,000
-----------
SCHEDULE B
NUMBER OF
FIRM SELLING STOCKHOLDERS FIRM SHARES
Charterhouse Equity Partners II, L.P..................
Concord Partners II, L.P. ............................
Concord Partners Japan Limited .......................
The Xxxxx University Third Century Fund...............
Internationale Nederlanden
(U.S.) Capital Corporation..........................
Total ................................................ 500,000
-------
SCHEDULE C
MAXIMUM NUMBER OF
ADDITIONAL SELLING STOCKHOLDERS ADDITIONAL SHARES
Charterhouse Equity Partners
II, L.P.....................................
[Concord Entities]............................
Total......................................... 412,500
-------
SCHEDULE D
DESIGNATED SUBSIDIARIES1
STATE OF STATES IN WHICH
NAME OF DESIGNATED SUBSIDIARY INCORPORATION QUALIFIED TO DO BUSINESS
----------------------------- ------------- ------------------------
Cornell Corrections, Inc. Delaware Texas, California,
Pennsylvania
Cornell Corrections
Management, Inc. Delaware Texas, Colorado
Cornell Corrections of
Texas, Inc. Delaware Texas
Cornell Corrections of
California, Inc. California Utah, North Carolina
Cornell Corrections
of Rhode Island, Inc. Delaware Rhode Island, Texas
Abraxas Group, Inc. Delaware District of Columbia,
Ohio, Pennsylvania
--------
1 To be updated for other material subsidiaries.
