EXHIBIT 1.1
7,600,000 SHARES
CORRECTIONS CORPORATION OF AMERICA
COMMON STOCK
UNDERWRITING AGREEMENT
May __, 2003
XXXXXX BROTHERS INC.,
As Representative of the several
Underwriters named in Schedule I,
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Corrections Corporation of America, a Maryland corporation (the
"Company"), and Xxxxxxx International Limited (the "Selling Stockholder"),
propose to sell an aggregate of 7,600,000 shares (the "Firm Stock") of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"). Of the
7,600,000 shares of the Firm Stock, 6,400,000 shares are being sold by the
Company and 1,200,000 shares are being sold by the Selling Stockholder. In
addition, the Selling Stockholder proposes to grant to the Underwriters named in
Schedule I hereto (the "Underwriters") an option to purchase up to an additional
1,140,000 shares of the Common Stock on the terms and for the purposes set forth
in Section 3 (the "Option Stock"). The Firm Stock and the Option Stock, if
purchased, are hereinafter collectively called the "Stock." This is to confirm
the agreement concerning the purchase of the Stock from the Company and the
Selling Stockholder by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A Registration Statement on Form S-3, and an
amendment thereto, with respect to the Stock has (i) been prepared by the
Company in conformity in all material respects with the requirements of the
United States Securities Act of 1933 (the "Securities Act") and the rules and
regulations (the "Rules and Regulations") of the United States Securities and
Exchange Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such Registration Statement and the amendment thereto
have been delivered by the Company to you as the representative (the
"Representative") of the Underwriters. As used in this Agreement, "Effective
Time" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission; "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in such registration
statement, or amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission by the Company with
the consent of the Representative pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration statement, as
amended at the Effective Time,
including any documents incorporated by reference therein at such time and all
information contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations and deemed to be a part of the
Registration Statement as of the Effective Time pursuant to paragraph (b) of
Rule 430A of the Rules and Regulations; and "Prospectus" means such final
prospectus, as first filed with the Commission pursuant to paragraph (1) or (4)
of Rule 424(b) of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to and
include any documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act, as of the date of such Preliminary Prospectus
or the Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any document filed under the United States Securities
Exchange Act of 1934 (the "Exchange Act") after the date of such Preliminary
Prospectus or the prospectus, as the case may be, and incorporated by reference
in such Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to
include any annual report of the Company filed with the Commission pursuant to
section 13(a) or 15(d) of the Exchange Act after the Effective Time that is
incorporated by reference in the Registration Statement. The Commission has not
issued any order preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the Registration
Statement or the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do not and
will not, as of the applicable effective date (as to the Registration Statement
and any amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto), 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; provided
that no representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance upon and
in conformity with written information furnished to the Company through the
Representative by or on behalf of any Underwriter specifically for inclusion
therein.
(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder 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 light of the circumstances under which they
were made, not misleading.
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(d) The Company and each of its subsidiaries have been
duly incorporated and are validly existing as corporations or limited liability
companies in good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires such
qualification, except as would not, individually or in the aggregate, have a
materially adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect"), and have all
corporate or limited liability company power and authority, as applicable,
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged; and none of the subsidiaries of the
Company (other than CCA of Tennessee, Inc.; CCA Properties of America, LLC; CCA
Properties of Texas, LP; CCA Properties of Arizona, LLC; and CCA Properties of
Tennessee, LLC (collectively, the "Significant Subsidiaries")) is a "significant
subsidiary", as such term is defined in Rule 405 of the Rules and Regulations.
(e) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims except as set forth in the
Prospectus.
(f) The shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) That certain Securities Purchase Agreement, dated
March 28, 2003, among the Company, MDP Ventures IV LLC and the other parties
thereto (the "MDP Agreement") has been duly authorized, executed and delivered
by the Company.
(i) That certain Second Amendment and Waiver to Third
Amended and Restated Credit Agreement (the "Second Amendment") has been duly
authorized, executed and delivered by the Company.
The execution, delivery and performance of this Agreement, the MDP Agreement,
and the Second Amendment by the Company, the consummation of the transactions
contemplated hereby and the use of the proceeds from the sale of the Stock as
described in the Prospectus will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, except
where such conflict, breach, violation or
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default would not have a Material Adverse Effect, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties or assets, except where such
conflict, breach, violation or default would not have a Material Adverse Effect;
and except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters
and except where the failure to obtain such would not have a Material Adverse
Effect, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(j) There are no contracts, agreements or understandings
between the Company, any subsidiary and any person granting such person the
right (other than rights that have been waived or satisfied) to require the
Company or any subsidiary to file a registration statement under the Securities
Act with respect to any securities of the Company or any subsidiary owned or to
be owned by such person or to require the Company or any subsidiary to include
such securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company or any subsidiary under the
Securities Act.
(k) During the six-month period preceding the date of the
Prospectus, none of the Company, any of its subsidiaries or any other person
acting on behalf of the Company or any of its subsidiaries has sold or issued
any shares of Common Stock, including any sales pursuant to rule 144A under, or
Regulations D or S of, the Securities Act (other than shares issued to employees
of the Company under an incentive plan registered on an effective Form S-8 and
the issuance of securities as specifically disclosed in the Prospectus).
(l) To their knowledge after reasonable investigation,
neither the Company nor any of its subsidiaries has sustained, since the date of
the latest audited financial statements included or incorporated by reference in
the Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus and except where such loss
or interference would not have a Material Adverse Effect; and, since such date,
there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any development in or affecting the
general affairs, management, financial position, stockholders' equity or results
of operations of the Company and each of its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus or as would not have a Material Adverse
Effect.
(m) The historical combined and consolidated financial
statements (including the related notes and supporting schedules) filed as part
of the Registration Statement or included or incorporated by reference in the
Prospectus comply in all material respects with the requirements of Regulation
S-X under the Securities Act applicable to registration statements on Form S-3
under the Securities Act and present fairly, in all material respects, the
combined and consolidated financial condition and results of operations of the
entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in all material respects
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in conformity with U.S. generally accepted accounting principles applied on a
consistent basis throughout the periods involved. The pro forma financial
statements (including the related notes) filed as part of the Registration
Statement or included or incorporated by reference in the Prospectus comply in
all material respects with the requirements of Regulation S-X applicable to pro
forma financial information under the Securities Act applicable to registration
statements on Form S-3 under the Securities Act and have been prepared on a
basis consistent with the historical financial statements of the Company and
give effect to assumptions used in the preparation thereof on a reasonable basis
and in good faith, and present fairly, in all material respects, the historical
financial information and proposed transactions purported to be shown thereby,
at the dates and for the periods indicated.
(n) Ernst & Young LLP, who have certified certain
financial statements of the Company, whose report appears in the Prospectus or
is incorporated by reference therein and who have delivered the initial letter
referred to in Section 9(i), are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(o) Except as set forth in the Prospectus, the Company
and each of its subsidiaries have good and valid title in fee simple to all real
property and good and valid title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially affect the value of
such property and do not materially interfere with the use made of such property
by the Company and each of its subsidiaries; and all real property and buildings
held under lease by the Company and each of its subsidiaries are held by them
under valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made of such property and buildings
by the Company and its subsidiaries.
(p) To their knowledge after reasonable investigation,
the Company and each of its subsidiaries carry, or are covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of their
respective businesses and the value of their respective properties and as is
customary for companies engaged in similar businesses in similar industries.
(q) The Company and each of its subsidiaries own or
possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses necessary for the conduct of their
respective businesses except where the failure to own or possess such rights
would not result in a Material Adverse Effect, and have no knowledge after
reasonable investigation that the conduct of their respective businesses will
conflict with, and have not received any notice of any claim of conflict with,
any such rights of others which, individually or in the aggregate, would result
in a Material Adverse Effect.
(r) Except as described in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company or any
of its subsidiaries is the subject which, if determined adversely to the Company
or any of its subsidiaries, would reasonably be expected to have a Material
Adverse Effect; and to the Company's and each subsidiary's knowledge, except as
described in the Prospectus, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
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(u) The conditions for use of Form S-3, as in effect on
the date hereof, as set forth in the General Instructions thereto, have been
satisfied.
(v) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and Regulations
which have not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by the
Rules and Regulations.
(w) No labor disturbance by the employees of the Company
or any subsidiary exists or, to the knowledge of the Company or any subsidiary,
is imminent which might be expected to have a Material Adverse Effect.
(x) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any subsidiary would have any liability; the Company or any
subsidiary has not incurred and does not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company or any
subsidiary would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause the loss
of such qualification, except for such action or failure which would not result
in a Material Adverse Effect.
(y) Set forth on Exhibit A hereto is a list of each
employee pension or benefit plan with respect to which the Company or any
corporation considered an affiliate of the Company within the meaning of Section
407(d)(7) of ERISA is a party in interest or disqualified person.
(z) Except as described in the Prospectus, the Company
and each of its subsidiaries has filed all federal, state and local income and
franchise tax returns required to be filed (subject to extensions of time for
the proper filing of such returns) through the date hereof and has paid all
taxes as set forth in such returns, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries (nor does the Company or any
subsidiary have any knowledge of any tax deficiency) which, if determined
adversely to the Company or any of its subsidiaries, might reasonably be
expected to have a Material Adverse Effect.
(aa) Since the date as of which information is given in
the Prospectus through the date hereof, and except as may otherwise be disclosed
in the Prospectus, neither the Company nor any of its subsidiaries has (i)
issued or granted any securities not otherwise in the ordinary course of
business (which includes the granting of options to employees of the Company
under an incentive plan registered on an effective Form S-8 and the issuance of
securities as specifically disclosed in the Prospectus), (ii) incurred any
liability or obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary
6
course of business, (iii) entered into any material transaction not in the
ordinary course of business or (iv) declared or paid any dividend on its capital
stock not otherwise in the ordinary course of business.
(bb) The Company and each of its subsidiaries (i) makes
and keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are executed
in accordance with management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to maintain
accountability for its assets and (C) the reported accountability for its assets
is compared with existing assets at reasonable intervals.
(cc) Neither the Company nor any of its subsidiaries (i)
is in violation of its charter or by-laws, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which it is a party
or by which it is bound or to which any of its properties or assets is subject
or (iii) except as described in the Prospectus, is in violation in any material
respect of any law, ordinance, governmental rule, regulation or court decree to
which it or its property or assets may be subject or has failed to obtain any
material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to the
conduct of its business, except, with regard to (ii) and (iii) of this
paragraph, for such defaults, violations or failures that would not reasonably
be expected to have a Material Adverse Effect.
(dd) To the knowledge of the Company after reasonable
investigation, neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(ee) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under the
Exchange Act), which (i) are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the Company's principal executive officer and its principal financial officer
by others within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared; (ii) have
been evaluated for effectiveness as of a date within 90 days prior to the filing
of the Company's most recent annual or quarterly report filed with the
Commission; and (iii) to the knowledge of the Company, are effective in all
material respects to perform the functions for which they were established.
(ff) Based on the evaluation of its disclosure controls
and procedures, the Company is not aware of (i) any significant deficiency in
the design or operation of internal controls which could adversely affect the
Company's ability to record, process, summarize and report financial data or any
material weaknesses in internal controls or (ii) any fraud, whether or
7
not material, that involves management or other employees who have a significant
role in the Company's internal controls.
(gg) Since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant changes in
internal controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
(hh) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the Company or any
of its subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or previously
owned or leased by the Company or its subsidiaries in violation of any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit
or which would require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except for any violation or
remedial action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial actions, a
Material Adverse Effect; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or caused
by the Company or any of its subsidiaries or with respect to which the Company
or any of its subsidiaries have knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not have or
would not be reasonably likely to have, singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect; and the terms "hazardous wastes", "toxic
wastes", "hazardous substances" and "medical wastes" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(ii) Neither the Company nor any subsidiary is an
"investment Company" within the meaning of such term under Investment Company
Act of 1940 and the rules and regulations of the Commission thereunder.
(jj) The market-related and customer-related data and
estimates included under the captions "Summary" and "Business" in the Prospectus
are based on or derived from sources which the Company believes to be reliable
and accurate in all material respects.
(kk) Prior to the date hereof, neither the Company, its
subsidiaries nor any of their respective affiliates has taken any action which
is designed to or which has constituted stabilization or manipulation of the
price of any security of the Company or its subsidiaries in connection with the
offering of the Stock.
(ll) The statements set forth under the captions "Risk
Factors--We are subject to legal proceedings associated with owning and managing
correctional detention facilities," "Risk Factors--We are subject to tax related
risks," "The Company," "Description of Certain Existing Indebtedness and
Outstanding Preferred Stock," "General Description of Securities We May Offer,"
"Description of Debt Securities," "Description of Guarantees," "Description of
8
Preferred Stock," "Description of Common Stock," and "Description of Warrants"
in the Prospectus and "Risk Factors--We are subject to legal proceedings
associated with owning and managing correctional detention facilities," "Risk
Factors--We are subject to tax related risks," "The Transactions," "Business,"
"Description of Capital Stock," and "Description of Certain Existing
Indebtedness" in the supplement to the Prospectus, insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate in all material respects.
(mm) None of the transactions contemplated by this
Agreement (including without limitation, the use of the proceeds from the sale
of the Stock), will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations T, U, and X of the Board of Governors of the Federal
Reserve System.
(nn) The Company shall ensure that the purchase of Common
Stock from MDP and the other transactions contemplated pursuant to the MDP
Agreement and the sale of Common Stock hereunder does not and will not violate
or result in a violation of Regulation M of the Exchange Act.
(oo) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes.
2. Representations, Warranties and Agreements of the Selling
Stockholder. The Selling Stockholder represents, warrants and agrees that:
(a) The Selling Stockholder has, and immediately prior
to the First Delivery Date (as defined in Section 5) will have, record and
beneficial ownership of the Stock to be sold by the Selling Stockholder, free
and clear of all liens, claims, encumbrances or other rights of any other person
and there are no outstanding options or other rights to purchase, restrictions
on transfer or shareholder, voting trust or similar agreements with respect to
such Stock; and upon delivery of such shares and payment therefor pursuant
hereto, good and valid title to such shares, free and clear of all liens,
claims, encumbrances or other rights of any other person, will pass to the
several Underwriters.
(b) The Selling Stockholder has entered into the Custody
Agreement and Power of Attorney dated April 10, 2003 (the "Custody Agreement and
Power of Attorney") with Bass, Xxxxx & Xxxx PLC, as custodian (the "Custodian"),
and Xxxx X. Xxxxxxxx and Xxxxxx X. Xxxxx, Xx., as attorneys-in-fact (the
"Attorneys-in-Fact"), pursuant to which (i) the Selling Stockholder has placed
in custody for delivery under this Agreement certificates in negotiable form
(with signature guaranteed by a commercial bank or trust company in the United
States or by a member firm of the New York Stock Exchange) representing the
shares of Stock to be sold by the Selling Stockholder hereunder or accompanied
by a duly executed stock power or powers in blank bearing the signature of the
Selling Stockholder (with signature guaranteed by a commercial bank or trust
company in the United States or by a member firm of the New York Stock Exchange)
and (ii) the Selling Stockholder has duly and irrevocably executed and delivered
a power of attorney, appointing the Attorneys-in-Fact, with full power of
substitution, and with full authority to deliver to the Underwriters the Stock
to be sold by the Selling
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Stockholder and to execute and deliver this Agreement and take such other action
as may be necessary or desirable on behalf of the Selling Stockholder in
connection therewith.
(c) The Selling Stockholder has full right, power and
authority to enter into this Agreement and the Custody Agreement and Power of
Attorney; the execution, delivery and performance of this Agreement and the
Custody Agreement and Power of Attorney by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated hereby
and thereby will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or to which
any of the property or assets of the Selling Stockholder is subject, nor will
such actions result in any violation of the provisions of the charter or by-laws
of the Selling Stockholder, or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder; and, except
for the registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in connection with
the purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement or the Custody Agreement and Power of Attorney by
the Selling Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby and thereby.
(d) The Selling Stockholder has not taken and will not
take, directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 6,400,000 shares of
the Firm Stock and the Selling Stockholder agrees to sell 1,200,000 shares of
the Firm Stock, severally and not jointly, to the several Underwriters and each
of the Underwriters, severally and not jointly, agrees to purchase the number of
shares of the Firm Stock set forth opposite that Underwriter's name in Schedule
I hereto. Each Underwriter shall be obligated to purchase from the Company and
from the Selling Stockholder that number of shares of the Firm Stock which
represents the same proportion of the number of shares of the Firm Stock to be
sold by the Company and by the Selling Stockholder as the number of shares of
the Firm Stock set forth opposite the name of such Underwriter in Schedule I
represents of the total number of shares of the Firm Stock to be purchased by
all of the Underwriters pursuant to this Agreement. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representative may
determine.
In addition, the Selling Stockholder grants to the Underwriters an
option to purchase up to 1,140,000 shares of Option Stock. Such option is
granted solely for the purpose of covering over-allotments in the sale of Firm
Stock and is exercisable as provided in Section 5. Shares of Option Stock shall
be purchased severally for the account of the Underwriters in proportion to
10
the number of shares of Firm Stock set opposite the name of such Underwriters in
Schedule I hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representative so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts. The price of both the Firm Stock and any Option Stock shall be $_____
per share.
The Company and the Selling Stockholder shall not be obligated to
deliver any of the Stock to be delivered on the First Delivery Date or the
Second Delivery Date (as hereinafter defined), as the case may be, except upon
payment for all the Stock to be purchased on such Delivery Date as provided
herein.
4. Offering of Stock by the Underwriters.
Upon authorization by the Representative of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the office of Xxxxxx & Xxxxxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York City time, on May
7, 2003 or at such other date or place as shall be determined by agreement
between the Representative and the Company. This date and time are sometimes
referred to as the "First Delivery Date." On the First Delivery Date, the
Company and the Selling Stockholder shall deliver or cause to be delivered
certificates representing the Firm Stock to the Representative for the account
of each Underwriter against payment to or upon the order of the Company and the
Selling Stockholder of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be
registered in such names and in such denominations as the Representative shall
request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Stock, the Company and the Selling Stockholder shall make
the certificates representing the Firm Stock available for inspection by the
Representative in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement, and may be exercised at any time in whole or in part by written
notice being given to the Company and the Selling Stockholder by the
Representative. Such notice shall set forth the aggregate number of shares of
Option Stock as to which the option is being exercised, the names in which the
shares of Option Stock are to be registered, the denominations in which the
shares of Option Stock are to be issued and the date and time, as determined by
the Representative, when the shares of Option Stock are to be delivered;
provided, however, that this date and time shall not be earlier than the First
Delivery Date nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. The date and time the
shares of Option Stock are delivered are sometimes referred to as the "Second
Delivery Date" and the First Delivery Date and the Second Delivery Date are
sometimes each referred to as a "Delivery Date".
11
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representative
and the Company) at 10:00 A.M., New York City time, on the Second Delivery Date.
On the Second Delivery Date, the Selling Stockholder shall deliver or cause to
be delivered the certificates representing the Option Stock to the
Representative for the account of each Underwriter against payment to or upon
the order of the Selling Stockholder of the purchase price by wire transfer in
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Option Stock
shall be registered in such names and in such denominations as the
Representative shall request in the aforesaid written notice. For the purpose of
expediting the checking and packaging of the certificates for the Option Stock,
the Selling Stockholder shall make the certificates representing the Option
Stock available for inspection by the Representative in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to the
Second Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representative and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the last Delivery Date
except as permitted herein; to advise the Representative, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representative with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a Prospectus is required in connection with the offering or sale of
the Stock; to advise the Representative, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal.
(b) To furnish promptly to the Representative and to
Xxxxxx & Xxxxxxx LLP, counsel for the Underwriters, a signed copy of the
Registration Statement as originally filed with the Commission, and each
amendment thereto filed with the Commission, including all consents and exhibits
filed therewith.
12
(c) To deliver promptly to the Representative such number
of the following documents as the Representative shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits other
than this Agreement and the computation of per share earnings), (ii) each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus and (iii) any document incorporated by reference in the Prospectus
(excluding exhibits thereto); and, if the delivery of a Prospectus is required
at any time after the Effective Time in connection with the offering or sale of
the Stock or any other securities relating thereto and if at such time any
events shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Representative and, upon its
request, to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the Representative
may from time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance.
(d) To file promptly with the Commission any amendment to
the Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the reasonable judgment of the Company or the Representative, be
required by the Securities Act or requested by the Commission.
(e) Prior to filing with the Commission any amendment to
the Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any Prospectus pursuant to Rule
424 of the Rules and Regulations, to furnish a copy thereof to the
Representative and counsel for the Underwriters and obtain the consent of the
Representative to the filing, which consent will not be unreasonably withheld,
conditioned or delayed.
(f) As soon as practicable after the Effective Date, to
make generally available to the Company's security holders and to deliver to the
Representative an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158).
(g) For a period of five years following the Effective
Date, to furnish to the Representative copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and financial
statements furnished by the Company to the principal national securities
exchange upon which the Common Stock may be listed pursuant to requirements of
or agreements with such exchange or to the Commission pursuant to the Exchange
Act or any rule or regulation of the Commission thereunder; provided that the
Company need not separately furnish any information that is publicly available
on the Commission's XXXXX site or the Company's website.
13
(h) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Stock for offering and sale
under the securities laws of such jurisdictions as the Representative may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction.
(i) For a period of 90 days from the date hereof, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock, or sell or grant options, rights or warrants with respect to
any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the issuance of options under any currently effective
stock option or incentive plans or of shares of common stock upon the exercise
of a currently outstanding option, warrant or right or the conversion of a
security outstanding on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
in each case without the prior written consent of Xxxxxx Brothers Inc.
(j) Prior to the Effective Date, to apply for the listing
of the Stock on the New York Stock Exchange, Inc. and to use its best efforts to
complete that listing, subject only to official notice of issuance, prior to the
First Delivery Date.
(k) To apply the net proceeds from the sale of the Stock
being sold by the Company as set forth in the Prospectus.
(l) To take such steps as shall be necessary to ensure
that neither the Company nor any subsidiary shall become an "investment company"
within the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
7. Further Agreements of the Selling Stockholder. The Selling
Stockholder agrees:
(a) That it will comply with the terms of that certain
Lock-Up Letter Agreement, dated April 1, 2003, between itself and Xxxxxx
Brothers Inc., as representative of the Underwriters.
(b) That the Stock to be sold by the Selling Stockholder
hereunder, which is represented by the certificates held in custody for the
Selling Stockholder, is subject to the interest of the Underwriters, that the
arrangements made by the Selling Stockholder for such custody are to that extent
irrevocable, and that the obligations of the Selling Stockholder hereunder shall
not be terminated by any act of the Selling Stockholder, by operation of law, or
the occurrence of any event.
(c) To deliver to the Representative prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if the Selling
14
Stockholder is a non-United States person) or Form W-9 (if the Selling
Stockholder is a United States person.)
8. Expenses. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus or
any document incorporated by reference therein, all as provided in this
Agreement; (d) the costs of producing and distributing this Agreement and any
other related documents in connection with the offering, purchase, sale and
delivery of the Stock; (e) the costs of delivering and distributing the Custody
Agreement and Power of Attorney; (f) any applicable listing or other fees; (g)
the fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters, which shall not exceed $7,500); and (h) all other
costs and expenses incident to the performance of the obligations of the Company
and the Selling Stockholder under this Agreement; provided that, except as
provided in this Section 8 and in Section 13 the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters, and the Selling Stockholder
shall pay the fees and expenses of its counsel, and any transfer taxes payable
in connection with its sales of Stock to the Underwriters.
9. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholder contained herein, to the performance by the Company
and the Selling Stockholder of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to
the Company on or prior to such Delivery Date that the Registration Statement or
the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Underwriters, is
material or omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the Custody
Agreement and Power of
15
Attorney, the Stock, the Registration Statement and the Prospectus, and all
other legal matters relating to this Agreement and the transactions contemplated
hereby and thereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company and the Selling Stockholder shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) The Company shall have entered into that certain
Second Amendment and Waiver to Third Amended and Restated Credit Agreement.
(e) Miles & Stockbridge P.C., counsel for the Company,
shall have furnished to the Representative its written opinion, addressed to the
Underwriters and dated such Delivery Date, in form and substance satisfactory to
the Underwriters and counsel for the Underwriters, and substantially in the form
attached hereto as Exhibit B-1. Bass, Xxxxx & Xxxx PLC, counsel for the Company,
shall have furnished to the Representative its written opinion, addressed to the
Underwriters and dated such Delivery Date, in form and substance satisfactory to
the Underwriters and counsel for the Underwriters, and substantially in the form
attached hereto as Exhibit B-2.
(f) O'Xxxx Xxxxxxx X'Xxxx Xxxxx Xxxxxxxx & Xxxxxx,
counsel for the Selling Stockholder, shall have furnished to the Representative
its written opinion, addressed to the Underwriters and dated the First Delivery
Date, in form and substance satisfactory to the Underwriters and counsel for the
Underwriters, and substantially in the form attached hereto as Exhibit C-1.
Winston & Xxxxxx, counsel for the Selling Stockholder, shall have furnished to
the Representative its written opinion, addressed to the Underwriters and dated
the First Delivery Date, in form and substance satisfactory to the Underwriters
and counsel for the Underwriters, and substantially in the form attached hereto
as Exhibit C-2.
(g) The Representative shall have received from Xxxxxx &
Xxxxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representative may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the
Representative shall have received from Ernst & Young a letter, in form and
substance satisfactory to the Representative, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
16
(i) With respect to the letter of Ernst & Young referred
to in the preceding paragraph and delivered to the Representative concurrently
with the execution of this Agreement (the "initial letter"), the Company shall
have furnished to the Representative a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation s-x
of the Commission, (ii) stating, as of such Delivery Date of the bring-down
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect to
the financial information and other matters covered by the initial letter and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letter.
(j) The Company shall have furnished to the
Representative a certificate, dated such Delivery Date, of its Chairman of the
Board of Directors, its President or a Vice President and its Chief Financial
Officer stating that:
(i) The representations, warranties and
agreements of the Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements contained herein; and the
conditions set forth in Sections 9(a), (l), (n) and (o) have been fulfilled; and
(ii) They have carefully examined the
Registration Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus did not include any
untrue statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has occurred which should
have been set forth in a supplement or amendment to the Registration Statement
or the Prospectus.
(k) The Selling Stockholder (or the Custodian or one or
more attorneys-in-fact on behalf of the Selling Stockholder) shall have
furnished to the Representative on such Delivery Date a certificate, dated the
such Delivery Date, signed by, or on behalf of, the Selling Stockholder (or the
custodian or one or more attorneys-in-fact) stating that the representations,
warranties and agreements of the Selling Stockholder contained herein are true
and correct as of the such Delivery Date and that the Selling Stockholder has
complied with all agreements contained herein to be performed by the Selling
Stockholder at or prior to the such Delivery Date.
(l) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
and (ii) since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial
17
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Representative, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(m) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange or The Nasdaq Stock Market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been suspended or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States; (ii) a banking moratorium shall have been declared by Federal or
state authorities; (iii) the United States shall have become engaged in new
hostilities, there shall have been an escalation in existing hostilities
involving the United States or there shall have been a declaration of a national
emergency or war by the United States or there shall have occurred any other
calamity or crisis (including, without limitation, as a result of terrorist
activities); or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the judgment of a majority in interest of the several
Underwriters, impracticable or inadvisable to proceed with the public offering
or delivery of the Stock being delivered on such Delivery Date on the terms and
in the manner contemplated in the Prospectus.
(n) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of Rule
436(g)(2) of the Rules and Regulations and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities.
(o) The New York Stock Exchange, Inc. shall have approved
the Stock for inclusion, subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company and each of its subsidiaries shall
indemnify and hold harmless each Underwriter, its directors, officers and
employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Stock), to
18
which that Underwriter, director, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained (A) in
any Preliminary Prospectus, the Registration Statement or the Prospectus or in
any amendment or supplement thereto or (B) in any Blue Sky application or other
document prepared or executed by the Company or any of its subsidiaries (or
based upon any written information furnished by the Company or any of its
subsidiaries) specifically for the purpose of qualifying any or all of the Stock
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue Sky
Application"), or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, or
(iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company and its
subsidiaries shall not be liable under this clause (iii) to the extent that it
is determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its bad faith, gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such director, officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by that
Underwriter, director, officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representative
by or on behalf of any Underwriter specifically for inclusion therein which
information consists solely of the information specified in Section 10(f);
provided further, that the Company and its subsidiaries shall not be liable to
the Underwriters or any of their respective directors, officers, employees or
controlling persons with respect to any such untrue statement or omission made
in any Preliminary Prospectus existing as of the date hereof that is corrected
in the Prospectus if it is judicially determined that (i) the person asserting
any such loss, claim, damage, liability or action purchased Stock from the
Underwriters in reliance upon the Preliminary Prospectus but was not delivered
or sent a copy of the Prospectus, if required by law, at or prior to the written
confirmation of the sale of such Stock to such person, unless such failure to
deliver or send the Prospectus was a result of noncompliance by the Company with
Section 6 of this Agreement and (ii) the Underwriters, and each such officer,
director, employee and controlling person, if any, would not have incurred such
loss, claim, damage, liability or action had the Prospectus been delivered or
sent. The foregoing indemnity agreement is in addition to any liability which
the Company may otherwise have to any Underwriter or to any director, officer,
employee or controlling person of that Underwriter.
19
(b) The Selling Stockholder shall indemnify and hold
harmless each Underwriter, its directors, officers and employees, and each
person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, director, officer, employee or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, Registration Statement
or the Prospectus, or in any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Underwriter, its directors, officers and
employees and each such controlling person for any legal or other expenses
reasonably incurred by that Underwriter, its directors, officers and employees
or controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Selling Stockholder shall
only be subject to such liability to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission is based upon
information provided by it in writing to the Company for use in the Registration
Statement under the caption "Principal and Selling Stockholders"; provided,
further, that the Selling Stockholder shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement or omission
or alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any such amendment or supplement in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Company through the Representative by or on behalf of any
Underwriter specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Selling Stockholder may
otherwise have to any Underwriter or any directors, officer, employee or
controlling person of that Underwriter.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the meaning
of the Securities Act, and the Selling Stockholder and each person who controls
the Selling Stockholder within the meaning of the Securities Act, in each case
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Company through the Representative by or on behalf of that Underwriter
specifically for inclusion therein,
20
and shall reimburse the Company and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Company or any such director, officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party under
this Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representative shall have the right to employ counsel to represent jointly
the Representative and those other Underwriters and their respective directors,
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company or the Selling Stockholder under this Section
10 if, in the reasonable judgment of the Representative, it is advisable for the
Representative and those Underwriters, directors, officers, employees and
controlling persons to be jointly represented by separate counsel, and in that
event the reasonable fees and expenses of such separate counsel shall be paid by
the Company. No indemnifying party shall (i) without the prior written consent
of the indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under section 10(a), 10(b) or 10(c) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
21
to therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Selling Stockholder on the one hand and
the Underwriters on the other from the offering of the Stock 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 Stockholder on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling Stockholder,
on the one hand, and the total underwriting discounts and commissions received
by the Underwriters with respect to the shares of the Stock purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the offering
of the shares of the Stock under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Selling Stockholder or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
shall be deemed to include, for purposes of this Section 10(e), 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 10(e), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any 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 Underwriters' obligations to contribute as provided in
this Section 10(e) are several in proportion to their respective underwriting
obligations and not joint.
(f) The Underwriters severally confirm and the Company
and Selling Stockholder acknowledge that the statements set forth in paragraphs
4 (regarding concessions and reallowances), 6 (regarding stabilizing and similar
transactions), 19 (regarding electronic distribution of prospectuses) and 23
(regarding discretionary sales) under the caption "Underwriting" in the
Prospectus constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
22
11. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Stock which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of shares of the
Firm Stock set opposite the name of each remaining non-defaulting Underwriter in
Schedule I hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting Underwriters in Schedule
I hereto; provided, however, that the remaining non-defaulting Underwriters
shall not be obligated to purchase any of the Stock on such Delivery Date if the
total number of shares of the Stock which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total number of shares of the Stock to be purchased on such Delivery Date, and
any remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the number of shares of the Stock which it agreed to purchase on
such Delivery Date pursuant to the terms of Section 3. If the foregoing maximums
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representative who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Stock to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Representative do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Stock)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company or the Selling Stockholder, except that the Company will continue
to be liable for the payment of expenses to the extent set forth in Sections 8
and 13. As used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule I hereto who, pursuant to this Section 11, purchases Firm
Stock which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholder for damages
caused by its default. If other Underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representative
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representative by notice given to and received by the
Company and the Selling Stockholder prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in sections 9(l)
or 9(m), shall have occurred or if the Underwriters shall decline to purchase
the Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the Company or
the Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholder to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholder is
not
23
fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company shall pay the full amount
thereof to the Representative. If this Agreement is terminated pursuant to
Section 11 by reason of the default of one or more Underwriters, neither the
Company nor the Selling Stockholder shall be obligated to reimburse any
defaulting Underwriter on account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail or facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, X.X. 00000, Attention: Syndicate Registration Department, fax:
(000) 000-0000, with a copy, in the case of any notice pursuant to Section
10(d), to the Director of Litigation, Office of the General Counsel, Xxxxxx
Brothers Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company, shall be delivered or sent by mail
or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: General Counsel, fax: (000) 000-0000);
(c) if to the Selling Stockholder, shall be delivered or
sent by mail or facsimile transmission to the Selling Stockholder at Xxxxxxx
International Limited, c/o Oryx Finance Limited, 000 Xxxxxxxxx Xxxx, Xxxxxx X0
0XX, Xxxxxx Xxxxxxx, Attention: Xxxxxxx X. Xxxxx, fax: x00 (00) 0000 0000, with
a copy to Rolaco Group Services S.A., 00, Xxxxxxxxx xx Xxxx x'Xxxx, 0000 Xxxxxx,
Xxxxxxxxxxx, Attention: Xx. Xxxxxxx Xxxxxxxx, fax: +41 (22) 000- 0000; and
(d) any notice to an Underwriter pursuant to Section
10(d) shall be delivered or sent by mail or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representative, which address will be supplied to any other party hereto by the
Representative upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholder shall be entitled to act and rely upon any request, consent,
notice or agreement given or made on behalf of the Underwriters by Xxxxxx
Brothers Inc. and the Company and the Underwriters shall be entitled to act and
rely upon any request, consent, notice or agreement given or made on behalf of
the Selling Stockholder by the Custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Stockholder and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Selling Stockholder contained in this Agreement shall also
be deemed to be for the benefit of the directors and officers of any Underwriter
and any person or persons, if any, who control any Underwriter within the
meaning of Section 15 of the Securities Act and (B) the indemnity agreement of
the Underwriters contained in Section 10(c) of this Agreement shall be deemed to
be for the benefit of directors of the Company, officers of
24
the Company who have signed the Registration Statement and any person
controlling the Company within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 15, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholder and the
Underwriters contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS ENTERED INTO AND TO BE WHOLLY PERFORMED IN THE STATE OF NEW YORK.
Each party irrevocably agrees that any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby may be instituted in the federal courts of the United States of America
located in the City of New York or the courts of the State of New York in each
case located in the Borough of Manhattan in the City of New York (collectively,
the "Specified Courts"), and the selling Stockholder irrevocably submits to the
exclusive jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. The
parties further agree that service of any process, summons, notice or document
by mail to such party's address set forth above shall be effective service of
process for any lawsuit, action or other proceeding brought in any such court.
The parties hereby irrevocably and unconditionally waive any objection to the
laying of venue of any lawsuit, action or other proceeding in the Specified
Courts, and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such lawsuit, action or other
proceeding brought in any such court has been brought in an inconvenient forum.
19. Counterparts. This Agreement may be executed in two or more
counterparts and, if executed in counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
25
If the foregoing correctly sets forth the agreement among the Company,
the Selling Stockholder and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
Corrections Corporation of America
By:
---------------------------
Name:
Title:
Xxxxxxx International Limited
By:
---------------------------
Name:
Attorney-in-Fact
26
Accepted:
XXXXXX BROTHERS INC.
By:
------------------------------------
Authorized Representative
For itself and as Representative
of the several Underwriters named
in Schedule I hereto
27
SCHEDULE I
Number of
Underwriters Shares
------------ ---------
Xxxxxx Brothers Inc........................
UBS Warburg LLC............................ ---------
XX Xxxxx Securities Corporation............
First Analysis Securities Corporation......
Total 7,600,000
=========
28
