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EXHIBIT 1.1
EXECUTION COPY
$100,000,000
PRISON REALTY TRUST, INC.
12% SENIOR NOTES DUE 2006
UNDERWRITING AGREEMENT
June 4, 1999
Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Prison Realty Trust, Inc., a Maryland corporation (the
"Company"), proposes, upon the terms and considerations set forth herein, to
issue and sell to you ("Xxxxxx Brothers") $100,000,000 in aggregate principal
amount of its 12% Senior Notes due 2006 (the "Notes") pursuant to the terms of
an indenture, as supplemented by an indenture supplement, dated as of June 11,
1999 (collectively, the "Indenture"), between the Company and State Street Bank
and Trust Company, as trustee (the "Trustee"), relating to the Notes. This is to
confirm the agreement concerning the purchase of the Notes from the Company by
Xxxxxx Brothers.
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 (File No.
333-70419), including a prospectus, with respect to the Notes
has (i) been prepared by the Company in conformity with the
requirements of the United States Securities Act of 1933, as
amended (the "Securities Act") and the rules and regulations
(the "Rules and Regulations") of the United States Securities
and Exchange Commission (the "Commission") promulgated
thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities
Act; and the Indenture shall be qualified under the Trust
Indenture Act of 1939 (the "Trust Indenture Act") and the
applicable rules and regulations thereunder. Copies of such
registration statement have been delivered by the Company to
you. 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
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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 Xxxxxx Brothers pursuant to
Rule 424(a) of the Rules and Regulations; "Registration
Statement" means such registration statement, as amended at
the Effective Time, including all information contained in the
final prospectus filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations in accordance with Section
5 hereof 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; "Prospectus" means such
final prospectus including any supplemental prospectus, as
first filed with the Commission pursuant to paragraph (1) or
(4) of Rule 424(b) of the Rules and Regulations; and
references herein to the Registration Statement, a Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include the documents and financial statements incorporated or
deemed to be incorporated therein pursuant to Item 12 of Form
S-3 which were filed under the United States Securities
Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (collectively, the
"Exchange Act"), on or before the Effective Date of the
Registration Statement or the issue date of such Preliminary
Prospectus or Prospectus, as the case may be. The Commission
has not issued any order preventing or suspending the use of
any Preliminary Prospectus or Prospectus; and no stop order
suspending the effectiveness of the Registration Statement is
in effect, and no proceedings for such purpose are pending
before or threatened by the Commission.
(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 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 by Xxxxxx Brothers specifically for inclusion
therein; and the Indenture conforms in all material respects
to the requirements of the Trust Indenture Act and the
applicable rules and regulations thereunder; provided that no
representation or warranty is made as to the statement of
eligibility and qualification on Form T-1 of the Trustee under
the Trust Indenture Act or 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 by Xxxxxx Brothers specifically for
inclusion therein, which information is described in Section
8(e) hereof.
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(c) The market-related and industry-related data and
estimates included in the Prospectus are based on or derived
from sources which the Company believes to be reliable and
accurate.
(d) The Company and each of its subsidiaries (as
defined in Section 14) have been duly incorporated and are
validly existing as corporations 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 to the extent that the failure to be so qualified could
not be reasonably expected to have a material adverse effect
on the general affairs, management, 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
power and authority 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 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 (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims other than liens or
encumbrances in favor of the lenders under the Company's Bank
Credit Facility, dated as of January 1, 1999, as described in
the Prospectus.
(f) This Agreement has been duly authorized, executed
and delivered by the Company.
(g) The Indenture has been duly authorized, and on
the Delivery Date (as defined below) when duly executed by the
proper officers of the Company (assuming due execution and
delivery by the Trustee) and delivered by the Company, will
constitute a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law).
(h) The Notes have been duly and validly authorized
by the Company
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and when duly executed by the Company in accordance with the
terms of the Indenture and, assuming due authentication of the
Notes by the Trustee, upon delivery to Xxxxxx Brothers against
payment therefor in accordance with the terms hereof, will
constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable in
accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law); and
the Notes, when issued and delivered, will conform in all
material respects to the description thereof contained in the
Prospectus.
(i) The execution, delivery and performance of this
Agreement and the Indenture by the Company and the
consummation of the transactions contemplated hereby and
thereby (including the issuance and sale of the Notes and the
use of the proceeds from the sale thereof as described in the
Prospectus under the caption "Use of Proceeds") 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, lease 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 for such conflicts, breaches, violations or defaults as
could not, in the aggregate, be reasonably expected to 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 for
such violations as could not, in the aggregate, be reasonably
expected to have a Material Adverse Effect; and except for (i)
the registration of the Notes under the Securities Act, (ii)
the qualification of the Indenture under the Trust Indenture
Act and (iii) 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 Notes by
Xxxxxx Brothers, 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 Indenture
by the Company and the consummation of the transactions
contemplated hereby and thereby.
(j) With the exception of two Registration Rights
Agreements, each dated December 31, 1998, in connection with
the Company's issuance to PMI Mezzanine Fund, L.P. of its 7.5%
convertible subordinated notes in the aggregate principal
amount of $30.0 million and the Company's issuance to MDP
Ventures IV LLC of its 9.5% convertible subordinated notes in
the aggregate principal amount of $40.0 million, there are no
contracts, agreements or understandings
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between the Company and any person granting such person the
right to require the Company to file a registration statement
under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company 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 under the Securities Act.
(k) Except as described in the Prospectus, the
Company has not sold or issued any securities with terms that
are substantially similar to the Notes during the six-month
period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of,
the Securities Act.
(l) 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,
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 material adverse change, or any
development involving a prospective material adverse change,
in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations,
business or prospects of the Company and its subsidiaries (a
"Material Adverse Change"), otherwise than as set forth or
contemplated in the Prospectus.
(m) The financial statements (including the related
notes and supporting schedules) included or incorporated by
reference in the Prospectus present fairly the 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 conformity with generally
accepted accounting principals applied on a consistent basis
throughout the periods involved.
(n) Xxxxxx Xxxxxxxx LLP, who has certified certain
financial statements of the Company, whose report appears in
the Prospectus or is incorporated by reference therein and who
has delivered the initial letter referred to in Section 7(h)
hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(o) The Company and each of its subsidiaries have
good and marketable title in fee simple to all real property
and good and marketable 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 and proposed to be made of such property by the Company
and its subsidiaries; all real property and buildings held
under lease by
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the Company and 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 and
proposed to be made of such property and buildings by the
Company and its subsidiaries; neither the Company nor, to the
best of the knowledge of the Company, any lessee under a
lease, relating to any of the real property or facilities
owned by the Company, is in default under or has any rights to
terminate any of the leases relating to the real property or
facilities owned by the Company and the Company does not know
of any event which, but for the passage of time or the giving
of notice, or both, would constitute a default or under or
termination of any of such leases, except such defaults or
termination rights that could not be reasonably expected to
have a Material Adverse Effect on the Company; and, except as
disclosed in the Prospectus, neither the Company nor, to the
best of the knowledge of the Company, any other party under a
management contract, relating to any of the real property or
facilities owned by the Company, is in default under any of
the management contracts relating to the real property or
facilities owned by the Company, the Company has not received
any notice of any rights to terminate any of such management
contracts and the Company does not know of any event which,
but for the passage of time or the giving of notice, or both,
would constitute a default or under or termination of any of
such management contracts, except such defaults or termination
rights that could not be reasonably expected to have a
Material Adverse Effect on the Company.
(p) The Company and each of its subsidiaries carry,
or are covered by, insurance in such amounts and covering such
risks as is reasonably 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) Except as described in the Prospectus, the
Company and each of its subsidiaries own or possess adequate
rights to use all material trademarks, service marks, trade
names, trademark registrations, service xxxx registrations and
licenses necessary for the conduct of their respective
businesses and have no reason to believe 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.
(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, could be reasonably expected to
have a Material Adverse Effect; and to the best of the
Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others.
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(s) 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 incorporated therein by reference as permitted by
the Rules and Regulations.
(t) No relationship, direct or indirect, exists
between or among the Company on the one hand, and the
directors, officers, stockholders, customers or suppliers of
the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(u) No labor disturbance by the employees of the
Company exists or, to the knowledge of the Company, is
imminent which could be reasonably expected to have a Material
Adverse Effect.
(v) 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 would have any
liability; the Company 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 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.
(w) The Company has filed all federal, state and
local income and franchise tax returns required to be filed
through the date hereof and has paid all taxes due thereon,
and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has had (nor does the
Company have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of its
subsidiaries, could be reasonably expected to have) a Material
Adverse Effect.
(x) The Company has been organized in conformity with
the requirements for qualification as a real estate investment
trust under the Internal Revenue Code of 1986, as amended (the
"Code"), and it has operated and intends to continue to
operate in such a manner as to enable it to meet the
requirements for taxation as a real estate investment trust
under the Code commencing with the Company's taxable year
ending December 31, 1999.
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(y) 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, the Company has not
(i) issued or granted any securities, (ii) incurred any
liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the
ordinary course of business, (iii) entered into any
transaction not in the ordinary course of business or (iv)
declared or paid any dividend on its capital stock.
(z) The Company (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, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the
reported accountability for its assets is compared with
existing assets at reasonable intervals.
(aa) 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, lease 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) 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.
(ab) 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.
(ac) 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,
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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
could not be reasonably expected 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 could
not be reasonably expected 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.
(ad) Neither the Company nor any subsidiary is an
"investment company" within the meaning of such term under the
United States Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder.
2. Purchase of the Notes by Xxxxxx Brothers. On the basis of
the representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell to Xxxxxx
Brothers, and Xxxxxx Brothers agrees to purchase from the Company, all of the
Notes at an aggregate purchase price equal to 97.00% of the principal amount
thereof (the "Purchase Price").
The Company shall not be obligated to deliver any of the
Notes, except upon payment for all the Notes to be purchased pursuant to this
Agreement as provided herein.
3. Offering of Notes by Xxxxxx Brothers. Upon authorization by
Xxxxxx Brothers of the release of the Notes, Xxxxxx Brothers proposes to offer
the Notes for sale upon the terms and conditions set forth in the Prospectus.
4. Delivery of and Payment for the Notes. Delivery of and
payment for the Notes shall be made at the office of Xxxxxx & Xxxxxxx, 000 Xxxxx
Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York City time, on the third
full business day following the date of this Agreement or at such other date or
place as shall be determined by agreement between Xxxxxx Brothers and the
Company. This date and time are sometimes referred to as the "Delivery Date." On
the Delivery Date, the Company shall deliver or cause to be delivered
certificates representing the Notes to Xxxxxx Brothers for the account of Xxxxxx
Brothers against payment to or upon the order of the Company of the purchase
price by wire transfer in immediately available funds. Time shall be of the
essence, and delivery at the time and place
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specified pursuant to this Agreement is a further condition of the obligation of
Xxxxxx Brothers hereunder. Upon delivery, the Notes shall be registered in such
names and in such denominations as may be set forth in the Indenture. For the
purpose of expediting the checking and packaging of the certificates for the
Notes, the Company shall make the certificates representing the Notes available
for inspection by Xxxxxx Brothers in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by
Xxxxxx Brothers and to file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than 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
except as permitted herein; to advise Xxxxxx Brothers,
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 Xxxxxx
Brothers with copies thereof; to advise Xxxxxx Brothers,
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
Notes 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 Xxxxxx Brothers and to
counsel for Xxxxxx Brothers 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;
(c) To deliver promptly to Xxxxxx Brothers such
number of the following documents as Xxxxxx Brothers 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, the Indenture and the computation of per share
earnings) and (ii) each Preliminary Prospectus, the Prospectus
and any amended or supplemented Prospectus; 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
Notes 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
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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 in order to comply with the
Securities Act, to notify Xxxxxx Brothers and, upon their
request, to file such document and to prepare and furnish
without charge to Xxxxxx Brothers and to any dealer in
securities as many copies as Xxxxxx Brothers 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 judgment of
the Company or Xxxxxx Brothers, 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
or any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to Xxxxxx Brothers and
counsel for Xxxxxx Brothers and obtain the consent of Xxxxxx
Brothers to the filing;
(f) As soon as practicable, to make generally
available to the Company's security holders and to deliver to
Xxxxxx Brothers earnings statements 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) So long as any of the Notes are outstanding, to
furnish to Xxxxxx Brothers 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;
(h) Promptly from time to time to take such action as
Xxxxxx Brothers may reasonably request to qualify the Notes
for offering and sale under the securities laws of such
jurisdictions as Xxxxxx Brothers 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 Notes;
(i) To apply the net proceeds from the sale of the
Notes being sold by the Company as set forth in the
Prospectus;
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(j) 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 United States Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder; and
(k) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, sell, offer to
sell, contract to sell, grant any option to purchase, issue
any instrument convertible or exchangeable for, or otherwise
transfer or dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result
in the disposition in the future of), any debt securities of
the Company or any of its subsidiaries, except with the prior
consent of Xxxxxx Brothers.
6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Notes 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 (including, without limitation, exhibits) and any
amendment or supplement to the Preliminary Prospectus and Prospectus, all as
provided in this Agreement; (d) the costs of reproducing and distributing this
Agreement; (e) the filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. of the terms of sale of the
Notes; (f) any applicable listing or other fees; (g) the fees and expenses of
qualifying the Notes under the securities laws of the several jurisdictions as
provided in Section 5(h) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to Xxxxxx Brothers);
(h) any fees charged by securities rating services for rating the Notes; and (i)
all other costs and expenses incident to the performance of the obligations of
the Company under this Agreement; provided, that (x) the Company and Xxxxxx
Brothers will bear their own "road show" expenses, (y) the Company, on the one
hand, and Xxxxxx Brothers, on the other hand, will each bear one half of the
cost of the charter air craft used in connection with the "road show" relating
to the offering of the Notes and (z) the only legal expenses of Xxxxxx Brothers
to be borne by the Company pursuant to this Section 6 are pursuant to clause (g)
of this Section 6.
7. Conditions of Xxxxxx Brothers' Obligations. The obligations
of Xxxxxx Brothers hereunder are subject to the accuracy, when made and on the
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its 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 5(a); no stop order
suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no
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proceeding for that purpose shall have been initiated or
threatened by the Commission; 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) Xxxxxx Brothers shall not have discovered and
disclosed to the Company on or prior to the 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 Xxxxxx & Xxxxxxx, counsel for Xxxxxx
Brothers, 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 Indenture, the Notes, the Registration
Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material
respects to counsel for Xxxxxx Brothers, and the Company shall
have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon
such matters.
(d) Miles & Stockbridge P.C. shall have furnished to
Xxxxxx Brothers its written opinion, as counsel to the
Company, addressed to Xxxxxx Brothers and dated the Delivery
Date, in form and substance reasonably satisfactory to Xxxxxx
Brothers, to the effect that:
(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws
of the State of Maryland and has the corporate power
and authority to own or hold its properties and
conduct the businesses in which it is engaged as such
properties and businesses are described in the
Prospectus;
(ii) The Company has authorized capital stock as
described under the caption "Description of Common
Stock--General" set forth in the Prospectus, and all
of the issued shares of capital stock of the Company,
comprising 117,076,081 shares of common stock, $0.01
par value per share, and 4,300,000 shares of 8%
Series A Cumulative Preferred Stock, have been duly
authorized and validly issued and are fully paid and
non-assessable, and the description of the common
stock, $0.01 par value per share, of the Company and
the preferred stock of the Company, consisting solely
of the shares of preferred stock, $0.01 par value,
designated 8.0% Series A Cumulative Preferred Stock,
conform to the description thereof set forth under
the caption "Description of Capital Stock" in the
Prospectus, including under the caption "New Prison
Realty Capital Stock" in the prospectus that is
incorporated therein by reference;
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(iii) The execution and delivery of and the
performance of its obligations under each of the
Underwriting Agreement and the Indenture by the
Company have been duly authorized by the Company;
(iv) The issuance and sale of the Notes by the
Company have been duly authorized by the Company;
(v) The execution and delivery by the Company of
this Agreement and the Indenture and the consummation
by the Company of the transactions contemplated
hereby and thereby will not result in any violation
of the provisions of the charter or bylaws of the
Company or, to the knowledge of such counsel, any
applicable law, rule or regulation of any Maryland
court or governmental agency having jurisdiction over
the Company, except for such violations that could
not, singly or in the aggregate, be reasonably
expected to have a Material Adverse Effect; and
(vi) No consent, approval, authorization, order,
registration or qualification of or with any Maryland
governmental agency or body or, to our knowledge, any
Maryland court is required for the issue and sale of
the Notes by the Company and the compliance by the
Company with the provisions of this Agreement, except
for such consents, approvals, authorizations,
registrations or qualifications as may be required
under state securities or Blue Sky laws in connection
with the purchase and distribution of the Notes by
Xxxxxx Brothers.
In rendering such opinion, such counsel may state
that its opinion is limited to matters governed by the laws of
the State of Maryland.
(e) Xxxxxx & Xxxxxxxxxxx, P.A. shall have furnished
to Xxxxxx Brothers its written opinion, as counsel to the
Company, addressed to Xxxxxx Brothers and dated the Delivery
Date, in form and substance reasonably satisfactory to Xxxxxx
Brothers, to the effect that:
(i) The Company has been duly formed and is
validly existing as a corporation under the laws of
the State of Maryland, with corporate power and
authority to own its properties and conduct its
businesses as now conducted, and based solely upon
certificates from public officials, is duly qualified
to do business and is in good standing as a foreign
corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its
businesses requires such qualification, except to the
extent that the failure to be so qualified could not
be reasonably expected to have Material Adverse
Effect;
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(ii) As of the dates specified therein, the
Company had authorized and issued capital stock as
set forth under the caption "Capitalization" in the
Prospectus. All of the issued shares of the capital
stock of the Company have been duly authorized and
validly issued and conform to the description thereof
contained in the Prospectus;
(iii) The Indenture has been duly executed
and delivered by the Company, is duly qualified under
the Trust Indenture Act and, assuming that the
Indenture is a valid and binding agreement of the
Trustee, constitutes a valid and binding agreement of
the Company;
(iv) The Notes have been duly executed and
issued by the Company and, assuming due
authentication thereof by the Trustee and upon
payment delivery in accordance with the terms of this
Agreement, will constitute valid and binding
obligations of the Company;
(v) This Agreement has been duly executed
and delivered by the Company;
(vi) To such counsel's knowledge, there are
no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the transfer of,
any Notes pursuant to the Company's charter or
by-laws or any agreement or other instrument known to
such counsel;
(vii) The Company and each of its
subsidiaries have good and marketable title in fee
simple to all real 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 and proposed to be made
of such property by the Company and its subsidiaries;
and all real property and buildings held under lease
by the Company and 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 and proposed to be made
of such property and buildings by the Company and its
subsidiaries;
(viii) To the best of such counsel's
knowledge, and other than as set forth 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 of which, if determined adversely to
the Company or any of its subsidiaries, could be
reasonably expected to have a Material Adverse
Effect; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
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(ix) To the best of such counsel's
knowledge, and with the exception of two Registration
Rights Agreements, each dated December 31, 1998, in
connection with the Company's issuance to PMI
Mezzanine Fund, L.P. of its 7.5% convertible
subordinated notes in the aggregate principal amount
of $30.0 million and the Company's issuance to MDP
Ventures IV LLC of its 9.5% convertible subordinated
notes in the aggregate principal amount of $40.0
million, there are no contracts, agreements or
understandings between the Company and any person
granting such person the right to require the Company
to file a registration statement under the Securities
Act with respect to any securities of the Company
owned or to be owned by such person or to require the
Company 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
under the Securities Act;
(x) The statements contained in the
Prospectus under the captions "Business-Relationship
with CCA," "Business-CCA Leases," "Business-Other
Agreements," "Business-CCA Note," "Business-License
Fees," "Business-Relationship with the Service
Companies" and "Business-Governmental Regulation,"
insofar as they describe charter documents,
contracts, statutes, rules and regulations and other
legal matters, constitute an accurate summary thereof
in all material respects;
(xi) The statements contained in the
Prospectus under the caption "Material United States
Federal Tax Considerations" or "Material Federal
Income Tax Consequences," insofar as they purport to
constitute summaries of matters of United States
federal tax law and regulations or legal conclusions
with respect thereto, constitute accurate summaries
of the matters described therein in all material
respects;
(xii) 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 other than
liens or encumbrances in favor of the lenders under
the Company's Bank Credit Facility, dated as of
January 1, 1999, as described in the Prospectus;
(xiii) To such counsel's knowledge, there
are no contracts or documents of a character required
by the Securities Act or by the rules and regulations
thereunder to be described in the Registration
Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are
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not described or filed as required by the Securities
Act or by the rules and regulations thereunder;
(xiv) The execution and delivery by the
Company of this Agreement and the Indenture and the
consummation by the Company of the other transactions
contemplated hereby and thereby and by the Prospectus
will not (A) to the knowledge of such counsel, result
in a breach or violation of any of the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument of the Company
or any of its subsidiaries, except for such breaches
or violations that could not, singly or in the
aggregate, be reasonably expected to have a Material
Adverse Effect or (B) result in any violation of the
provisions of the charter or bylaws of the Company or
any of its subsidiaries, or, to the knowledge of such
counsel, any applicable law, rule or regulation with
respect to the Company or any of its subsidiaries or,
to the knowledge of such counsel, any rule or
regulation or order of any court or governmental
agency having jurisdiction over the Company or any of
its subsidiaries, except for such violations that
could not, singly or in the aggregate, be reasonably
expected to have a Material Adverse Effect; and, to
the knowledge of such counsel, except for such
consents, approvals or authorizations of, or filings,
registrations or qualifications with, governmental
authorities as may be required under the Securities
Act and the rules and regulations thereunder, the
Trust Indenture Act and the rules and regulations
thereunder or applicable states securities or Blue
Sky laws, rules or regulations in connection with the
purchase and distribution of the Notes by Xxxxxx
Brothers, no consent, approval, authorization or
order of, or filing or registration with, any such
court or governmental agency or body is required in
connection with the execution and delivery by the
Company of this Agreement or the Indenture or the
consummation by the Company of the other transactions
contemplated hereby and thereby and by the Prospectus
and the issuance and sale of the Notes by the
Company; and
(xv) The Registration Statement and the Prospectus
and any further amendments or supplements thereto
made by the Company prior to the Delivery Date (other
than the financial statements and related schedules
therein, as to which such counsel need express no
opinion) comply as to form in all material respects
with the requirements of the Securities Act and the
Rules and Regulations.
In rendering such opinion, such counsel may (i) state
that its opinion is limited to matters governed by the Federal
laws of the United States of America, the laws of the State of
Tennessee and the General Corporation Law of the State of
Delaware and that such counsel is not admitted in the State of
Delaware; (ii) rely (to the extent such counsel deems proper
and specifies in its opinion), as to
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matters involving the application of the laws of other
jurisdictions upon the opinion of other counsel of good
standing, provided that such counsel is satisfactory to
counsel for Xxxxxx Brothers and furnishes a copy of its
opinion to Xxxxxx Brothers.
Such counsel shall also have furnished to Xxxxxx
Brothers a written statement, addressed to Xxxxxx Brothers and
dated the Delivery Date, in form and substance satisfactory to
Xxxxxx Brothers, to the following effect: Such counsel has not
independently verified the accuracy, completeness or fairness
of the statements made or included in the Registration
Statement or the Prospectus and does not take responsibility
therefor, except as and to the extent set forth in paragraphs
(xi) and (xii) above. In the course of the preparation by the
Company of the Registration Statement and the Prospectus, such
counsel participated in conferences with certain officers and
employees of the Company and with representatives of Xxxxxx
Xxxxxxxx LLP, the Company's independent auditors. Based upon
such counsel's examination of the Registration Statement and
the Prospectus, such counsel's investigations made in
connection with the preparation of the Registration Statement
and the Prospectus and such counsel's participation in the
conferences referred to above, (i) such counsel is of the
opinion that the Registration Statement, as of its effective
date, and the Prospectus, as of June 4, 1999, complied as to
form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the
Commission thereunder, except that in each case such counsel
need not express an opinion with respect to the financial
statements or other financial data contained or incorporated
by reference in the Registration Statement or the Prospectus,
and (ii) such counsel has no reason to believe that the
Registration Statement, as of its effective date, contained
any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary
in order to make the statements therein not misleading or that
the Prospectus contains any untrue statement of a material
fact or omits to state any material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that in
each case such counsel need not express an opinion with
respect to the financial statements or other financial data
contained or incorporated by reference in the Registration
Statement or the Prospectus.
In addition, Xxxxxx & Xxxxxxxxxxx, P.A. shall have
furnished to Xxxxxx Brothers its written opinion, as special
tax counsel to the Company, addressed to Xxxxxx Brothers and
dated the Delivery Date, in form and substance reasonably
satisfactory to Xxxxxx Brothers.
(f) Xxxxxxx Xxxxxxx & Xxxxxxxx, special New York
counsel for the Company, shall have furnished to Xxxxxx
Brothers its written opinion addressed to Xxxxxx Brothers and
dated the Delivery Date, in form and substance reasonably
satisfactory to Xxxxxx Brothers, to the effect that:
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(i) The Indenture was duly qualified under
the Trust Indenture Act and, assuming the Indenture
has been duly authorized, executed and delivered by
the Company and, assuming that the Indenture is a
valid and binding agreement of the Trustee, the
Indenture constitutes a valid and legally binding
instrument of the Company enforceable against the
Company in accordance with its terms;
(ii) Assuming the Notes have been duly
authorized, executed and issued by the Company and,
assuming due authentication thereof by the Trustee
and upon payment and delivery in accordance with the
terms of this Agreement, the Notes will constitute
valid and legally binding obligations of the Company
enforceable in accordance with their terms and
entitled to the benefits of the Indenture;
(iii) No consent, approval, authorization,
order, registration or qualification of or with any
Federal or New York governmental agency or body or,
to our knowledge, any Federal or New York court is
required for the issue and sale of the Notes by the
Company and the compliance by the Company with all of
the provisions of this Agreement, except for the
registration under the Securities Act and the
Exchange Act of the Notes and such consents,
approvals, authorizations, registrations or
qualifications as may be required under state
securities or Blue Sky laws in connection with the
purchase and distribution of the Notes by Xxxxxx
Brothers;
(iv) The statements made in the Prospectus
under the caption "Description of Notes," insofar as
they purport to constitute summaries of the documents
referred to therein, constitute accurate summaries of
the terms of such documents in all material respects;
(v) The Registration Statement has become
effective under the Securities Act and the Prospectus
was filed pursuant to Rule 424(b) of the Rules and
Regulations and, to our knowledge, no stop order
suspending the effectiveness of the Registration
Statement has been issued or proceeding for that
purpose has been instituted or threatened by the
Commission; and
(vi) The Company is not an "investment
company" within the meaning of and subject to
regulation under the Investment Company Act of 1940,
as amended.
In rendering such opinion, such counsel may state
that its opinion is limited to matters governed by the Federal
laws of the United States of America and the laws of the State
of New York.
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(g) Xxxxxx Brothers shall have received from Xxxxxx &
Xxxxxxx, counsel for Xxxxxx Brothers, such opinion or
opinions, dated the Delivery Date, with respect to the
issuance and sale of the Notes, the Registration Statement,
the Prospectus and other related matters as Xxxxxx Brothers
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,
Xxxxxx Brothers shall have received from Xxxxxx Xxxxxxxx LLP a
letter, in form and substance satisfactory to Xxxxxx Brothers,
addressed to Xxxxxx Brothers 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.
(i) With respect to the letter of Xxxxxx Xxxxxxxx LLP
referred to in the preceding paragraph and delivered to Xxxxxx
Brothers concurrently with the execution of this Agreement
(the "initial letter"), the Company shall have furnished to
Xxxxxx Brothers a letter (the "bring-down letter") of such
accountants, in form and substance satisfactory to Xxxxxx
Brothers, addressed to Xxxxxx Brothers and dated the 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 the 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 Xxxxxx
Brothers a certificate, dated the Delivery Date, of its
Chairman of the Board, 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 the Delivery Date; the Company has
complied with all its agreements contained herein;
and the
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conditions set forth in Sections 7(a), 7(k), 7(l) and
7(m) 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) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest
audited financial statements included 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 or (ii) since such date there shall not have
been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting
the general affairs, management, financial position,
stockholders' equity or results of operations of the Company
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 Xxxxxx Brothers, so material and adverse as to make it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Notes being delivered on the
Delivery Date on the terms and in the manner contemplated in
the Prospectus.
(l) 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.
(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 in the
over-the-counter 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, (ii) a banking
moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged
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in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred such a
material adverse change in general economic, political or
financial conditions (or the effect of international
conditions on the financial markets in the United States shall
be such) as to make it, in the judgment of Xxxxxx Brothers,
impracticable or inadvisable to proceed with the public
offering or delivery of the Notes being delivered on the
Delivery Date on the terms and in the manner contemplated in
the Prospectus.
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 Xxxxxx Brothers.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless
Xxxxxx Brothers, its officers and employees and each person,
if any, who controls Xxxxxx Brothers 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 Notes),
to which Xxxxxx Brothers, that 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 based
upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the
Notes under the securities laws of any state or other
jurisdiction (any such application, document or information
being hereinafter called a "Blue Sky Application"), (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 or
(iii) any act or failure to act or any alleged act or failure
to act by Xxxxxx Brothers in connection with, or relating in
any manner to, the Notes 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 shall not be liable in the case of any matter
covered by 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 Xxxxxx Brothers through
its gross negligence or willful misconduct), and shall
reimburse Xxxxxx Brothers and each such officer, employee or
controlling person
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promptly upon demand for any legal or other expenses
reasonably incurred by Xxxxxx Brothers, that 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 Xxxxxx Brothers furnished to the Company by or on
behalf of Xxxxxx Brothers specifically for inclusion therein
and described in Paragraph 8(e); and provided further that as
to any Preliminary Prospectus this indemnity agreement shall
not inure to the benefit of Xxxxxx Brothers, its officers or
employees or any person controlling Xxxxxx Brothers on account
of any loss, claim, damage, liability or action arising from
the sale of Notes to any person by Xxxxxx Brothers if Xxxxxx
Brothers failed to send or give a copy of the Prospectus, as
the same may be amended or supplemented, to that person within
the time required by the Securities Act, and the untrue
statement or alleged untrue statement of any material fact or
omission or alleged omission to state a material fact in such
Preliminary Prospectus was corrected in the Prospectus, unless
such failure resulted from non-compliance by the Company with
Section 5(c). For purposes of the last proviso to the
immediately preceding sentence, the term "Prospectus" shall
not be deemed to include the documents incorporated therein by
reference, and Xxxxxx Brothers shall not be obligated to send
or give any supplement or amendment to any document
incorporated by reference in any Preliminary Prospectus or the
Prospectus to any person other than a person to whom Xxxxxx
Brothers had delivered such incorporated document or documents
in response to a written request therefor. The foregoing
indemnity agreement is in addition to any liability which the
Company may otherwise have to Xxxxxx Brothers or to any
officer, employee or controlling person of Xxxxxx Brothers.
(b) Xxxxxx Brothers 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, 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
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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 Xxxxxx Brothers furnished
to the Company by or on behalf of Xxxxxx Brothers specifically
for inclusion therein, 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 Xxxxxx Brothers may otherwise have to
the Company or any such director, officer, employee or
controlling person.
(c) Promptly after receipt by an indemnified party
under this Section 8 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 8, 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 8 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 8. 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 8 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 any indemnified party shall have the
right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such indemnified
party unless (i) the employment thereof has been specifically
authorized by the indemnifying party in writing, (ii) such
indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which
are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such
counsel it is advisable for such indemnified party to employ
separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel
reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at
the expense of the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such
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action on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but
substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses
of more than one separate firm of attorneys at any time for
all such indemnified parties, which firm shall be designated
in writing by Xxxxxx Brothers, if the indemnified parties
under this Section 8 consist of Xxxxxx Brothers or any of
their respective officers, employees or controlling persons,
or by the Company, if the indemnified parties under this
Section consist of the Company or any of the Company's
directors, officers, employees or controlling persons. 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.
(d) If the indemnification provided for in this
Section 8 shall for any reason be unavailable to or
insufficient to hold harmless an indemnified party under
Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred 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 on the
one hand and Xxxxxx Brothers on the other from the offering of
the Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of
the Company, on the one hand and Xxxxxx Brothers 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,
on the one hand and Xxxxxx Brothers 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 Notes
purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total
underwriting discounts and commissions received by Xxxxxx
Brothers with
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respect to the Notes purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering
of the Notes 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 or Xxxxxx Brothers, the
intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such
statement or omission. The Company and Xxxxxx Brothers 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 Xxxxxx Brothers 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 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), Xxxxxx Brothers shall not be
required to contribute any amount in excess of the amount by
which the total price at which the Notes underwritten by it
and distributed to the public was offered to the public
exceeds the amount of any damages which Xxxxxx Brothers 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.
(e) Xxxxxx Brothers confirms and the Company
acknowledges that the statements with respect to the public
offering of the Notes by Xxxxxx Brothers set forth as the
fifth paragraph, the first sentence of the eighth paragraph,
and the ninth paragraph under the caption "Underwriting" in
the Prospectus are correct and constitute the only information
concerning Xxxxxx Brothers furnished in writing to the Company
by or on behalf of Xxxxxx Brothers specifically for inclusion
in the Registration Statement and the Prospectus.
9. Termination. The obligations of Xxxxxx Brothers hereunder
may be terminated by Xxxxxx Brothers by notice given to and received by the
Company prior to delivery of and payment for the Notes if, prior to that time,
any of the events described in Sections 7(k), 7(l) or 7(m), shall have occurred
or if Xxxxxx Brothers shall decline to purchase the Notes for any reason
permitted under this Agreement.
10. Reimbursement of Xxxxxx Brothers' Expenses. If (a) the
Company shall fail to tender the Notes for delivery to Xxxxxx Brothers by reason
of any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
obligations hereunder required to be fulfilled by the Company is not
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fulfilled, the Company will reimburse Xxxxxx Brothers for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
Xxxxxx Brothers in connection with this Agreement and the proposed purchase of
the Notes, and upon demand the Company shall pay the full amount thereof to
Xxxxxx Brothers. If this Agreement is terminated pursuant to Section 9 by reason
of the default of Xxxxxx Brothers, the Company shall not be obligated to
reimburse Xxxxxx Brothers on account of those expenses.
11. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to Xxxxxx Brothers, shall be delivered or sent
by mail, telex or facsimile transmission to Xxxxxx Brothers
Inc., Three World Financial Center, New York, New York 10285,
Attention: Syndicate Department (Fax: 000-000-0000), with a
copy, in the case of any notice pursuant to Section 8(c), to
the Director of Litigation, Office of the General Counsel,
Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000;
(b) if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement or Prospectus,
Attention: Xxxxxxx X. Xxxxxx (Fax: 000-000-0000), with a copy
to Xxxxxxxxx X. Xxxxx, Esq., Xxxxxx & Xxxxxxxxxxx, P.A., 000
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000;
provided however, that any notice to Xxxxxx Brothers pursuant
to Section 8(c) shall be delivered or sent by mail, telex or facsimile
transmission to Xxxxxx Brothers at its address set forth in its acceptance telex
to Xxxxxx Brothers, which address will be supplied to any other party hereto by
Xxxxxx Brothers upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made by Xxxxxx Brothers Inc.
12. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon Xxxxxx Brothers, the Company
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 contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control Xxxxxx Brothers within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of Xxxxxx Brothers contained
in Section 8(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of 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 12, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
13. Survival. The respective indemnities, representations,
warranties and
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agreements of the Company and Xxxxxx Brothers contained in this Agreement or
made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Notes and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
14. Definition of 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.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
16. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
[Signature page follows]
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If the foregoing correctly sets forth the agreement among the Company and Xxxxxx
Brothers, please indicate your acceptance in the space provided for that purpose
below.
Very Truly Yours,
PRISON REALTY TRUST, INC.
By /s/ Xxxxxxx X. Xxxxxx
____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Operating Officer
Accepted:
XXXXXX BROTHERS INC.
By /s/ Xxxxxx X. XxXxxxxx
_______________________
Authorized Representative
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