EXHIBIT 1.2
$200,000,000
CORRECTIONS CORPORATION OF AMERICA
__% SENIOR NOTES DUE 2011
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"), proposes to sell an aggregate $200,000,000 principal amount of the
Company's __% Senior Notes due 2011 (the "Notes"). The Notes will be irrevocably
and unconditionally guaranteed (the "Guarantees") by the subsidiaries of the
Company listed in Schedule II hereto that have signed this Agreement (each, a
"Guarantor" and, collectively, the "Guarantors"), and will be issued pursuant to
the indenture, dated April __, 2003, as supplemented by the first supplemental
indenture (as so supplemented, the "Indenture"), dated as of the Delivery Date
(as hereinafter defined), among the Company, the Guarantors and State Street
Bank and Trust Company, as trustee. This is to confirm the agreement concerning
the purchase of the Notes from the Company by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company and each of the Guarantors represent, warrant and agree that:
(a) A Registration Statement on Form S-3, and an
amendment thereto, with respect to the Notes 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.
(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
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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) This Agreement has been duly authorized, executed
and delivered by the Company and each of the Guarantors.
(g) The Indenture has been duly authorized and will be
duly executed and delivered by the Company and each of the Guarantors and has
been duly qualified under the Trust Indenture Act of 1939, as amended, and the
rules and regulations of the Commission applicable to an indenture that is
qualified thereunder.
(h) The Notes have been duly authorized and will be duly
executed and delivered by the Company.
(i) The Guarantees have been duly authorized and will be
duly executed and delivered by each of the Guarantors.
(j) The Notes and the Guarantees conform as to legal
matters to the description thereof contained in the Prospectus.
(k) 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.
(l) 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.
(m) The execution, delivery and performance of this
Agreement, the Indenture, the Notes, the Guarantees, the MDP Agreement, and the
Second Amendment by the Company
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and each of the Guarantors, as applicable, the consummation of the transactions
contemplated hereby and the use of the proceeds from the sale of the Notes 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 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 Notes and the Guarantees 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 Notes 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.
(n) 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.
(o) 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 Notes, including any sales pursuant to rule 144A under, or Regulations D or
S of, the Securities Act, other than a note in the principal amount of $175,000
issued in connection with an acquisition (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).
(p) 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
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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.
(q) 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 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.
(r) 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 7(g), are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(s) 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.
(t) 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.
(u) 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
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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.
(v) 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.
(w) 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.
(x) 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.
(y) 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.
(z) 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.
(aa) 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.
(bb) 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
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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.
(cc) 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 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.
(dd) 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.
(ee) 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.
(ff) 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.
(gg) 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
7
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.
(hh) 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 not
material, that involves management or other employees who have a significant
role in the Company's internal controls.
(ii) 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.
(jj) 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.
(kk) 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.
(ll) 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.
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(mm) 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 Notes.
(nn) 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
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," "Description of Certain Existing Indebtedness,"
"Certain U.S. Federal Income Tax Considerations" and "ERISA Considerations" 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.
(oo) None of the transactions contemplated by this
Agreement (including without limitation, the use of the proceeds from the sale
of the Notes), 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.
(pp) The Company shall ensure that the purchase of the
Company's common stock from MDP and the other transactions contemplated pursuant
to the MDP Agreement and the sale of the Company's common stock as contemplated
by the Prospectus does not and will not violate or result in a violation of
Regulation M of the Exchange Act.
(qq) 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.
(rr) No Restricted Subsidiary (as defined in the
Indenture) of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution on such
Restricted Subsidiary's capital stock, from repaying to the Company any loan or
advances to such Restricted Subsidiary from the Company or from transferring any
of such Restricted Subsidiary's property or assets to the Company or any other
Restricted Subsidiary of the Company, except as described in or contemplated by
the Prospectus or pursuant to the provisions of that certain indenture, dated
May 3, 2002, governing the Company's 9?% Senior Notes due 2009, and the Credit
Agreement.
(ss) Immediately after each of the Guarantors has entered
into the Guarantee to which it is a party, (i) the fair value of the assets of
such Guarantor will exceed the debts and liabilities, subordinated, contingent
or otherwise, of such Guarantor, (ii) the present fair saleable value of the
property of such Guarantor will be greater than the amount that will be required
to pay the probable liabilities of such Guarantor on its debts and other
liabilities, subordinated,
9
contingent or otherwise, as such debts and other liabilities, subordinated,
contingent or otherwise, become absolute and matured, (iii) such Guarantor will
be able to pay its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured, and
(iv) such Guarantor will not have an unreasonably small capital with which to
conduct the business in which it is engaged as such business is conducted and is
proposed to be conducted following the Delivery Date.
(tt) Neither the Company nor any of its subsidiaries
intends, or intends to permit any of its respective subsidiaries, to incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing and the amounts of cash to be received by the Company or any of its
subsidiaries and the timing and the amounts of cash to be payable on or in
respect of the Company's indebtedness or the indebtedness of each subsidiary.
2. Purchase of the Notes 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 to the several
Underwriters and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company, the aggregate principal amount of the Notes set forth
opposite the name of such Underwriter on Schedule I hereto, at a purchase price
of __% of the amount set forth opposite the name of such Underwriter on Schedule
I hereto.
3. Offering of Notes by the Underwriters.
Upon authorization by the Representative of the release of the Notes,
the several Underwriters propose 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 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 "Delivery Date." On the Delivery Date, the Company shall deliver or cause
to be delivered certificates representing the Notes to the Representative for
the account of each Underwriter 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 specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Notes 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 Delivery Date. The Company
shall make the Notes 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 Delivery Date.
5. 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)
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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 Notes; 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 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 the Representative and to
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.
(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 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 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
11
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) Whether or not required by the Rules and Regulations,
so long as any Notes are outstanding and so long as the Indenture so requires,
the Company will furnish to the Representative copies of all materials furnished
to holders of the Notes; 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.
(h) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Notes 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 Notes; 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 debt securities with terms substantially similar to the Notes (other
than the Notes) without the prior written consent of Xxxxxx Brothers Inc.
(j) To apply the net proceeds from the sale of the Notes
being sold by the Company as set forth in the Prospectus.
(k) 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.
(l) To use its best efforts in cooperation with the
Underwriters to permit the Notes to be eligible for clearance and settlement
through the facilities of The Depository Trust Company and to secure a CUSIP
number for the Notes.
12
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 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 Notes; (e) any applicable listing or other fees; (f) 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 the Underwriters, which shall not exceed $7,500); (g) the approval of
the Notes by DTC for "book-entry" transfer (including fees and expenses of
counsel); (h) rating the Notes and the Exchange Notes; (j) the Trustee, any
agent of the Trustee and the counsel for the Trustee in connection with the
Indenture, the Notes, and the Guarantees; (i) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement; provided that, except as provided in this Section 8 and in Section 12
the Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Notes which they may sell
and the expenses of advertising any offering of the Notes made by the
Underwriters.
7. 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
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 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 Notes,
the Guarantees 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
13
Underwriters, and the Company and 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) 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 Notes, the
Guarantees, the Indenture, 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.
(g) 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.
(h) 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.
14
(i) 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 7(a), (j) and (l) 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.
(j) (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 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 Notes being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(k) 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
15
public offering or delivery of the Notes being delivered on such 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) On or prior to the Delivery Date, The Depository
Trust Company shall have accepted the Notes for clearance.
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.
8. 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 Notes), 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 (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 Notes 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 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 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,
16
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(e); 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 Notes 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 Notes to such person, unless such failure to deliver or send the
Prospectus was a result of noncompliance by the Company with Section 5 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 the QIU (as hereinafter defined) or to
any director, officer, employee or controlling person of that Underwriter or the
QIU.
(b) 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, 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, 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.
17
(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
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 under this Section 8 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.
(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), 8(b) or 8(c) 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 the Underwriters 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
18
Company 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 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
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 the Underwriters with 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 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 and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 8 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 8
shall be deemed to include, for purposes of this Section 8(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 8(e), no Underwriter shall 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 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 8(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements set forth in paragraphs 3 (regarding
concessions and reallowances), 4 (regarding stabilizing and similar
transactions) and 9 (regarding electronic distribution of prospectuses) 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.
9. 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
Notes which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the amount of Notes set
opposite the name of each remaining non-defaulting Underwriter in Schedule I
hereto bears to the total number amount of Notes 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 Notes on such Delivery
19
Date if the total amount of Notes which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total amount of Notes to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the amount of Notes which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 2. 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 Notes
to be purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representative do not elect to purchase the
Notes which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter or the Company, except that the
Company will continue to be liable for the payment of expenses to the extent set
forth in Sections 6 and 12. 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 9, purchases Notes 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 for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Notes 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.
10. Qualified Independent Underwriter. The Company hereby confirms
that at their request Xxxxxx Brothers Inc. has without compensation acted as
"qualified independent underwriter" (in such capacity, the "QIU") within the
meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. in connection with the offering of the Notes. The
Company will indemnify and hold harmless the QIU against any losses, claims,
damages or liabilities, joint or several, to which the QIU may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
the QIU's acting (or alleged failing to act) as such "qualified independent
underwriter" and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred.
11. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representative 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(j) or 7(l), shall have occurred or if
the Underwriters shall decline to purchase the Notes for any reason permitted
under this Agreement.
12. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the Notes for delivery to the Underwriters 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
Underwriters' obligations hereunder required to be fulfilled by the
20
Company is not 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 Notes, and upon demand the Company shall pay the
full amount thereof to the Representative. If this Agreement is terminated
pursuant to Section 9 by reason of the default of one or more Underwriters, the
Company shall not be obligated to reimburse any defaulting Underwriter on
account of those expenses.
13. 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 9(c),
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); and
(c) any notice to an Underwriter pursuant to Section 9(c)
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 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.
14. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters and 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 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 8(b) 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 15, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Company 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
21
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.
16. 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.
17. 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.
18. 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.
19. 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.
If the foregoing correctly sets forth the agreement among the Company
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:
CCA OF TENNESSEE, INC.
PRISON REALTY MANAGEMENT, INC.
TECHNICAL AND BUSINESS INSTITUTE OF AMERICA, INC.
TRANSCOR AMERICA, LLC
CCA INTERNATIONAL, INC.
CCA PROPERTIES OF AMERICA, LLC
CCA PROPERTIES OF ARIZONA, LLC
CCA PROPERTIES OF TENNESSEE, LLC
CCA PROPERTIES OF TEXAS
XXXXXX XXX XXXXXXX TRI-COUNTY EXTRADITION, INC.
By
------------------------------------------------
Name:
Title:
22
Accepted:
XXXXXX BROTHERS INC.
By:
------------------------------------
Authorized Representative
For itself and as Representative
of the several Underwriters named
in Schedule I hereto
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SCHEDULE I
Principal Amount
Underwriters of Notes
------------ ----------------
Xxxxxx Brothers Inc..............................................
Deutsche Bank Securities Inc.....................................
UBS Warburg LLC..................................................
XX Xxxxx Securities Corporation..................................
SouthTrust Securities, Inc.......................................
First Analysis Securities Corporation............................
Xxxxxxxxx & Company, Inc.........................................
BB&T Capital Markets, a division of Xxxxx & Xxxxxxxxxxxx, Inc....
Xxxxxx Xxxxxx & Co. Inc..........................................
Total $200,000,000
============
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SCHEDULE II
Guarantors
CCA Of Tennessee, Inc.
Prison Realty Management, Inc.
CCA International, Inc.
Technical And Business Institutes Of America, Inc.
CCA Properties Of America, LLC
CCA Properties Of Arizona, LLC
CCA Properties Of Tennessee, LLC CCA
Properties Of Texas, L.P.
Xxxxxx Xxx Xxxxxxx Tri-County Extradition, Inc
