EXHIBIT 1.1
SENIOR SUBORDINATED NOTES DUE 1999
OF CCA HOLDINGS CORP.
PLACEMENT AGREEMENT
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February 10, 1997
▇▇▇▇▇▇ ▇▇▇▇ LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
HC Crown Corp. ("HC Crown"), a Delaware corporation and a wholly-owned
subsidiary of Hallmark Cards Incorporated, proposes to sell to ▇▇▇▇▇▇ ▇▇▇▇ LLC
(the "Placement Agent") an aggregate of $82,000,000 aggregate principal amount
of Senior Subordinated Notes due 1999 (the "Notes"), plus accrued interest since
January 18, 1995, the original date of issue of the Original Notes (as defined
herein). CCA Holding Corp. ("CCA"), a Delaware corporation originally sold to
HC Crown on January 18, 1995 Senior Subordinated Notes due 1999 (the "Original
Notes") pursuant to a Senior Subordinated Loan Agreement, dated as of January
18, 1995, between CCA and HC Crown (as amended and restated by the Amended and
Restated HC Loan Agreement dated as of November 15, 1996 (revised), the "HC
Crown Loan Agreement"). Immediately prior to the Closing Time (as defined
herein) the HC Crown Loan Agreement shall be converted into an indenture (the
"Indenture"), between CCA and a trustee. The Notes issued pursuant to the
Indenture will contain substantially the same terms and conditions as are
contained in the HC Crown Loan Agreement and the Original Notes issued
thereunder. Terms used herein but not defined herein shall have the meaning
assigned to them in the Offering Memorandum (as defined herein).
Pursuant to the terms of a Subordination Agreement, dated as of
January 18, 1995 among HC Crown, CCA and certain lenders under a credit facility
of CCE-I (as originally executed and delivered and thereafter amended and
restated, the "Subordination Agreement" and, together with each other
subordination agreement between any holder (or the trustee on behalf of such
holder) of Notes and certain lenders under a credit facility of CCA, the
"Subordination Agreements"), the Notes will be subordinated in right and
priority of payment to all existing indebtedness of CCA, other than indebtedness
that by its terms is expressly subordinated in right and priority of payment to
the Notes. The obligations of the Original
Notes were, and the obligations of the Notes will be, guaranteed (the
"Guarantees") on a subordinated basis by two subsidiaries of CCA and by a
limited partnership in which CCA owns indirect limited and general partnership
interests. The Notes and the Guarantees are more fully described in the
Offering Memorandum referred to below.
The Notes will be offered and sold by HC Crown to the Placement Agent
without registration under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon exemptions from the registration
requirements of the Securities Act. In connection with the sale of the Notes,
CCA has prepared a preliminary offering memorandum dated November 19, 1996 (the
"Preliminary Offering Memorandum") and a final offering memorandum dated the
date hereof (such final offering memorandum, in the form first furnished to the
Placement Agent for use in connection with the offering and sale of the Notes,
or if such form is not so used, in the form subsequently furnished for such use,
the "Offering Memorandum"), each setting forth certain information concerning
CCA, the Notes and HC Crown. CCA hereby confirms that it has authorized the use
of the Preliminary Offering Memorandum and the Offering Memorandum in connection
with the offer and resale of the Notes by the Placement Agent under Rule 144A of
the Securities Act, subject to the provisions of Section 4(c) hereof. Unless
stated to the contrary, all references herein to the Offering Memorandum are to
the Offering Memorandum at the date hereof (the "Execution Time") and are not
meant to include any amendment or supplement thereto subsequent to the Execution
Time. If CCA prepares a supplement dated the date hereof to the Preliminary
Offering Memorandum containing only pricing related information, then the term
"Offering Memorandum" for purposes of this Agreement shall refer collectively to
the Preliminary Offering Memorandum and such supplement.
CCA and HC Crown understand that the Placement Agent proposes to make
an offering of the Notes only on the terms, subject to the conditions and in the
manner set forth in the Offering Memorandum and Section 3 hereof, as soon as the
Placement Agent deems advisable after this Agreement has been executed and
delivered.
Pursuant to the HC Crown Loan Agreement, holders of the Original Notes
were entitled to demand that CCA register the Original Notes pursuant to the
Securities Act on two separate occasions, subject to the terms and provisions
thereof. HC Crown has exercised the first demand registration right with
respect to the Notes All expenses (other than internal expenses of CCA and the
expenses of any annual audit) related to the first such exercise of registration
rights by HC Crown will be paid by or on behalf of HC Crown pursuant to
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the terms and provisions of a letter agreement dated November 15, 1999 between
CCA and HC Crown (the "Letter Agreement"). Pursuant to the Letter Agreement,
CCA has agreed to comply with HC Crown's request to file and use its best
efforts to effect the registration of notes of CCA having terms substantially
identical to those set forth in the Notes, which will be exchanged for the Notes
(except that such notes as exchanged will not contain terms with respect to
transfer restrictions under applicable securities laws). Additionally, the
holders of the Notes shall be entitled to a second demand registration right
pursuant to the Indenture after March 31, 1997. All expenses (other than
internal expenses of CCA and the expenses of any annual audit) related to the
second demand registration, if exercised, will be paid by the holders of the
Notes exercising such registration rights in accordance with the terms and
provisions of the Indenture.
All references in this Agreement to financial statements and schedules
and other information that is "contained," "included" or "stated" in the
Offering Memorandum (and all other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information that is incorporated by reference in the Offering Memorandum; and
all references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that is
incorporated by reference in the Offering Memorandum.
Section 1. Representations and Warranties. (a) CCA represents and
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warrants to and agrees with the Placement Agent that:
(i) CCA is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with corporate power
and authority under such laws to own, lease and operate its properties and
conduct its business as described in the Offering Memorandum.
(ii) CCA has all corporate power and authority to execute, deliver
and perform its obligations under this Agreement. the Letter Agreement and
the Indenture.
(iii) As of the Closing Time this Agreement, the Indenture and the
Letter Agreement will have been duly authorized, executed and delivered by
CCA and upon such execution by CCA (assuming the due authorization,
execution and delivery thereof by the other-parties thereto) will
constitute the valid and binding obligations of CCA enforceable against CCA
in accordance with their respective terms, except as enforcement
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thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium, liquidation, receivership or other similar laws now or
hereafter in effect relating to the enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and except as any rights to indemnity and
contribution may be limited by federal and state securities laws and public
policy considerations.
(iv) The execution and delivery by CCA of, and its performance
under this Agreement, the Indenture, and the Letter Agreement, and the
consummation by CCA of the transactions contemplated hereby and thereby, do
not and will not result in any violation of the charter or By-Laws of CCA,
and do not and will not conflict in any material respect with, or result in
a material breach of any of the terms or provisions of, or constitute a
material default under, or result in the creation or imposition of any
material lien, charge or encumbrance upon any property or assets of CCA
under any indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other agreement or
instrument to which CCA is a party or by which CCA or any of its properties
are bound, any statute, or any judgment, order, decree, rule or regulation
of any court or governmental agency or body applicable to, or having
jurisdiction over CCA or its properties.
(v) The Notes have been duly authorized, executed and delivered,
have been validly issued and constitute valid and binding obligations of
CCA, entitled to the benefits of the Indenture and enforceable against CCA
in accordance with their terms, except that (a) enforceability thereof may
be limited by (i) bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium,
liquidation, receivership or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding
at law or in equity), (b) any rights to indemnification and contribution
may be limited by federal and state securities laws and public policy
considerations, (c) any waiver of stay or extension of usury laws contained
in the Indenture may be unenforceable and (d) any liquidated damages
provisions
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contained therein may be unenforceable, in whole or in part.
(vi) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(vii) As of their respective dates, none of the Offering
Memorandum or any amendment or supplement thereto, and as of the Closing
Time, the Offering Memorandum, as amended or supplemented to such time,
contained or will contain an untrue statement of a material fact or omitted
or will omit to state a 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 this representation and warranty does not
apply to statements or omissions made in (i) reliance upon and in
conformity with information furnished in writing or confirmed in writing to
CCA by or on behalf of the Placement Agent or HC Crown expressly for use in
the Offering Memorandum or (ii) respect of events, facts or circumstances
relating to the Crown Missouri Systems and the Crown Connecticut Systems
(collectively, the "Crown Systems") during the period prior to January 18,
1995.
(viii) The financial statements of CCA and certain affiliates
included or incorporated by reference in the offering Memorandum present
fairly the consolidated financial position of CCA and such affiliates as of
the dates indicated and the consolidated results of operations and the
consolidated statements of cash flows of CCA and such affiliates for the
periods specified. The selected consolidated financial data of CCA and
certain affiliates included or incorporated by reference in the Offering
Memorandum present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements of CCA included or incorporated by reference in the Offering
Memorandum. The consolidated financial statements of CCA included in or
incorporated by reference in the Offering Memorandum have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(ix) None of CCA, its affiliates (as such term is defined in Rule
501(b) of Regulation D under the Securities Act ("Regulation D")), or any
person acting on behalf of the foregoing has, directly or indirectly, made
offers or sales of any security, or solicited offers to buy any security,
under circumstances that would require the registration of the Notes under
the Securities Act.
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(x) None of CCA, its affiliates (as such term is defined in Rule
501(b) of Regulation D under the Securities Act ("Regulation D")), or any
person acting on behalf of CCA has engaged, in connection with the offering
of the Notes or any security of the same class or series as the Notes, (A)
in any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act or (B) in any directed
selling efforts within the meaning of Rule 902 under the Securities Act in
the United States in connection with the Notes being offered and sold
pursuant to Regulation S under the Securities Act, and each of them has
complied with the offering restrictions requirement of Regulation S under
the Securities Act, CCA has not entered and will not enter into any
contractual arrangement with respect to the distribution of the Notes
except for this Agreement, the HC Crown Loan Agreement, the Letter
Agreement, the Indenture, and the Subordination Agreements.
(xi) CCA has not taken and will not take, directly or indirectly,
any action designed to cause or result in stabilization or manipulation of
the price of the Notes.
(xii) No authorization, approval, consent or license of any
governmental instrumentality or court (other than under United States
securities or state securities or "blue sky" laws and the rules and
regulations of the NASD), is required for the performance by CCA of its
obligations under this Agreement and the Indenture.
(b) HC Crown represents and warrants to and agrees with the
Placement Agent that:
(i) HC Crown has all corporate power and authority to execute,
deliver and perform its obligations under this Agreement, the Letter
Agreement and the HC Crown Loan Agreement.
(ii) As of the Closing Time, this Agreement and the Letter
Agreement will have been duly authorized, executed and delivered by HC
Crown and upon such execution by HC Crown (assuming the due authorization,
execution and delivery thereof by the other parties thereto) will
constitute the valid and binding obligations of HC Crown enforceable
against HC Crown in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium (general or specific), liquidation, receivership
or similar laws reflecting enforcement of creditors' rights generally and
except as
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enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and except as any rights to indemnity and contribution may be limited by
federal and state securities laws and public policy considerations.
(iii) The performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in a material breach
or violation by HC Crown of any of the terms or provisions of, or
constitute a material default by HC Crown under, any indenture, mortgage,
deed of trust, trust (constructive or other), loan agreement, lease,
franchise, license or other agreement or instrument to which HC Crown is a
party or by which HC Crown or any of its properties is bound, any statute,
or any judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to HC Crown or any of its
properties.
(iv) HC Crown has good and valid title to the Notes proposed to be
sold by HC Crown hereunder and full corporate power and authority to enter
into this Agreement and to sell, assign, transfer and deliver such Notes
hereunder.
(v) Assuming the Placement Agent acquires the Notes from HC Crown
in good faith and without notice of any adverse claim (as such term is
defined in Section 8-302 of the Uniform Commercial Code currently in effect
in the State of New York), upon delivery of such Notes and payment therefor
in accordance with the terms of the Placement Agreement, the Placement
Agent will have acquired good and valid title to such Notes, free and clear
of any pledges, liens, claims, encumbrances, security interests and other
adverse claims other than those created by the action or inaction of the
Placement Agent.
(vi) As of their respective dates, none of the Offering Memorandum
or any amendment or supplement thereto, and as of the Closing Time, the
Offering Memorandum, as amended or supplemented to such time, contained or
will contain an untrue statement of a material fact or omitted or will omit
to state a 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 this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with
information furnished in writing or confirmed in writing (x) to CCA or HC
Crown by or on behalf of the Placement Agent
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expressly for use in the Offering Memorandum or (y) by or on behalf of CCA
expressly for use in the Offering Memorandum.
(vii) None of HC Crown, its affiliates (as such term is defined in
Rule 501(b) of Regulation D), or any person acting on the behalf of HC
Crown (exclusive of the Placement Agent) has engaged, in connection with
the offering of the Notes or any security of the same class or series as
the Notes, (A) in any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act or (B) in any
directed selling efforts within the meaning of Rule 902 under the
Securities Act in the United States in connection with the Notes being
offered and sold pursuant to Regulation S under the Securities Act, and
each of them has complied with the offering restrictions requirement of
Regulation S under the Securities Act, HC Crown has not entered and will
not enter into any contractual arrangement with respect to the distribution
of the Notes except for this Agreement, the Indenture, the Letter Agreement
and the HC Crown Loan Agreement.
(viii) None of HC Crown, its affiliates (as such term is defined
in Rule 501(b) of Regulation D under the Securities Act ("Regulation D")),
or any person acting on behalf of the foregoing (exclusive of the Placement
Agent) has, directly or indirectly, made offers or sales of any security,
or solicited offers to buy any security, under circumstances that would
require the registration of the Notes under the Securities Act.
(ix) HC Crown has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of CCA to facilitate the sale or resale of the
Notes.
(x) Assuming the accuracy of the representations and warranties
and compliance with the agreements of CCA set forth in Section 1 hereof and
of the Placement Agent in Section 3 hereof, it is not necessary in
connection with the offer, sale and delivery of the Notes to the Placement
Agent, or in connection with the initial resale of the Notes by the
Placement Agent in accordance with this Agreement, to register the Notes
under the Securities Act.
(xi) HC Crown is not required to be registered under the Investment
Company Act of 1940, as amended.
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(xii) No authorization, approval, consent or license of any
governmental instrumentality or court (other than under United States
securities or state securities or "blue sky" laws and the rules and
regulations of the NASD), is required for the performance by HC Crown of
its obligations under this Agreement and the Indenture.
(c) Any certificate signed by any officer of HC Crown and
delivered to the Placement Agent or to counsel for the Placement Agent shall be
deemed a representation and warranty by HC Crown to the Placement Agent as to
the matters covered thereby.
Section 2. Sale and Delivery to the Placement Agent; Closing. (a)
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On the basis of the representations and warranties herein contained, and subject
to the terms and conditions herein set forth, HC Crown agrees to sell to the
Placement Agent, and the Placement Agent agrees to purchase from HC Crown, at
the purchase price of $87,711,000 an aggregate of $82,000,000 principal amount
of Notes.
(b) Payment of the purchase price for, and delivery of certificates
for, the Notes shall be made at the offices of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., eastern standard
time, on February 13, 1997 or such later date and time not more than two full
business days thereafter as the Placement Agent, HC Crown and CCA shall mutually
determine (such date and time of payment and delivery being herein called the
"Closing Time").
(c) Certificates for the Notes to be purchased by the Placement Agent
shall be in such denominations and registered in such names as the Placement
Agent may request in writing at least two full business days before the Closing
Time. The certificates for the Notes will be made available in New York City
for examination and packaging by the Placement Agent not later than 10:00 A.M.
on the business day immediately prior to the Closing Time.
Section 3. Resale of the Notes. The Placement Agent represents and
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warrants to, and agrees with, CCA and HC Crown that:
(a) it is a Qualified Institutional Buyer within the meaning of Rule
144A(a)(i) under the Securities Act and an "accredited investor" within the
meaning of Rule 501(a) under the Securities Act;
(b) it has not offered or sold, and will not offer or sell, any Notes
except (i) to persons whom it reasonably believes to be Qualified Institutional
Buyers, (ii) to a
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limited number of other institutional accredited investors whom it believes to
be "accredited investors" (as defined in Rule 501(a) (1), (2), (3) or (7) of
Regulation D) that, prior to their purchase of the Notes, deliver to it a letter
substantially in a form acceptable to CCA and HC Crown or (iii) to non-U,S,
persons outside the United States to whom it reasonably believes offers and
sales of the Notes may be made in reliance upon Regulation S under the
Securities Act;
(c) none of it, any of its affiliates, or any person acting on its or
their behalf has made or will make offers or sales of the Notes in the United
States by (i) means of any form of general solicitation or general advertising
(within the meaning of Regulation D) or (ii) in any manner involving a public
offering (within the meaning of Section 4(2) under the Securities Act) in the
United States or in any manner which does not comply with the provisions of the
Securities Act or the rules and regulations thereunder;
(d) in connection with the transactions described in Section
3(b)(iii), it will sell Notes in such transactions only in accordance with
Regulation S under the Securities Act and has not offered or sold, and will not
offer or sell, the Notes to, or for the account or benefit of, U.S. persons (i)
as part of its distribution at any time or (ii) otherwise until one year after
the Closing Time, and it will send to each distributor, dealer or other person
receiving a selling concession, fee or remuneration to which it sells the Notes
during the restricted period a confirmation or other notice setting forth the
restrictions on offers and sales of the Notes within the United States or to, or
for the account or benefit of, U.S. persons. Terms used in this paragraph have
the meanings given to them by Regulation S under the Securities Act;
(e) it (i) has not offered or sold and will not offer or sell any
Notes to persons in the United Kingdom, except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or payment) for the purposes of their businesses or
otherwise in circumstances which do not constitute an offer to the public in the
United Kingdom for purposes of the Public Offers of Securities Regulations 1995,
(ii) has complied and will comply with all applicable provisions of the
Financial Services Act 1986 of the United Kingdom with respect to anything done
by it in relation to the Notes in, from or otherwise involving the United
Kingdom, and (iii) has only issued or passed on and will only issue or pass on
in the United Kingdom any document in connection with the issue of the Notes to
a person who is of a kind described in Article 8 of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) (No. 2) Order 1995 of the United
Kingdom or is a
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person to whom the document may otherwise lawfully be issued or passed on; and
(f) in the case of a non-bank subsequent purchaser of a Note acting
as a fiduciary for one or more third parties, in connection with an offer and
sale to such purchaser pursuant to clause (b) above, each such third party
shall, in the judgment of the Placement Agent, be an "accredited investor" or a
Qualified Institutional Buyer, as such terms are defined above, or a non-U.S.
person outside the United States.
Section 4. Certain Covenants of CCA and HC Crown. CCA and HC Crown
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each severally (and not jointly) with respect to itself only covenants, to the
extent applicable, with the Placement Agent as follows:
(a) CCA will furnish to the Placement Agent, HC Crown and their
respective counsel, without charge, as many copies of the Preliminary Offering
Memorandum and the Offering Memorandum and any amendments or supplements thereto
as they may reasonably request (it being understood that CCA's ability to comply
with this clause (a) is subject to receipt of sufficient copies from the
financial printing firm, whose fees and expenses are being paid by or on behalf
of HC Crown).
(b) CCA will give the Placement Agent and HC Crown timely notice of
its intention to prepare any amendment or supplement to the Preliminary Offering
Memorandum or the Offering Memorandum, and will not distribute any such
amendment or supplement to which the Placement Agent or counsel for the
Placement Agent shall reasonably object.
(c) If at any time prior to completion of the distribution of the
Notes by the Placement Agent to purchasers who are not affiliates of the
Placement Agent (as determined by the Placement Agent) any event shall occur or
condition exist as a result of which it is necessary, in the reasonable opinion
of the Placement Agent, counsel for the Placement Agent, HC Crown, counsel for
HC Crown, CCA or counsel for CCA, to amend or supplement the Offering Memorandum
in order that the Offering Memorandum, as then amended or supplemented, will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, CCA will, subject to
paragraph (b) of this Section 4, promptly prepare such amendment or supplement
as may be necessary to correct such untrue statement or omission (in form and
substance reasonably agreed upon by counsel to the Placement Agent, counsel to
CCA and counsel to HC Crown), so that as so amended or supplemented, the
statements in the Offering Memorandum will
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not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and furnish to the
Placement Agent such number of copies of such amendment or supplement as the
Placement Agent may reasonably request (it being understood that CCA's ability
to comply with this clause (c) is subject to receipt of sufficient copies from
the financial printing firm, whose fees and expenses are being paid by or on
behalf of HC Crown), CCA agrees to notify the Placement Agent and HC Crown in
writing to suspend use of the Offering Memorandum as promptly as practicable
after the officers of CCA become aware of any event or circumstances which would
require an amendment or supplement to the Offering Memorandum pursuant to this
paragraph (c), and the Placement Agent and HC Crown hereby agree upon receipt of
such notice from CCA to suspend use of the Offering Memorandum until CCA has
amended or supplemented the Offering Memorandum to correct such misstatement or
omission.
(d) Notwithstanding any provision of paragraph (b) or (c) of this
Section 4 to the contrary, however, CCA's obligations under paragraphs (b) and
(c) of this Section 4 and the Placement Agent's and HC Crown's obligations under
paragraph (c) of this Section 4 shall terminate on the earlier to occur of (i)
the effective date of a registration statement with respect to the Notes filed
pursuant to the Letter Agreement and (ii) the date upon which the Placement
Agent and its affiliates cease to hold Notes acquired as part of their initial
distribution, but in any event (in the case of this clause (ii)) not later than
nine months from the Closing Time.
(e) None of CCA, HC Crown or any of their respective affiliates (as
defined in Rule 501(b) under the Securities Act), nor any person acting on
behalf of the foregoing, will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Notes in the United States, or engage in any directed
selling efforts (as defined in Rule 902 under the Securities Act) with respect
to the Notes prior to the effectiveness of a registration statement with respect
to the Notes, and each of them will comply with the offering restrictions
requirement of Regulation S with respect to the Notes. Terms used in this
clause (e) have the meanings ascribed to them by Regulation S. No covenant is
made hereby with respect to the conduct of the Placement Agent or its affiliates
(as such term is defined in Rule 501(b) under the Securities Act).
(f) None of CCA, HC Crown or any of their respective affiliates (as
defined in Rule 501(b) under the Securities Act), will, directly or indirectly,
make offers or
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sales of any securities, or solicit offers to buy any security, under
circumstances that would require the registration of the Notes under the
Securities Act. No covenant is made hereby with respect to the conduct of the
Placement Agent or its affiliates (as such term is defined in Rule 501(b) under
the Securities Act).
(g) Each Note will bear a legend substantially in the following form
until such legend shall no longer be necessary or advisable because the Notes
are no longer subject to the restrictions on transfer described herein:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
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SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW, BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) or (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN
THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY, EXCEPT (A) TO THE ISSUER, OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR
HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE OR REGISTRAR), (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND, IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY, IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, WRITTEN LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, AS USED
-13-
HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT,
(h) The Placement Agent will arrange for the registration and
qualification of the Notes for offering and sale under the applicable securities
or "blue sky" laws of such states and other U.S. jurisdictions as the Placement
Agent may reasonably designate in connection with the resale of the Notes as
contemplated by this Agreement and the Offering Memorandum and will continue
such qualifications in effect for as long as may be necessary to complete the
distribution of the Notes; provided that in no event shall HC Crown be obligated
--------
to (i) qualify itself or CCA as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 4(i), (ii) file any general consent to service of
process in any jurisdiction where it is not at the Closing Tie then so subject,
(iii) subject itself to taxation in any such jurisdiction if it is not so
subject or (iv) register the Notes under the Securities Act except in accordance
with the Letter Agreement and the Indenture, CCA and HC Crown, as applicable,
shall promptly advise the Placement Agent of the receipt by CCA or HC Crown of
any notification with respect to the suspension of the qualification or
exemption from qualification of the Notes for offering or sale in any
jurisdiction or the institution of any proceeding for such purpose.
Section 5. Payment of Expenses. HC Crown will pay all costs and
-------------------
expenses incident to the performance of the obligations under this Agreement,
including (a) the preparation and printing of the Preliminary Offering
Memorandum and the Offering Memorandum (including financial statements and
exhibits) and any amendments or supplements thereto, and the cost of delivery
thereto to the Placement Agent, (b) the preparation, issuance, printing and
distribution of the Notes and any survey of state securities or "blue sky" laws
or legal investment memoranda ("Blue Sky Survey"), (c) the delivery of the Notes
to the Placement Agent, including any stock transfer taxes payable upon the sale
of the Notes to the Placement Agent, (d) the delivery of the Notes by the
Placement Agent to the purchasers thereof, including any stock transfer taxes
payable upon the sale of the Notes by the Placement Agent, (e) the reasonable
fees and disbursements of CCA's counsel (▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
and Debevoise & ▇▇▇▇▇▇▇▇, it being understood that HC Crown's obligation to
reimburse the fees and disbursements of Debevoise & ▇▇▇▇▇▇▇▇ shall not exceed
$40,000) and accountants, (f) the qualification of the Notes under the
applicable state securities or "blue sky" laws in accordance with Section 4(i)
hereof, including all filing fees and
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reasonable fees and disbursements of counsel for the Placement Agent in
connection therewith and in connection with the Blue Sky Survey, (g) any filing
fees in connection with any filing for review of the offering with the National
Association of Securities Dealers, Inc. ("NASD"), (h) any fees charged by rating
agencies for rating the Notes, (i) the fees and expenses of the transfer agent
and registrar for the Notes including the reasonable fees and disbursements of
counsel for such transfer agent and registrar in connection herewith and (j) all
fees and expenses of the Placement Agent including the reasonable fees and
disbursements of counsel for the Placement Agent.
If the sale of the Notes provided for herein is not consummated
because this Agreement is terminated pursuant to Section 10(a) (i) hereof or
because any condition to the obligations of the Placement Agent set forth in
Section 6 hereof is not satisfied, other than by reason of a default by the
Placement Agent hereunder, HC Crown shall reimburse the Placement Agent promptly
upon demand for all reasonable out-of-pocket expenses (including reasonable fees
and disbursements of counsel to the Placement Agent) that shall have been
incurred by it in connection with the proposed purchase and sale of the Notes;
provided, however, that in no event shall CCA or any of its affiliates be
obligated with respect to any of such expenses (subject to the immediately
preceding paragraph).
Section 6. Conditions of Placement Agent's Obligations. The
-------------------------------------------
obligations of the Placement Agent to purchase and pay for the Notes that it has
agreed to purchase pursuant to this Agreement are subject to the accuracy in all
material respects of the representations and warranties of CCA and HC Crown
contained herein or in certificates of any officer of CCA, HC Crown or any of
their respective subsidiaries delivered pursuant to the provisions hereof, to
the performance by CCA and HC Crown of their respective obligations hereunder,
and to the following conditions:
(a) At the Closing Time, the Placement Agent and HC Crown shall have
received a signed opinion of ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for
CCA, dated as of the Closing Time, in form and substance reasonably satisfactory
to counsel for the Placement Agent and HC Crown, to the effect that:
(i) CCA is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with corporate power
and authority under such laws to own, lease and operate its properties and
conduct its business, as described in the Offering Memorandum.
-15-
(ii) CCA is duly qualified to transact business as a foreign
corporation and is in good standing in Massachusetts and California.
(iii) This Agreement, the Letter Agreement and the Indenture have
each been duly authorized, executed and delivered by CCA and constitute a
valid and binding agreement of CCA enforceable against CCA in accordance
with their respective terms, except to the extent that (a) enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, liquidation, receivership, fraudulent conveyance or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and (iii)
usury laws, (b) any right to indemnity and contribution may be limited by
state or federal securities laws and public policy considerations, (c) any
waiver of stay or extension or usury laws contained in the Indenture may be
unenforceable and (d) any liquidated damages provisions contained therein
may be unenforceable, in whole or in part.
(iv) The Initial Notes have been duly authorized, executed, and
delivered and, when authenticated by the Trustee, will be validly issued
and constitute valid and binding obligations of CCA, entitled to the
benefits of the Indenture and enforceable against CCA in accordance with
their terms, except that (a) enforceability thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, liquidation,
receivership, fraudulent conveyance or other similar laws now or hereafter
in effect relating to creditors' rights generally, (ii) general principles
of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) and (iii) usury laws, (b) any right to
indemnity and contribution may be limited by state or federal securities
laws and public policy considerations, (c) any waiver of stay or extension
or usury laws contained in the Indenture may be unenforceable and (d) any
liquidated damages provisions contained therein may be unenforceable, in
whole or in part,
(v) To the knowledge of such counsel, no authorization, approval
consent or license of any governmental instrumentality or court that, in
the opinion of such counsel, is normally applicable to transactions of the
type contemplated by this Agreement (other than under United States
securities or state securities or "blue sky" laws and the rules and
regulations of the NASD, as to which no opinion need be
-16-
expressed), is required for the performance by CCA of its obligations under
this Agreement and the Indenture.
(vi) The execution and delivery by CCA of, and its performance
under this Agreement, the Indenture, and the Letter Agreement, and the
consummation by CCA of the transactions contemplated hereby and thereby, do
not and will not result in any violation of the charter or By-Laws of CCA,
and do not and will not conflict in any material respect with, or result in
a material breach of any of the terms or provisions of, or constitute a
material default under, or result in the creation or imposition of any
material lien, charge or encumbrance upon any property or assets of CCA
under (A) any agreement or instrument of which such counsel is aware to
which CCA is a party identified in such counsel's opinion, (B) any existing
applicable law (other than state securities Blue Sky laws), or (C) to the
knowledge of such counsel, any judgment, order or decree of which such
counsel is aware under applicable laws of any New York, Delaware or federal
government, governmental instrumentality or court having jurisdiction over
CCA or its properties. Such counsel need express no opinion, however, as
to whether the execution, delivery and performance by CCA of any of the
agreements executed and delivered in connection with the transactions
contemplated hereby will constitute a violation of or a default under any
covenant, restriction or provision with respect to financial ratios or
tests or any aspect of the financial condition or results of operations of
CCA and the Restricted Subsidiaries.
(vii) When the Notes were issued such securities were not of the
same class (within the meaning of Rule 144A under the Securities Act) as
securities of CCA listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.
(viii) The terms of the Indenture, the Letter Agreement and the
Notes have been reviewed by such counsel and conform in all material
respects to the summary descriptions thereof in the Offering Memorandum.
(ix) Statements set forth in the Offering Memorandum, insofar as
such statements constitute a summary of the legal matters, documents or
legal proceedings or refer to statements of regulation, law or legal
conclusions, fairly present the information called for with respect to such
legal matters, documents or legal proceedings and statements, and are
accurate in all material respects.
-17-
In addition, such opinion shall include a statement, subject to such
qualifications as are customarily applied to such statements by such counsel,
that such counsel have participated in the preparation of the Offering
Memorandum and in conferences with officers and other representatives of CCA,
representatives of the independent public accountants for CCA and certain of its
affiliates, officers and representatives of HC Crown and with the Placement
Agent's representatives at which the contents of the Offering Memorandum and
related matters were discussed and, although such counsel need not pass upon or
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum, on the basis of the foregoing,
no facts have come to the attention of such counsel that have caused them to
believe that the Offering Memorandum or any amendment or supplement thereto
(except for the financial statements, notes, schedules, statistical and other
financial data included therein or omitted therefrom, as to which such counsel
need express no statement) at the time any such amended or supplemented Offering
Memorandum was issued or at the Closing Time, contained or contains an untrue
statement of a material tact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that such counsel need express no opinion or belief with
respect to (i) the financial statements, notes, schedules, statistical and other
financial data included therein or omitted therefrom or (ii) events, facts or
circumstances relating to the Crown Systems during the period prior to January
18, 1995.
In giving such opinion, such counsel may state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon the representations and warranties contained in this Agreement,
certificates of officers of CCA and its affiliates, and certificates of public
officials.
(b) At the Closing Time, the Placement Agent shall have received a
signed opinion of ▇▇▇, ▇▇▇▇▇▇ & Albenson, counsel to HC Crown, dated as of the
Closing Time, in form and substance reasonably satisfactory to counsel for the
Placement Agent, to the effect that:
Assuming and based solely upon (a) the accuracy of the representations
and warranties of CCA and HC Crown set forth in Section 1 of this Agreement
and of the Placement Agent set forth in Section 3 of this Agreement, (b)
the due performance by CCA and HC Crown of the covenants and agreements set
forth in Section 4 of this Agreement and the due performance by the
Placement Agent of the covenants and agreements set forth in Section 3 of
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this Agreement, (c) compliance by the Placement Agent with the offering and
transfer procedures and restrictions described in the Offering Memorandum,
(d) the accuracy of the representations and warranties made in accordance
with this Agreement and Offering Memorandum by purchasers to whom the
Placement Agent initially resells Notes and (e) that purchasers to whom the
Placement Agent initially resells Notes receive a copy of the Offering
Memorandum prior to such sale, the offer, sale and delivery of the Notes to
the Placement Agent in the manner contemplated by this Agreement and the
Offering Memorandum and the initial resale of the Notes by the Placement
Agent in the manner contemplated in the Offering Memorandum and this
Agreement, do not require registration under the Securities Act, it being
understood that such counsel need express no opinion as to any subsequent
resale of any Notes.
In addition, such opinion shall include a statement, subject to such
qualifications as are customarily applied to such statements by such counsel,
that such counsel have participated in the preparation of the Offering
Memorandum and in conferences with officers and other representatives of HC
Crown, officers and representatives of CCA and its counsel, representatives of
the independent public accountants for CCA, and with the Placement Agent's
representatives at which the contents of the Offering Memorandum and related
matters were discussed and, although such counsel need not pass upon or assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum, on the basis of the foregoing, no facts
have come to the attention of such counsel that have caused them to believe that
the Offering Memorandum or any amendment or supplement thereto (except for the
financial statements, schedules, statistical and other financial data included
therein or omitted therefrom, as to which such counsel need express no
statement) at the time any such amended or supplemented Offering Memorandum was
issued or at the Closing Time, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that such
counsel need express no opinion or belief with respect to the financial
statements, schedules, statistical and other financial data included therein or
omitted therefrom.
In giving such opinion, such counsel may state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon representations, warranties and certifications made by HC Crown and
its
-19-
officers and representatives and upon certificates of public officials.
(c) At the Closing Time, the Placement Agent shall have received a
signed opinion of ▇▇▇▇▇▇ ▇▇▇, in-house counsel to HC Crown, dated as of the
Closing Time, in form and substance reasonably satisfactory to counsel for the
Placement Agent, to the effect that:
(i) HC Crown is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware,
(ii) HC Crown has full corporate power and authority to enter into
this Agreement and to sell, assign, transfer and deliver such Notes
hereunder,
(iii) Assuming the Placement Agent acquires the Notes from HC
Crown in good faith and without notice of any adverse claim (as such term
is defined in Section 8-302 of the Uniform Commercial Code currently in
effect in the State of New York), upon delivery of such Notes and payment
therefor in accordance with the terms of the Placement Agreement, the
Placement Agent will have acquired good and valid title to such Notes, free
and clear of any adverse claims other than those created by the action or
inaction of the Placement Agent,
(iv) This Agreement and the Letter Agreement have each been duly
authorized, executed and delivered by HC Crown and constitute a valid and
binding agreement of HC Crown enforceable against HC Crown in accordance
with its respective terms, except to the extent that (a) enforcement hereof
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium
(general or specific), liquidation, receivership, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), (b) the
right to indemnity and contribution may be limited by state or federal
securities laws or public policy and (c) any liquidated damages provisions
contained therein ma! he unenforceable, in whole or in part,
(v) The execution and delivery by HC Crown of, and its performance
under, this Agreement, the Letter Agreement and the HC Crown Loan Agreement
and the consummation by HC Crown of the transactions contemplated hereby
and thereby, do not and will not result in any violation of the charter or
By-Laws of HC Crown, and do
-20-
not and will not conflict in any material respect with, or result in a
material breach of any of the terms or provisions of, or constitute a
material default under, or result in the creation or imposition of any
material lien, charge or encumbrance upon any property or assets of HC
Crown under (A) an! agreement or instrument to which HC Crown is a party
specifically identified in such counsel's opinion, (B) any existing federal
law or Missouri law (excluding state securities or "blue sky" laws and the
rules and regulations of the National Association of Securities Dealers, as
to which no opinion need be expressed), or (C) to the knowledge of such
counsel, any judgment, order or decree of any New York, Delaware, Missouri
or federal government, governmental instrumentality or court having
jurisdiction over HC Crown or its properties (excluding state securities or
"blue sky" laws and the rules and regulations of the National Association
of Securities Dealers, as to which no opinion need be expressed), Such
counsel need express no opinion, however, as to whether the execution,
delivery and performance by HC Crown of any of the agreements executed and
delivered in connection with the transactions contemplated hereby will
constitute a violation of or a default under any covenant, restriction or
provision with respect to financial ratios or tests or any aspect of the
financial condition or results of operations of HC Crown,
(vi) HC Crown is not required to be registered under the Investment
Company Act of 1940, as amended,
(vii) To the knowledge of such counsel, no authorization,
approval, consent or license of any governmental instrumentality or court
that, in the opinion of such counsel, is normally applicable to
transactions of the type contemplated by this Agreement (other than under
United States securities or state securities or "blue sky" laws and the
rules and regulations of the NASD, as to which no opinion need be
expressed), is required for the performance by HC Crown of its obligations
under this Agreement and the Indenture,
Such opinion shall be to such effect with respect to other legal
matters relating to this Agreement and the Notes as counsel for the Placement
Agent may reasonably request, In giving such opinion, such counsel may state
that, insofar as such opinion involves factual matters they have relied, to the
extent they deem proper, upon certificates of public officials and affiliates of
HC Crown.
-21-
(d) At the Closing Time, (i) the Offering Memorandum, as it may then
be amended or supplemented, shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they are made, not misleading, (ii) except as may be disclosed in the Offering
Memorandum, there shall not have been, since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition (financial or otherwise), earnings, business affairs or business
prospects of CCA, and its subsidiaries, considered as one enterprise, whether or
not arising in the ordinary course of business, (iii) CCA and HC Crown, as
applicable, shall each have complied in all material respects with all
agreements and satisfied in all material respects all conditions on its part to
be performed or satisfied at or prior to the Closing Time and (iv) the
representations and warranties of CCA and HC Crown set forth in Section 1(a) and
Section 1(c) shall be accurate in all material respects as though expressly made
at and as of the Closing Time. At the Closing Time, the Placement Agent shall
have received (i) a certificate of the Senior Vice President, Finance and
Acquisition of CCA, dated as of the Closing Time, to such effect, except that
such certificate need not relate to any events, facts or circumstances relating
to the Crown Systems during the period prior to January 18, 1995 and (ii) a
certificate of the Chief Executive Officer and the Chief Financial Officer of HC
Crown, dated as of the Closing Time, to such effect, except that such
certificate need only relate to any events, facts or circumstances relating to
the Crown Systems during the period prior to January 18, 1995 and any other
information furnished to CCA by HC Crown expressly for use in the Offering
Memorandum (or any amendment or supplement thereto), or any Preliminary Offering
Memorandum,
(e) At the time that this Agreement is executed by CCA, the Placement
Agent shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated such date, in
form and substance reasonably satisfactory to the Placement Agent, confirming
that they are independent public accountants with respect to CCA within the
meaning of the Securities Act and the applicable published rules and regulations
thereunder, and otherwise reasonably satisfactory to the Placement Agent (it
being understood that different offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP are the auditors
of CCA and HC Crown),
(f) At the Closing Time, the Placement Agent shall have received from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, in form and substance reasonably satisfactory to
the Placement Agent and dated as of the Closing Time, to the effect that they
reaffirm the statements made in the letters furnished pursuant to Section 6(e)
hereof,
-22-
(g) All proceedings taken by CCA and HC Crown, at or prior to the
Closing Time in connection with the authorization and sale of the Notes as
contemplated in this Agreement shall be reasonably satisfactory in form and
substance to the Placement Agent and to counsel for the Placement Agent,
(h) At the Closing Time, each of this Agreement, the Letter Agreement
and the Indenture, shall have been executed and delivered by the parties thereto
and shall be in full force and effect,
(i) At the Closing Time, there shall not be any pending or threatened
legal or governmental proceedings against CCA or HC Crown with respect to any of
the transactions contemplated in this Agreement other than such pending or
threatened legal or governmental proceeding which would not reasonably be deemed
to cause a material adverse effect on CCA or the transactions contemplated
herein,
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, this Agreement may be
terminated by the Placement Agent on notice to CCA and HC Crown at any time at
or prior to the Closing Time, and such termination shall be without liability of
any party to any other party, except as provided in Section S hereof,
Notwithstanding any such termination, the provisions of Sections 7 and 8 hereof
shall remain in effect, The Placement Agent may in its sole discretion waive any
conditions to the obligations of the Placement Agent hereunder.
Section 7. Indemnification
---------------
(a) CCA agrees to indemnify and hold harmless the Placement Agent, HC
Crown, their respective officers, directors, members and stockholders, and each
person, if any, who controls any of them within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the extent and in the manner
set forth in clauses (i), (ii) and (iii) below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact included in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not
-23-
misleading, but only after final judgment has been rendered in a litigation
or proceeding in respect thereof;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding b- any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
--------
7(d) below) any such settlement is effected with the prior written consent
of CCA; and
(iii) against any and all expense whatsoever (including, subject
to Section 7(d) hereof, the reasonable fees and disbursements of counsel
chosen by the Placement Agent and HC Crown), reasonably incurred in
investigating preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent such expense is not paid under clause (i) or (ii) above because the
litigation, investigation or proceeding was terminated without liability
prior to final judgment or settlement;
provided, however, that the foregoing indemnity agreement does not apply to any
loss, liability, claim, damage or expense to the extent arising (i) out of any
untrue statement or omission or alleged untrue statement or omission in respect
of events, facts or circumstances relating to the Crown Systems during the
period prior to January 18, 1995, (ii) out of an untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to CCA or HC Crown by the Placement Agent or
HC Crown expressly for use in the Offering Memorandum (or any amendment or
supplement thereto), or any Preliminary Offering Memorandum, or (iii) any breach
by the Placement Agent of any representation, warranty or other provision of
this Agreement; provided further that the foregoing indemnification with respect
-------- -------
to any Preliminary Offering Memorandum shall not inure to the benefit of the
Placement Agent (or any person controlling the Placement Agent) from whom the
person asserting any such losses, claims, damages or liabilities purchased any
of the Notes if a copy of the Offering Memorandum (as then amended or
supplemented if CCA shall have furnished any amendments or supplements thereto)
was not sent or given by or on behalf of the Placement Agent on the initial
resale to such person, if such is required by
-24-
law, at or prior to the written confirmation of the sale of such Notes to such
person and if the Offering Memorandum (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability.
(b) HC Crown agrees to indemnify and hold harmless the Placement
Agent, CCA, their respective directors, officers, partners, stockholders and
members, and each person, if any, who controls the Placement Agent within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to
the extent and in the manner set forth in clauses (i!, (ii) and (iii) below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact included in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, but only after final judgment
has been rendered in a litigation or proceeding in respect thereof;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
--------
7(d) below) any such settlement is effected with the prior written consent
of HC Crown;
(iii) against any and all expense whatsoever (including, subject
to Section 7(d) hereof, the reasonable tees and disbursements of counsel
chosen by the Placement Agent), reasonably incurred in investigating,
preparing or defending against any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent such expense
is not paid under clause (i) or (ii) above because the litigation,
investigation or proceeding was terminated without liability prior to final
judgment or settlement; and
-25-
(iv) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any breach by the Placement Agent
of its representations and warranties contained in Section 3(c)(ii) hereof,
provided, however, that the indemnification and holding harmless provided
for in this Section 7(b)(iv) shall only be for the benefit of CCA, its
directors, officers, partners, stockholders and members, and each person,
if any, who controls CCA within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act:
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising (i) in respect of the
indemnification and holding harmless of-CCA, its directors, officers, partners,
stockholders and members, and each person, if any, who controls CCA within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
out of any untrue statement or omission or alleged untrue statement or omission
in respect of events, facts or circumstances relating to the Crown Systems
during the period subsequent to January 18, 1995, other than untrue statements
or omissions, or alleged untrue statements or omissions, made in the Offering
Memorandum (or any amendment or supplement thereto) or any Preliminary Offering
Memorandum in reliance upon and in conformity with written information furnished
to CCA by the HC Crown expressly for use in the Offering Memorandum (or any
amendment or supplement thereto), or such Preliminary Offering Memorandum, (ii)
out of an untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information furnished to
CCA or HC Crown by the Placement Agent expressly for use in the Offering
Memorandum (or any amendment or supplement thereto), or any Preliminary Offering
Memorandum: provided, further that the foregoing indemnification with respect to
-------- -------
any Preliminary Offering Memorandum shall not inure to the benefit of the
Placement Agent (or any person controlling the Placement Agent) from whom the
person asserting any such losses, claims, damages or liabilities purchased any
of the Notes if a copy of the Offering Memorandum (as then amended or
supplemented if HC Crown or CCA shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of the Placement
Agent on the initial resale to such person, if such is required by law, at or
prior to the written confirmation of the sale of such Notes to such person and
if the Offering Memorandum (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability.
(c) The Placement Agent agrees to indemnify and hold harmless CCA and
HC Crown, their respective directors,
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officers, partners, stockholders and members and each person, if any, who
controls any of them within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any and all loss, liability, claim,
damage and expense described in the indemnity agreement in Section 7(a) hereof,
as incurred, but only with respect to (i) untrue statements or omissions, or
alleged untrue statements or omissions, made in the Offering Memorandum (or any
amendment or supplement thereto) or any Preliminary Offering Memorandum in
reliance upon and in conformity with written information furnished to CCA or HC
Crown by the Placement Agent expressly for use in the Offering Memorandum (or
any amendment or supplement thereto), or such Preliminary (Offering Memorandum
or (ii) any breach by the Placement Agent of the representations, warranties or
other provisions of this Agreement
(d) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability that it may have otherwise than on
account of this indemnity agreement, An indemnifying party may participate at
its own expense in the defense of such action In no event shall the indemnifying
party or parties be liable for the fees and expenses of more than one counsel
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it (subject to the approval of the indemnified
parties defendant in such action, which approval shall not be unreasonably
withheld or delayed) unless such indemnified parties reasonably object to such
assumption on the ground that there may be legal defenses available to them
which are different from or are in conflict with those available to such
indemnifying party, If an indemnifying party assumes the defense of such action,
the indemnifying parties shall not be liable for any fees and expenses of
counsel for the indemnified parties incurred thereafter in connection with such
action.
Section 8. Contribution. In order to provide for just and equitable
------------
contribution in circumstances under which the indemnity provided for in Section
7 is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, CCA, HC Crown and the Placement Agent
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity incurred by CCA, HC Crown,
and
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the Placement Agent, as incurred, in such proportions that (a) the Placement
Agent is responsible for that portion represented by the percentage that the
Placement Agent's Discount appearing on the cover page of the Offering
Memorandum bears to the offering price appearing thereon and (b) CCA and HC
Crown are severally responsible for the balance on the same basis, if at all, as
each of them would have been obligated to provide indemnification pursuant to
Section 7; provided, however, that 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, for purposes of this Section each person, if any,
who controls the Placement Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Placement Agent, and each director and officer of CCA and HC
Crown and each person who controls CCA or HC Crown within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as CCA or HC Crown, as the case may be,
Section 9. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery, The representations, warranties, indemnities, agreements and other
---------
statements of CCA and HC Crown or their officers and of the Placement Agent or
its officers set forth in or made pursuant to this Agreement will remain
operation and in full force and effect regardless of any investigation made by
or on behalf of CCA, HC Crown, the Placement Agent or any controlling person
thereof, and will survive delivery of and payment for the Notes.
Section 10. Termination of Agreement. (a) The Placement Agent may
------------------------
terminate this Agreement, by notice to HC Crown, at any time at or prior to the
Closing Time (i) if there has been, since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition (financial or otherwise), earnings, business affairs or business
prospects of CCA and its subsidiaries, considered as one enterprise, whether or
not arising in the ordinary course of business, (ii) if there has occurred any
material adverse change in the financial markets in the United States or
internationally or any outbreak of hostilities or escalation of existing
hostilities or other calamity or crisis the effect of which on the financial
markets of the United States or internationally is such as to make it, in the
reasonable judgment of the Placement Agent, impracticable to market the Notes,
or enforce contracts for the sale of the Notes or (iii) if a banking moratorium
has been declared by either federal or New York State authorities, If this
Agreement is terminated pursuant to this Section, such
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termination shall be without liability of any party to any other party, except
to the extent provided in Section 5, Notwithstanding any such termination, the
provisions of Sections 7 and 8 shall remain in effect.
This Agreement may also be terminated pursuant to the provisions of
Section 6, with the effect stated in such Section.
Section 11. Notices. All notices and other communications under this
-------
Agreement shall be in writing and shall be deemed to have been duly given, upon
receipt, if delivered, mailed or transmitted by any standard form of
telecommunication, Notices to the Placement Agent shall be directed to the
Placement Agent at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopier no.:
(▇▇▇) ▇▇▇-▇▇▇▇), attention of ▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; notices to CCA shall be
directed to it at CCA Holdings Corp., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇), attention of ▇▇▇▇▇▇ ▇.
▇▇▇▇, with a copy to the General Counsel; and notices to HC Crown shall be
directed to it at HC Crown Corp., ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇), attention of ▇▇▇▇▇▇ ▇▇▇, Esq. Copies of all
notices shall be directed to ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇), attention of ▇▇▇▇▇▇
▇▇▇▇▇▇, to Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ PLLC, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (telecopier no. (▇▇▇) ▇▇▇-▇▇▇▇), attention of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇, Esq. and to ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopier no.:(▇▇▇) ▇▇▇-▇▇▇▇), attention of ▇▇▇▇ ▇.
▇▇▇▇▇, Esq.
Section 12. Parties. This Agreement is made solely for the benefit
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of the Placement Agent, CCA and HC Crown and, to the extent expressed, any
person who controls CCA, HC Crown or the Placement Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
directors of CCA, HC Crown, their partners, stockholders, members, officers,
employees and trustees, and their respective executors, administrators,
successors and assigns and no other person shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns" shall not
include any purchaser, as such purchaser, from the Placement Agent of the Notes.
The parties acknowledge and agree that the Placement Agent has been engaged by
and has acted and will be acting solely on behalf of HC Crown,
Section 13. Governing Law and Time. This Agreement shall be governed
----------------------
by the laws of the State of New York, without effect to the provisions thereof
relating to conflicts
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of law. Specified times of the day refer to New York City time.
Section 14. Counterparts. This Agreement may be executed in one or
------------
more counterparts and when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
If the foregoing is in accordance with the Placement Agent's
understanding of the agreement, please sign and return to us a counterpart
hereof, whereupon this instrument will become a binding agreement among CCA, HC
Crown and the Placement Agent in accordance with its terms.
Very truly yours,
CCA HOLDINGS CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
_________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
HC CROWN CORP.
By: /s/ ▇▇▇▇▇▇ ▇▇▇
_________________________
Name: ▇▇▇▇▇▇ ▇▇▇
Title: Vice President
Confirmed and accepted as of
the date first above written:
▇▇▇▇▇▇ ▇▇▇▇ LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
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