EXHIBIT 1.1
$150,000,000
WACKENHUT CORRECTIONS CORPORATION
8 1/4% SENIOR NOTES DUE 2013
PURCHASE AGREEMENT
July 1, 2003
BNP PARIBAS SECURITIES CORP.
▇▇▇▇▇▇ BROTHERS INC.
FIRST ANALYSIS SECURITIES CORPORATION
SOUTHTRUST SECURITIES, INC.
COMERICA SECURITIES, INC.
c/o BNP Paribas Securities Corp.
The Equitable Tower
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Wackenhut Corrections Corporation, a Florida corporation (the
"COMPANY"), proposes, upon the terms and conditions set forth herein, to issue
and sell to you (the "OFFERING"), as the initial purchasers (the "INITIAL
PURCHASERS"), $150,000,000 in aggregate principal amount of its 8 1/4% Senior
Notes due 2013 (the "NOTES"). The Notes will (i) have terms and provisions that
are summarized in the Offering Memorandum (as defined below) and (ii) are to be
issued pursuant to an Indenture (the "INDENTURE"), to be dated as of July 9,
2003, to be entered into between the Company and The Bank of New York, as
trustee (the "TRUSTEE"). This is to confirm the agreement concerning the
purchase of the Notes from the Company by the Initial Purchasers.
As described in the Offering Memorandum, the net proceeds from the
Offering, together with cash on hand and $100.0 million of the borrowings under
an amendment (the "AMENDED SENIOR CREDIT FACILITY") to the Company's senior
secured credit facility (the "EXISTING SENIOR CREDIT FACILITY") will be used by
the Company to (i) repurchase (the "SHARE REPURCHASE") up to 12.0 million shares
of its common stock, par value $0.01 per share (the "COMMON STOCK"), from Group
4 ▇▇▇▇▇, its majority shareholder (ii) refinance (the "REFINANCING") $125.0
million of borrowings outstanding under the Existing Senior Credit Facility (the
Offering, the Amended Senior Credit Facility, the Share Repurchase and the
Refinancing are collectively referred to in this Agreement as the
"TRANSACTIONS") and (iii) pay fees and expenses related to the Transactions.
1. PRELIMINARY OFFERING MEMORANDUM AND OFFERING MEMORANDUM. The Notes
will be offered and sold to the Initial Purchasers without registration under
the Securities Act of 1933, as amended (the "ACT"), in reliance on an exemption
pursuant to Section 4(2) under the Act. The Company has prepared a preliminary
offering memorandum, dated June 18, 2003 (the "PRELIMINARY OFFERING
MEMORANDUM"), and an offering memorandum, dated July 1, 2003 (the "OFFERING
MEMORANDUM"), setting forth information regarding the Company, the Notes, the
Exchange Notes (as defined herein) and the Transactions. The Company hereby
confirms that it has authorized the use of the Preliminary Offering Memorandum
and the Offering Memorandum in connection with the offering and resale of the
Notes by the Initial Purchasers.
It is understood and acknowledged that upon original issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the Act, the Notes (and all securities issued in exchange
therefore (other than the Exchange Notes), in substitution thereof) shall bear a
legend substantially in the form of the following (along with such other legends
as the Initial Purchasers and their counsel deem necessary):
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR OTHER
SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS
NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING ITS
NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE
DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY
RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF
ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR
ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION DATE"),
OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
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UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A INSIDE THE UNITED
STATES, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT
IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY,
THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS NOTE IS COMPLETED AND
DELIVERED BY THIS TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
You have advised the Company that you will make offers (the "EXEMPT
RESALES") of the Notes purchased by you hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely to (i) persons whom you
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBS") and (ii) outside the United States to certain
persons in offshore transactions in reliance on Regulation S under the Act.
Those persons specified in clauses (i) and (ii) are referred to herein as the
("ELIGIBLE PURCHASERS"). You will offer the Notes to Eligible Purchasers
initially at a price equal to 100% of the principal amount thereof. Such price
may be changed at any time without notice.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement attached
hereto as Exhibit A (the "REGISTRATION RIGHTS AGREEMENT") among the Company and
the Initial Purchasers to be dated July 9, 2003, or such other date as agreed to
by the Company and the Initial Purchasers. Pursuant to the Registration Rights
Agreement, the Company will agree to file with the Securities and Exchange
Commission (the "COMMISSION") under the circumstances set forth therein, (i) a
registration statement under the Act (the "EXCHANGE OFFER REGISTRATION
STATEMENT") relating to the Company's 8 1/4% Senior Notes due 2013 (the
"EXCHANGE NOTES") to be offered in exchange for the Notes (such offer to
exchange being referred to collectively as the "EXCHANGE OFFER" and (ii) if
required by the terms of the Registration Rights Agreement, a shelf registration
statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION
STATEMENT" and, together with the Exchange Offer Registration Statement, the
"REGISTRATION Statements") relating to the resale by certain holders of the
Notes, and to use their best efforts to cause such Registration Statements to be
declared effective. This is to confirm the agreements concerning the purchase of
the Notes from the Company by the Initial Purchasers.
2. REPRESENTATIONS, WARRANTIES OF THE COMPANY. The Company represents,
warrants and covenants to each Initial Purchaser as follows:
(a) When the Notes are issued and delivered pursuant to this
Agreement, such Notes will not be of the same class (within the meaning of Rule
144A under the Act) as securities of the Company that are listed on a national
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securities exchange registered under Section 6 of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), or that are quoted in a United States
automated inter-dealer quotation system.
(b) Neither the Company nor any of its Subsidiaries (as
defined below) is, or after giving effect to the offering and sale of the Notes
and upon application of the proceeds as described under the caption "Use of
Proceeds" in the Offering Memorandum will be, an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(c) Assuming that your representations and warranties in
Section 3(b) are true, the purchase of the Notes by you pursuant to this
Agreement and the resale of the Notes pursuant to the Exempt Resales is exempt
from the registration requirements of the Act. No form of general solicitation
or general advertising within the meaning of Regulation D (including, but not
limited to, advertisements, articles, notices or other communications published
in any newspaper, magazine or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising) was used by the Company or any of
its representatives (other than you, as to whom the Company makes no
representation) in connection with the offer and sale of the Notes.
(d) No form of general solicitation or general advertising was
used by the Company or any of its representatives (other than you, as to whom
the Company makes no representation) with respect to Notes sold outside the
United States to non-U.S. persons (as defined in Rule 902 under the Act), by
means of any directed selling efforts within the meaning of Rule 902 under the
Act, and the Company, any affiliate of the Company and any person acting on its
or their behalf (other than you, as to whom the Company makes no representation)
has complied with and will implement the "offering restrictions" required by
Rule 902.
(e) Set forth on Exhibit B hereto is a list of each "employee
pension benefit plan," as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974 including the regulations and published
interpretations thereunder ("ERISA") or "employee benefit plan," as defined in
Section 3(3) of ERISA 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," as defined in Section 3(14) of ERISA" or
"disqualified person," as defined in Section 4975(e)(2) of the Internal Revenue
Code of 1986, as amended.
(f) The Preliminary Offering Memorandum and Offering
Memorandum have been prepared by the Company for use by the Initial Purchasers
in connection with the Exempt Resales. No order or decree preventing the use of
the Preliminary Offering Memorandum or the Offering Memorandum, or any order
asserting that the transactions contemplated by this Agreement are subject to
the registration requirements of the Act has been issued and no proceeding for
that purpose has commenced or is pending or, to the knowledge of the Company, is
contemplated.
(g) The Preliminary Offering Memorandum and the Offering
Memorandum, and any amendment or supplement thereto, as of their respective
dates and the Offering Memorandum as of the Closing Date (as defined below), did
not or will not contain any untrue statement of a material fact or omit to state
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a material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, except that this representation and warranty does not
apply to statements in or omissions from the Preliminary Offering Memorandum and
Offering Memorandum made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company in writing by or on
behalf of the Initial Purchasers expressly for use therein.
(h) Each subsidiary of the Company that is material to the
business, financial condition or results of operations of the Company, taken as
a whole (each a "SUBSIDIARY" and collectively, the "SUBSIDIARIES"), is set forth
on Exhibit F hereto. The only subsidiaries of the Company are (a) the
Subsidiaries set forth on Exhibit F hereto and (b) certain other subsidiaries
which, considered in the aggregate as a single subsidiary, are not material to
the business, financial condition or results of operations of the Company, taken
as a whole.
(i) The market-related, industry-related and customer-related
data and estimates included in the Preliminary Offering Memorandum and the
Offering Memorandum are based on or derived from sources that the Company
believes to be reliable and accurate.
(j) The Company and each of its Subsidiaries have been duly
incorporated, organized or formed, as the case may be, and are validly existing
as corporations, limited liability companies, partnerships or limited liability
partnerships or other corporate entities, as the case may be, in good standing
under the laws of their respective jurisdictions of incorporation, organization
or formation, as the case may be, are duly qualified to do business and are in
good standing in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses requires such
qualification (except such failures to qualify as are not, either individually
or in the aggregate, material to the Company and its Subsidiaries taken as a
whole), and have all corporate, limited liability company, partnership or
limited liability partnership as the case may be, power and authority necessary
to own or hold their respective properties and to conduct the businesses in
which they are engaged; and none of the Subsidiaries of the Company (other than
Wackenhut Corrections Corporation Australia Pty. Ltd., Wackenhut Correctional
Services Pty. Ltd. and Australasian Correctional Management, PTY Ltd. (each a
"SIGNIFICANT SUBSIDIARY")) is a "significant subsidiary," as such term is
defined in Rule 405 of the Rules and Regulations (as defined herein).
(k) The Company has an authorized capitalization as set forth
in the Offering Memorandum, and all of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each Subsidiary
of the Company have been duly and validly authorized and issued and are fully
paid and non-assessable and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except with respect to the shares of capital
stock of certain Subsidiaries of the Company subject to liens or encumbrances
under the Amended Senior Credit Facility as disclosed in the Offering
Memorandum. There are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity or debt
5
securities convertible into or exchangeable or exercisable for, any capital
stock of the Company or any of its Subsidiaries other than those accurately
described in the Offering Memorandum as being authorized or outstanding as of
the date stated therein.
(l) The Company and its Subsidiaries, as applicable, have all
requisite corporate, limited liability company, partnership or limited liability
partnership, as the case may be, power and authority to consummate the
Transactions and to enter into all agreements related to the Transactions
(collectively, the "TRANSACTION DOCUMENTS") to which they are a party. Each of
the Transaction Documents has been duly and validly authorized by the Company
and its Subsidiaries, as applicable, and when executed and delivered by the
Company and its Subsidiaries, as applicable, will (assuming due authorization,
execution and delivery by the other parties thereto) constitute a legal, valid
and binding agreement of each of the Company and such Subsidiaries, enforceable
against the Company and each of such Subsidiaries, as applicable, in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally, from time to time in
effect, and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(m) The Company has all requisite corporate power and
authority to enter into the Indenture. The Indenture has been duly and validly
authorized by the Company, and upon its execution and delivery and, assuming due
authorization, execution and delivery by the Trustee, will constitute the valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights generally, from time to
time in effect, and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law); no
qualification of the Indenture under the Trust Indenture Act of 1939 (the "1939
ACT") is required in connection with the offer and sale of the Notes
contemplated hereby or in connection with the Exempt Resales.
(n) The Indenture will conform to the description thereof in
the Offering Memorandum.
(o) The Notes are in the form contemplated by the Indenture.
The Company has all requisite corporate power and authority to issue and sell
the Notes. The Notes have been duly and validly authorized by the Company and,
when duly executed by the Company in accordance with the terms of the Indenture,
assuming due authentication of the Notes by the Trustee, upon delivery to the
Initial Purchasers against payment therefor in accordance with the terms hereof,
will be validly issued and delivered, and will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture,
enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights generally, from time to time in effect, and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
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(p) The Notes will conform to the description thereof in the
Offering Memorandum.
(q) The Company has all requisite corporate power and
authority to issue the Exchange Notes. The Exchange Notes have been duly and
validly authorized by the Company and if and when duly issued and authenticated
in accordance with the terms of the Indenture and delivered in accordance with
the Exchange Offer provided for in the Registration Rights Agreement, will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture, enforceable against the Company in accordance with their
terms, except as such enforceability may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally, from time to time in effect, and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(r) The Company has all requisite corporate power and
authority to enter into the Registration Rights Agreement. The Registration
Rights Agreement has been duly and validly authorized by the Company and, when
executed and delivered by the Company in accordance with the terms hereof and
thereof, will be validly executed and delivered and (assuming the due
authorization, execution and delivery thereof by you) will be the legally valid
and binding obligation of the Company in accordance with the terms thereof,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditor's rights
generally, from time to time in effect, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and, as to rights of indemnification and contribution, by
principles of public policy.
(s) The Registration Rights Agreement will conform to the
description thereof in the Offering Memorandum.
(t) The Company has all requisite corporate power and
authority to enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(u) The issue and sale of the Notes and the compliance by the
Company with all of the provisions of the Notes, the Exchange Notes, the
Indenture, the Registration Rights Agreement and this Agreement and the
consummation of the Transactions (i) will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries is bound or to which
any of the property or assets of the Company or any of its Subsidiaries is
subject, except for such conflicts, breaches, violations or defaults that,
individually or in the aggregate, would not result in any material adverse
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change in the management, condition, financial or otherwise, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"), (ii) will not
result in any violation of the provisions of the charter or by-laws of the
Company or any of its Subsidiaries or (iii) will not violate 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 such violations that, individually or in the
aggregate, would not have a Material Adverse Effect; and no consent, approval,
authorization or order of, or filing, registration or qualification with any
such court or governmental agency or body is required for the issue and sale of
the Notes or the consummation by the Company of the transactions contemplated by
this Agreement (including each of the Transactions), the Registration Rights
Agreement or the Indenture, except for the filing of a registration statement by
the Company with the Commission pursuant to the Act as required by the
Registration Rights Agreement, such consents, approvals, authorizations, orders,
filings, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Notes by the Initial Purchasers and any filings, qualifications or other
consents or approvals under the 1939 Act in connection with the Exchange Notes.
(v) There are no contracts, agreements or understandings
between the Company and any person granting such person the right (other than
rights that have been waived or satisfied) to require the Company to file a
registration statement under the Act with respect to any securities of the
Company (other than the Registration Rights Agreement) owned or to be owned by
such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Rights Agreement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Act.
(w) The Company has not, directly or indirectly, solicited any
offer to buy or offered to sell, and will not, directly or indirectly, solicit
any offer to buy or offer to sell, in the United States or to any United States
citizen or resident, any security which is or would be integrated with the sale
of the Notes in a manner that would require the Notes to be registered under the
Act. None of the Company, its Affiliates (as such term is defined in Rule 501
under the Securities Act (each, an "Affiliate")) or any person acting on its or
any of their behalf (other than the Initial Purchasers, as to whom the Company
makes no representation or warranty) has engaged or will engage, in connection
with the Offering, in any form of general solicitation or general advertising
within the meaning of Rule 502 under the Act.
(x) Except as otherwise disclosed in the Offering Memorandum,
neither the Company nor any of its Subsidiaries has sustained, since the date of
the latest audited financial statements included in the Offering Memorandum, 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 Offering Memorandum; and, since such date, except as
otherwise disclosed in the Offering Memorandum, there has not been any material
change in the stockholders' equity or long-term debt of the Company or any of
its Subsidiaries or any Material Adverse Effect.
(y) The financial statements (including the related notes and
supporting schedules) included in the Offering Memorandum present fairly, in all
material respects, the financial condition and results of operations of the
entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto and
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comply as to form, in all material respects, with the applicable requirements of
the Act. The financial data set forth in the Offering Memorandum under the
captions "Offering Memorandum Summary - Summary Historical and Pro Forma
Financial and Other Data" and "Selected Consolidated Financial and Other Data"
fairly present, in all material respects, the information set forth therein on a
basis consistent with that of the financial statements contained in the Offering
Memorandum.
(z) The presentation of the other financial data, operating
data and statistical information and data included in the Offering Memorandum is
a fair presentation of such information and data in all material respects and,
to the extent derived therefrom, has been prepared on a basis consistent with
the financial statements and the books and records of the Company and its
Subsidiaries.
(aa) The pro forma financial statements and the related notes
thereto included in the Offering Memorandum present fairly, in all material
respects, the information shown therein, have been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein, and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(bb) Ernst & Young LLP, who have certified certain financial
statements of the Company and certain of its Affiliates, whose report appears in
the Offering Memorandum and who have delivered the initial letter referred to in
Section 7(e) hereof, are independent public accountants as required by the Act
and the rules and regulations promulgated thereunder (the "RULES AND
REGULATIONS"); and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain financial
statements of the Company and whose reports appear in the Offering Memorandum,
were independent public accountants as required by the Act and the Rules and
Regulations during the periods covered by the financial statements on which they
reported contained in the Offering Memorandum.
(cc) The Company and each of its Subsidiaries has good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are disclosed in the Offering
Memorandum, the liens and encumbrances contemplated under the Amended Senior
Credit Facility as disclosed in the Offering Memorandum, and such liens,
encumbrances and defects as do not materially affect the value of the property
of the Company and its Subsidiaries taken as a whole and do not materially
interfere with the use made and proposed to be made of such property by the
Company or any of its Subsidiaries; and all real property and buildings held
under lease by the Company or any 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 and proposed to be made of such
property and buildings by the Company or any of its Subsidiaries.
(dd) Except as described in the Offering Memorandum, 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. The
Company has no reason to believe that it or any Subsidiary will not be able (i)
9
to renew its existing insurance coverage as and when such policies expire,
except where the failure to renew would not have a Material Adverse Effect or
(ii) to obtain comparable coverage from similar institutions as may be necessary
or appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Effect.
(ee) Except as described in the Offering Memorandum, 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 that, if determined adversely to the Company
or any of its Subsidiaries, would reasonably be expected to have a Material
Adverse Effect, and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
(ff) Except as otherwise disclosed in the Offering Memorandum,
the Company and its Subsidiaries own or possess, license or have other rights to
use sufficient trademarks, trade names, patent rights, copyrights, licenses,
approvals, trade secrets and other similar rights (collectively, "INTELLECTUAL
PROPERTY RIGHTS") reasonably necessary to conduct their businesses as now
conducted or as proposed in the Offering Memorandum to be conducted, except
where the failure to own, possess, license or have other rights to use such
Intellectual Property Rights would not reasonably be expected to have a Material
Adverse Effect; and the expected expiration of any of such Intellectual Property
Rights would not result in a Material Adverse Effect. Except as otherwise
disclosed in the Offering Memorandum, neither the Company nor any of its
Subsidiaries has received any notice of infringement or conflict with asserted
Intellectual Property Rights of others, which infringement or conflict, if the
subject of an unfavorable decision, would result in a Material Adverse Effect.
(gg) The Company and each of its Subsidiaries possess such
valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(hh) No relationship, direct or indirect, that would be
required to be described in a Company registration statement pursuant to Item
404 of Regulation S-K, exists between or among the Company on the one hand, and
the directors, officers, stockholders, customers or suppliers of the Company on
the other hand, that has not been described in the Offering Memorandum.
(ii) No labor disturbance by the employees of the Company or
any of its Subsidiaries exists or, to the knowledge of the Company or any of its
Subsidiaries, is imminent that would reasonably be expected to have a Material
Adverse Effect.
(jj) The Company is in compliance in all material respects
with all presently applicable provisions of ERISA; no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA with
10
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "CODE"); and each
"pension plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(kk) The Company has filed all federal, state and local income
and franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, except where such failure to file or pay would not
have a Material Adverse Effect, and no tax deficiency has been determined
adversely to the Company or any of its Subsidiaries that has had (nor does the
Company have any knowledge of any tax deficiency that, if determined adversely
to the Company or any of its Subsidiaries, might have) a Material Adverse
Effect.
(ll) Since the date as of which information is given in the
Preliminary Offering Memorandum through the date hereof, and except as may
otherwise be disclosed in the Offering Memorandum, subsequent to the respective
dates as of which information is given in the Offering Memorandum, neither the
Company nor any of its Subsidiaries has (i) issued or granted any securities,
other than securities issued upon the exercise of stock options, (ii) incurred
any liability or obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business and which have
not or would not reasonably be expected to result in a Material Adverse Effect,
(iii) entered into any transaction not in the ordinary course of business or
(iv) declared or paid any dividend on its capital stock (other than to the
Company or its Subsidiaries).
(mm) The Company (i) makes and keeps accurate books and
records and (ii) maintains internal accounting controls that provide reasonable
assurance that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
(nn) Neither the Company nor any of its Subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default, and no event has
occurred that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant, condition
or other obligation contained in any 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, except for any
defaults which would not, individually or in the aggregate, have a Material
Adverse Effect or (iii) is in violation 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 or maintain 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 for
any violation or failures to obtain or maintain which would not, individually or
in the aggregate, have a Material Adverse Effect.
11
(oo) 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.
(pp) Except as disclosed in the Offering Memorandum, and
except for such matters as would not, individually or in the aggregate, either
result in a Material Adverse Effect or require disclosure in the Offering
Memorandum, the Company and each of its Subsidiaries (or, to the knowledge of
the Company or any of its Subsidiaries, any of their respective predecessors in
interest) (1) is conducting and have conducted the business, operations and
facilities in compliance with Environmental Laws (as defined below); (2) have
duly obtained, possess, maintain in full force and effect, and have fulfilled
and performed all of its obligations under any and all permits, licenses or
registrations required under Environmental Law ("ENVIRONMENTAL PERMITS"); (3) is
not party to, or otherwise bound by, any contract under which it is obligated by
any representation, warranty, indemnification, covenant, restriction or other
undertaking concerning any material liability under Environmental Law or related
to the remediation of any Hazardous Substances (as defined below); (4) have not
received any notice from a governmental authority or any other third party
alleging any violation of Environmental Law or liability thereunder (including,
without limitation, liability as a "potentially responsible party" and/or for
costs of investigating or remediating sites containing Hazardous Substances
and/or damages to natural resources); (5) is not subject to any pending or, to
the best knowledge of the Company or any of its Subsidiaries, threatened claim
or other legal proceeding under any Environmental Laws; and (6) does not have
any knowledge of any pending Environmental Law, or any unsatisfied condition in
an Environmental Permit, or any release of Hazardous Substances that,
individually or in the aggregate, can reasonably be expected to form the basis
of any such claim or legal proceeding against the Company or any of its
Subsidiaries or to require any material capital expenditures to maintain the
Company's or any of its Subsidiaries' compliance with Environmental Law or with
their Environmental Permits. As used in this paragraph, "ENVIRONMENTAL LAWS"
means any and all applicable federal, state, local, and foreign laws, statutes,
ordinances, rules, regulations, requirements and common law, or any enforceable
administrative or judicial interpretation, order, consent, decree or judgment
thereof, relating to pollution or the protection of human health or the
environment, including, without limitation, those relating to, regulating, or
imposing liability or standards of conduct concerning (i) noise or odor, (ii)
emissions, discharges, releases or threatened releases of Hazardous Substances
into ambient air, surface water, groundwater or land, (iii) the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
release, transport or handling of, or exposure to, Hazardous Substances, (iv)
the protection of wildlife or endangered or threatened species, or (v) the
investigation, remediation or cleanup of any Hazardous Substances. As used in
this paragraph, "HAZARDOUS SUBSTANCES" means pollutants, contaminants or
hazardous, dangerous, toxic, biohazardous or infectious substances, materials,
constituents or wastes or toxins, petroleum, petroleum products and their
breakdown constituents, or any other chemical substance regulated under
Environmental Laws or exhibiting a hazardous waste characteristic including but
not limited to corrosivity, ignitability, toxicity, or reactivity, whether
solid, gaseous or liquid in nature.
12
(qq) 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.
(rr) Prior to the date hereof, neither the Company nor any of
its Affiliates nor any person acting on its or their behalf (other than you, as
to whom the Company makes no representation) has taken any action that is
designed to or that has constituted or that might have been expected to cause or
result in stabilization or manipulation of the price of any security of the
Company in connection with the Offering.
(ss) The minute books and records of the Company and its
Subsidiaries relating to proceedings of their respective shareholders, boards of
directors, and committees of their respective boards of directors made available
to Shearman & Sterling, counsel for the Initial Purchasers, are their original
minute books and records or are true, correct and complete copies thereof, with
respect to all proceedings of said shareholders, boards of directors and
committees since three years prior to the date of the document request letter
dated May 5, 2003 delivered to the Company by Shearman & Sterling through the
date hereof. In the event that definitive minutes have not been prepared with
respect to any proceedings of such shareholders, boards of directors or
committees, the Company has provided Shearman & Sterling with originals or true,
correct and complete copies of draft minutes or written agendas relating
thereto, which drafts and agendas, if any, reflect all events that occurred in
connection with such proceedings.
(tt) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under the
Exchange Act), which (i) are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the Company's principal executive officer and its principal financial officer
by others within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared; (ii) have
been evaluated for effectiveness as of a date within 90 days prior to the date
of the Company's most recent annual or quarterly report; and (iii) are effective
in all material respects to perform the functions for which they were
established.
(uu) 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 either
with respect to itself or any of its consolidated subsidiaries 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.
(vv) 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.
13
(ww) The Company is, and immediately after the Closing Date
will be, Solvent. As used herein, the term "Solvent" means, with respect to the
Company on a particular date, that on such date (i) the Company would be able to
pay its debts as they become due in the usual course of business, and (ii) the
Company's total assets would be greater than the sum of its total liabilities
plus the amount that would be needed, if the Company were to be dissolved upon
the consummation of the Transactions, to satisfy the preferential rights upon
dissolution of shareholders of the Company whose preferential rights are
superior of those receiving the distribution in the Transactions.
(xx) The Common Stock of the Company is registered pursuant to
Section 12(b) of the Exchange Act and is listed on the New York Stock Exchange
(the "NYSE"), and the Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from the NYSE, nor has the Company
received any notification that the Commission or the NYSE is contemplating
terminating such registration or listing.
(yy) The Company is subject to and, except for the failure to
file separate audited financial statements for its affiliate, Premier Custodial
Group, for each of the fiscal years ended December 30, 2001 and December 31,
2000, (i) is in full compliance with the reporting requirements of Section 13 or
15(d) of the Exchange Act and (ii) each report filed by the Company with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act complied as to
form in all material respects at the time of its filing with or will comply as
to form in all material respects at the time of the filing thereof with the
Exchange Act and the rules and regulations of the Commission thereunder.
(zz) Except as disclosed in the Offering Memorandum, no
subsidiary of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary of the
Company.
3. PURCHASE OF THE NOTES BY THE INITIAL PURCHASERS, AGREEMENTS TO SELL,
PURCHASE AND RESELL. (a) The Company hereby agrees, on the basis of the
representations, warranties and agreements of the Initial Purchasers contained
herein and subject to all the terms and conditions set forth herein, to issue
and sell to the Initial Purchasers and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions set forth herein, each Initial Purchaser agrees, severally
and not jointly, to purchase from the Company, at a purchase price of 97 % of
the principal amount thereof, the total principal amount of Notes set forth
opposite the name of such Initial Purchaser in Schedule I hereto. The Company
shall not be obligated to deliver any of the securities to be delivered
hereunder except upon payment for all of the securities to be purchased as
provided herein.
(b) Each of the Initial Purchasers, severally and not jointly,
hereby represents and warrants to the Company that (i) it will offer the Notes
for sale upon the terms and conditions set forth in this Agreement and in the
Offering Memorandum (ii) it has all requisite corporation power and authority to
enter into this Agreement and (iii) it has duly authorized, executed and
delivered this Agreement. Each of the Initial Purchasers hereby represents and
warrants to, and agrees with, the Company that such Initial Purchaser: (i) is a
QIB with such knowledge and experience in financial and business matters as are
14
necessary in order to evaluate the merits and risks of an investment in the
Notes; (ii) is purchasing the Notes pursuant to a private sale exempt from
registration under the Act; (iii) in connection with the Exempt Resales, will
solicit offers to buy the Notes only from, and will offer to sell the Notes only
to, the Eligible Purchasers in accordance with this Agreement and on the terms
contemplated by the Offering Memorandum; and (iv) will not offer or sell the
Notes, nor has it offered or sold the Notes by, or otherwise engaged in, any
form of general solicitation or general advertising (within the meaning of
Regulation D, including, but not limited to, advertisements, articles, notices
or other communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising) and will
not engage in any directed selling efforts within the meaning of Rule 902 under
the Act, in connection with the offering of the Notes. The Initial Purchasers
have advised the Company that they will offer the Notes to Eligible Purchasers
at a price initially equal to 100% of the principal amount thereof, plus accrued
interest, if any, from the date of issuance of the Notes. Such price may be
changed by the Initial Purchasers at any time without notice.
Each of the Initial Purchasers understands that the Company
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 7(c) and 7(d) hereof, counsel to the Company and counsel to
the Initial Purchasers, will rely upon the accuracy and truth of the foregoing
representations, warranties and agreements and the Initial Purchasers hereby
consent to such reliance.
(c) Notwithstanding any of the foregoing, the Company shall
not be obligated to deliver any of the securities to be delivered hereunder
unless each of the Transactions shall have been consummated in accordance with
the terms of the Transaction Documents as in effect on the date of the Offering
Memorandum. Other than as set forth in Section 5(s) and in Sections 6, 8, 11 and
14 hereof, in the event the Company exercises its rights under this Section
3(c), the Company shall have no further obligations to the Initial Purchasers,
including the obligation to deliver the securities in accordance with the terms
of Section 3(a) hereof.
4. DELIVERY OF THE NOTES AND PAYMENT THEREFOR. Delivery to the Initial
Purchasers of and payment for the Notes shall be made at the office of the
Company, ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such other
place as my be agreed by the Company and the Initial Purchasers), at 9:00 A.M.,
New York City time on July 9, 2003, or such other time and date as the Initial
Purchasers shall designate by notice to the Company (the "CLOSING DATE").
The Notes will be delivered to the Initial Purchasers, or the
Trustee as custodian for The Depository Trust Company ("DTC"), against payment
by or on behalf of the Initial Purchasers of the purchase price therefor by wire
transfer in immediately available funds, by causing DTC to credit the Notes to
the account of the Initial Purchasers at DTC. The Notes will be evidenced by one
or more global securities in definitive form (the "GLOBAL NOTES") registered in
the name of Cede & Co. as nominee of DTC. The Global Notes in definitive form
shall be made available to the Initial Purchasers in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date.
15
5. AGREEMENTS OF THE COMPANY. The Company agrees with each of the
Initial Purchasers as follows:
(a) The Company will furnish to the Initial Purchasers,
without charge, as of the date of the Offering Memorandum, such number of copies
of the Offering Memorandum as may then be amended or supplemented as they may
reasonably request.
(b) The Company will not make any amendment or supplement to
the Preliminary Offering Memorandum or to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised or to which they shall
have reasonably objected within five business days after being furnished with a
copy of such proposed amendment or supplement.
(c) The Company consents to the use, in accordance with the
securities or Blue Sky laws of the jurisdictions in which the Notes are offered
by the Initial Purchasers and by dealers, prior to the date of the Offering
Memorandum, of each Preliminary Offering Memorandum so furnished by the Company.
The Company consents to the use of the Offering Memorandum in accordance with
the securities or Blue Sky laws of the jurisdictions in which the Notes are
offered by the Initial Purchasers and by all dealers to whom Notes may be sold,
in connection with the offering and sale of the Notes.
(d) If, at any time prior to completion of the distribution of
the Notes by the Initial Purchasers to Eligible Purchasers, any event occurs or
information becomes known that, in the judgment of the Company or in the opinion
of counsel for the Initial Purchasers, should be set forth in the Offering
Memorandum so that the Offering Memorandum does not include any untrue statement
of 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, or if it is necessary to supplement or amend the Offering
Memorandum in order to comply with any law, the Company will forthwith prepare
an appropriate supplement or amendment thereto, and will expeditiously furnish
at its own expense to the Initial Purchasers and dealers a reasonable number of
copies thereof.
(e) The Company will cooperate with the Initial Purchasers and
with their counsel in connection with the qualification or registration of the
Notes for offering and sale by the Initial Purchasers and by dealers under (or
obtain exemptions from the application of) the securities or Blue Sky laws of
such jurisdictions as the Initial Purchasers may designate and will file such
consents to service of process or other documents necessary or appropriate in
order to effect such qualifications, registrations and exemptions; PROVIDED that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Notes, in any jurisdiction where it is not now so
subject. The Company will advise the Initial Purchasers promptly of the
suspension or qualification or registration of (or any such exemption relating
to) the Notes for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the event of
the issuance of any order suspending such qualification, registration or
exemption, the Company shall use its best efforts to obtain the withdrawal
thereof at the earliest possible moment.
16
(f) For a period of 180 days from the date of the Offering
Memorandum, the Company agrees not to, directly or indirectly, sell, offer to
sell, contract to sell, grant any option to purchase, issue any instrument
convertible into or exchangeable for, or otherwise transfer or dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition in the future of), any debt securities of the
Company or any of its Subsidiaries similar to the Notes (which debt securities
shall not include borrowings in connection with a customary commercial credit
facility), except (i) in exchange for the Exchange Notes in connection with the
Exchange Offer or (ii) with the prior consent of the Initial Purchasers.
(g) For so long as any Notes or Exchange Notes remain
outstanding, the Company will furnish to any Initial Purchaser upon request (i)
as soon as practicable after the filing thereof, copies of the Annual Report on
Form 10-K of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders' equity and
cash flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as practicable
after the filing thereof, copies of each proxy statement, Quarterly Report on
Form 10-Q, Current Report on Form 8-K or other report filed by the Company with
the Commission, the NYSE or any securities exchange or inter-dealer quotation
system; (iii) as soon as available, copies of any report or communication of the
Company mailed generally to holders of its capital stock or debt securities
(including the holders of the Notes); and (iv) from time to time such other
information concerning the Company as the Initial Purchasers may reasonably
request.
(h) The Company will apply the net proceeds from the sale of
the Notes to be sold by it hereunder substantially in accordance with the
description set forth in the Offering Memorandum under the caption "Use of
Proceeds."
(i) Except as stated in this Agreement and in the Preliminary
Offering Memorandum and Offering Memorandum, neither the Company nor any of its
Affiliates has taken, nor will any of them take, directly or indirectly, any
action designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Notes. Except as permitted by the Act, the
Company will not distribute any offering material in connection with the Exempt
Resales.
(j) The Company will use their best efforts to permit the
Notes to be designated Private Offerings, Resales and Trading through Automated
Linkages (PORTAL) MarketSM (the "PORTAL MARKETSM") securities in accordance with
the rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL MarketSM and to permit the Notes
to be eligible for clearance and settlement through DTC.
(k) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its Affiliates, to, resell any of
the Notes that constitute "restricted securities" under Rule 144 that have been
reacquired by any of them.
17
(l) The Company agrees that it will not and will cause its
Affiliates not to make any offer or sale of securities of the Company of any
class if, as a result of the doctrine of "integration" referred to in Rule 502
under the Act, such offer or sale would render invalid (for the purpose of the
sale of the Notes by the Company to the Initial Purchasers, (i) the resale of
the Notes by the Initial Purchasers to Eligible Purchasers or (ii) the resale of
the Notes by such Eligible Purchasers to others) the exemption from the
registration requirements of the Act provided by Section 4(2) thereof or by Rule
144A or by Regulation S thereunder or otherwise.
(m) The Company agrees to comply with all the terms and
conditions of the Registration Rights Agreement and all agreements set forth in
the representation letter of the Company to DTC relating to the approval of the
Notes by DTC for "book entry" transfer.
(n) The Company will take such steps as shall be necessary to
ensure that neither the Company nor any of the Company's Subsidiaries becomes an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended.
(o) Each certificate for a Note will bear the legend contained
in "Notice to Investors" in the Offering Memorandum for the time period and upon
the other terms stated in the Offering Memorandum.
(p) Prior to the completion of the placement of the Notes by
the Initial Purchasers with the Eligible Purchasers, the Company shall file, on
a timely basis, with the Commission and the NYSE all reports and documents
required to be filed under Section 13 or 15 of the Exchange Act. Additionally,
at any time when the Company is not subject to Section 13 or 15 of the Exchange
Act and so long as any of the Notes qualify as "restricted securities" within
the meaning of Rule 144(a)(3) of the Act, for the benefit of holders and
beneficial owners from time to time of Notes, the Company shall furnish, at its
expense, upon request, to holders and beneficial owners of Notes and prospective
purchasers of Notes information ("ADDITIONAL ISSUER INFORMATION") satisfying the
requirements of Rule 144A(d)(4).
(q) The Company shall comply with the terms of the Indenture
and the Offering Memorandum and shall promptly notify the Initial Purchasers if
the Company discovers that any of its representations contained in this
Agreement is not, at any time prior to the completion of the distribution of the
Notes, true and correct, or if the Company has at any such time breached any of
its obligations hereunder.
(r) The Company will do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date, and to satisfy all conditions precedent to the Initial Purchasers'
obligations hereunder to purchase the Notes.
(s) The Company shall use its best efforts to cause (i) each
of the Transactions to be consummated in accordance with the terms of the
Transaction Documents as described in the Offering Memorandum and (ii) each of
the conditions to the consummation of the Transactions set forth in each of the
Transaction Documents to be satisfied.
6. EXPENSES. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
the Company agrees, to pay all costs, expenses, fees and taxes incident to and
in connection with: (i) the preparation, printing, filing and distribution of
18
the Preliminary Offering Memorandum and the Offering Memorandum (including,
without limitation, financial statements and exhibits) and all amendments and
supplements thereto (including the fees, disbursements and expenses of the
Company's accountants and counsel); (ii) the reasonable fees and disbursement of
Shearman & Sterling, counsel to the Initial Purchasers, incurred in connection
with the Offering; (iii) the preparation, printing (including, without
limitation, word processing and duplication costs) and delivery of this
Agreement, the Indenture, the Registration Rights Agreement, all Blue Sky
Memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection therewith and with the Exempt
Resales; (iv) the issuance and delivery by the Company of the Notes and any
taxes payable in connection therewith; (v) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Notes to the
Initial Purchasers; (vi) the qualification of the Notes and Exchange Notes for
offer and sale under the securities or Blue Sky laws of the several states
(including, without limitation, the reasonable fees and disbursements of your
counsel relating to such registration or qualification); (vii) all fees and
expenses of the Trustee, including the fees and disbursements of counsel for the
Trustee in connection with the Indenture, the Notes and the Exchange Notes;
(viii) the furnishing of such copies of the Preliminary Offering Memorandum and
the Offering Memorandum, and all amendments and supplements thereto, as may be
reasonably requested for use in connection with the Exempt Resales; (ix) the
preparation of certificates for the Notes (including, without limitation,
printing and engraving thereof); (x) the application for quotation of the Notes
in the PORTAL MarketSM (including all disbursements and listing fees); (xi) the
approval of the Notes by DTC for "book-entry" transfer (including fees and
expenses of counsel); (xii) the rating of the Notes and the Exchange Notes;
(xiii) the performance by the Company of its other obligations under this
Agreement; and (xiv) all travel expenses (including expenses related to
chartered aircraft) of each Initial Purchaser and the Company's officers and
employees and any other expenses of each Initial Purchaser and the Company in
connection with attending or hosting meetings with prospective purchasers of the
Notes.
7. CONDITIONS TO INITIAL PURCHASERS' OBLIGATIONS. The respective
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on and as of the Closing 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 Initial Purchasers shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact that, in the opinion of Shearman & Sterling, counsel to the Initial
Purchasers, is material or omits to state a fact that, 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.
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Notes, the
Exchange Notes, the Registration Rights Agreement, the Indenture and the
Offering Memorandum, and all other legal matters relating to this Agreement and
the Transactions shall be reasonably satisfactory in all material respects to
Shearman & Sterling, counsel for the Initial Purchasers, and the Company shall
19
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(c) Akerman Senterfitt shall have furnished to the Initial
Purchasers its written opinion (containing customary assumptions,
qualifications, limitations and exceptions acceptable to the Initial
Purchasers), as counsel to the Company, addressed to the Initial Purchasers and
dated the Closing Date, as set forth in Exhibit C hereto.
(d) Each of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, respectively, shall have furnished to the Initial Purchasers
its written opinion (containing customary assumptions, qualifications,
limitations and exceptions acceptable to the Initial Purchasers, as counsel to
Wackenhut Corrections (UK) Limited, Wackenhut Corrections Corporation South
Africa (Pty) Limited and Wackenhut Corrections Corporation Australia Pty. Ltd.,
respectively, addressed to the Initial Purchasers and dated the Closing Date, in
the form of Exhibit D hereto or in substance satisfactory to the Initial
Purchasers.
(e) The Initial Purchasers shall have received from Shearman &
Sterling, counsel for the Initial Purchasers, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the Notes, the
Offering Memorandum and other related matters as the Initial Purchasers may
reasonably require, and the Company shall have furnished to such counsel such
documents and information as they reasonably request for the purpose of enabling
them to pass upon such matters.
(f) At the time of execution of this Agreement, the Initial
Purchasers shall have received from Ernst & Young LLP a letter, in form and
substance satisfactory to the Initial Purchasers, addressed to the Initial
Purchasers and dated the date hereof (i) confirming that they are independent
public accountants within the meaning of the 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
Offering Memorandum, 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 (iii) covering such other matters as are ordinarily covered by
accountants' "comfort letters" to underwriters in connection with registered
public offerings.
(g) With respect to the letter of Ernst & Young LLP referred
to in the preceding paragraph and delivered to the Initial Purchasers
concurrently with the execution of this Agreement (the "INITIAL LETTER"), the
Company shall have furnished to the Initial Purchasers a letter (the "BRING-DOWN
LETTER") of such accountants, addressed to the Initial Purchasers and dated the
Closing Date (i) confirming that they are independent public accountants within
the meaning of the Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the Closing Date (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as of a
date not more than three days prior to the date of the Closing Date), 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.
20
(h) Neither the Company nor any of its Subsidiaries shall have
sustained, since the date of the latest audited financial statements included in
the Offering Memorandum, 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 Offering Memorandum;
and, since such date, except as otherwise disclosed in the Offering Memorandum,
there shall not have been any material change in the stockholders' equity or
long-term debt of the Company or any of its Subsidiaries or a Material Adverse
Effect affecting the management, condition, financial or otherwise,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries, taken as a whole.
(i) On the Closing Date, the Initial Purchasers shall have
received a written certificate executed by the Chief Financial Officer of the
Company, dated as of the Closing Date, to the effect that:
(i) the representations, warranties and covenants of the
Company set forth in Section 2 of this Agreement are true and correct
with the same force and effect as though expressly made on and as of
the Closing Date;
(ii) the Company has complied with all the agreements and
satisfied all the conditions on their part to be performed or satisfied
at or prior to the Closing Date;
(iii) for the period from and after the date of this Agreement
and prior to the Closing Date there has not occurred any Material
Adverse Effect; and
(iv) to such officer's actual knowledge the issuance and sale
of the Notes by the Company has not been enjoined by any court or
governmental body or agency.
(j) 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.
(k) At the Closing Date, the Notes shall have been designated
for trading on the PORTAL MarketSM and shall be eligible for clearance and
settlement through DTC.
(l) The Company shall have executed and delivered the
Registration Rights Agreement, and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company.
(m) The Company and the Trustee shall have executed and
delivered the Indenture and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company and the Trustee.
21
(n) At the Closing Date, each of the Transactions shall have
been consummated in accordance with the terms of the Transaction Documents as in
effect on the date of the Offering Memorandum.
(o) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading or quotation in
securities generally on the New York Stock Exchange, the Nasdaq National Market
System or the American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, has been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction; (ii) a material disruption in securities settlement, payment or
clearance services in the United States; (iii) a banking moratorium has been
declared by Federal or state authorities; (iv) any attack on, outbreak or
escalation of hostilities or act of terrorism involving the United States, any
declaration of war by Congress or any other national or international calamity,
crisis or emergency if, in the judgment of the Initial Purchasers, the effect of
any such attack, outbreak, escalation, act, declaration, calamity, crisis or
emergency makes it impractical or inadvisable to proceed with completion of the
Offering or sale of and payment for the Notes; (v) the occurrence of any other
calamity, crisis (including without limitation as a result of terrorist
activities), or 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
the Initial Purchasers, impracticable or inadvisable to proceed with the
Offering or the delivery of the Notes being delivered on the Closing Date or
that, in the judgment of the Initial Purchasers, would materially and adversely
affect the financial markets or the markets for the Notes and other debt
securities.
(p) On or before the Closing Date, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such information,
documents and opinions as they may reasonably require for the purposes of
enabling them to pass upon the issuance and sale of the Notes as contemplated
herein, or in order to evidence the accuracy of any of the representations and
warranties, or the satisfaction of any of the conditions or agreements, herein
contained.
(q) Each of the conditions to the closing of the Share
Repurchase as set forth in the agreements governing the Share Repurchase
(without giving effect to any amendment, waiver or supplement thereto) as of the
date hereof shall have been satisfied.
(r) ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., General Counsel of the Company shall
have furnished to the Initial Purchasers his written opinion (containing
customary assumptions, qualifications, limitations and exceptions acceptable to
the Initial Purchasers) addressed to the Initial Purchasers and dated the
Closing Date in the form of Exhibit E hereto.
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 Initial Purchasers.
22
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company hereby agrees to indemnify and hold harmless
each Initial Purchaser, its directors, officers and employees and each person,
if any, who controls any Initial Purchaser within the meaning of the 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 and
relating to the Company's exercise of its rights pursuant to Section 3(c)
hereof), to which that Initial Purchaser, director, officer, employee or
controlling person may become subject, under the 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 Offering Memorandum or the Offering Memorandum
or in any amendment or supplement thereto or (B) in any Blue Sky application or
other document prepared or executed by the Company (or based upon any written
information furnished by the Company) specifically for the purpose of qualifying
any or all of the Notes under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter
called a "BLUE SKY APPLICATION"), (ii) the omission or alleged omission to state
in any Preliminary Offering Memorandum or the Offering Memorandum, or in any
amendment or supplement thereto, or in any Blue Sky Application, any material
fact required to be stated therein or necessary in order 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 Initial Purchaser in connection with, or relating in any manner to,
the Notes or the Offering, and that is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (PROVIDED that the Company shall not be
liable 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 Initial Purchaser through its gross
negligence or willful misconduct), and shall reimburse each Initial Purchaser
and each such director, officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Initial
Purchaser, director, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; PROVIDED, HOWEVER,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Offering Memorandum or Offering Memorandum, or in any
such amendment or supplement thereto, in reliance upon and in conformity with
written information concerning such Initial Purchaser furnished to the Company
through the Initial Purchasers by or on behalf of any Initial Purchaser
specifically for inclusion therein. The foregoing indemnity agreement is in
addition to any liability that the Company may otherwise have to any Initial
Purchaser or to any director, officer, employee or controlling person of that
Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, hereby
agrees to 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 Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or any
such director, officer, employee or controlling person may become subject, under
the Act or otherwise, insofar as such loss, claim, damage, liability or action
23
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Offering
Memorandum or the Offering Memorandum or in any amendment or supplement thereto,
or (ii) the omission or alleged omission to state in any Preliminary Offering
Memorandum or the Offering Memorandum, or in any amendment or supplement
thereto, 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 Initial Purchaser furnished to the Company by or on behalf of that Initial
Purchaser specifically for inclusion therein, and shall reimburse the Company
and any such director, officer, employee or controlling person for any legal or
other expenses reasonably incurred by the Company or any such director, officer,
employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in addition to
any liability that any Initial Purchaser may otherwise have to the Company or
any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under this Section 8 except to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and; PROVIDED FURTHER that
the failure to notify the indemnifying party shall not relieve it from any
liability that 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 Initial Purchasers shall have the right to employ counsel to
represent jointly the Initial Purchasers and those Initial Purchasers 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 Initial Purchasers against the Company under this Section 8 if,
in the reasonable judgment of the Initial Purchasers, it is advisable for the
Initial Purchasers and those directors, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
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
24
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Initial Purchasers on the other
from the offering of the Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, on the one hand, and the Initial
Purchasers on the other with respect to the statements or omissions that
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 Initial Purchasers 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 initial purchasers' discounts and commissions received by the
Initial Purchasers 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 as set forth on the cover page of the Offering Memorandum.
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
Initial Purchasers, 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 Initial Purchasers agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation that 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(d) shall be deemed to include, for purposes of this Section 8(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Initial Purchaser shall
be required to contribute any amount in excess of the amount by which the total
price at which the Notes initially purchased by it were offered to the Eligible
Purchasers exceeds the total price at which such Initial Purchaser purchased the
Notes from the Company. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute as provided in this Section 8(d) are
several in proportion to their respective underwriting obligations and not
joint.
25
(e) The Initial Purchasers severally confirm and the Company
acknowledges that (i) the names of the Initial Purchasers at set forth on the
cover page of the Offering Memorandum and (ii) the statements with respect to
the offering of the Notes by the Initial Purchasers set forth in the first
sentence of the third paragraph of the section entitled "Plan of Distribution"
in the Offering Memorandum are correct and constitute the only information
concerning such Initial Purchasers furnished in writing to the Company by or on
behalf of the Initial Purchasers specifically for inclusion in the Offering
Memorandum.
9. DEFAULTING INITIAL PURCHASERS. If, on the Closing Date, any Initial
Purchaser defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Initial Purchasers shall be obligated to purchase
the Notes that the defaulting Initial Purchaser agreed but failed to purchase on
the Closing Date in the respective proportions that the number of Notes set
opposite the name of each remaining non-defaulting Initial Purchaser in Schedule
I hereto bears to the total number of Notes set opposite the names of all the
remaining non-defaulting Initial Purchasers in Schedule I hereto; PROVIDED,
HOWEVER, that the remaining non-defaulting Initial Purchasers shall not be
obligated to purchase any of the Notes on the Closing Date if the total number
of Notes that the defaulting Initial Purchaser or Initial Purchasers agreed but
failed to purchase on such date exceeds 9.09% of the total number of Notes to be
purchased on the Closing Date, and any remaining non-defaulting Initial
Purchasers shall not be obligated to purchase more than 110% of the number of
Notes that it agreed to purchase on the Closing Date pursuant to the terms of
Section 3. If the foregoing maximums are exceeded, the remaining non-defaulting
Initial Purchasers, or those other Initial Purchasers satisfactory to the
Initial Purchasers 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 the Closing Date. If the remaining Initial
Purchasers or other Initial Purchasers satisfactory to the Initial Purchasers do
not elect to purchase the Notes that the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase on the Closing Date, this Agreement
shall terminate without liability on the part of any non-defaulting Initial
Purchaser 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 11.
Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company for damages caused by its
default. If other Initial Purchasers are obligated or agree to purchase the
Notes of a defaulting or withdrawing Initial Purchaser, either the remaining
Initial Purchasers or the Company may postpone the Closing 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 Initial Purchasers may be necessary in the
Offering Memorandum or in any other document or arrangement.
10. TERMINATION. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers 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(h) or 7(o) shall have occurred
or if the Initial Purchasers shall decline to purchase the Notes for any reason
permitted under this Agreement.
11. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If the Company fails
to tender the Notes for delivery to the Initial Purchasers by reason of any
failure, refusal or inability on the part of the Company to perform any
26
agreement on its part to be performed, or because any other condition of the
obligations hereunder required to be fulfilled by the Company is not fulfilled,
the Company shall reimburse the Initial Purchasers for all reasonable
out-of-pocket expenses incurred by the Initial Purchasers in connection with
this Agreement and the proposed purchase and offerings and sale of the Notes,
including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges, and upon
demand the Company shall pay the full amount thereof to the Initial Purchasers.
If this Agreement is terminated pursuant to Section 9 by reason of the default
of one or more Initial Purchasers, the Company shall not be obligated to
reimburse any defaulting Initial Purchaser on account of those expenses.
12. NOTICES, ETC. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Initial Purchasers:
BNP Paribas Securities Corp.
The Equitable Tower
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Syndicate
and
▇▇▇▇▇▇ Brothers Inc.
Litigation Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
Shearman & Sterling LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
27
If to the Company:
Wackenhut Corrections Corporation
One Park Place
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
with a copy to:
Akerman Senterfitt
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Any such statements, requests, notices or agreements shall
take effect at the time delivered by hand, if personally delivered; two business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
and their respective successors. The term "successors" shall not include any
purchaser of the Notes as such from any of the Initial Purchasers merely by
reason of such purchase. 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 directors of the Initial
Purchasers, officers of the Initial Purchasers and any person or persons
controlling any Initial Purchaser within the meaning of Section 15 of the Act
and (B) the indemnity agreement of the Initial Purchasers 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 and any person controlling the Company within
the meaning of Section 15 of the Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
14. SURVIVAL. The respective indemnities, representations, warranties
and agreements of the Company and the Initial Purchasers contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Notes and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
28
15. DEFINITION OF THE TERM "BUSINESS DAY" and "SUBSIDIARY." For
purposes of this Agreement, "business day" means any day on which the New York
Stock Exchange, Inc. is open for trading and (ii) "subsidiary" means any entity
the total voting capital stock of which is more than 50% controlled, either
directly or indirectly by the Company or a Subsidiary.
16. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
17. GOVERNING LAW. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
(b) Any legal suit, action or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby ("RELATED
PROCEEDINGS") may be instituted in the federal courts of the United States of
America located in the City and County of New York or the courts of the State of
New York in each case located in the City and County of New York (collectively,
the "SPECIFIED COURTS"), and each party irrevocably submits to the non-exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of
a judgment of any such court (a "RELATED JUDGMENT"), as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
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.
29
If the foregoing correctly sets forth the agreement among the
Company, and the Initial Purchasers, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
WACKENHUT CORRECTIONS CORP.
By: /s/ ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: Chief Financial Officer-Senior Vice President
Accepted:
BNP PARIBAS SECURITIES CORP.
▇▇▇▇▇▇ BROTHERS INC.
FIRST ANALYSIS SECURITIES CORPORATION
SOUTHTRUST SECURITIES, INC.
COMERICA SECURITIES, INC.
Acting severally on behalf of themselves and the
several Initial Purchasers
named in Schedule I hereto:
By: BNP Paribas Securities Corp.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Managing Director
30
SCHEDULE I
PRINCIPAL
AMOUNT OF
NOTES
TO BE
INITIAL PURCHASERS PURCHASED
------------------ ---------
BNP Paribas Securities Corp............................... $82,800,000
▇▇▇▇▇▇ Brothers Inc....................................... 55,200,000
First Analysis Securities Corporation..................... 8,250,000
SouthTrust Securities, Inc................................ 2,250,000
Comerica Securities, Inc.................................. 1,500,000
-------------
Total................................................ $150,000,000
==============
31
[EXHIBITS OMITTED]