EXHIBIT 1.1
Correctional Properties Trust
3,000,000 Common Shares of Beneficial Interest
($0.001 par value)
Underwriting Agreement
New York, New York
July 17, 2003
Citigroup Global Markets Inc.
Banc of America Securities LLC
As representatives of the several Underwriters
named in Schedule II hereto,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Correctional Properties Trust, a real estate investment trust
organized under the laws of the State of Maryland (the "Company"), proposes to
sell to the several underwriters named in Schedule II hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, the number of common shares of beneficial interest, $0.001 par
value per share ("Common Shares"), of the Company set forth in Schedule I hereto
(said shares to be issued and sold by the Company being hereinafter called the
"Underwritten Securities"). The Company also proposes to grant to the
Underwriters an option to purchase up to the number of additional Common Shares
set forth in Section 2(b) hereto to cover over-allotments (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). To the extent there are no
additional Underwriters listed on Schedule II other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof.
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1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a
registration statement (file number 333-90364) on Form S-3, including a
related basic prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a Preliminary Final Prospectus, each
of which has previously been furnished to you. The Company will next
file with the Commission one of the following: (1) after the Effective
Date of such registration statement, a final prospectus supplement
relating to the Securities in accordance with Rules 430A and 424(b),
(2) prior to the Effective Date of such registration statement, an
amendment to such registration statement (including the form of final
prospectus supplement) or (3) a final prospectus in accordance with
Rules 415 and 424(b). In the case of clause (1), the Company has
included in such registration statement, as amended at the Effective
Date, all information (other than Rule 430A Information) required by
the Act and the rules thereunder to be included in such registration
statement and the Final Prospectus. As filed, such final prospectus
supplement or such amendment and form of final prospectus supplement
shall contain all Rule 430A Information, together with all other such
required information, and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final Prospectus)
as the Company has advised you, prior to the Execution Time, will be
included or made therein. The Registration Statement, at the Execution
Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which Option Securities are purchased, if such date
is not the Closing Date (a "settlement date"), the Final Prospectus
(and any supplement thereto) will, comply in all material respects with
the applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; on the Effective Date and at the Execution
Time, the Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date, the
Final Prospectus, if not filed pursuant to Rule 424(b), will not, and
on the date of any filing pursuant to Rule 424(b) and on the Closing
Date and any settlement date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as
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to the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto).
(c) The subsidiaries listed on Schedule 1(c) attached hereto
(individually a "Subsidiary" and collectively, the "Subsidiaries") are
the only subsidiaries of the Company.
(d) Each of the Company and the Subsidiaries has been duly
incorporated or organized and is validly existing as a corporation,
limited partnership, general partnership or limited liability company
in good standing under the laws of the jurisdiction in which it is
chartered or organized with full corporate, partnership or limited
liability company power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described
in the Final Prospectus, and is duly qualified to do business as a
foreign corporation, limited partnership, general partnership or
limited liability company and is in good standing under the laws of
each jurisdiction which requires such qualification.
(e) All the outstanding shares of capital stock, partnership
interests, limited liability company interests or other equivalent
equity interest of each Subsidiary has been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Final Prospectus, all outstanding capital
shares, partnership interests, limited liability company interests or
other equivalent equity interest of the Subsidiaries are owned by the
Company either directly or through wholly owned Subsidiaries free and
clear of any perfected security interest or any other security
interests, claims, liens or encumbrances.
(f) The Company's authorized equity capitalization is as set
forth in the Final Prospectus (exclusive of any supplement thereto);
the capital shares of the Company conform in all material respects to
the description thereof contained in the Final Prospectus (exclusive of
any supplement thereto); the outstanding Common Shares have been duly
and validly authorized and issued and are fully paid and nonassessable;
the Securities have been duly and validly authorized, and, when issued
and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the certificates for
the Securities are in valid and sufficient form; and the holders of
outstanding capital shares of the Company are not entitled to
preemptive or other rights to subscribe for the Securities; and, except
as set forth in the Final Prospectus (exclusive of any supplement
thereto), no options, warrants or other rights to purchase, agreements
or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, capital shares of or ownership
interests in the Company are outstanding.
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(g) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Final
Prospectus under the headings "Risk Factors", "Description of Common
Shares of Beneficial Interest", "Provisions of Maryland Law and of Our
Declaration of Trust and Bylaws", "Material Federal Income Tax
Considerations", "Recent Developments" and "Correctional Properties
Trust" insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings.
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
(i) The Company has operated, for all periods from inception
and intends to continue to operate in such a manner as to qualify to be
taxed as a "real estate investment trust" under the Internal Revenue
Code of 1986, as amended (the "Code"), including the taxable year in
which sales of the Securities are to occur.
(j) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940,
as amended.
(k) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act, real estate syndication laws and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters in
the manner contemplated herein and in the Final Prospectus.
(l) Neither the Company nor any of its Subsidiaries is
required to own or possess any trademarks, service marks, trade names,
copyrights, licenses or other intellectual property in order to conduct
the Company's business as now conducted or as proposed in the Final
Prospectus to be conducted, other than those the failure to possess or
own would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business.
(m) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to, (i) the declaration of trust, charter or
articles or certificate of formation, bylaws, partnership agreement,
limited liability company agreement or other organizational documents
of the Company or any of its
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Subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its Subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its Subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its Subsidiaries or any of its
or their properties.
(n) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(o) The consolidated historical financial statements and
schedules of the Company and its consolidated Subsidiaries included in
the Final Prospectus and the Registration Statement present fairly in
all material respects the financial condition, results of operations
and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and the Exchange Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise
noted therein). The financial data included in the Final Prospectus and
Registration Statement fairly present, on the basis stated in the Final
Prospectus and the Registration Statement, the information included
therein.
(p) The Company has at least $150 million aggregate market
value of voting stock held by non affiliates.
(q) Since the respective dates as of which information is
given in the Final Prospectus, except as may otherwise be stated
therein or contemplated thereby (exclusive of any supplement), (i)
there has been no material adverse change, in the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, (ii) there have
been no transactions entered into by the Company or any of its
Subsidiaries which are material with respect to the Company and its
Subsidiaries, taken as a whole, and (iii) except for regular quarterly
dividends on the Company's Common Shares, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital shares.
(r) The documents incorporated or deemed to be incorporated by
reference in the Final Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material
respects with the requirements of the Exchange Act, and, when read
together with the other information in the Final Prospectus, at the
time the Registration Statement became effective and as of the
Execution Time, the Closing Date, any settlement date or during the
period specified in Section 5(b), did not and will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated
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therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(s) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its Subsidiaries or its or their property is pending
or, to the best knowledge of the Company, threatened that (i) could
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(t) Each of the Company and the Subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations
as presently conducted.
(u) Except as disclosed in the Final Prospectus (exclusive of
any supplements thereto), the Company and its Subsidiaries have good
and marketable title to all real properties and all other properties
and assets owned by them, in each case free from liens, encumbrances
and defects that would materially affect the value thereof or revenues
derived therefrom or materially interfere with the use made or to be
made thereof by them; the Company and its Subsidiaries hold any leased
real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to be
made thereof by them; except as disclosed in the Final Prospectus
(exclusive of any supplement thereto), no tenant under any lease
pursuant to which the Company or any of its Subsidiaries leases its
property or any other person will have an option or a right of first
refusal to purchase the premises leased thereunder or the building of
which such premises are a part; no tenant under any lease to which the
Company or any Subsidiary leases any portion of its property is in
default under such lease; each of the properties of any of the Company
or its Subsidiaries complies with all applicable codes and zoning laws
and regulations except in any case where such non-compliance would not
have a material adverse effect on the condition, operations, prospects
or earnings of the non-compliant property; and neither the Company nor
any of its Subsidiaries has knowledge of any pending or threatened
condemnation, zoning change or other proceeding or action that will in
any manner affect the size of, use of, improvements on, construction
on, or access to the properties of any of the Company or its
Subsidiaries.
(v) To the best knowledge of the Company and its Subsidiaries,
the real property owned or leased by such entities is free of material
structural defects and all building systems contained therein are in
good working order in all material respects, subject to ordinary wear
and tear or, in each instance, the Company maintains adequate reserves
to effect reasonably required repairs, maintenance and capital
expenditures.
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(w) The Company's rent roll as of June 30, 2003 is in all
material respects a true, correct and complete specification of the
identity of each tenant, square footage, base rent, number of beds, tax
payment and lease expiration for the real property of the Company and
its Subsidiaries as of such date.
(x) Neither the Company nor any Subsidiary is in violation or
default of (i) any provision of its charter or articles or certificate
of formation, bylaws, partnership agreement, declaration of trust,
limited liability company agreement or other organizational documents,
(ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such Subsidiary or any of its
properties, as applicable.
(y) Ernst & Young LLP and Xxxxxx Xxxxxxxx LLP, which have
certified certain financial statements of the Company and its
consolidated Subsidiaries and delivered their report with respect to
the audited consolidated financial statements and schedules included in
the Final Prospectus, are (or, in the case of Xxxxxx Xxxxxxxx LLP, were
at the time the financial statements prepared by them were certified
and their reports were delivered), independent public accountants with
respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(z) There are no transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by the
Company of the Securities.
(aa) The Company has filed all foreign, Federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Final Prospectus (exclusive of any supplement
thereto) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Final Prospectus (exclusive of any supplement
thereto).
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(bb) No labor problem or dispute with the employees of the
Company or any of its Subsidiaries exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its Subsidiaries'
principal suppliers or contractors, that could have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(cc) Each of the Company's and its Subsidiaries' properties
are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; all policies of insurance
and fidelity or surety bonds insuring the Company's or any of its
Subsidiaries' respective properties, businesses, assets, employees,
officers and directors are in full force and effect; the Company and
its Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company or any of its Subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause; neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(dd) 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,
partnership interests, limited liability company interests or other
equivalent equity interest, 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, except as described in or contemplated by
the Final Prospectus (exclusive of any supplement thereto).
(ee) The Company and its Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate Federal, state or foreign regulatory authorities necessary
to conduct their respective businesses, and neither the Company nor any
such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision,
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ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(ff) The Company and each of its Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(gg) The Company has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(hh) The Company and its Subsidiaries are (i) in compliance
with any and all applicable foreign, Federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual or
potential liability under any Environmental Law, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto). Except as set forth
in the Final Prospectus, neither the Company nor any of the
Subsidiaries has been named as a "potentially responsible party" under
any Environmental Laws, including, but not limited to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended ("CERCLA").
(ii) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the
course of which it identifies
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and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws,
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties).
On the basis of such review, the Company has reasonably concluded that
such associated costs and liabilities would not, singly or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(jj) None of the Company, or any of its Subsidiaries has any
knowledge of (i) the presence of any Hazardous Materials on any of the
properties owned by it, or (ii) any spills, releases, discharges or
disposal, of Hazardous Materials that have occurred or are presently
occurring on, under, to or from such properties as a result of any
construction on or operation and use of such properties, which
presence, spills, releases, discharges or disposals could reasonably be
expected to have a material adverse effect on the condition (financial
or otherwise), prospects, earnings. business or properties of the
Company and its Subsidiaries, taken as a whole; and in connection with
the construction on or operation and use of the properties owned by the
Company and its Subsidiaries, the Company has no knowledge of any
material failure to comply with all Environmental Laws.
As used herein, "Hazardous Materials" shall include, without
limitation, any flammable substances, explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, or related materials, oil and petroleum products, asbestos
or any material as defined by any Federal, state or local Environmental
Law, ordinance, rule, or regulation including, without limitation,
CERCLA, the Hazardous Materials Transportation Act, as amended (49
U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery
Act, as amended (42 U.S.C. Section 9601, et seq.), the Clean Water Act,
as amended (33 U.S.C. Section 1251, et seq.) and in the regulations
adopted and publications promulgated pursuant to any of the foregoing
or by any Federal, state or local governmental authority having or
claiming jurisdiction over any property owned by the Company or any
Subsidiary.
(kk) The minimum funding standard under Section 302 of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder ("ERISA"), has
been satisfied by each "pension plan" (as defined in Section 3(2) of
ERISA) which has been established or maintained by the Company and/or
one or more of its Subsidiaries, and the trust forming part of each
such plan which is intended to be qualified under Section 401 of the
Code is so qualified; each of the Company and its Subsidiaries has
fulfilled its obligations, if any, under Section 515 of ERISA; neither
the Company nor any of its Subsidiaries maintains or is required to
contribute to a
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"welfare plan" (as defined in Section 3(1) of ERISA) which provides
retiree or other post-employment welfare benefits or insurance coverage
(other than "continuation coverage" (as defined in Section 602 of
ERISA)); each pension plan and welfare plan established or maintained
by the Company and/or one or more of its Subsidiaries is in compliance
in all material respects with the currently applicable provisions of
ERISA; and neither the Company nor any of its Subsidiaries has incurred
or could reasonably be expected to incur any withdrawal liability under
Section 4201 of ERISA, any liability under Section 4062, 4063, or 4064
of ERISA, or any other liability under Title IV of ERISA.
(ll) The Company (i) does not have any material lending or
other relationship with any bank or lending affiliate of Citigroup
Global Markets Holdings Inc. and (ii) does not intend to use any of the
proceeds from the sale of the Securities hereunder to repay any
outstanding debt owed to any affiliate of Citigroup Global Markets
Holdings Inc.
(mm) There is and has been no failure on the part of the
Company or any of the Company's trustees, directors or officers, in
their capacities as such, to comply with any provision of the Sarbanes
Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the "Sarbanes Oxley Act"), including Section 402
related to loans and Sections 302 and 906 related to certifications.
(nn) Neither the Company nor any of its Subsidiaries nor, to
the knowledge of the Company, any trustee, director, officer, agent,
employee or affiliate of the Company or any of its Subsidiaries is
aware of or has taken any action, directly or indirectly, that would
result in a violation by such Persons of the FCPA, including, without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment,
promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of
anything of value to any "foreign official" (as such term is defined in
the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA
and the Company, its Subsidiaries and, to the knowledge of the Company,
its affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain policies and procedures designed
to ensure, and which are reasonably expected to continue to ensure,
continued compliance therewith.
"FCPA" means Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder.
(oo) The operations of the Company and its Subsidiaries are
and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or
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guidelines, issued, administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws") and no action, suit or
proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its Subsidiaries
with respect to the Money Laundering Laws is pending or, to the best
knowledge of the Company, threatened.
(pp) Neither the Company nor any of its Subsidiaries nor, to
the knowledge of the Company, any trustee, director, officer, agent,
employee or affiliate of the Company or any of its Subsidiaries is
currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department ("OFAC"); and
the Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds
to any Subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently subject
to any U.S. sanctions administered by OFAC.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
$24.16125 per share, the amount of the Underwritten Securities set forth
opposite such Underwriter's name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to 487,500 Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time on or before the 30th day after the date of the Final Prospectus
upon written or telegraphic notice by the Representatives to the Company setting
forth the number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The number of
shares of the Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof
13
shall have been exercised on or before the third Business Day prior to the
Closing Date) shall be made on the date and at the time specified in Schedule I
hereto or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement between the Representatives and the Company
or as provided in Section 9 hereof (such date and time of delivery and payment
for the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the Option Securities (at the expense of the Company) to the Representatives, at
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. The Company understands that the
several Underwriters propose to offer the Securities for sale to the public as
set forth in the Final Prospectus.
5. Agreements. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement (including the Final
Prospectus or any Preliminary Final Prospectus) to the Basic Prospectus
or any Rule 462(b) Registration Statement unless the Company has
furnished you a copy for your review prior to filing and will not file
any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Final Prospectus is otherwise required under Rule 424(b),
the Company will cause the Final
14
Prospectus, properly completed, and any supplement thereto to be filed,
in a form approved by the Representatives, with the Commission pursuant
to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise
the Representatives (1) when the Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when
the Final Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or when any
Rule 462(b) Registration Statement shall have been filed with the
Commission, (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (4) of any request by the Commission or its
staff for any amendment of the Registration Statement, or any Rule
462(b) Registration Statement, or for any supplement to the Final
Prospectus or for any additional information, (5) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose and (6) of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the institution or
threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain as soon
as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (1) notify the
Representatives of such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance and (3) supply any supplemented
Final Prospectus to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its Subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a
15
prospectus by an Underwriter or dealer may be required by the Act, as
many copies of each Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Securities and will pay any fee of the National Association of
Securities Dealers, Inc., in connection with its review of the
offering; 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 Securities, in any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge,
or otherwise dispose of, (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, including the
filing (or participation in the filing) of a registration statement
with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act, any other Common
Shares or any securities convertible into, or exercisable, or
exchangeable for, Common Shares; or publicly announce an intention to
effect any such transaction, for a period of 45 days after the date of
this Agreement, provided, however, that the Company may issue and sell
Common Shares pursuant to any employee share option plan, share
ownership plan or dividend reinvestment plan of the Company in effect
at the Execution Time and the Company may issue Common Shares issuable
upon the conversion of securities or the exercise of warrants
outstanding at the Execution Time.
(g) The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or
reproduction, and filing with the Commission of the Registration
Statement (including financial statements and exhibits thereto), any
Preliminary Final Prospectus, the Final Prospectus and each amendment
or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Registration Statement,
any Preliminary Final Prospectus, the Final Prospectus and all
amendments or supplements to any of them as may be reasonably requested
for use in connection with the offering and sale of the Securities;
(iii) the preparation, printing, authentication, issuance and
16
delivery of certificates for the Securities, including any stamp taxes
in connection with the original issuance and sale of the Securities;
(iv) the printing (or reproduction) and delivery of this Agreement and
all other agreements or documents printed (or reproduced) and delivered
in connection with the offering of the Securities; (v) the listing of
the Securities on the New York Stock Exchange; (vi) the registration or
qualification of the Securities for offer and sale under the laws of
any jurisdiction as provided in Section 5(e) hereof (including the
reasonable fees, expenses and disbursements of counsel for the
Underwriters relating to the preparation, printing or reproduction, and
delivery of the preliminary and supplemental Blue Sky Memoranda and
such registration and qualification); (vii) the filing fees and the
fees and expenses of counsel for the Underwriters in connection with
any filings required to be made with the National Association of
Securities Dealers, Inc.; (viii) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (ix) the
fees and expenses of the Company's accountants and the fees and
expenses of counsel (including local and special counsel) for the
Company.
(h) The Company will comply with all applicable securities and
other applicable laws, rules and regulations, including, without
limitation, the Sarbanes Oxley Act, and will use its best efforts to
cause the Company's trustees, directors and officers, in their
capacities as such, to comply with such laws, rules and regulations,
including, without limitation, the provisions of the Sarbanes Oxley
Act.
(i) The Company will use its best efforts to meet the
requirements to qualify as a "real estate investment trust" under the
Code for the taxable year in which sales of the Securities are to
occur.
(j) The Company will use its best efforts to list the
Securities on the New York Stock Exchange.
(k) The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
17
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, as the case may be, to the accuracy of the statements of the Company
made in any certificates pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have requested and caused Xxxxxxxxx
Traurig, P.A., counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date, or any
settlement date, as the case may be, and addressed to the
Representatives and reasonably satisfactory in form and substance to
counsel for the Underwriters, to the effect that:
(i) the Company is duly qualified to do business as a
foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it
owns or leases material properties or conducts material
business and where the failure to be so qualified would,
individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus;
(ii) each of the Subsidiaries has been duly
incorporated or organized, as applicable, and is validly
existing as a corporation, limited partnership, general
partnership or limited liability company in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate, partnership or limited
liability company power and authority to own or lease, as the
case may be, and to operate its properties and conduct its
business as described in the Final Prospectus,
18
and is duly qualified to do business as a foreign corporation,
partnership or limited liability company and is in good
standing under the laws of each jurisdiction which requires
such qualification wherein it owns or leases material
properties or conducts material business and where the failure
to be so qualified would, individually or in the aggregate,
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final
Prospectus;
(iii) all the outstanding capital shares, partnership
interests, limited liability company interests or other
equivalent equity interest of each Subsidiary have been duly
and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final
Prospectus, all outstanding capital shares, partnership
interests, limited liability company interests or other
equivalent equity interest of such Subsidiaries are owned by
the Company either directly or through wholly owned
Subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interest, claim, lien or encumbrance;
(iv) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its Subsidiaries or
its or their property of a character required to be disclosed
in the Registration Statement which is not adequately
disclosed in the Final Prospectus, and there is no franchise,
contract or other document of a character required to be
described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit thereto, which is not described
or filed as required; and the statements included or
incorporated by reference in the Final Prospectus under the
headings "Risk Factors", "Description of Common Shares of
Beneficial Interest", "Material Federal Income Tax
Considerations", "Recent Developments" and "Correctional
Properties Trust" insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed
therein, are accurate and fair summaries of such legal
matters, agreements, documents or proceedings;
(v) the holders of outstanding capital shares of the
Company are not entitled to preemptive or other rights to
subscribe for the Securities;
(vi) except as set forth in the Final Prospectus, no
options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any
obligations into or exchange any securities for, capital
shares of or ownership interests in the Company are
outstanding;
19
(vii) the Registration Statement has become effective
under the Act; any required filing of the Basic Prospectus,
any Preliminary Final Prospectus and the Final Prospectus, and
any supplements thereto, pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule
424(b); to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened by the Commission and the
Registration Statement as of its Effective Date and the Final
Prospectus as of the date thereof and the Closing Date (other
than the financial statements and other financial and
statistical information contained therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act
and the Exchange Act and the respective rules thereunder and
the Company satisfies all conditions and requirements for the
filing of the Registration Statement on Form S-3 under the
Act; and such counsel has no reason to believe that on the
Effective Date or the date the Registration Statement was last
deemed amended the Registration Statement contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Prospectus
as of its date and on the Closing Date included or includes
any untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading (in each case, other than the
financial statements and other financial and statistical
information contained therein, as to which such counsel need
express no opinion);
(viii) this Agreement has been duly authorized,
executed and delivered by the Company;
(ix) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Final Prospectus,
will not be an "investment company" as defined in the
Investment Company Act of 1940, as amended;
(x) since inception, (i) the Company has been
organized in conformity with the requirements of the Code for
qualification as a "real estate investment trust" for United
States Federal income tax purposes and its method of operation
will enable it to continue to satisfy the requirements for
qualification and taxation as a "real estate investment trust"
under the Code, and (ii) neither CPT Operating Partnership
L.P., Correctional Properties North Carolina Prison Finance
LLC nor CPT Limited Partner Inc. has been taxable as a
corporation for U.S. federal income tax purposes pursuant to
the provisions of the Code;
20
(xi) the Securities are duly listed, and admitted and
authorized for trading, subject to official notice of
issuance, on the New York Stock Exchange;
(xii) no consent, approval, authorization, filing
with or order of any court or governmental agency or body is
required in connection with the performance by the Company of
the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement and
in the Final Prospectus and such other approvals (specified in
such opinion) as have been obtained;
(xiii) neither the issue and sale of the Securities
by the Company, nor the consummation by the Company of any
other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in
a breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
Subsidiaries pursuant to, (A) the declaration of trust,
charter or by-laws of the Company or its Subsidiaries, (B) the
terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the
Company or its Subsidiaries is a party or bound or to which
its or their property is subject, or (C) any statute, law,
rule, regulation, judgment, order or decree applicable to the
Company or its Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
Subsidiaries or any of its or their properties; and
(xiv) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than
Florida, New York or Delaware or the Federal laws of the United States,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and
(B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public
officials. References to the Final Prospectus in this paragraph (b)
shall also include any supplements thereto at the Closing Date.
(c) The Company shall also have requested and caused Xxxxxxx,
Baetjer and Xxxxxx, LLP, Maryland counsel for the Company, to have
furnished to the Representatives their opinion, dated the Closing Date
or any settlement date, as the case may be, and addressed to the
Representatives and reasonably satisfactory in form and substance to
counsel for the Underwriters, to the effect that:
21
(i) the Company has been duly formed and is validly
existing as a real estate investment trust under and by virtue
of the laws of the State of Maryland and is in good standing
with the State Department of Assessments and Taxation of
Maryland. The Company has full trust power to own or lease, as
the case may be, and to operate its properties and conduct its
business as described in the Final Prospectus,
(ii) this Agreement has been duly authorized and
executed by the Company.
(iii) the Company's authorized equity capitalization
is as set forth in the Final Prospectus; the shares of
beneficial interest of the Company conform in all material
respects to the description thereof contained in the Final
Prospectus; the outstanding Common Shares have been duly and
validly authorized and issued and are fully paid and
nonassessable; the Securities have been duly and validly
authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; the certificates for the Securities,
if any, are in valid and sufficient form; and the holders of
outstanding Common Shares of the Company are not entitled to
preemptive or other rights to subscribe for the Securities
arising under Maryland REIT law or the Company's declaration
of trust or By-laws;
(iv) no consent, approval, authorization, filing with
or order of any Maryland court or governmental agency or body
is required in connection with the performance by the Company
of the transactions contemplated herein, except such as have
been obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement and
in the Final Prospectus and such other approvals (specified in
such opinion) as have been obtained;
(v) neither the issue and sale of the Securities by
the Company, nor the consummation by the Company of any other
of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or
violation of, or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to, (A)
the declaration of trust or by-laws of the Company or (B) any
Maryland statute, law, rule or regulation or any judgment,
order or decree known to us applicable to the Company of any
Maryland court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company; and
(vi) the statements included in the Final Prospectus
under the headings "Description of Common Shares of Beneficial
Interest" and "Provisions of Maryland Law and of Our
Declaration of Trust and Bylaws" insofar as such statements
summarize the Common Shares or the
22
Company's declaration of trust or By-laws, are accurate and
fair summaries thereof.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of Maryland or the Federal laws of the United States, to
the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and
(B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public
officials. References to the Final Prospectus in this paragraph (c)
shall also include any supplements thereto at the Closing Date.
(d) The Representatives shall have received from Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for the Underwriters, such
opinion or opinions, dated the Closing Date or any settlement date, as
the case may be, and addressed to the Representatives, with respect to
the issuance and sale of the Securities, the Registration Statement,
the Final Prospectus (together with any supplement thereto) and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, or any settlement date, as the case
may be, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Final Prospectus,
any supplements to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct on and as of the
Closing Date or any settlement date, as the case may be, with
the same effect as if made on the Closing Date or any
settlement date, as the case may be, and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date or any settlement date, as the case
may be;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the Final
Prospectus (exclusive of any supplement thereto), there has
been no material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except
23
as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(f) The Company shall have requested and caused Ernst & Young
LLP to have furnished to the Representatives, at the Execution Time and
at the Closing Date, letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to
the Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable rules and regulations adopted by the Commission thereunder
and that they have performed a review of the unaudited interim
financial information of the Company for the six-month period ended
June 30, 2003, and as at June 30, 2003 in accordance with Statement on
Auditing Standards No. 100, and stating in effect, except as provided
in Schedule I hereto, that:
(i) in their opinion the audited financial statements
and financial statement schedules of the Company included or
incorporated by reference in the Registration Statement and
the Final Prospectus and reported on by them comply as to form
in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related
rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its Subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing Standards
No. 100, of the unaudited interim financial information for
the six-month period ended June 30, 2003, and as at June 30,
2003, incorporated by reference in the Registration Statement
and the Final Prospectus; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the shareholders, trustees, directors and each
committee of the Company and the Subsidiaries; and inquiries
of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
Subsidiaries as to transactions and events subsequent to
December 31, 2002, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements
included or incorporated by reference in the
Registration Statement and the Final Prospectus do
not comply as to form in all material respects with
applicable accounting requirements of the Act and
with the related rules and regulations adopted by the
Commission with respect to financial statements
included or incorporated by reference in quarterly
reports on Form 10-Q under the Exchange
24
Act; and said unaudited financial statements are not
in conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated by reference in
the Registration Statement and the Final Prospectus;
(2) with respect to the period subsequent to
June 30, 2003, there were any changes, at a specified
date not more than five days prior to the date of the
letter, in the amounts outstanding under the bonds
payable and revolving line of credit of the Company
and its Subsidiaries or capital shares of the Company
or decreases in the assets or shareholders' equity of
the Company as compared with the amounts shown on the
June 30, 2003 consolidated balance sheet included or
incorporated by reference in the Registration
Statement and the Final Prospectus, or for the period
from July 1, 2003 to such specified date there were
any decreases, as compared with July 1, 2002 in
revenues or in total or per share amounts of net
income of the Company and its Subsidiaries, except in
all instances for changes or decreases set forth in
such letter, in which case the letter shall be
accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Representatives; or
(3) the information included or incorporated
by reference in the Registration Statement and Final
Prospectus in response to Regulation S-K, Item 301
(Selected Financial Data), Item 302 (Supplementary
Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to
Fixed Charges) is not in conformity with the
applicable disclosure requirements of Regulation S-K;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its Subsidiaries) set forth or incorporated by
reference in the Registration Statement and the Final
Prospectus and in Exhibit 12 to the Registration Statement,
including the information set forth under the captions
"Summary", "Risk Factors" and "Use of Proceeds" in the Final
Prospectus, the information included or incorporated by
reference in Items 1, 2, 6, 7, 7A, 8, 11 and 13 of the
Company's Annual Report on Form 10-K, incorporated by
reference in the Registration Statement and the Final
Prospectus, the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q, incorporated by
reference in the Registration Statement and
25
the Final Prospectus and the information included in the
Company's Current Report on Form 8-K dated April 25, 2003 and
Current Report on Form 8-K dated July 15, 2003, agrees with
the accounting records of the Company and its Subsidiaries,
excluding any questions of legal interpretation (Information
in this section to be completed upon receipt of draft).
References to the Final Prospectus in this paragraph (f)
include any supplement thereto at the date of the letter.
(g) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in paragraph (f) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties of
the Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto).
(h) The Company shall have furnished to the Representatives,
at the Execution Time and at the Closing Time, a Management Comfort
Letter, signed by the President and Chief Executive Officer and the
Chief Financial Officer of the Company, dated respectively as of the
Execution Time and as of the Closing Date, or any settlement date, as
the case may be, in form and substance satisfactory to the
Representatives, confirming that such officers have reviewed, examined
and performed certain other specified procedures on the information of
an accounting, financial or statistical nature included or incorporated
by reference in the Registration Statement and the Final Prospectus not
covered by the letter referred to in Section 6(f).
(i) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(j) The Securities shall have been listed and admitted and
authorized for trading on the New York Stock Exchange, and satisfactory
evidence of such actions shall have been provided to the
Representatives.
26
(k) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each officer and trustee of the Company and addressed to
the Representatives.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancelation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for
the Underwriters, at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the
Closing Date.
7. Expenses. If the sale of the Securities provided for herein
is not consummated because any condition to the obligations of the Underwriters
set forth in Section 6 hereof is not satisfied, because of any termination
pursuant to Section 10 hereof or because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or comply with any
provision hereof other than by reason of a default by any of the Underwriters,
the Company will reimburse the Underwriters severally through Citigroup Global
Markets Inc. on demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged
27
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors and trustees,
each of its officers who signs the Registration Statement, and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges
that the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities and, under the heading "Plan of Distribution", (i)
the list of Underwriters and their respective participation in the sale of the
Securities, (ii) the sentences related to concessions and reallowances and (iii)
the paragraph related to stabilization, syndicate covering transactions and
penalty bids in any Preliminary Final Prospectus and the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Final Prospectus or the
Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, 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
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
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 (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses
28
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), 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. For purposes of
this Section 8, each person who controls
29
an Underwriter within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the same
rights to contribution as such Underwriter, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each officer
of the Company who shall have signed the Registration Statement and each
director or trustee of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Shares shall have
been suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
30
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, trustees, directors, employees, agents or controlling persons
referred to in Section 8 hereof, and will survive delivery of and payment for
the Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Citigroup Global Markets Inc. General
Counsel (fax no.: (000) 000-0000) and confirmed to the General Counsel,
Citigroup Global Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: General Counsel; or, if sent to the Company, will be mailed,
delivered or telefaxed to Correctional Properties Trust, Attn: Xxxxxxx X. Xxxxx
(fax no.: (000) 000-0000) and confirmed to it at Correctional Properties Trust,
0000 XXX Xxxx., Xxxxx 000, Xxxx Xxxxx Xxxxxxx, XX 00000 (fax no.: (561)
000-0000), attention of the Legal Department.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in
paragraph 1(a) above contained in the Registration Statement at the
Effective Date including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
31
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement
relating to the Securities that was first filed pursuant to Rule 424(b)
after the Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the
Securities and the offering thereof and is used prior to filing of the
Final Prospectus, together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to
such rules under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
32
Very truly yours,
CORRECTIONAL PROPERTIES TRUST
By: /s/ XXXXXXX XXXXX
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: President and CEO
33
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Citigroup Global Markets Inc.
Banc of America Securities LLC
By: Citigroup Global Markets Inc.
By: /s/ XXXXX XXXXXXXXXX
--------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Director
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
SCHEDULE I
Underwriting Agreement dated July 17, 2003
Registration Statement No.: 333-90364
Representatives: Citigroup Global Markets Inc. and Banc of America
Securities LLC
Title, Purchase Price and Description of Securities:
Title: Common Shares of Beneficial Interest
Number of Shares to be sold by the Company: 3,250,000
Price to Public per Share (include accrued dividends, if any): 25.50
Price to Public -- total: 82,875,000
Underwriting Discount per Share: 1.33875
Underwriting Discount -- total: 4,350,937.50
Proceeds to Company per Share: 24.16125
Proceeds to Company -- total: 78,524,062.50
Closing Date, Time and Location: July 18, 2003 at 10:00 a.m. at Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx,
XX, XX 00000
Type of Offering: Non-Delayed
Date referred to in Section 5(f) after which the Company may offer or sell
securities issued or guaranteed by the Company without the consent of the
Representatives: 45 days from the date of this Agreement.
Modification of items to be covered by the letter from Ernst & Young LLP
delivered pursuant to Section 6(f) at the Execution Time: None
SCHEDULE II
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------
Citigroup Global Markets Inc. 2,372,500
Banc of America Securities LLC 747,500
First Analysis Securities 130,000
Corporation
---------
Total ............................. 3,250,000
=========
[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
[LETTERHEAD OF OFFICER OR TRUSTEE OF CORRECTIONAL PROPERTIES TRUST]
Correctional Properties Trust
Public Offering of Common Shares of Beneficial Ownership
July __, 2003
Citigroup Global Markets Inc.
Banc of America Securities LLC
As Representative of the several Underwriters
named on Schedule II hereto,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between
Correctional Properties Trust, a real estate investment trust (the "Company"),
and you as representative of a group of Underwriters named therein, relating to
an underwritten public offering of Common Shares of Beneficial Interest, $0.001
par value (the "Common Shares"), of the Company.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of Citigroup Global Markets Inc., offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of beneficial interest of the Company or any securities convertible into
or exercisable or exchangeable for such shares of beneficial interest, or
publicly announce an intention to effect any such transaction, for a period of
45 days after the date of the Underwriting Agreement, other than shares of
Common Shares disposed of as bona fide gifts approved by Citigroup Global
Markets Inc.
2
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
[SIGNATURE OF OFFICER OR TRUSTEE]
[NAME AND ADDRESS OF OFFICER OR TRUSTEE]
