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EXHIBIT 10.1
Execution Version
$375,000,000
CORRECTIONS CORPORATION OF AMERICA
6 1/4% SENIOR NOTES DUE 2013
PURCHASE AGREEMENT
March 8, 2005
LEHMAN BROTHERS INC.,
J.P. MORGAN SECURITIES INC.
BANC OF AMERICA SECURITIES, LLC
As Representatives of the several Initial
Purchasers
named in Schedule I c/o
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
Ladies and Gentlemen:
Corrections Corporation of America, a Maryland corporation (the
"Company"), proposes, upon the terms and
considerations set forth herein, to
issue and sell to you, as the initial
purchasers (the "Initial Purchasers"),
$375.0 million in aggregate principal
amount of its 6-1/4% Senior Notes due 2013
(the "Notes"). The Initial Purchasers,
acting severally and not jointly, propose
to purchase the respective principal amount
of Notes set forth on Schedule I
attached hereto. The Notes will (i) have
terms and provisions that are
summarized in the Offering Memorandum (as
defined below) and (ii) are to be
issued pursuant to an Indenture dated March
23, 2005 (the "Indenture") to be
entered into among the Company, the
Guarantors (as defined below) and U.S. Bank
National Association, as trustee (the
"Trustee"). The Company's obligations
under the Notes, including the due and
punctual payment of interest on the
Notes, will be unconditionally guaranteed
(the "Guarantees") by the subsidiaries
listed in Schedule II hereto that have
signed this Agreement, (together the
"Guarantors"). As used herein, the term
"Notes" shall include the Guarantees,
unless the context otherwise requires. This
is to confirm the agreement
concerning the purchase of the Notes from
the Company by the Initial Purchasers.
1.
Preliminary Offering Memorandum and Offering Memorandum. The Notes
will
be offered and sold to the Initial
Purchasers without registration under the
Securities Act of 1933, as amended (the
"Securities Act"), in reliance on an
exemption pursuant to Section 4(2) under
the Securities Act. The Company and the
Guarantors have prepared a preliminary
offering memorandum, dated March 8, 2005
(the "Preliminary Offering Memorandum"),
and an offering memorandum, dated March
8, 2005 (the "Offering Memorandum"),
setting forth information regarding the
Company, the Guarantors, the Notes and the
Exchange Notes (as defined herein),
the Guarantees and the Exchange Guarantees
(as defined herein). The Company and
the Guarantors hereby confirm that they
have authorized the use of the
Preliminary Offering
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Memorandum and the Offering Memorandum in
connection with the offering and
resale of the Notes by the Initial
Purchasers in accordance with Section 3
hereof.
Any
reference to the Preliminary Offering Memorandum or the
Offering
Memorandum shall be deemed to refer to and
include the Company's most recent
Annual Report on Form 10-K for the fiscal
year ended December 31, 2004 and the
Company's Current Reports on Form 8-K,
dated January 6, 2005, February 10, 2005,
February 23, 2005 and March 2, 2005, each
as filed with the United States
Securities and Exchange Commission (the
"Commission") pursuant to Section 13(a),
13(c) or 15(d) of the United States
Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on or prior to the
date of the Preliminary Offering
Memorandum or the Offering Memorandum, as
the case may be. Any reference to the
Preliminary Offering Memorandum or the
Offering Memorandum, as the case may be,
as amended or supplemented, as of any
specified date, shall also be deemed to
include any documents filed with the
Commission pursuant to Section 13(a), 13(c)
or 15(d) of the Exchange Act after the date
of the Offering Memorandum and prior
to the date on which the Notes offering is
consummated. In no event, however,
will any of the information disclosed by
the Company under Items 2.02 and 7.01
of any Current Report on Form 8-K that may
from time to time be furnished with
the Commission be included in any reference
to the Preliminary Offering
Memorandum or the Offering Memorandum, as
the case may be. All documents filed
under the Exchange Act and so deemed to be
included in the Preliminary Offering
Memorandum or the Offering Memorandum, as
the case may be, or any amendment or
supplement thereto are hereinafter called
the "Exchange Act Reports."
It is
understood and acknowledged that upon original issuance thereof,
and
until such time as the same is no longer
required under the applicable
requirements of the Securities Act, the
Notes (and all securities issued in
exchange therefore or, in substitution
thereof) shall bear the following legend
(along with such other legends as the
Initial Purchasers and their counsel deem
necessary):
"THE NOTES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY
NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO
A
PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL
BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
PURCHASING
FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER
IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN
OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S
UNDER THE
SECURITIES
ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM
THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO
AN
EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN
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ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES."
You have
advised the Company that you will make offers (the "Exempt
Resales") of the Notes purchased by you
hereunder on the terms set forth in the
Offering Memorandum, as amended or
supplemented, solely to (i) persons whom you
reasonably believe to be "qualified
institutional buyers" as defined in Rule
144A under the Securities Act ("QIBs") and
(ii) outside the United States to
certain persons in offshore transactions in
reliance on Regulation S under the
Securities Act. Those persons specified in
clauses (i) and (ii) are referred to
herein as the ("Eligible Purchasers"). You
will offer the Notes to Eligible
Purchasers initially at a price equal to
100% of the principal amount thereof.
Such price may be changed at any time
without notice.
Holders
(including subsequent transferees) of the Notes will have the
registration rights set forth in the
registration rights agreement attached
hereto as Exhibit A (the "Registration
Rights Agreement") among the Company, the
Guarantors and the Initial Purchasers to be
dated March 23, 2005 (the "Closing
Date"), for so long as such Notes
constitute "Transfer Restricted Securities"
(as defined in the Registration Rights
Agreement). Pursuant to the Registration
Rights Agreement, the Company and the
Guarantors will agree to file with the
Commission under the circumstances set
forth therein, a registration statement
under the Securities Act (the "Exchange
Offer Registration Statement") relating
to the Company's 6-1/4% Senior Notes due
2013 (the "Exchange Notes") and the
Guarantors' Exchange Guarantees (the
"Exchange Guarantees" to be offered in
exchange for the Notes and the Guarantees.
Such portion of the offering is
referred to as the "Exchange Offer."
2.
Representations, Warranties and Agreements of the Company and
the
Guarantors. The Company and each of the
Guarantors, jointly and severally,
represent, warrant and agree as
follows:
(a) When the Notes and Guarantees are issued and delivered
pursuant
to this Agreement, such Notes and
Guarantees will not be of the same class
(within the meaning of Rule 144A under the
Securities Act) as securities of the
Company or any of the Guarantors that are
listed on a national securities
exchange registered under Section 6 of the
Exchange Act or that are quoted in a
United States automated inter-dealer
quotation system.
(b) Neither the Company nor any of its subsidiaries is, or
after
giving effect to the offering and sale of
the Notes and upon application of the
net proceeds therefrom as described under
the caption "Use of Proceeds" in the
Offering Memorandum will be, an "investment
company" or a company "controlled"
by an "investment company" within the
meaning of the Investment Company Act of
1940, as amended.
(c) The Company and each Guarantor has all requisite corporate,
limited liability company or limited
partnership power and authority to enter
into the Registration Rights Agreement. The
Registration Rights Agreement has
been duly authorized by the Company and
each Guarantor and, when executed by the
Company and each Guarantor on the Closing
Date in accordance with the terms
hereof and thereof, the Registration Rights
Agreement will have been validly
executed and delivered by the Company and
the Guarantors. When the Registration
Rights Agreement has been duly executed and
delivered by the Company and each of
the
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Guarantors (assuming the due execution and
delivery thereof by you), the
Registration Rights Agreement will be the
legally valid and binding obligation
of the Company and each Guarantor in
accordance with the terms hereof and
thereof, enforceable against the Company
and each Guarantor in accordance with
its terms, except as such enforceability
may be limited by bankruptcy,
insolvency, reorganization, moratorium and
other similar laws relating to or
affecting creditor's rights and remedies
generally, by general equitable
principles (regardless of whether such
enforceability is considered in a
proceeding in equity or at law) and, as to
rights of indemnification and
contribution, by principles of public
policy and applicable laws, including but
not limited to federal and state securities
laws.
(d) Assuming that your representations and warranties in
Section
3(a) are true, the purchase and resale of
the Notes pursuant hereto (including
pursuant to the Exempt Resales) is exempt
from the registration requirements of
the Securities Act. No form of general
solicitation or general advertising
within the meaning of Regulation D
(including, but not limited to,
advertisements, articles, notices or other
communications published in any
newspaper, magazine or similar medium or
broadcast over television or radio, or
any seminar or meeting whose attendees have
been invited by any general
solicitation or general advertising) was
used or will be used by the Company,
the Guarantors, any of their affiliates or
any of their respective
representatives (other than each of you, as
to whom the Company and the
Guarantors make no representation) in
connection with the offer and sale of the
Notes.
(e) No form of general solicitation or general advertising was
used
by the Company, the Guarantors or any of
their respective representatives (other
than each of you or any person acting on
your behalf, as to whom the Company and
the Guarantors make no representation) with
respect to Notes sold outside the
United States to non-U.S. persons (as
defined in Rule 902 under the Securities
Act), by means of any directed selling
efforts within the meaning of Rule 902
under the Securities Act, and the Company,
any affiliate of the Company and any
person acting on its or their behalf (other
than each of you, as to whom the
Company and the Guarantors make no
representation) has complied with and will
implement the "offering restrictions"
required by Rule 902.
(f) The Company is subject to Section 13 or 15(d) of the
Exchange
Act.
(g) The Offering Memorandum with respect to the Notes has been
prepared by the Company and the Guarantors
for use by the Initial Purchasers in
connection with the Exempt Resales. To the
knowledge of the Company after
reasonable investigation, no order or
decree preventing the use of the Offering
Memorandum, or any order asserting that the
transactions contemplated by this
Agreement are subject to the registration
requirements of the Securities Act has
been issued and no proceeding for that
purpose has commenced or is pending or,
to the knowledge of the Company or any of
the Guarantors is contemplated.
(h) The Preliminary Offering Memorandum, the Offering Memorandum
and
the Exchange Act Reports as of their
respective dates and the Offering
Memorandum, as amended or supplemented, as
of the Closing Date, did not or will
not at any time contain any untrue
statement of a material fact or omit to state
a material fact required to be stated
therein or necessary in order to make the
statements made therein, in light of the
circumstances under which they were
made, not misleading, except that this
representation and warranty does not
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apply to statements in or omissions from
the Preliminary Offering Memorandum and
Offering Memorandum made in reliance upon
and in conformity with information
relating to the Initial Purchasers
furnished to the Company in writing by or on
behalf of the Initial Purchasers expressly
for use therein.
(i) The Registration Rights Agreement will conform to the
description thereof in the Offering
Memorandum in all material respects.
(j) The market-related and customer-related data and estimates
included under the captions "Summary" and
"Business" in the Offering Memorandum
are based on or derived from sources which
the Company and the Guarantors
believe to be reliable and accurate in all
material respects.
(k) The Company and each of its subsidiaries have been duly
organized and are validly existing as
corporations, limited liability companies
or limited partnerships in good standing
under the laws of their respective
jurisdictions of organization, are duly
qualified to do business and are in good
standing as foreign corporations, limited
liability companies or limited
partnerships in each jurisdiction in which
their respective ownership or lease
of property or the conduct of their
respective businesses requires such
qualification, except as would not,
individually or in the aggregate, have a
material adverse effect on the consolidated
financial position, stockholders'
equity, results of operations, business or
prospects of the Company and its
subsidiaries, taken as a whole (a "Material
Adverse Effect"), and have all
corporate, limited liability company or
limited partnership power and authority,
as applicable, necessary to own or hold
their respective properties and to
conduct the businesses in which they are
presently engaged and none of the
subsidiaries of the Company (other than CCA
of Tennessee, LLC., CCA Properties
of America LLC, CCA Properties of Texas LP;
CCA Properties of Arizona LLC; and
CCA Properties of Tennessee LLC
(collectively, the "Significant Subsidiaries"))
is a "significant subsidiary", as such term
is defined in Rule 405 of the Rules
and Regulations.
(l) The Company has an authorized
capitalization as set forth in the Offering
Memorandum, and all of the issued shares of
capital stock of the Company have
been duly and validly authorized and
issued, are fully paid and non-assessable
and conform to the description thereof
contained in the Offering Memorandum; and
all of the issued shares of capital stock
of each subsidiary of the Company have
been duly and validly authorized and issued
and are fully paid and
non-assessable and are owned directly or
indirectly by the Company, free and
clear of all liens, encumbrances, equities
or claims except as set forth in the
Offering Memorandum.
(m) The Company and each Guarantor has all requisite corporate,
limited company or limited partnership
power and authority to enter into the
Indenture. The Indenture has been duly and
validly authorized by the Company and
each Guarantor, and upon its execution and
delivery and, assuming due
authorization, execution and delivery by
the Trustee, will constitute the valid
and binding agreement of the Company and
each Guarantor, enforceable against the
Company and each Guarantor in accordance
with its terms, except as such
enforceability may be limited by
bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws
relating to or affecting creditors'
rights generally and by general equitable
principles; no qualification of the
Indenture under the Trust Indenture Act of
1939, as
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amended (the "1939 Act"), is required in
connection with the offer and sale of
the Notes contemplated hereby or in
connection with the Exempt Resales.
(n) The Indenture will conform to the description thereof in
the
Offering Memorandum in all material
respects.
(o) The Company has all requisite corporate power and authority
to
issue and sell the Notes. The Notes have
been duly and validly authorized by the
Company and, when duly executed by the
Company in accordance with the terms of
the Indenture, assuming due authentication
of the Notes by the Trustee, upon
delivery to the Initial Purchasers against
payment therefor in accordance with
the terms of this Agreement, will be
validly issued and delivered, and will
constitute valid and binding obligations of
the Company entitled to the benefits
of the Indenture, enforceable against the
Company in accordance with their
terms, except as such enforceability may be
limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization,
moratorium, and other laws relating to
or affecting creditors' rights generally
and by general equitable principles.
(p) The Notes will conform to the description thereof in the
Offering Memorandum in all material
respects.
(q) The Company has all requisite corporate power and authority
to
issue the Exchange Notes. The Exchange
Notes have been duly and validly
authorized by the Company and if and when
duly executed and authenticated in
accordance with the terms of the Indenture
and issued and delivered in
accordance with the Exchange Offer provided
for in the Registration Rights
Agreement, will constitute valid and
binding obligations of the Company entitled
to the benefits of the Indenture,
enforceable against the Company in accordance
with their terms, except as such
enforceability may be limited by bankruptcy,
fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws
relating to or affecting creditors' rights
generally and by general equitable
principles.
(r) Each Guarantor has all requisite corporate limited company
or
limited partnership power and authority to
issue the Guarantees. The Guarantees
have been duly and validly authorized by
each Guarantor and when duly executed
and delivered by each Guarantor in
accordance with the terms of the Indenture
and upon the due execution, authentication
and delivery of the Notes in
accordance with the Indenture and the
issuance of the Notes in the sale to the
Initial Purchasers contemplated by this
Agreement, will constitute valid and
binding obligations of each Guarantor,
enforceable against each Guarantor in
accordance with their terms, except as such
enforceability of the Guarantors'
obligations thereunder may be limited by
bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and
other laws relating to or affecting
creditors' rights generally and by general
equitable principles.
(s) The Guarantees will conform to the description thereof in
the
Offering Memorandum in all material
respects.
(t) Each Guarantor has all requisite corporate limited company
or
limited partnership power and authority to
issue the Exchange Guarantees. The
Exchange Guarantees have been duly and
validly authorized by each Guarantor and
if and when duly executed and
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delivered by each Guarantor in accordance
with the terms of the Indenture and
upon the due execution and authentication
of the Exchange Notes in accordance
with the Indenture and the issuance and
delivery of the Exchange Notes in the
Exchange Offer contemplated by the
Registration Rights Agreement, will
constitute valid and binding obligations of
each Guarantor, entitled to the
benefits of the Indenture, enforceable
against each Guarantor in accordance with
their terms, except as such enforceability
of the Guarantors' obligations
thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws
relating to or affecting creditors'
rights generally and by general equitable
principles.
(u) The Company and each Guarantor has all requisite corporate
limited company or limited partnership
limited company or limited partnership
power and authority to enter into this
Agreement. This Agreement has been duly
authorized, executed and delivered by the
Company and the Guarantors.
(v) The issue and sale of the Notes and the Guarantees and the
execution, delivery and performance of this
Agreement, the Indenture, the Notes,
the Guarantees, the Exchange Notes, the
Exchange Guarantees, and compliance by
the Company and the Guarantors with all of
the provisions of the Notes, the
Guarantees, the Exchange Notes, the
Exchange Guarantees, the Indenture, the
Registration Rights Agreement, by the
Company and each of the Guarantors, as
applicable, and this Agreement and the
consummation of the transactions
contemplated hereby and thereby and the use
of the net proceeds from the sale of
the Notes as described in the Offering
Memorandum (i) will not conflict with or
result in a breach or violation of any of
the terms or provisions of, or
constitute a default under, any indenture,
mortgage, deed of trust, loan
agreement or other agreement or instrument
to which the Company or any of its
subsidiaries is a party or by which the
Company, or any of its subsidiaries is
bound or to which any of the property or
assets of the Company or any of its
subsidiaries is subject, except where such
conflict, breach, violation or
default would not have a Material Adverse
Effect (ii) result in any violation of
the provisions of the charter or by-laws of
the Company or any of its
subsidiaries or (iii) result in any
violation of any statute or any order, rule
or regulation of any court or governmental
agency or body having jurisdiction
over the Company or any of its subsidiaries
or any of their properties or
assets, except where such conflict, breach,
violation or default would not have
a Material Adverse Effect. Assuming the
accuracy of the representations,
warranties and covenants of the Initial
Purchasers in Section 3(a) hereof, no
consent, approval, authorization or order
of, or filing, registration or
qualification with any such court or
governmental agency or body is required for
the issue and sale of the Notes and the
Guarantees or the consummation by the
Company and the Guarantors of the
transactions contemplated by this Agreement,
the Registration Rights Agreement or the
Indenture, except where the failure to
receive the required consent, approval,
authorization, order, filing,
registration or qualification (other than
as may be required under the federal
securities laws) would not have a Material
Adverse Effect and except for the
filing of a registration statement by the
Company with the Commission pursuant
to the Securities Act as required by the
Registration Rights Agreement and such
consents, approvals, authorizations,
orders, filings, registrations or
qualifications as may be required under
state securities or Blue Sky laws in
connection with the purchase and
distribution of the Notes by the Initial
Purchasers.
(w) There are no contracts, agreements or understandings between
the
Company, any subsidiary and any person
granting such person the right (other
than rights that
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have been waived or satisfied) to require
the Company or any subsidiary to file
a registration statement under the
Securities Act with respect to any securities
of the Company or any subsidiary owned or
to be owned by such person or to
require the Company or any subsidiary to
include such securities in the
securities registered pursuant to the
Registration Rights Agreement or, except
for those registration rights as provided
in the registration rights agreements,
dated December 31, 1998, as amended through
the date hereof, by and between the
Company and PMI Mezzanine Fund, L.P., and
the registration rights agreement,
dated as of December 31, 1998, by and
between Correctional Management Services
Corporation, a predecessor of the Company,
and CFE, Inc., in any securities
being registered pursuant to any other
registration statement filed by the
Company or any Guarantor under the
Securities Act.
(x) During the six-month period preceding the date of the
Offering
Memorandum, none of the Company, the
Guarantors or any other person acting on
behalf of the Company or any Guarantor has
offered or sold to any person any
Notes or Guarantees, or any securities of
the same or a similar class as the
Notes or Guarantees, other than Notes or
Guarantees offered or sold to the
Initial Purchasers hereunder. The Company
and each of the Guarantors will take
reasonable precautions designed to ensure
that any offer or sale, direct or
indirect, in the United States or to any
U.S. person (as defined in Rule 902
under the Securities Act), of any Notes or
any substantially similar security
issued by the Company or any Guarantor,
within six months subsequent to the date
on which the distribution of the Notes has
been completed (as notified to the
Company by the Initial Purchasers), is made
under restrictions and other
circumstances reasonably designed not to
affect the status of the offer and sale
of the Notes in the United States and to
U.S. persons contemplated by this
Agreement as transactions exempt from the
registration provisions of the
Securities Act; including any sales
pursuant to Rule 144A under, or Regulations
D or S of, the Securities Act.
(y) To our knowledge after reasonable investigation, neither
the
Company, the Guarantors nor any of their
respective subsidiaries has sustained,
since the date of the latest audited
financial statements included incorporated
by reference in the Offering Memorandum,
any loss or interference with its
business from fire, explosion, flood or
other calamity, whether or not covered
by insurance, or from any labor dispute or
court or governmental action, order
or decree, in each case otherwise than as
set forth or contemplated in the
Offering Memorandum and except where such
loss or interference would not have a
Material Adverse Effect; and, since such
date, there has not been any change in
the capitalization or long-term debt of the
Company. the Guarantors or any of
their respective subsidiaries or any
development in or affecting the general
affairs, management, financial position,
stockholders' equity or results of
operations of the Company, the Guarantors
or any of their respective
subsidiaries, otherwise than as set forth
or contemplated in the Offering
Memorandum or as would not have a Material
Adverse Effect.
(z) The historical consolidated financial statements (including
the
related notes and supporting schedules)
included in the Offering Memorandum
comply in all material respects with the
requirements of Regulation S X under
the Securities Act applicable to
registration statements on Form S-1 under the
Securities Act and present fairly, in all
material respects, the consolidated
financial condition and results of
operations of the entities purported to be
shown thereby at the dates and for the
periods indicated and have been prepared
in all material respects in conformity with
U.S. generally accepted accounting
principles applied on a consistent basis
throughout the periods presented.
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(aa) Ernst & Young LLP, who have certified certain
financial
statements of the Company, whose report
appears in the Offering Memorandum and
who have delivered the letter referred to
in Sections 7(f) hereof, are
independent registered public accountants
as required by the Securities Act and
the Rules and Regulations, and were
independent accountants as required by the
Act and the Rules and Regulations during
the periods covered by the financial
statements on which they reported contained
in the Offering Memorandum.
(bb) Except as set forth or contemplated in the Offering
Memorandum,
the Company, and each of its subsidiaries
has good and valid title in fee simple
to all real property and good and valid
title to all personal property owned by
them, in each case free and clear of all
liens, encumbrances and defects except
such as are described in the Offering
Memorandum or such as do not materially
affect the value of such property and do
not materially interfere with the use
made of such property by the Company and
each of its subsidiaries; and all real
property and buildings held under lease by
the Company and each of its
subsidiaries are held by them under valid,
subsisting and enforceable leases,
with such exceptions as are not material
and do not interfere with the use made
of such property and buildings by the
Company and its subsidiaries.
(cc) To their knowledge after reasonable investigation, the
Company
and each of its respective subsidiaries
carry, or are covered by, insurance in
such amounts and covering such risks as is
adequate for the conduct of their
respective businesses and the value of
their respective properties and as is
customary for companies engaged in similar
businesses in similar industries.
(dd) The Company and each of its subsidiaries own or possess
adequate rights to use all material
patents, patent applications, trademarks,
service marks, trade names, trademark
registrations, service mark registrations,
copyrights and licenses necessary for the
conduct of their respective businesses
except where the failure to own or possess
such rights would not result in a
Material Adverse Effect, and have no
knowledge after reasonable investigation
that the conduct of their respective
businesses will conflict with, and have not
received any notice of any claim of
conflict with, any such rights of others,
which individually or in the aggregate,
would result in a Material Adverse
Effect.
(ee) Except as described in the Offering Memorandum, there are
no
legal or governmental proceedings pending
to which the Company, its Guarantors
or any of its subsidiaries is a party or of
which any property or assets of the
Company or any of its subsidiaries is the
subject which, if determined adversely
to the Company or any of its subsidiaries,
would reasonably be expected to have
a Material Adverse Effect. To the Company's
and each subsidiary's knowledge,
except as disclosed in the Offering
Memorandum, no such proceedings are
threatened or contemplated by governmental
authorities or threatened by others.
(ff) There are no contracts or other documents that as of the
filing
date of the annual report on form 10-K
would be required to be filed as exhibits
to a Company registration statement
pursuant to Item 601(10) of Regulation S-K
that have not been so filed as of March 7,
2005.
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(gg) No relationship, direct or indirect, that would be required
to
be described under Item 404 of Regulation
S-K promulgated under the Act, exists
between or among the Company, any Guarantor
on the one hand, and the directors,
officers, stockholders, customers or
suppliers of the Company, or any Guarantor
on the other hand, other than as described
in the Offering Memorandum.
(hh) No labor disturbance by the employees of the Company or
any
subsidiary exists or, to the knowledge of
the Company or any subsidiary, is
imminent which could reasonably be expected
to have a Material Adverse Effect.
(ii) The Company is in compliance in all material respects with
all
presently applicable provisions of the
Employee Retirement Income Security Act
of 1974, as amended, including the
regulations and published interpretations
thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred
with respect to any "pension plan" (as
defined in ERISA) for which the Company
or any subsidiary would have any liability;
neither the Company nor any
subsidiary has incurred and expects to
incur liability under (i) Title IV of
ERISA with respect to termination of, or
withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended,
including the regulations and published
interpretations thereunder (the "Code");
and each "pension plan" for which the
Company or any subsidiary would have any
liability that is intended to be qualified
under Section 401(a) of the Code is
so qualified in all material respects and
nothing has occurred, whether by
action or by failure to act, which would
cause the loss of such qualification,
except for such action or failure which
would not result in a Material Adverse
Effect.
(jj) Set forth on Exhibit B hereto is a list of each employee
pension or benefit plan with respect to
which the Company or any corporation
considered an affiliate of the Company
within the meaning of Section 407(d)(7)
of ERISA is a party in interest or
disqualified person.
(kk) Except as described in the Offering Memorandum, the Company
and
each of the subsidiaries has filed all
federal, state and local income and
franchise tax returns required to be filed
(subject to extensions of time for
the proper filing of such returns) through
the date hereof and has paid all
taxes as set forth in such returns, and no
tax deficiency has been determined
adversely to the Company, or any of its
subsidiaries (nor does the Company or
any of its subsidiaries have any knowledge
of any tax deficiency) which, if
determined adversely to the Company or any
of its subsidiaries, might reasonably
be expected to have a Material Adverse
Effect.
(ll) Since the date as of which information is given in the
Offering
Memorandum through the date hereof, and
except as may otherwise be disclosed in
the Offering Memorandum or the Exchange Act
Reports, neither the Company nor any
Guarantor has (i) issued or granted any
securities not otherwise in the ordinary
course of business, (ii) incurred any
material liability or obligation, direct
or contingent, other than liabilities and
obligations which were incurred in the
ordinary course of business, (iii) entered
into any material transaction not in
the ordinary course of business or (iv)
declared or paid any dividend on its
capital stock not otherwise in the ordinary
course of business.
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(mm) The Company and each of its subsidiaries (i) makes and
keeps
accurate books and records and (ii)
maintains internal accounting controls which
provide reasonable assurance that (A)
transactions are executed in accordance
with management's authorization, (B)
transactions are recorded as necessary to
permit preparation of its financial
statements and to maintain accountability
for its assets and (C) the reported
accountability for its assets is compared
with existing assets at reasonable
intervals.
(nn) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii)
is in default and no event has
occurred which, with notice or lapse of
time or both, would constitute such a
default, in the due performance or
observance of any term, covenant or condition
contained in any material indenture,
mortgage, deed of trust, loan agreement or
other agreement or instrument to which it
is a party or by which it is bound or
to which any of its properties or assets is
subject or (iii) except as described
in the Offering Memorandum is in violation
of any law, ordinance, governmental
rule, regulation or court decree to which
it or its property or assets may be
subject or has failed to obtain any
material license, permit, certificate,
franchise or other governmental
authorization or permit necessary to the
ownership of its property or to the conduct
of its business, except, with regard
to (ii) and (iii) of this paragraph, for
such defaults, violations or failures
that would not reasonably be expected to
have a Material Adverse Effect.
(oo) To the knowledge of the Company after reasonable
investigation,
neither the Company nor any of its
subsidiaries, nor any director, officer,
agent, employee or other person associated
with or acting on behalf of the
Company or any of its subsidiaries, has
used any corporate funds for any
unlawful contribution, gift, entertainment
or other unlawful expense relating to
political activity; made any direct or
indirect unlawful payment to any foreign
or domestic government official or employee
from corporate funds; violated or is
in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence
payment, kickback or other unlawful
payment.
(pp) The Company has established and maintains disclosure
controls
and procedures (as such term is defined in
Rule 13a-14 under the Exchange Act),
which (i) are designed to ensure that
material information relating to the
Company, including its consolidated
subsidiaries, is made known to the Company's
principal executive officer and its
principal financial officer by others within
those entities, particularly during the
periods in which the periodic reports
required under the Exchange Act are being
prepared; (ii) have been evaluated for
effectiveness as of a date within 90 days
prior to the filing of the Company's
most recent annual or quarterly report
filed with the Commission; and (iii) are
effective in all material respects to
perform the functions for which they were
established.
(qq) Based on the evaluation of its disclosure controls and
procedures, the Company is not aware of (i)
any significant deficiency in the
design or operation of internal controls
which could adversely affect the
Company's ability to record, process,
summarize and report financial data or any
material weaknesses in internal controls,
except as disclosed in the Offering
Memorandum; or (ii) any fraud, whether or
not material, that involves management
or other employees who have a significant
role in the Company's internal
controls.
11
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(rr) Since the date of the most recent evaluation of such
disclosure
controls and procedures, there have been no
significant changes in internal
controls or in other factors that could
significantly affect internal controls,
including any corrective actions with
regard to significant deficiencies and
material weaknesses.
(ss) The Company and, to the best of its knowledge, its officers
and
its directors are in compliance in all
material respects with applicable
provisions of the Sarbanes-Oxley Act of
2002 and the rules and regulations
promulgated in connection therewith that
are effective as of the date hereof.
(tt) There has been no storage, disposal, generation,
manufacture,
refinement, transportation, handling or
treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous
substances by the Company or any of its
subsidiaries (or, to the knowledge of the
Company or any of its subsidiaries or
any of their predecessors in interest) upon
or from any of the property now or
previously owned or leased by the
Compan
